<PAGE> 1
As filed with the Securities and Exchange Commission on July 21, 1995.
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT Of 1934
(AMENDMENT NO. )
Filed by the registrant / X /
Check the appropriate box:
/ / Preliminary proxy statement
/ X / Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
JOHN HANCOCK BOND FUND
- - -------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
JOHN HANCOCK BOND FUND
- - -------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/ X / $125 per Rule 14a-6 and Item 22(a)(2) under the Securities
Exchange Act of 1934 (Paid by wire transfer upon filing of
preliminary proxy materials on June 30, 1995)
<PAGE> 2
John Hancock Funds Letterhead
July 21, 1995
ADJUSTABLE U.S. GOVERNMENT TRUST
(TO BE RENAMED INTERMEDIATE MATURITY GOVERNMENT FUND)
Dear Fellow Shareholder:
I am writing to inform you that a special meeting of shareholders will be held
in September to vote on several important proposals that affect the Fund and
your investment. Please take the time to read the enclosed materials and
cast your vote on the enclosed proxy card. Please vote promptly. It is extremely
important, no matter how many shares you own.
The proposals summarized below have been carefully reviewed by your Fund's Board
of Trustees who are responsible for protecting your interests as a shareholder.
The Trustees believe these proposals are in the best interest of shareholders,
and they recommend that you vote for each proposal. Here is a brief summary of
each proposal:
1) To remove the Fund's current master/feeder operating structure and replace
it with a structure traditonal to most mutual funds.
This change will be a tax-free event and will not result in any increase
in fees for Fund shareholders.
2) To approve a new Investment Management Contract for the Fund.
The previous contract will expire with removal of the old operating
structure.
3) To change the fund's investment objective. Currently, the Fund is managed
with a strong reliance on adjustable rate securities. This has limited the
Fund's flexibility to respond to changing interest rate climates, and has
hindered its ability to meet the investment objective of high current
income. THE PROPOSED CHANGES WILL ALLOW THE FUND GREATER FLEXIBILITY TO
PURSUE AN OBJECTIVE OF EARNING "A HIGH LEVEL OF CURRENT INCOME CONSISTENT
WITH PRESERVATION OF CAPITAL AND MAINTENANCE OF LIQUIDITY."
4) To amend the fund's fundamental investment restriction regarding
investments in illiquid securities.
The proposed changes will allow the fund to be repositioned and renamed as the
JOHN HANCOCK INTERMEDIATE MATURITY GOVERNMENT FUND.
YOUR VOTE IS IMPORTANT!
We urge you to exercise your right as a shareholder and to vote by completing,
signing and returning the enclosed proxy ballot form to us immediately. Your
prompt response will help avoid the necessity for additional mailings at the
Fund's expense. For your convenience, we have provided a postage-paid
envelope.
If you have questions, please call your Customer Service Representative at
1-800-225-5291, Monday through Friday between 8:00 A.M. and 8:00 P.M. Eastern
time. Thank you for your prompt attention to these important matters.
Sincerely,
Edward J. Boudreau, Jr.
Chairman and CEO
Enclosure
<PAGE> 3
JOHN HANCOCK ADJUSTABLE U.S. GOVERNMENT TRUST
(as proposed to be renamed, John Hancock
Intermediate Maturity Government Fund)
101 HUNTINGTON AVENUE
BOSTON, MASSACHUSETTS 02199
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 8, 1995
A Special Meeting of Shareholders (the "Meeting") of John Hancock
Adjustable U.S. Government Trust (the "Fund"), a series of John Hancock Bond
Fund (the "Trust") (telephone 1-800-225-5291), will be held at the offices of
the Trust located at 101 Huntington Avenue, Boston, Massachusetts 02199, at 9:00
a.m., Eastern time, on Friday, September 8, 1995. The purpose of the Meeting is
to consider and act upon the following proposals:
(1) To approve the Agreement and Plan of Liquidation and Termination of
Adjustable U.S. Government Fund. Approval of this Proposal will allow the
current operating structure to be replaced by a traditional operating structure
common to most mutual funds. This change will be tax-free and will not increase
fees currently paid by shareholders.
(2) To approve the terms of a new investment management contract between
the Trust, on behalf of the Fund, and John Hancock Advisers, Inc. (the
"Adviser"). The existing contract expires automatically with the change in
operating structure outlined in Proposal 1. The new contract contains no
increase in the total fees currently paid indirectly by the Fund for investment
advisory services.
(3) To approve an amendment to the Fund's fundamental investment objective
and to redesignate the Fund's investment objective as non-fundamental. These
changes will allow the Adviser greater flexibility to manage the Fund's
portfolio appropriately in light of ever-changing market conditions.
(4) To approve an amendment to the Fund's fundamental investment
restriction with respect to investments in illiquid securities and to
redesignate the investment restriction as non-fundamental. This conforms the
Fund's restriction to that of most other John Hancock mutual funds.
(5) To transact other business that may properly come before the Meeting or
any adjournment of the Meeting.
YOUR BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE IN FAVOR OF ALL PROPOSALS
Shareholders of record of the Fund as of the close of business on July 14,
1995 are entitled to notice of and to vote at the Meeting or any adjournment of
the Meeting. The Proxy Statement and proxy card are being mailed to shareholders
on or about July 21, 1995.
THOMAS H. DROHAN
Senior Vice President and Secretary
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE COMPLETE AND
RETURN THE ENCLOSED PROXY CARD. YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE
MEETING.
Boston, Massachusetts
July 21, 1995
<PAGE> 4
JOHN HANCOCK ADJUSTABLE U.S. GOVERNMENT TRUST
(as proposed to be renamed, John Hancock
Intermediate Maturity Government Fund)
101 HUNTINGTON AVENUE
BOSTON, MASSACHUSETTS 02199
---------------
PROXY STATEMENT
GENERAL
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Trustees of John Hancock Bond Fund (the "Trust"), on
behalf of John Hancock Adjustable U.S. Government Trust (the "Fund"). The
proxies will be used at the special meeting (the "Meeting") of the Fund's
shareholders to be held at the offices of the Trust located on the 2nd floor at
101 Huntington Avenue, Boston, Massachusetts on Friday, September 8, 1995 at
9:00 a.m., Boston time. Proxies will be solicited by mail and may also be
solicited in person or by telephone by officers, Trustees, directors and/or
registered representatives of the Trust's principal distributor, John Hancock
Funds, Inc. ("John Hancock Funds"); or by employees, officers and/or directors
of John Hancock Advisers, Inc. (the "Adviser"), and the transfer agent, John
Hancock Investor Services Corporation ("Investor Services").
The cost of preparing and mailing this Proxy Statement and the
accompanying Notice and proxy card will be borne indirectly by the Fund. The
mailing address of the Trust, the Adviser, John Hancock Funds and Investor
Services is 101 Huntington Avenue, Boston, Massachusetts 02199. This Proxy
Statement and proxy card are being mailed to shareholders on or about July 21,
1995. The Fund's annual report for the March 31, 1995 fiscal year was mailed to
the shareholders on or about May 31, 1995. A copy may be obtained free of charge
by writing to the Trust at the address stated above or by calling
1-800-225-5291.
OUTSTANDING SHARES AND VOTING REQUIREMENTS
The Board of Trustees has fixed the close of business on July 14, 1995 as
the record date (the "Record Date") for determination of shareholders of the
Fund entitled to notice of and to vote at the Special Meeting. Shareholders of
record of the Fund on the Record Date are entitled to one vote per share at the
Special Meeting or any adjournment of the meeting. On June 30, 1995, 2,755,756
shares of beneficial interest of the Fund were outstanding.
<PAGE> 5
SUMMARY
At a meeting of the Trust's Board of Trustees on May 16, 1995, the
Trustees evaluated a recommendation of the Adviser and determined that it would
be in the best interests of the Fund and its shareholders if the Fund
participated in two tax-free reorganizations (the "Reorganizations"), whereby
the Fund would acquire in two simultaneous transactions the assets of John
Hancock Intermediate Government Trust and John Hancock U.S. Government Trust
(the "Acquired Funds"). Each of the Acquired Funds is also a series of the
Trust. The Trustees have determined that the name of the Fund will be changed to
John Hancock Intermediate Maturity Government Fund. In connection with the
Trustees' approval of the Reorganizations, the Trustees have voted to approve,
and voted to recommend that the Fund's shareholders approve, the proposals
relating to the Fund's structure, its investment objective and an investment
restriction discussed in greater detail below.
Shareholder approval of the proposals will enable the Fund to participate
in the Reorganizations. One of the immediate benefits of the Reorganizations to
the Fund and its shareholders will be an increase in the Fund's asset size.
Increased asset size may enhance the diversification of the Fund's portfolio,
thereby reducing the risk of loss associated with holding any one security in
the portfolio. Increased asset size may also produce economies of scale
resulting in a decrease in expenses (as a percentage of net assets) borne by the
Fund and its shareholders.
This Proxy Statement does not relate directly to the Reorganizations and
shareholders are not being asked to vote on the Reorganizations.
PROPOSAL 1
CONSIDERATION OF THE PROPOSAL TO APPROVE THE AGREEMENT AND
PLAN OF LIQUIDATION AND TERMINATION OF
ADJUSTABLE U.S. GOVERNMENT FUND
GENERAL
In 1991, the Fund was organized as a series of the Trust with the
investment objective of earning a high level of current income, consistent with
low volatility of principal. The Fund seeks to achieve its investment objective
by investing all of its assets in the Master Fund, which has an investment
objective identical to that of the Fund. This structure, whereby a mutual fund
invests all of its assets in another mutual fund, is called a "Master/ Feeder"
structure. This structure allows several funds (each, a "feeder fund") with
different distribution features, but with the same investment objective,
restrictions and policies, to combine
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<PAGE> 6
their investments in a single master fund instead of managing them separately.
The Master/Feeder structure may produce measurable benefits to shareholders of a
feeder fund if other feeder funds invest in the master fund, thereby increasing
the master fund's assets and producing economies of scale that result in reduced
fund expenses indirectly borne by the shareholders of each feeder fund.
Because the Fund is the only investor in the Master Fund, it has not
derived any advantages from the Master/Feeder structure. The Master/Feeder
structure has not resulted in investment in the Master Fund by other feeder
funds, either affiliated with the Adviser or not so affiliated. Because no other
feeder funds are investing in the Master Fund, the Master/Feeder structure has
resulted in additional and unnecessary regulatory compliance that imposes added
burdens on the Fund without an equal benefit.
As a feeder fund in a Master/Feeder structure, the Fund indirectly pays
its share of the expenses of the Master Fund. Because the Fund is the only
feeder fund investing in the Master Fund, the Fund has borne both its own
expenses and, indirectly, the entire amount of the Master Fund's advisory,
custody and other expenses. The abolition of the Master/Feeder structure will
not result in any increase in the fees borne directly and indirectly by the Fund
for advisory, transfer agency, custody or distribution services. Furthermore,
the administration agreement (the "Administration Agreement") between the Trust,
on behalf of the Fund, and the Adviser will terminate upon the abolition of the
Master/Feeder structure and the Fund will no longer pay an administration fee of
0.10% of the Fund's average net assets. See Proposal 2 for additional discussion
of the Administration Agreement.
At a meeting of the Trust's Board of Trustees on May 16, 1995, the
Trustees considered alternatives available to the Fund and the Master Fund,
including liquidating and terminating the Master Fund. The Trustees also
considered appointing the Adviser to serve as the Fund's investment adviser to
manage the Fund's assets in accordance with the Fund's investment objective,
policies and restrictions. The Trustees determined that the Master/Feeder
structure provided no measurable benefit to the Fund, the Master Fund or their
respective shareholders. The Trustees' decision was based principally upon the
Adviser's offer to manage the assets of the Fund pursuant to a new investment
management contract on substantially identical terms as the current investment
management contract between the Trust, on behalf of the Master Fund, and the
Adviser (see Proposal 2 below).
After consideration of the relevant factors, the Trustees, including the
Trustees who are not "interested persons" of the Trust, as that term is defined
(the "Independent Trustees") in the Investment Company Act of 1940, as amended
(the "1940 Act"), voted
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<PAGE> 7
to approve, and voted to recommend that the shareholders of the Fund and the
Master Fund approve, the abolition of the Master/ Feeder structure of the Fund
in accordance with the provisions of the Liquidation Plan, which is attached to
this document as EXHIBIT A. The following discussion of the Liquidation Plan is
qualified in its entirety by reference to EXHIBIT A.
LIQUIDATION AND TERMINATION
The Board of Trustees has determined that the abolition of the
Master/Feeder structure will be accomplished by means of a tax-free liquidation
of the Master Fund in accordance with the requirements of Section 332 of the
Internal Revenue Code of 1986, as amended (the "Code"), and the termination of
the Master Fund in accordance with the Trust's Declaration of Trust and
applicable Massachusetts law. The conversion to a traditional, one-tier
investment company structure would be accomplished by having the Master Fund
distribute its portfolio securities and other assets, if any, together with all
of its liabilities, to the Fund in a liquidating distribution, in complete
redemption and cancellation of all of the Master Fund's shares of beneficial
interest. The Fund may elect either to retain or sell all or any portion of
these securities. Approval of the proposal to approve the Liquidation Plan will
constitute approval of the steps necessary to effect the abolition of the
Master/Feeder structure, including the approval by the Fund, as the sole
shareholder of the Master Fund, of the liquidation and termination of the Master
Fund.
Consummation of the Liquidation Plan is subject to the receipt of an
opinion of Hale and Dorr, counsel to the Fund and the Master Fund, substantially
to the effect that the liquidation of the Master Fund will qualify as a complete
liquidation of the Master Fund under Section 332 of the Code with respect to
which neither the Master Fund nor the Fund will recognize any gain or loss under
the Code, that the Fund's basis in each security distributed to it in
liquidation will be the same as the Master Fund's basis for that security, and
that the Fund's holding period for each security will include the Master Fund's
holding period for that security. Consummation of the Liquidation Plan is also
contingent upon approval by the Fund's shareholders of an investment management
contract between the Trust, on behalf of the Fund, and the Adviser, as described
in Proposal 2.
TRUSTEES' RECOMMENDATION
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS APPROVE THE PROPOSAL
TO APPROVE THE LIQUIDATION PLAN.
If the shareholders of the Fund and the Master Fund do not approve this
Proposal and Proposal 2, the Fund will continue to
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<PAGE> 8
operate as a feeder fund in a Master/Feeder structure and the Trustees will
consider what future action to take, including resubmission of the Proposal to
shareholders at a future date. Furthermore, if Proposal 1 and Proposal 2 are not
approved, the Meeting will be adjourned and no further action will be considered
at that time with respect to Proposals 3 and 4.
VOTE REQUIRED
Approval of Proposal 1 requires the affirmative vote of a majority of the
outstanding shares of the Fund represented in person or by proxy and entitled to
vote at the Meeting if a quorum is present. With respect to the Master Fund, the
Fund, as the sole holder of shares of beneficial interest of the Master Fund,
will vote to approve or not to approve Proposal 1 in the same proportion as the
vote cast by the Fund's shareholders on Proposal 1 at the Meeting. Because there
are no other feeder funds investing in the Master Fund, the Fund's vote will
determine whether the shareholders of the Master Fund have approved Proposal 1.
PROPOSAL 2
APPROVAL OF TERMS OF AN INVESTMENT MANAGEMENT CONTRACT
BETWEEN THE TRUST, ON BEHALF OF THE FUND,
AND JOHN HANCOCK ADVISERS, INC.
GENERAL
Under the Master/Feeder structure, the Trust, on behalf of the Master
Fund, entered into an investment management contract (the "Master Management
Contract") with the Adviser, whereby the Adviser provides the Master Fund with
investment research and portfolio management services. In connection with the
appointment of the Adviser as the Master Fund's investment adviser on December
22, 1994, the investment management contract between the Master Fund and the
previous investment adviser was terminated and the Master Management Contract
was approved by the Fund's shareholders (reflecting the Fund's status as sole
shareholder of the Master Fund) at a shareholder meeting held on December 16,
1994.
Under the Master/Feeder structure, the Fund is not required to engage the
services of an investment adviser because the Fund holds only a redeemable
interest in the Master Fund. The Fund's shareholders, however, indirectly bear
the payment of the Master Fund's expenses, including the payment of the Master
Fund's advisory fee. If the Fund's shareholders approve the Liquidation Plan
described in Proposal 1 and the Fund's Master/Feeder structure is abolished, the
Fund will acquire all the assets and liabilities of the Master Fund and the
Master Management Contract will
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<PAGE> 9
terminate. Accordingly, the Fund will be required to engage an investment
adviser to manage the Fund's portfolio of investments.
At a meeting of the Board of Trustees on May 16, 1995, the Trustees,
including the Independent Trustees, voted to approve and recommended that the
Fund's shareholders approve, an investment management contract between the
Trust, on behalf of the Fund, and the Adviser (the "Fund Management Contract").
The rate of the advisory fee in the Fund Management Contract, as approved by the
Trustees and recommended for approval by the Fund's shareholders, is identical
to the rate of the advisory fee in the Master Management Contract. If the Fund's
shareholders do not approve Proposal 1, the Master Fund will not be liquidated
and terminated and the Master Management Contract and the Administration
Agreement will continue in effect.
COMPARISON OF THE TERMS OF THE FUND MANAGEMENT CONTRACT AND THE
MASTER MANAGEMENT CONTRACT
Similarities between the Contracts. The material terms of the Fund
Management Contract discussed below are substantially similar to the terms of
the Master Management Contract approved on December 16, 1994 by the Fund's
shareholders. The Fund Management Contract is attached hereto as EXHIBIT B, and
the discussion of the terms of the Contract is qualified in its entirety by
reference to EXHIBIT B.
Pursuant to the Fund Management Contract and subject to the supervision
and approval of the Board of Trustees, the Adviser is responsible for using its
best efforts to provide the Fund with continuing and suitable investment
programs, consistent with the Fund's investment objective, policies and
restrictions. Specifically, the Adviser is required to: (a) furnish the Fund
with advice and recommendations with respect to the purchase, holding and
disposition of portfolio securities; (b) advise the Fund in connection with
policy decisions to be made by the Trustees and furnish the Fund with research,
economic and statistical data; (c) provide administration of the day-to-day
investment operations of the Fund; (d) submit reports to the Trustees as to the
valuation of the Fund's assets and other subjects; (e) assist the Fund in
negotiations relating to the Fund's investments; (f) place orders for the
purchase and sale of portfolio securities; (g) provide office space, equipment
and supplies and executive, clerical and secretarial personnel; (h) maintain and
preserve the Fund's records; (i) obtain and evaluate information relating to
economies, industries, businesses, security markets and securities; and (j)
oversee and evaluate the performance of agents and service providers to the
Fund. In addition, the Adviser has agreed, from time to time or at any time
requested by the Trustees, to furnish the Trustees with reports as to the
Adviser's performance under the
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<PAGE> 10
Fund Management Contract. Under the Fund Management Contract, the Adviser may
appoint and employ one or more subadvisers that are satisfactory to the Fund.
The Fund Management Contract provides that the Adviser is not liable for
any error of judgment or mistake of law, or for any loss suffered by the Trust
or the Fund in connection with the matters to which the Fund Management Contract
relates. However, the Adviser will be liable for a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties or from reckless disregard of its obligations and duties under the
Contract.
By its terms, the Fund Management Contract will continue in effect for an
initial term of two years from the date of execution and for successive annual
periods thereafter, provided that the continuance is specifically approved at
least annually by (i) the Trustees or by (ii) a vote of a "majority" (as defined
in the 1940 Act) of the Fund's outstanding voting securities, and provided
further that, in the first event, the continuance is also approved by a majority
of the Trust's Independent Trustees by vote cast in person at a meeting called
for the purpose of voting on approval. The Fund Management Contract is
terminable without penalty, on not less than 60 days' notice by the Trustees, by
the vote of a majority of the Fund's outstanding voting securities or by the
Adviser. The Fund Management Contract terminates automatically in the event of
its "assignment" (as defined in the 1940 Act).
Differences between the Contracts. The Fund Management Contract clarifies
that the Fund may bear the allocable cost of the Adviser's employees rendering
legal, accounting and auditing services to the Fund. In describing the
calculation of the Adviser's compensation, the Fund Management Contract makes
clear that the Adviser will receive only a pro rata portion of its monthly fee
for any periods in which the Adviser serves for less than a full month. Both
Contracts require the Adviser to reduce its fee if the Fund's normal operating
expenses are in excess of any limitation imposed by state law in states where
the Fund's shares are qualified for sale. The Fund Management Contract contains
an additional provision permitting the Adviser to refrain from imposing all or a
portion of its fee (in advance of the time its fee would otherwise accrue)
and/or undertake to make any other payments or arrangements necessary to limit
the Fund's expenses to any level the Adviser may specify. Any fee reduction or
undertaking shall constitute a binding modification of the Fund Management
Contract while it is in effect but may be discontinued or modified prospectively
by the Adviser at any time.
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<PAGE> 11
The Fund Management Contract provides specifically that the Adviser may
provide investment advisory services to other clients, including other
investment companies, and that the Adviser is under no obligation to acquire any
particular investment on behalf of the Fund if, in the Adviser's sole
discretion, it is not feasible or desirable to acquire a position in that
investment on behalf of the Fund.
The Fund Management Contract states that it will governed in accordance
with the laws of The Commonwealth of Massachusetts and that each provision of
the Contract is independent of all other provisions.
THE ADVISORY FEE AND THE FUND'S OTHER EXPENSES
Under the Fund Management Contract, the Fund will directly pay the Adviser
a monthly fee that is equal on an annual basis to 0.40% of the Fund's average
daily net assets. THIS IS THE SAME RATE OF COMPENSATION AS IS PAID INDIRECTLY BY
THE FUND TO THE ADVISER UNDER THE MASTER MANAGEMENT CONTRACT. Although the Fund
participates in a Master/Feeder structure, and bears the Master Fund's fees and
expenses indirectly, the Fund is not a party to the Master Management Contract.
However, because no other feeder funds invest in the Master Fund, the Fund also
bears the expense of the advisory fee paid by the Master Fund to the Adviser
pursuant to the Master Management Contract. Accordingly, the amount of the
advisory fee paid directly under the Fund Management Contract will be no higher
than the amount borne indirectly under the Master Management Contract. Approval
of the Fund Management Contract will not result in an increase, either directly
or indirectly, to any other fees borne by the Fund.
During the Fund's fiscal year ended March 31, 1995, the Fund indirectly
paid advisory fees to the Adviser and the previous adviser of $14,293 and
$42,877, respectively. These payments reflect agreements by the Adviser and
previous adviser to reduce the Fund's and the Master Fund's total operating
expenses to 0.75% and 1.40% of the average daily net assets of the Class A
shares and Class B shares, respectively. Had these expense reductions not been
in effect, the Fund would have indirectly borne advisory fees to the Adviser and
the previous adviser of $28,694 and $86,085, respectively.
If the Fund Management Contract is approved by the Fund's shareholders,
the Adviser will continue to reduce the Fund's management fees and other annual
operating expenses (not including transfer agency fees, Rule 12b-1 fees and
other class-specific expenses) to 0.35% of the average daily net assets of the
Class A shares and Class B shares, respectively, until December 31, 1996. As a
result of this expense reduction, the Fund's total annual
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<PAGE> 12
operating expenses for the current fiscal year are expected to be 0.75% and
1.40% of the average daily net assets of Class A and Class B shares,
respectively. Without this expense reduction, the Fund's total annual operating
expenses for the current fiscal year are estimated to be 1.37% and 2.02% of the
average daily net assets of the Class A shares and Class B shares, respectively
(assuming shareholders approve Proposal 1).
As a feeder fund in the Master/Feeder structure, the Fund requires certain
administrative and accounting services that are provided to it by the Adviser in
its capacity as administrator (the "Administrator") pursuant to the
Administration Agreement. For these services, the Fund pays a monthly
administration fee to the Administrator equal on an annual basis to 0.10% of the
Fund's average daily net assets. If the Fund's shareholders approve the Fund
Management Contract, the Trust, on behalf of the Fund, will terminate the
Administration Agreement with the Administrator and the Fund will no longer pay
an administration fee.
During the fiscal year ended March 31, 1995, as a result of the expense
reduction described above, the Fund paid no administration fees to the
Administrator or the previous administrator. Had this limitation not been in
effect, the Fund would have paid administration fees to the Administrator and
the previous administrator of $7,171 and $21,511, respectively.
TRUSTEES' EVALUATION AND RECOMMENDATION
At the meeting of the Board of Trustees on May 16, 1995, the Trustees,
including the Independent Trustees, approved the Fund Management Contract and
the amount of the advisory fee to be paid by the Fund. In making this
determination, the Trustees considered several factors, including the nature,
quality and scope of the services to be provided to the Fund and the investment
record of the Adviser in managing the Master Fund and the other John Hancock
mutual funds. The Trustees also considered that the Adviser's relationship with
the Fund will provide continuity of portfolio management services to the Fund.
The Trustees believe the Fund Management Contract and the proposed advisory fee
to be reasonable, fair and in the best interests of the Fund's shareholders.
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT FUND SHAREHOLDERS
APPROVE THE FUND MANAGEMENT CONTRACT.
If the Fund Management Contract is not approved, the Trustees will not
authorize the implementation of the Liquidation Plan as described in Proposal 1,
regardless of the fact that Proposal 1 may have been approved by the
shareholders of the Fund.
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<PAGE> 13
VOTE REQUIRED
Approval of Proposal 2 requires the affirmative vote of a majority of the
outstanding voting securities of the Fund, as defined in the 1940 Act, which
means the lesser of (1) 67 percent or more of the shares of the Fund represented
at the Meeting if at least 50 percent of all outstanding shares of the Fund are
represented at the Meeting or (2) 50 percent or more of the outstanding shares
of the Fund entitled to vote at the meeting (the "Majority Shareholder Vote").
THE INVESTMENT ADVISER
The Adviser is a wholly-owned subsidiary of The Berkeley Financial Group
(the "Berkeley Group"), which is a wholly-owned subsidiary of John Hancock Asset
Management, which is a wholly-owned subsidiary of John Hancock Subsidiaries,
Inc., which is a wholly-owned subsidiary of John Hancock Mutual Life Insurance
Company (the "Life Company"). The address of the Adviser is 101 Huntington
Avenue, Boston, Massachusetts 02199. The address of the other entities is John
Hancock Place, Boston, Massachusetts 02117. The directors of the Adviser and
their principal occupations or employment are set forth under the caption, "The
Directors of the Adviser." The Adviser provides investment advisory services to
other mutual funds with investment objectives substantially identical to that of
the Fund. See EXHIBIT C for a list of those funds and the rates of the advisory
fees paid by those funds.
BROKERAGE COMMISSIONS ON PORTFOLIO TRANSACTIONS
During the Fund's fiscal year ended March 31, 1995, the Fund paid no
brokerage commissions to affiliated brokers.
OTHER MATERIAL PAYMENTS BY THE FUND TO THE ADVISER AND AFFILIATES OF THE ADVISER
For the period from December 22, 1994 (when the Adviser was approved as
investment adviser to the Master Fund) to March 31, 1995, the Fund paid $9,013
and $21,694 to John Hancock Funds for distribution related services on behalf of
Class A and Class B shares, respectively. It is expected that John Hancock Funds
will continue to provide these services to the Fund.
DIRECTORS OF THE ADVISER
Edward J. Boudreau, Jr., Chairman and Chief Executive Officer of the
Trust, is the principal executive officer of the Adviser. Mr. Boudreau's
principal occupations and address, as well as those of the other Directors of
the Adviser, are set forth below.
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<TABLE>
<S> <C>
Edward J. Boudreau, Jr. Chairman and Chief Executive Officer, the
101 Huntington Avenue Adviser and The Berkeley Financial Group
Boston, MA 02199 (the "Berkeley Group"); Chairman, John
Hancock Advisers International Ltd., John
Hancock Funds and Investor Services
(collectively, the "Affiliated
Companies"); Chairman, NM Capital
Management, Inc. and Sovereign Asset
Management Corporation; and Chairman,
First Signature Bank & Trust.
Stephen L. Brown Chairman and Chief Executive Officer, the
John Hancock Place Insurance Company; Director, the Adviser
Boston, MA 02117 and the Affiliated Companies; Trustee, The
Berkeley Group and John Hancock Asset
Management.
Foster L. Aborn Vice Chairman, Director and President,
John Hancock Place Investment and Pension Sector, the
Boston, MA 02117 Life Company; Director, the Adviser,
Independence Investment Associates, Inc., John
Hancock Funds, Investor Services, and John Hancock
Subsidiaries, Inc.; Trustee, The Berkeley Group and
John Hancock Asset Management; Director, Hancock
Venture Partners, Inc.; Director, John Hancock
Capital Growth Management, Inc.; and Director, John
Hancock Capital Corp. and John Hancock Freedom
Securities Corp.
Richard S. Scipione Director, the Adviser, NM Capital
John Hancock Place Management, Inc., Sovereign Asset
Boston, MA 02117 Management Corporation and the Affiliated
Companies; General Counsel, the Life
Company; and Trustee, The Berkeley Group.
Thomas E. Moloney Chief Financial Officer, the Life
John Hancock Place Company; Director, the Adviser and the
Boston, MA 02117 Affiliated Companies; and Trustee, The
Berkeley Group.
John M. DeCiccio Senior Vice President, Investment
John Hancock Place Technology and Financial Management, the
Boston, MA 02117 Life Company; Director, the Adviser and
the Affiliated Companies; and Trustee, The
Berkeley Group.
</TABLE>
-11-
<PAGE> 15
<TABLE>
<S> <C>
Jeanne M. Livermore Senior Vice President, Group Pension
John Hancock Place Guaranteed and Stable Value Products, the
Boston, MA 02117 Life Company; Director, the Adviser, the
Affiliated Companies and John Hancock
Advisers International Ltd.; and Trustee,
The Berkeley Group.
John Goldsmith Chairman and Chief Executive Officer,
One Beacon Street John Hancock Freedom Securities Corp.;
Boston, MA 02108 Director, the Adviser and the Affiliated
Companies; and Trustee, The Berkeley
Group.
Richard O. Hansen Vice President, Managerial Department,
John Hancock Place the Life Company; Director, the Adviser
Boston, MA 02117 and the Affiliated Companies; and Trustee,
The Berkeley Group.
William C. Fletcher Director, the Adviser, John Hancock Funds,
53 State Street Investor Services; President and Director,
Boston, MA 02109 Independence Investment Associates, Inc.;
Trustee, The Berkeley Group; Trustee,
President and Chief Executive Office, John
Hancock Asset Management; and Director,
Hancock Natural Resource Group, Inc. and
John Hancock Energy Resources Management,
Inc.
Robert G. Freedman Vice Chairman and Chief Investment
101 Huntington Avenue Director, the Adviser; Director, the
Boston, MA 02199 Adviser, NM Capital Management, Inc.,
Sovereign Asset Management Corporation and
the Affiliated Companies; Senior Vice
President, The Berkeley Group; and
Director, John Hancock Advisers
International Ltd.
Robert H. Watts President, Chief Executive Officer and
John Hancock Place Director, John Hancock Distributors,
Boston, MA 02117 Inc.; and Director, the Adviser and the
Affiliated Companies.
C. Troy Shaver, Jr. President, Chief Executive Officer and
101 Huntington Avenue Director, John Hancock Funds; Director,
Boston, MA 02199 the Adviser, NM Management, Inc.,
Sovereign Asset Management Corporation and
the Affiliated Companies.
</TABLE>
-12-
<PAGE> 16
<TABLE>
<S> <C>
David A. King President, Chief Executive Officer and
101 Huntington Avenue Director, Investor Services; Director,
Boston, MA 02199 the Adviser and the Affiliated Companies.
</TABLE>
In addition to Messrs. Boudreau, Scipione and Freedman, the following
persons are officers and/or directors of both the Trust and the Adviser: Anne C.
Hodsdon, President of the Trust and President and Chief Operations Officer of
the Adviser; Thomas H. Drohan, Senior Vice President and Secretary of both the
Trust and the Adviser; James B. Little, Senior Vice President and Chief
Financial Officer of the Trust and Senior Vice President of the Adviser; James
K. Ho, Senior Vice President of both the Trust and the Adviser; Barry H. Evans,
Vice President of both the Trust and the Adviser; Anne McDonley, Vice President
of both the Trust and the Adviser; B.J. Willingham, Senior Vice President of
both the Trust and the Adviser; John A. Morin, Vice President of both the Trust
and the Adviser; Susan S. Newton, Vice President and Compliance Officer of the
Trust and Vice President and Assistant Secretary of the Adviser; and James J.
Stokowski, Vice President and Treasurer of the Trust and Vice President of the
Adviser.
SHARE OWNERSHIP
On December 16, 1994, shareholders approved the appointment of the Adviser
and also elected the Trustees to the Board of Trustees. As of July 14, 1995, Mr.
Boudreau, Mr. Carlin, Mr. Linbeck and Mr. Smith owned beneficially or of record
101 (0.00%), 100 (0.00%), 101 (0.00%) and 100 (0.00%) Class A shares of the
Fund, respectively.
To the knowledge of the Trust, as of June 30, 1995, the following persons
owned of record or beneficially, 5% or more of the outstanding Class A shares of
the Fund: First Trust Company TTEE, Perspective Advisory Co., P.O. Box 173736,
Denver, CO (12.42%); First Trust Corp & Co., P.O. Box 173736, Denver, CO
(10.00%); Merrill Lynch Pierce Fenner & Smith Inc., Trade House Account, P.O.
Box 45286, Jacksonville, FL (9.04%); First Trust Corp, P.O. Box 173736, Denver
CO (7.04%); First Trust Corp & Co., P.O. Box 173736, Denver, CO (5.85%); San
Diego County Credit Union, 9985 Pacific Heights Blvd., San Diego, CA (5.56%);
Standard Savings Bank, Attn: Danny Lau, 228 W. Garvey Avenue, Monterey Park, CA
(5.47%); and the following person owned of record or beneficially, 5% or more of
the outstanding Class B shares of the Fund: Merrill Lynch Pierce Fenner & Smith
Inc., P.O. Box 45286, Jacksonville, FL (6.72%).
On June 30, 1995, the Fund owned 2,755,756 shares of Adjustable U.S.
Government Fund (the "Master Fund"), which are all the outstanding shares of the
Master Fund.
-13-
<PAGE> 17
PROPOSAL 3
APPROVAL OF AMENDMENT TO THE FUND'S FUNDAMENTAL
INVESTMENT OBJECTIVE AND REDESIGNATION OF THE
FUND'S INVESTMENT OBJECTIVE AS NON-FUNDAMENTAL
GENERAL
At a meeting of the Board of Trustees on May 16, 1995, the Trustees,
including the Independent Trustees, voted to approve, and voted to recommend to
the Fund's shareholders that they approve, a proposal to amend the Fund's
investment objective and to redesignate the investment objective as
non-fundamental.
PROPOSED AMENDED INVESTMENT OBJECTIVE
The Fund's current investment objective (as set forth in the Fund's
Prospectus) is to "earn a high level of current income consistent with low
volatility of principal" (the "Current Objective"). The Fund's proposed
investment objective would be to "achieve a high level of current income
consistent with preservation of capital and maintenance of liquidity" (the
"Proposed Objective"). As currently managed, the Fund seeks to reduce volatility
of principal by investing at least 90% of the Fund's total assets in adjustable
rate securities and in fixed rate debt securities that have, at the time of
purchase, a final maturity or average life of less than five years. This policy
limits the flexibility of the Fund to respond to changing interest rate
environments and diminishes the Fund's opportunities to achieve high current
income.
As described above in the Summary, the Fund will be acquiring the assets
of the Acquired Funds in connection with the Reorganizations. The
Reorganizations are expected to increase the Fund's asset size. The Proposed
Objective will give the Adviser more flexibility to seek high current income for
shareholders and to attract additional investors to the Fund. The Proposed
Objective is the same as that of John Hancock Intermediate Government Trust, one
of the Acquired Funds.
The Proposed Objective of the Fund will be non-fundamental, which means
that the investment objective may be changed at the discretion of the Trustees
without a shareholder vote. The Trustees believe that the ability to change the
Fund's investment objective will enable the Fund to better respond to changing
economic and market conditions without incurring the expense and delay
associated with holding a shareholders' meeting. If the Trustees were to decide
at some future date to amend the Fund's investment objective, no change would
become effective until the
-14-
<PAGE> 18
Fund's Prospectus and Statement of Additional Information had been amended or
supplemented to disclose the change.
In conjunction with their approval of the proposed Amendment to the Fund's
investment objective, the Trustees have also approved several changes to the
Fund's non-fundamental investment policies and one of the Fund's non-fundamental
investment restrictions. These changes to non-fundamental investment policies
and restrictions do not require approval by the Fund's shareholders. Therefore,
you are not being asked to vote on these changes.
The Trustees have determined that the Fund should be managed to conform
substantially to the investment policies of John Hancock Intermediate Government
Trust, one of the Acquired Funds. The Fund has not been able to attract
significant investor assets over the past several years. However, the Adviser
believes that repositioning the Fund as an "intermediate-term" government fund
will provide the Fund and its shareholders with better opportunities to achieve
the investment objective of high current income. The Current Objective and the
investment policies of the Fund do not give the Adviser enough investment
flexibility to manage the Fund through any but the most favorable interest rate
climates. The Adviser believes that the restructured Fund would benefit from
John Hancock's broad distribution network, and would be in a better position to
capture a greater share of the market for intermediateterm government funds and
to increase its asset size.
<TABLE>
The chart below summarizes the Fund's non-fundamental investment policies
and a non-fundamental investment restriction as they are currently disclosed in
the Fund's prospectus and as proposed to be changed:
<CAPTION>
ADJUSTABLE GOVERNMENT JOHN HANCOCK INTERMEDIATE
TRUST (BEFORE PROPOSED MATURITY GOVERNMENT FUND
CHANGES) (AFTER PROPOSED CHANGES)
<S> <C> <C>
INVESTMENT Current objective is to Proposed objective is to
OBJECTIVE earn a high level of achieve a high level of
current income, current income, consistent
consistent with low with the preservation of
volatility of principal. capital and maintenance of
liquidity.
PRIMARY Under normal At least 65% of the Fund's
INVESTMENTS circumstances, at least assets will be invested in
65% of the Fund's assets U.S. Government securities,
are invested in including mortgage-backed
adjustable rate mortgage securities issued or
securities issued or guaranteed by U.S.
guaranteed by the U.S. Government agencies and
</TABLE>
-15-
<PAGE> 19
<TABLE>
<S> <C> <C>
Government or its medium-term debt
agencies or obligations of
instrumentalities. governmental issuers.
At least 80% of the Fund's
total assets are invested Under normal market
in U.S. Government conditions, the Fund will
securities. maintain a weighted average
remaining maturity or
remaining average life of
three to ten years.
OTHER Up to 20% of the Fund's The Fund may invest in
INVESTMENTS assets are invested in illiquid, restricted and
privately issued Rule 144A securities,
collateralized mortgage subject to a 15% limit on
obligations ("CMOs"), illiquid investments.
mortgage-backed The Fund may enter into
securities and U.S. repurchase agreements,
Government zero coupon purchase securities
securities. For on a forward commitment
defensive purposes, the or when-issued
Fund may temporarily basis, lend portfolio
invest without limit securities and enter into
in short-term securities, reverse repurchase
e.g., U.S. Government agreements. The Fund will
money market instruments. not be subject to
The Fund may invest in additional bank regulatory
illiquid, restricted limitations.
and Rule 144A securities,
subject to a 10% limit
on illiquid investments.
The Fund may also enter
into repurchase
agreements, purchase
securities on a forward
commitment or when-issued
basis and lend portfolio
securities. Investments
are subject to additional
bank regulatory
limitations.
PERMITTED The Fund may invest The Fund may invest in
TRANSACTIONS in mortgage-related mortgage-related
IN DERIVATIVE derivatives, including derivatives, including CMOs
INSTRUMENTS CMOs and stripped and SMBS as well as
mortgage-backed mortgage dollar rolls.
securities ("SMBS"), as The Fund may buy and sell
well as mortgage dollar options contracts,
rolls. financial futures contracts
</TABLE>
-16-
<PAGE> 20
<TABLE>
<S> <C> <C>
for hedging and non-hedging
purposes.
DIVERSIFICA- The Fund is diversified The Fund is diversified and
TION AND and does not concentrate does not concentrate more
CONCENTRATION more than 25% of its than 25% of its total
(no change) total assets in any one assets in any one industry.
industry.
NON-FUNDAMENTAL The Fund may not invest The Fund may not invest in
INVESTMENT in commodities and commodities, except that
RESTRICTION commodity futures the Fund may purchase and
contracts, put or call sell: options on securities
options or any and securities indices,
combination thereof. futures contracts on
securities and securities indices and
options on these futures, forward
commitments, when-issued securities,
securities index put or call warrants
and repurchase agreements entered
into in accordance with the Fund's
investment policies.
</TABLE>
The proposed change to the Current Objective and the changes to the Fund's
investment policies approved by the Trustees will not significantly increase the
risks associated with an investment in the Fund. The Fund currently maintains a
short to intermediate duration. As proposed to be managed, the Fund will
maintain a longer duration. Duration is a measure of the exposure of the Fund to
changes in interest rates. A longer duration may increase the volatility of the
Fund's net asset value to changing interest rates. The Fund currently does not
engage in options transactions. As proposed to be managed, the Fund will engage
in options transactions, futures contracts and options on futures for hedging
and non-hedging purposes. Options and futures contracts are bought and sold to
manage the Fund's exposure to changing interest rates and security prices. The
Fund may experience losses if the prices of its options and futures positions
were poorly correlated with its other investments, or if it could not close out
its positions because of an illiquid secondary market.
TRUSTEES' RECOMMENDATION
THE TRUSTEES OF THE TRUST RECOMMEND THAT THE FUND'S SHAREHOLDERS VOTE FOR
THE PROPOSAL TO AMEND THE INVESTMENT OBJECTIVE OF THE FUND.
-17-
<PAGE> 21
VOTE REQUIRED
Approval of Proposal 3 to amend the Fund's fundamental investment
objective requires a Majority Shareholder Vote as set forth in Proposal 2 above.
PROPOSAL 4
PROPOSED AMENDMENT TO THE FUND'S
FUNDAMENTAL INVESTMENT RESTRICTION REGARDING INVESTMENTS
IN ILLIQUID SECURITIES, AND REDESIGNATION OF THIS
INVESTMENT RESTRICTION FROM FUNDAMENTAL TO NON-FUNDAMENTAL
On May 16, 1995, the Trustees of the Fund, including the Independent
Trustees, voted to approve, and voted to recommend to the Fund's shareholders
that they approve, a proposal to amend the Fund's investment restriction with
respect to illiquid securities. The proposal would permit the Fund to invest up
to 15% of its net assets in these securities and to redesignate the restriction
from fundamental to non-fundamental.
The Fund's existing restriction limits its investments in illiquid
securities to 10% of its net assets. Under policies of the SEC, a security is
considered illiquid if it cannot be sold within seven days at the price at which
an open-end fund valued the security on its books. In 1992, the SEC concluded
that the 10% limit was overly restrictive for open-end mutual funds that are not
money market funds. Accordingly, it increased the limit for these funds to 15%
of the funds' net assets. All but a few states' securities commissions also
permit a 15% limit on illiquid investments. Accordingly, the Trustees believe
that the Fund's current restriction should be amended to permit the Fund to
invest up to 15% of its net assets in illiquid securities.
At present, the Fund's investment restriction with respect to illiquid
securities is fundamental, which means that it can be changed only by a vote of
the Fund's shareholders. Neither the 1940 Act nor state securities laws require
such a policy to be fundamental (i.e., changeable only with shareholder
approval). Accordingly, the Trustees believe that the current fundamental policy
of the Fund concerning illiquid securities should be deleted and replaced with
an appropriate non-fundamental policy. Consistent with the SEC's current
position on liquidity, the Trustees have adopted a non-fundamental restriction
(to be effective upon shareholder approval) that would permit the Fund to invest
up to 15% of its net assets in illiquid securities.
In addition, the Trustees have adopted procedures under which the Adviser
may determine that certain securities, which were not issued in a pubic offering
registered under the Securities Act of
-18-
<PAGE> 22
1933, are nevertheless liquid by virtue of the existence of a trading market as
permitted by Rule 144A under such Act.
Accordingly, it is proposed that the existing investment restriction be
modified as discussed below and be adopted as a nonfundamental investment
restriction. For purposes of this investment restriction, the staff of the SEC
considers, and the Fund will treat, over-the-counter options to be illiquid and
subject to the 15% limitation. The Board of Trustees considered that, as an
open-end mutual fund, the Fund must have sufficient liquidity to redeem its
shares daily in accordance with the 1940 Act and, in addition, must be able to
value each portfolio security accurately in order to compute its net asset value
each day and effect purchase and redemption orders at the correct price.
Therefore, a higher percentage of illiquid securities in the Fund's portfolio
may increase the risk that the Fund may have difficulty in accurately valuing
its portfolio or in raising sufficient cash to satisfy redemption requests. The
Trustees nevertheless believe that the flexibility that accompanies the proposed
change will benefit the Fund by keeping it competitive with other funds,
including those within the John Hancock fund complex that currently have the
flexibility to invest up to 15% of their net assets in illiquid securities.
The Fund's current fundamental investment restriction regarding illiquid
securities states that:
"The Fund may not: . . .
(9) invest in illiquid securities, including repurchase agreements
maturing in more than seven days but excluding securities which may be resold
pursuant to Rule 144A under the Securities Act of 1933, if, as a result thereof,
more than 10% of the net assets (taken at market value at the time of each
investment of the Fund . . .) would be invested in such securities, except that
the Fund may invest all or substantially all of its assets in another registered
investment company having substantially the same investment restrictions as the
Fund . . .."
The Trustees recommend that the shareholders vote to replace this
restriction with the following new non-fundamental restriction regarding
illiquid securities:
"The Fund may not: . . .
(g) Purchase any security, including any repurchase agreement maturing in
more than seven days, which is not readily marketable, if more than 15% of the
net assets of the Fund, taken at market value, would be invested in these
securities."
-19-
<PAGE> 23
TRUSTEES' RECOMMENDATION
THE TRUSTEES RECOMMEND THAT THE FUND'S SHAREHOLDERS ADOPT THE PROPOSED
CHANGE TO THE FUND'S INVESTMENT RESTRICTION WITH RESPECT TO ILLIQUID SECURITIES.
REQUIRED VOTE
Approval of the proposed change to the Fund's investment restriction
requires a Majority Shareholder Vote as defined above in Proposal 2.
OTHER MATTERS
The Trust's management knows of no business to be brought before the
Meeting except as described above. However, if any other matters properly come
before the Meeting, the persons named in the enclosed form of proxy intend to
vote on these matters in accordance with their best judgment. If shareholders
would like additional information about the matters proposed for action, the
Trust's management will be glad to hear from them and to provide further
information.
PROXIES AND VOTING AT THE MEETING
Any person giving a proxy has the power to revoke it any time prior to its
exercise by executing a superseding proxy or by submitting a written notice of
revocation to the Secretary of the Trust. In addition, although mere attendance
at the Meeting will not revoke a proxy, a Fund shareholder present at the
Meeting may withdraw his or her proxy and vote in person. All properly executed
and unrevoked proxies received in time for the Meeting will be voted in
accordance with the instructions contained in the proxies. If no instruction is
given, the persons named as proxies will vote the shares of the Fund represented
thereby in favor of the matters set forth in Proposals 1, 2, 3 and 4, and will
use their best judgment in connection with the transaction of other business
that may properly come before the Special Meeting or any adjournment thereof.
In the event that, at the time any session of the Special Meeting is
called to order, a quorum is not present in person or by proxy, the persons
named as proxies may vote those proxies that have been received to adjourn the
Meeting to a later date. In the event that a quorum is present but sufficient
votes by Fund shareholders in favor of Proposals 1, 2, 3 and 4 have not been
received, the persons named as proxies will vote those proxies which they are
entitled to vote in favor of the relevant Proposal for such an adjournment, and
will vote those proxies required to be voted against the Proposal against any
adjournment. A shareholder vote
-20-
<PAGE> 24
may be taken on one or more of the Proposals in the Proxy Statement prior to the
adjournment if sufficient votes for its approval have been received and it is
otherwise appropriate.
Shares of beneficial interest of the Fund represented in person or by
proxy (including shares which abstain or do not vote with respect to one or more
of the Proposals presented for shareholder approval) will be counted for
purposes of determining whether a quorum is present at the Meeting. Abstentions
will be treated as shares that are present and entitled to vote with respect to
each Proposal, but will not be counted as a vote in favor of the Proposal.
Accordingly, an abstention from voting on a Proposal has the same effect as a
vote against the Proposal. As noted above, the adoption by the Fund's
shareholders of Proposals 2, 3 and 4 requires the affirmative vote of the lesser
of (i) 67 percent or more of the Fund's outstanding voting securities present at
the Special Meeting, if the holders of more than 50 percent of the Fund's shares
of beneficial interest are present or represented by proxy; or (ii) 50 percent
or more of the Fund's outstanding shares of beneficial interest. If a broker or
nominee holding shares in "street name" indicates on the proxy that it does not
have discretionary authority to vote as to a particular Proposal, those shares
will not be considered as present and entitled to vote with respect to the
Proposal. Accordingly, a "broker non-vote" has no effect on the voting in
determining whether a Proposal has been adopted pursuant to item (i) above.
However, in determining whether a Proposal has been adopted pursuant to item
(ii) above, because shares represented by a "broker non-vote" are considered
outstanding shares, a "broker non-vote" will have the same effect as a vote
against the Proposal.
In addition to the solicitation of proxies by mail or in person, the Fund
may also arrange to have votes recorded by telephone by officers and employees
of the Fund or by personnel of the Adviser or Investor Services. The telephone
voting procedure is designed to authenticate a shareholder's identity, to allow
a shareholder to authorize the voting of shares in accordance with the
shareholder's instructions and to confirm that the voting instructions have been
properly recorded. If these procedures were subject to a successful legal
challenge, such votes would not be counted at the Meeting. The Fund has not
sought to obtain an opinion of counsel on this matter and is unaware of any such
challenge at this time. A shareholder would be called on a recorded line at the
telephone number the Fund has in its records for the account and would be asked
the shareholder's Social Security number of other identifying information. The
shareholder would then be given an opportunity to authorize proxies to vote his
shares at the Meeting in accordance with the shareholder's instructions. To
ensure that the shareholder's instructions have been recorded correctly, the
shareholder will also receive a confirmation of the
-21-
<PAGE> 25
voting instructions in the mail. A special toll-free number will be available in
case the voting information contained in the confirmation is incorrect. If the
shareholder decides after voting by telephone to attend the Meeting, the
shareholder can revoke the proxy at that time and vote the shares at the
Meeting.
The Fund is the sole shareholder of the Master Fund as of the Record Date
and the Fund will vote its interest in the Master Fund to approve or not approve
Proposal 1 on September 8, 1995 in the same proportion as the votes cast by the
Fund's shareholders at the Fund Meeting.
SHAREHOLDERS' PROPOSALS
The Trust is not required, and does not intend, to hold meetings of
shareholders each year. Instead, meetings will beheld only when and if required.
Any shareholders desiring to present a proposal for consideration at the next
meeting for shareholders of the Trust must submit the proposal in writing, so
that it is received by the Trust at 101 Huntington Avenue, Boston, Massachusetts
02199 within a reasonable time before any meeting.
July 21, 1995 JOHN HANCOCK ADJUSTABLE
U.S. GOVERNMENT TRUST
-22-
<PAGE> 26
EXHIBIT A
AGREEMENT AND PLAN OF LIQUIDATION AND TERMINATION OF
ADJUSTABLE U.S. GOVERNMENT FUND
This Agreement and Plan of Liquidation and Termination (the "Liquidation
Plan") between Adjustable U.S. Government Fund (the "Master Fund") and John
Hancock Adjustable U.S. Government Trust (the "Feeder Fund"), each of which is a
series of John Hancock Bond Fund (the "Trust"), is for the purpose of effecting
the liquidation and termination of the Master Fund in accordance with the
requirements of the Internal Revenue Code of 1986, as amended (the "Code"), and
applicable Massachusetts law.
NOW THEREFORE, the parties hereto hereby agree as follows:
1. The Liquidation Plan shall become effective upon formal adoption by the
affirmative vote of the Trustees of the Trust, the shareholder of the Master
Fund and the shareholders of the Feeder Fund. Consummation of the Liquidation
Plan is subject to (i) the receipt of an opinion of Hale and Dorr, counsel to
the Master Fund and the Feeder Fund, substantially to the effect that the
liquidation of the Master Fund will qualify as a complete liquidation of the
Master Fund under Section 332 of the Code with respect to which neither the
Master Fund nor the Feeder Fund will recognize any gain or loss under the Code,
and that the Feeder Fund's basis in each security distributed to it in
liquidation will be the same as the Master Fund's basis for that security, and
that the Feeder Fund's holding period for each such security will include the
Master Fund's holding period for that security; and (ii) approval by the
shareholders of the Feeder Fund of an investment management contract between the
Trust, on behalf of the Feeder Fund, and John Hancock Advisers, Inc.
2. After September 22, 1995 or such date as shall be mutually agreed upon
(the "Liquidation Date"), the Master Fund shall not perform business activities
other than those required for the winding up of its affairs, preserving the
value of its assets, and distributing its assets in accordance with the
Liquidation Plan. The transfer of all of the Master Fund's assets and
liabilities to the Feeder Fund as the sole shareholder of the Master Fund in
liquidation and the termination of the Master Fund are to be effected on or as
promptly as possible after the Liquidation Date and are intended to be completed
not later than the close of the taxable year of the Master Fund in which the
liquidating distribution is made. If more than one liquidating distribution is
made, all such distributions must in any event be completed within three (3)
years from the close of the Master Fund's taxable year during which the first
liquidating distribution under the Liquidation Plan is made.
A-1
<PAGE> 27
3. After settlement of any claims, liabilities and expenses required to be
paid prior to the distribution described in this sentence, the Master Fund shall
distribute, transfer and assign all of its remaining assets, subject to all of
its liabilities, whether known or unknown, to the Feeder Fund by appropriate
instruments of transfer, in complete redemption or cancellation of all the
Master Fund's shares of beneficial interest.
4. The Trustees and officers of the Trust shall cause to be executed and
filed any and all documents necessary or appropriate to completely liquidate the
Master Fund in accordance with the foregoing in a manner that qualifies as a
"complete liquidation" within the meaning of Section 332 of the Code and to
terminate the Master Fund as a series of the Trust under the laws of The
Commonwealth of Massachusetts. The Trustees and officers shall execute and file,
or provide for the execution and filing of, any final income tax returns of the
Master Fund required to be filed, Treasury Department Form 966 and all other tax
returns, information statements, certificates, documents, and other information
required to be filed by reason of the complete liquidation and termination of
the Master Fund.
5. The officers and trustees of the Master Fund shall execute and
consummate the Liquidation Plan, and shall have power to adopt all resolutions,
execute all documents, file all papers, and take all necessary action they deem
necessary or desirable for the complete liquidation and termination of the
Master Fund.
IN WITNESS WHEREOF, the parties hereto have caused the Liquidation Plan to
be executed by their respective duly authorized officers, this 13th day of June,
1995.
JOHN HANCOCK BOND FUND, on behalf of
ADJUSTABLE U.S. GOVERNMENT FUND
By:_______________________________________
Title:____________________________________
JOHN HANCOCK BOND FUND, on behalf of
JOHN HANCOCK ADJUSTABLE U.S.
GOVERNMENT TRUST
By:_______________________________________
Title:____________________________________
A-2
<PAGE> 28
EXHIBIT B
JOHN HANCOCK INTERMEDIATE MATURITY GOVERNMENT FUND
(a series of John Hancock Bond Fund)
101 Huntington Avenue
Boston, Massachusetts 02199
September 22, 1995
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199
Investment Management Contract
------------------------------
Ladies and Gentlemen:
John Hancock Bond Fund (the "Trust"), of which John Hancock Intermediate
Maturity Government Fund (the "Fund") is a series, has been organized as a
business trust under the laws of The Commonwealth of Massachusetts to engage in
the business of an investment company. The Trust's shares of beneficial
interest, par value $.01 per share, may be divided into series, each series
representing the entire undivided interest in a separate portfolio of assets.
This Agreement relates solely to the Fund.
The Board of Trustees of the Trust (the "Trustees") has selected John
Hancock Advisers, Inc. (the "Adviser") to provide overall investment advice and
management for the Fund, and to provide certain other services, as more fully
set forth below, and the Adviser is willing to provide such advice, management
and services under the terms and conditions hereinafter set forth.
Accordingly, the Adviser and the Trust, on behalf of the Fund, agree as
follows:
1. DELIVERY OF DOCUMENTS. The Trust has furnished the Adviser with copies,
properly certified or otherwise authenticated, of each of the following:
(a) Declaration of Trust of the Trust, dated November 27, 1984, as amended
from time to time (the "Declaration of Trust");
(b) By-Laws of the Trust as in effect on the date hereof;
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<PAGE> 29
(c) Resolutions of the Trustees selecting the Adviser as investment
adviser for the Fund and approving the form of this Agreement;
(d) Commitments, limitations and undertakings made by the Fund to state
securities or "blue sky" authorities for the purpose of qualifying shares of the
Fund for sale in such states; and
(e) The Trust's Code of Ethics.
The Trust will furnish to the Adviser from time to time copies, properly
certified or otherwise authenticated, of all amendments of or supplements to the
foregoing, if any.
2. INVESTMENT AND MANAGEMENT SERVICES. The Adviser will use its best
efforts to provide to the Fund continuing and suitable investment programs with
respect to investments, consistent with the investment objectives, policies and
restrictions of the Fund. In the performance of the Adviser's duties hereunder,
subject always (x) to the provisions contained in the documents delivered to the
Adviser pursuant to Section 1, as each of the same may from time to time be
amended or supplemented, and (y) to the limitations set forth in the Fund's
then-current Prospectus and Statement of Additional Information included in the
registration statement of the Trust as in effect from time to time under the
Securities Act of 1933, as amended, and the Investment Company Act of 1940, as
amended (the "1940 Act"), the Adviser will, at its own expense:
(a) furnish the Fund with advice and recommendations, consistent
with the investment objectives, policies and restrictions of the
Fund, with respect to the purchase, holding and disposition of
portfolio securities, alone or in consultation with any
subadviser or subadvisers appointed pursuant to this Agreement
and subject to the provisions of any sub-investment management
contract respecting the responsibilities of such sub-adviser or
subadvisers;
(b) advise the Fund in connection with policy decisions to be made
by the Trustees or any committee thereof with respect to the
Fund's investments and, as requested, furnish the Fund with
research, economic and statistical data in connection with the
Fund's investments and investment policies;
(c) provide administration of the day-to-day investment operations
of the Fund;
(d) submit such reports relating to the valuation of the Fund's
securities as the Trustees may reasonably request;
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<PAGE> 30
(e) assist the Fund in any negotiations relating to the Fund's
investments with issuers, investment banking firms, securities
brokers or dealers and other institutions or investors;
(f) consistent with the provisions of Section 8 of this Agreement,
place orders for the purchase, sale or exchange of portfolio
securities with brokers or dealers selected by the Adviser,
PROVIDED that in connection with the placing of such orders and
the selection of such brokers or dealers the Adviser shall seek
to obtain execution and pricing within the policy guidelines
determined by the Trustees and set forth in the Prospectus and
Statement of Additional Information of the Fund as in effect
from time to time;
(g) provide office space and office equipment and supplies, the use
of accounting equipment when required, and necessary executive,
clerical and secretarial personnel for the administration of the
affairs of the Fund;
(h) from time to time or at any time requested by the Trustees, make
reports to the Fund of the Adviser's performance of the
foregoing services and furnish advice and recommendations with
respect to other aspects of the business and affairs of the
Fund;
(i) maintain all books and records with respect to the Fund's
securities transactions required by the 1940 Act, including
subparagraphs (b)(5), (6), (9) and (10) and paragraph (f) of
Rule 31a-1 thereunder (other than those records being maintained
by the Fund's custodian or transfer agent) and preserve such
records for the periods prescribed therefor by Rule 31a-2 of the
1940 Act (the Adviser agrees that such records are the property
of the Fund and will be surrendered to the Fund promptly upon
request therefor);
(j) obtain and evaluate such information relating to economies,
industries, businesses, securities markets and securities as the
Adviser may deem necessary or useful in the discharge of the
Adviser's duties hereunder;
(k) oversee, and use the Adviser's best efforts to assure the
performance of the activities and services of the custodian,
transfer agent or other similar agents retained by the Fund; and
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(l) give instructions to the Fund's custodian as to deliveries of
securities to and from such custodian and transfer of payment of
cash for the account of the Fund.
3. SUBADVISERS. The Adviser may engage one or more investment advisers
which are either registered as such or specifically exempt from registration
under the Investment Advisers Act of 1940, as amended, to act as subadvisers to
provide, with respect to the Fund, certain services set forth in Section 2 of
this Agreement, all as shall be set forth in a written contract to which the
Trust and the Adviser shall be parties, which contract shall be subject to
approval by the vote of a majority of the Trustees of the Trust who are not
interested persons of the Adviser, the subadviser or of the Trust, cast in
person at a meeting called for the purpose of voting on such approval and by the
vote of a majority of the outstanding voting securities of the Fund and
otherwise consistent with the terms of the 1940 Act. Any fee, compensation or
expense to be paid to any subadviser shall be paid by the Adviser, and no
obligation to the subadviser shall be incurred on the Fund's or Trust's behalf,
except as agreed upon by the Trustees of the Trust and otherwise consistent with
the terms of the 1940 Act.
4. EXPENSES PAID BY THE ADVISER. The Adviser will pay:
(a) the compensation and expenses of all officers and employees of
the Fund;
(b) the expenses of office rent, telephone and other utilities,
office furniture, equipment, supplies and other expenses of the
Fund;
(c) any other expenses incurred by the Adviser in connection with
the performance of its duties hereunder; and
(d) premiums for such insurance as may be agreed upon by the Adviser
and the Trustees.
5. EXPENSES OF THE FUND NOT PAID BY THE ADVISER. The Adviser will not be
required to pay any expenses which this Agreement does not expressly make
payable by it. In particular, and without limiting the generality of the
foregoing but subject to the provisions of Section 4, the Adviser will not be
required to pay under this Agreement:
(a) any and all expenses, taxes and governmental fees incurred by
the Trust or the Fund prior to the effective date of this
Agreement;
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(b) without limiting the generality of the foregoing clause (a), the
expenses of organizing the Trust and the Fund (including without
limitation, legal, accounting and auditing fees and expenses
incurred in connection with the matters referred to in this
clause (b)), of initially registering shares of the Trust under
the Securities Act of 1933, as amended, and of qualifying the
shares for sale under state securities laws for the initial
offering and sale of shares;
(c) the compensation and expenses of Trustees who are not interested
persons (as used in this Agreement, such term shall have the
meaning specified in the 1940 Act) of the Adviser and of
independent advisers, independent contractors, consultants,
managers and other unaffiliated agents employed by the Fund
other than through the Adviser;
(d) legal (including an allocable portion of the cost of its
employees rendering legal services to the Fund), accounting and
auditing fees and expenses of the Fund;
(e) the fees and disbursements of custodians and depositories of the
Fund's assets, transfer agents, disbursing agents, plan agents
and registrars;
(f) taxes and governmental fees assessed against the Fund's assets
and payable by the Fund;
(g) the cost of preparing and mailing dividends, distributions,
reports, notices and proxy materials to shareholders of the
Fund;
(h) brokers' commissions and underwriting fees; and
(i) the expense of periodic calculations of the net asset value of
the shares of the Fund.
6. COMPENSATION OF THE ADVISER. For all services to be rendered,
facilities furnished and expenses paid or assumed by the Adviser as herein
provided, the Adviser shall be entitled to a fee, paid monthly in arrears, at
the annual rate of 0.40% of the average daily net assets of the Fund for the
preceding month.
The "average daily net assets" of the Fund shall be determined on the
basis set forth in the Fund's Prospectus or otherwise consistent with the 1940
Act and the regulations promulgated thereunder. The Adviser will receive a pro
rata portion of such monthly fee for any periods in which the Adviser serves as
investment adviser to the Fund for less than a full
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<PAGE> 33
month. On any day that the net asset value calculation is suspended as specified
in the Fund's Prospectus, the net asset value for purposes of calculating the
advisory fee shall be calculated as of the date last determined.
In the event that normal operating expenses of the Fund, exclusive of
certain expenses prescribed by state law, are in excess of any limitation
imposed by the law of a state where the Fund has registered its shares of
beneficial interest, the fee payable to the Adviser will be reduced to the
extent required by law, and the Adviser will make any additional arrangements
that the Adviser is required by law to make.
In addition, the Adviser may agree not to impose all or a portion of its
fee (in advance of the time its fee would otherwise accrue) and/or undertake to
make any other payments or arrangements necessary to limit the Fund's expenses
to any level the Adviser may specify. Any fee reduction or undertaking shall
constitute a binding modification of this Agreement while it is in effect but
may be discontinued or modified prospectively by the Adviser at any time.
7. OTHER ACTIVITIES OF THE ADVISER AND ITS AFFILIATES. Nothing herein
contained shall prevent the Adviser or any affiliate or associate of the Adviser
from engaging in any other business or from acting as investment adviser or
investment manager for any other person or entity, whether or not having
investment policies or portfolios similar to the Fund's; and it is specifically
understood that officers, directors and employees of the Adviser and those of
its parent company, John Hancock Mutual Life Insurance Company, or other
affiliates may continue to engage in providing portfolio management services and
advice to other investment companies, whether or not registered, to other
investment advisory clients of the Adviser or of its affiliates and to said
affiliates themselves.
The Adviser shall have no obligation to acquire with respect to the Fund a
position in any investment which the Adviser, its officers, affiliates or
employees may acquire for its or their own accounts or for the account of
another client, if, in the sole discretion of the Adviser, it is not feasible or
desirable to acquire a position in such investment on behalf of the Fund.
Nothing herein contained shall prevent the Adviser from purchasing or
recommending the purchase of a particular security for one or more funds or
clients while other funds or clients may be selling the same security.
8. AVOIDANCE OF INCONSISTENT POSITION. In connection with purchases or
sales of portfolio securities for the account of the Fund, neither the Adviser
nor any of its investment management subsidiaries, nor any of the Adviser's or
such investment management subsidiaries' directors, officers or employees will
act
B-6
<PAGE> 34
as principal or agent or receive any commission, except as may be permitted by
the 1940 Act and rules and regulations promulgated thereunder. If any occasions
shall arise in which the Adviser advises persons concerning the shares of the
Fund, the Adviser will act solely on its own behalf and not in any way on behalf
of the Fund. Nothing herein contained shall limit or restrict the Adviser or any
of its officers, affiliates or employees from buying, selling or trading in any
securities for its or their own account or accounts.
9. NO PARTNERSHIP OR JOINT VENTURE. Neither the Trust, the Fund nor the
Adviser are partners of or joint venturers with each other and nothing herein
shall be construed so as to make them such partners or joint venturers or impose
any liability as such on any of them.
10. NAME OF THE TRUST AND THE FUND. The Trust and the Fund may use the
name "John Hancock" or any name or names derived from or similar to the names
"John Hancock Advisers, Inc." or "John Hancock Mutual Life Insurance Company"
only for so long as this Agreement remains in effect. At such time as this
Agreement shall no longer be in effect, the Trust and the Fund will (to the
extent that they lawfully can) cease to use such a name or any other name
indicating that the Fund is advised by or otherwise connected with the Adviser.
The Fund acknowledges that it has adopted the name "John Hancock Intermediate
Maturity Government Fund" through permission of John Hancock Mutual Life
Insurance Company, a Massachusetts insurance company, and agrees that John
Hancock Mutual Life Insurance Company reserves to itself and any successor to
its business the right to grant the nonexclusive right to use the name "John
Hancock" or any similar name or names to any other corporation or entity,
including but not limited to any investment company of which John Hancock Mutual
Life Insurance Company or any subsidiary or affiliate thereof shall be the
investment adviser.
11. LIMITATION OF LIABILITY OF THE ADVISER. The Adviser shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Fund in connection with the matters to which this Agreement relates, except
a loss resulting from willful misfeasance, bad faith or gross negligence on the
part of the Adviser in the performance of its duties or from reckless disregard
by it of its obligations and duties under this Agreement. Any person, even
though also employed by the Adviser, who may be or become an employee of and
paid by the Fund shall be deemed, when acting within the scope of his employment
by the Fund, to be acting in such employment solely for the Fund and not as the
Adviser's employee or agent.
12. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement shall
remain in force until June 30, 1997, and from year to year thereafter, but only
so long as such continuance is specifically approved at least annually by (a) a
majority of the
B-7
<PAGE> 35
Trustees who are not interested persons of the Adviser or (other than as Board
members) of the Fund, cast in person at a meeting called for the purpose of
voting on such approval, and (b) either (i) the Trustees or (ii) a majority of
the outstanding voting securities of the Fund. This Agreement may, on 60 days'
written notice, be terminated at any time without the payment of any penalty by
the vote of a majority of the outstanding voting securities of the Fund, by the
Trustees or by the Adviser. Termination of this Agreement shall not be deemed to
terminate or otherwise invalidate any provisions of any contract between the
Adviser and any other series of the Trust. This Agreement shall automatically
terminate in the event of its assignment. In interpreting the provisions of this
Section 12, the definitions contained in Section 2(a) of the 1940 Act
(particularly the definitions of "assignment," "interested person" and "voting
security") shall be applied.
13. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no amendment, transfer, assignment,
sale, hypothecation or pledge of this Agreement shall be effective until
approved by (a) the Trustees, including a majority of the Trustees who are not
interested persons of the Adviser or (other than as Trustees) of the Fund, cast
in person at a meeting called for the purpose of voting on such approval, and
(b) a majority of the outstanding voting securities of the Fund, as defined in
the 1940 Act.
14. GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of The Commonwealth of Massachusetts.
15. SEVERABILITY. The provisions of this Agreement are independent of and
separable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be deemed invalid or unenforceable in whole or in part.
16. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. The name John Hancock Intermediate Maturity
Government Fund is a series designation of the Trustees under the Trust's
Declaration of Trust. The Declaration of Trust has been filed with the Secretary
of State of The Commonwealth of Massachusetts. The obligations of the Fund are
not personally binding upon, nor shall resort be had to the private property of,
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<PAGE> 36
any of the Trustees, shareholders, officers, employees or agents of the Fund,
but only upon the Fund and its property. The Fund shall not be liable for the
obligations of any other series of the Trust and no other series shall be liable
for the Fund's obligations hereunder.
Yours very truly,
JOHN HANCOCK BOND FUND
on behalf of John Hancock Intermediate
Maturity Government Fund
By:___________________________________
Title:________________________________
The foregoing contract
is hereby agreed to as
of the date hereof.
JOHN HANCOCK ADVISERS, INC.
By:______________________________
Title:___________________________
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<PAGE> 37
<TABLE>
EXHIBIT C
The Adviser provides investment advisory services to the following John
Hancock funds with investment objectives substantially identical to that of the
Fund:
<CAPTION>
NAME OF FUND ASSET SIZE ADVISORY FEE
(as of 3/31/95)
<S> <C> <C>
John Hancock Intermediate $8,305,602 0.50% of the fund's
Government Trust average daily net
assets.(1)
John Hancock U.S. $17,780,907 0.65% of the first
Government Trust $200,000,000 of the
fund's average
daily net assets;
0.625% of the next
$300,000,000; and
0.60% in excess of
$500,000,000.
John Hancock Limited $214,660,384 0.60% of the first
Term Government Fund $250,000,000 of the
fund's average daily net assets;
0.55% of the next $250,000,000;
and 0.50% in excess of
$500,000,000.
<FN>
----------
(1) The Adviser has temporarily agreed to limit this fund's aggregate operating
expenses and to reduce its advisory fee to the extent necessary to limit the
total of the advisory fee and aggregate operating expenses of the Fund (not
including transfer agency fees, Rule 12b-1 fees and other class-specific
expenses) to 0.91% of average daily net assets attributable to Class A and
Class B shares, respectively.
</TABLE>
C-1
<PAGE> 38
JOHN HANCOCK ADJUSTABLE U.S. GOVERNMENT TRUST
(as proposed to be renamed, John Hancock Intermediate
Maturity Government Fund)
101 HUNTINGTON AVENUE, BOSTON, MASSACHUSETTS 02199
SPECIAL MEETING OF SHAREHOLDERS -- SEPTEMBER 8, 1995
PROXY SOLICITATION BY THE BOARD OF TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward J.
Boudreau, Jr., Thomas H. Drohan and James B. Little, with full power of
substitution in each, to vote all the shares of beneficial interest of John
Hancock Adjustable U.S. Government Trust ("Adjustable Government Trust"), a
series of John Hancock Bond Fund (the "Trust"), which the undersigned is (are)
entitled to vote at the Special Meeting of Shareholders (the "Meeting") of
Adjustable Government Trust to be held at 101 Huntington Avenue, Boston,
Massachusetts, on September 8, 1995 at 9:00 a.m., Boston time, and at any
adjournment of the Meeting. All powers may be exercised by a majority of said
proxy holders or substitutes voting or acting, or, if only one votes and acts,
then by that one. Receipt of the Proxy Statement dated July 21, 1995 is hereby
acknowledged. If not revoked, this proxy shall be voted:
THIS PROXY SHALL BE VOTED IN FAVOR OF (FOR) PROPOSALS (1), (2), (3) and (4) IF
NO SPECIFICATION IS MADE ABOVE. AS TO ANY OTHER MATTER, SAID PROXY OR PROXIES
SHALL VOTE IN ACCORDANCE WITH THEIR BEST JUDGMENT.
Please vote by filling in the appropriate boxes below, as shown, using
blue or black ink or dark pencil. Do not use red ink.
(1) To approve the Agreement and Liquidation and Termination of
Adjustable U.S. Government Fund. Approval of this Proposal will
allow the current operating structure to be replaced by a
traditional legal structure common to most mutual funds. This
change will be tax-free and will not increase fees currently paid
by shareholders.
FOR / / AGAINST / / ABSTAIN / /
(2) To approve the terms of a new investment management contract
between the Trust, on behalf of the Fund, and John Hancock
Advisers, Inc. (the "Adviser"). The existing contract expires
automatically with the change in operating structure outlined in
Proposal 1. The new contract contains no increase in the total
fees currently paid by the Fund for investment advisory services.
FOR / / AGAINST / / ABSTAIN / /
(3) To approve an amendment to the Fund's fundamental investment
objective and to redesignate the Fund's investment objective as
non-fundamental. These changes will allow the Adviser greater
flexibility to manage the Fund's portfolio appropriately in light
of ever-changing market conditions.
FOR / / AGAINST / / ABSTAIN / /
(4) To approve an amendment to the Fund's fundamental investment
restriction with respect to investments in illiquid securities and
to redesignate the investment restriction as non-fundamental.
This conforms the Fund's restriction to that of most other John
Hancock mutual funds.
FOR / / AGAINST / / ABSTAIN / /
Please do not forget to sign the reverse side of card.
<PAGE> 39
PLEASE SIGN, DATE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE
Date _____________________, 1995 _______________________________
Signature(s)
_______________________________
NOTE: Signature(s) should agree
with name(s) printed herein. When
signing as attorney, executor,
administrator, trustee or guardian,
please give your full title as
such. If a corporation, please
sign in full corporate name by
president or other authorized
officer. If a partnership, please
sign in partnership name by
authorized person.
