<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 25, 1995
REGISTRATION NO. 2-75807
REGISTRATION NO. 811-3392
================================================================================
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. 24 /X/
AND/OR
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940 /X/
AMENDMENT NO. 27
(Check appropriate box or boxes)
------------------------
JOHN HANCOCK TECHNOLOGY SERIES, INC.
(Exact Name of Registrant as Specified in Charter)
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
VICE PRESIDENT AND SECRETARY
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 (CHECK APPROPRIATE BOX)
/ / IMMEDIATELY UPON FILING PURSUANT TO PARAGRAPH (B)
/X/ ON MAY 1, 1995 PURSUANT TO PARAGRAPH (B)
/ / 60 DAYS AFTER FILING PURSUANT TO PARAGRAPH (A)
/ / ON (DATE) PURSUANT TO PARAGRAPH (A) OF RULE (485 OR 486)
CALCULATION OF REGISTRATION FEES UNDER THE SECURITIES ACT OF 1933
<TABLE>
<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 Capital Stock....................... Indefinite* N/A N/A N/A
- -------------------------------------------------------------------------------------------------------------------------------
Shares of Capital Stock....................... 1,568,094 $21.00 $289,998 $100+
===============================================================================================================================
<FN>
* Registrant continues its election of register an indefinite number of shares
of its capital stock pursuant to Rule 24f-2 under the Investment Company Act
of 1940, as amended.
** Registrant elects to calculate the maximum aggregate offering price pursuant
to Rule 24c-2. 2,041,710 shares were redeemed during the fiscal year ended
December 31, 1994, 2,323,318 shares were used for reductions pursuant to
Paragraph (c) of 24f-2 during the current fiscal year. 1,568,094 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 offering price
of $21.00 per share on April 18, 1995 is the price used as the basis for
calculating the registration fee. While no fee is required for the 1,554,285
shares, the Registrant has elected to register, for $100, an additional
$289,998 of shares (approximately 13,809 shares at $21.00 per share).
+ For both National Series and Global Series.
</TABLE>
PURSUANT TO RULE 24F-2 UNDER THE INVESTMENT COMPANY ACT OF 1940,
REGISTRANT HAS REGISTERED AN INDEFINITE NUMBER OF SECURITIES UNDER THE
SECURITIES ACT OF 1933. THE REGISTRANT FILED THE NOTICE REQUIRED BY RULE 24F-2
FOR ITS MOST RECENT FISCAL YEAR ON OR ABOUT FEBRUARY 23, 1995.
================================================================================
<PAGE> 2
<TABLE>
JOHN HANCOCK TECHNOLOGY SERIES
CROSS REFERENCE SHEET
---------------------
Pursuant to Rule 495(a) under the Securities Act of 1933
<CAPTION>
ITEM NUMBER FORM N-1A, PROSPECTUS CAPTION STATEMENT OF ADDITIONAL
PART A INFORMATION CAPTION
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
1 Front Cover Page *
2 Expense Information; The Fund's *
Expenses; Share Price
3 The Fund's Financial Highlights; *
Performance
4 Investment Objectives and Policies; *
Organization and Management of the Fund
5 Organization and Management of the *
Fund; The Fund's Expenses; Back Cover
Page
6 Organization and Management of the *
Fund; Dividends and Taxes; How to Buy
Shares; How to Redeem Shares;
Additional Services and Programs
7 How to Buy Shares; Shares Price; *
Additional Services and Programs;
Alternative Purchase Arrangements; The
Fund's Expenses; Back Cover Page
8 How to Redeem Shares *
9 Not Applicable *
10 * Front Cover Page
11 * Table of Contents
12 * Organization of the Fund
13 * Investment Objectives and
Policies; Certain Investment
Practices; Investment Restrictions
14 * Those Responsible for Management
15 * Those Responsible for Management
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
ITEM NUMBER FORM N-1A, PROSPECTUS CAPTION STATEMENT OF ADDITIONAL
PART A INFORMATION CAPTION
- ----------------------------------------------------------------------------------------------------
<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
NATIONAL
AVIATION &
TECHNOLOGY
FUND
CLASS A AND CLASS B SHARES
PROSPECTUS
MAY 1, 1995
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Expense Information................................................................... 2
The Fund's Financial Highlights....................................................... 3
Investment Objectives and Policies.................................................... 4
Organization and Management of the Fund............................................... 7
Alternative Purchase Arrangements..................................................... 8
The Fund's Expenses................................................................... 10
Dividends and Taxes................................................................... 11
Performance........................................................................... 12
How to Buy Shares..................................................................... 13
Share Price........................................................................... 14
How to Redeem Shares.................................................................. 21
Additional Services and Programs...................................................... 22
</TABLE>
This Prospectus sets forth information about John Hancock National Aviation &
Technology Fund (the "Fund"), a non-diversified series of John Hancock
Technology Series, Inc. (the "Company"), that you should know before investing.
Please read and retain it for future reference.
Additional information about the Fund has been filed with the Securities and
Exchange Commission (the "SEC"). You can obtain a copy of the Fund's Statement
of Additional Information, May 1, 1995, and incorporated by reference into this
Prospectus, free of charge by writing to or by telephoning: John Hancock
Investor Services, Corporation, Post Office 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 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
EXPENSE INFORMATION
The purpose of the following information is to help you understand the various
fees and expenses that 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 of the Fund's Class A and Class B
shares for the fiscal year ended December 31, 1994, adjusted to reflect current
expenses. Actual fees and expenses in the future may be greater or less than
those indicated.
<TABLE>
<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 fees+.......................................................................... None None
Exchange fee.............................................................................. None None
ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets)
Management fee** (net of waiver).......................................................... 0.85% 0.85%
12b-1 fee***.............................................................................. 0.30% 1.00%
Other expenses............................................................................ 0.78% 0.67%
Total Fund operating expenses............................................................. 1.93% 2.52%
</TABLE>
- ---------------
* No sales charge is payable at the time of purchase on investments of $1
million or more, but for such investments a contingent deferred sales charge
may be imposed on these investments, as described under the caption "Share
Price," in the event of certain redemption transactions within one year of
purchase.
** In the absence of waiver by the Adviser, the annual fund operating expenses
for Class A and Class B shares, respectively, or estimate to be: Management
fee, 1.00% and 1.00% and total expenses 2.08% and 2.67%.
*** The amount of the 12b-1 fee used to cover service expenses will be up to
0.25% of the Fund's average daily net assets, and the remaining portion will
be used to cover distribution expenses; but in no event will such remaining
portion for Class B shares exceed 0.75% of its average daily net assets.
+ Redemption by wire fee (currently $4.00) not included.
<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 a 5% annual return:
Class A Shares...................................................................... $ 69 $ 108 $ 149 $264
Class B Shares
--Assuming complete redemption at end of period................................... $ 76 $ 108 $ 154 $272
--Assuming no redemption.......................................................... $ 26 $ 78 $ 134 $272
(This example should not be considered a representation of past or future expenses. Actual expenses may be greater or less 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
initial sales charge permitted under the National Association of Securities
Dealers 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
THE FUND'S FINANCIAL HIGHLIGHTS
The following table of Financial Highlights has been examined by the Fund's
independent accountants. Price Waterhouse LLP has been the Fund's independent
accountants since January 1, 1992. Their unqualified report is included in the
Fund's 1994 Annual Report and is included in the Statement of Additional
Information. The Fund's financial highlights were audited by KPMG Peat Marwick
LLP prior to January 1, 1992. Further information about the performance of the
Fund is contained in the Fund's Annual Report to shareholders, that 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
indicated is as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985+
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
PER SHARE OPERATING
PERFORMANCE
Net Asset Value,
Beginning of
Period.............. $11.32 $10.34 $10.91 $ 8.84 $11.67 $10.31 $ 8.85 $11.02 $10.63 $ 9.21
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net Investment Income
(Loss).............. (0.03)(a) (0.07) (0.01)(a) 0.05 0.10 0.15 0.14 0.13 0.16 0.19
Net Realized and
Unrealized Gain
(Loss) on
Investments and
Options............. (1.58) 2.22 0.31 2.70 (2.33) 3.90 2.07 (1.39) 1.40 1.72
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total from
Investment
Operations...... (1.61) 2.15 0.30 2.75 (2.23) 4.05 2.21 (1.26) 1.56 1.91
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Less Distributions:
Dividends from Net
Investment Income... -- -- -- (0.03) (0.10) (0.17) (0.14) (0.17) (0.18) (0.23)
Distributions from
Net Realized Gain on
Investments and
Options............. (2.47) (1.17) (0.87) (0.65) (0.50) (2.52) (0.61) (0.74) (0.99) (0.26)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total
Distributions....... (2.47) (1.17) (0.87) (0.68) (0.60) (2.69) (0.75) (0.91) (1.17) (0.49)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net Asset Value, End
of Period........... $ 7.24 $11.32 $10.34 $10.91 $ 8.84 $11.67 $10.31 $ 8.85 $11.02 $10.63
======== ======== ======== ======== ======== ======== ======== ======== ======== ========
Total Investment
Return at Net Asset
Value............... (14.16)% 20.88% 3.02% 31.09% (19.26)% 39.54% 24.86% (12.31)% 15.23% 21.41%
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
RATIOS AND
SUPPLEMENTAL DATA
Net Assets, End of
Period (000's
omitted)............ $54,840 $77,561 $71,107 $73,344 $62,882 $83,634 $70,292 $60,131 $80,039 $82,880
Ratio of Expenses to
Average Net
Assets.............. 1.60% 1.49% 1.53% 1.64% 1.67% 1.28% 1.38% 1.23% 1.23% 1.14%
Ratio of Net
Investment Income
(Loss) to Average
Net Assets.......... (0.28)% (0.66)% (0.07)% 0.42% 0.95% 1.21% 1.40% 1.06% 1.38% 1.92%
Portfolio Turnover
Rate................ 44% 23% 34% 28% 29% 21% 12% 14% 10% 5%
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
JANUARY 3, 1994
TO DECEMBER 31, 1994
--------------------
<S> <C>
CLASS B**
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period.............. $11.23(b)
-----
Net Investment Loss............................... (0.09)(a)
Net Realized and Unrealized Loss on Investments
and Options...................................... (1.53)
-----
Total from Investment Operations............... (1.62)
-----
Less Distributions:
Distributions from Net Realized Gain on
Investments Sold and Options..................... (2.47)
-----
Total Distributions............................ (2.47)
-----
Net Asset Value, End of Period.................... $ 7.14
======
Total Investment Return at Net Asset Value........ (14.39)%
-----
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted)......... $485
Ratio of Expenses to Average Net Assets........... 2.59%*
Ratio of Net Investment Income (Loss) to Average
Net Assets....................................... (1.13)%*
Portfolio Turnover Rate........................... 44%
</TABLE>
- ---------------
* On an annualized basis.
** Class B shares commenced operations on January 3, 1994.
(a) On average month end shares outstanding.
(b) Initial price to commence operations.
+ Short-term capital gains previously classified as dividends from net
investment income have been reclassified to distributions from net realized
gain on investments and options.
3
<PAGE> 7
INVESTMENT OBJECTIVES AND POLICIES
The Fund's primary investment objective is long-term growth of capital
principally through investments in securities of companies in the aviation and
related industries and in companies which utilize technology extensively in
their product development or operations. Income is a secondary objective. The
Fund believes that its shares are suitable for investment by persons who are in
search of above average long-term rewards. There is no assurance that the Fund
will achieve its investment objectives.
- -------------------------------------------------------------------------------
THE FUND'S INVESTMENT OBJECTIVE IS TO SEEK
LONG-TERM GROWTH OF CAPITAL PRINCIPALLY
THROUGH SECURITIES OF COMPANIES IN THE
AVIATION AND RELATED INDUSTRIES.
- -------------------------------------------------------------------------------
Under normal market conditions, at least 80% of the Fund's total assets are
invested in the aviation and technology-oriented industries noted above. It is
also intended that at least 25% of the Fund's total assets be concentrated in
the aviation industry and in industries connected with, serving and/or supplying
the aviation industry. Management strives to realize the Fund's primary
investment objective through the careful selection and continuous supervision of
the Fund's portfolio of securities, which is primarily comprised of common
stocks and securities convertible into common stocks, including convertible
bonds, convertible preferred stocks and warrants.
When John Hancock Advisers, Inc. (the "Adviser") determines that market
conditions warrant a defensive investment strategy, the Fund may temporarily
invest in short-term obligations of, or securities guaranteed by, the U.S.
Government or its agencies or instrumentalities, high quality bank certificates
of deposit and commercial paper. This temporary investment is not designed to
achieve the Fund's primary investment objective.
COVERED CALL OPTIONS. The Fund may sell covered call options issued by the
Options Clearing Corporation against its portfolio securities. The portfolio
securities underlying these call options must have an aggregate value
(determined as of the sale date) not exceeding 25% of the net assets of the Fund
and must be listed on a national securities exchange. A call option gives the
purchaser of the option the right to buy, and obligates the writer to sell, the
underlying security at the exercise price upon exercise of the option at any
time during the option period, regardless of the market price of the security.
If the price of the underlying security rises above the exercise price and the
option is exercised, the Fund loses the opportunity to profit from that portion
of the rise which exceeds the exercise price.
- -------------------------------------------------------------------------------
THE FUND MAY EMPLOY CERTAIN INVESTMENT
STRATEGIES TO HELP ACHIEVE ITS INVESTMENT
OBJECTIVES.
- -------------------------------------------------------------------------------
FOREIGN ISSUERS. The Fund may invest up to 25% of its net assets in securities
of foreign issuers. An investment in foreign securities or the holding of
foreign currency may be affected by changes in currency rates and in exchange
control regulations (e.g., currency blockage). There may be a transaction charge
in connection with the exchange of currency. Foreign companies are not generally
subject to the same uniform accounting, auditing and general reporting standards
applicable to domestic companies, and there may be less publicly available
information concerning a foreign company. In addition, there is the possibility
of expropriation or nationalization of companies operating in certain foreign
countries. The volume of trading on foreign stock markets is generally less than
on U.S. stock exchanges; foreign securities are often more volatile and less
liquid
4
<PAGE> 8
than securities of comparable domestic companies, and transactions with foreign
brokers may involve the payment of higher commissions as a result of imposition
of fixed commissions. Finally, it may be more difficult to obtain and enforce a
legal judgment against a foreign issuer.
FOREIGN CURRENCIES TRANSACTIONS FOR HEDGING PURPOSES. The Fund has the ability
to enter into forward foreign currency exchange contracts to protect against
changes in foreign currency exchange rates. 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. The Fund might purchase
a foreign currency or enter into a forward purchase contract for the currency to
preserve the U.S. dollar price of securities it has the authority to purchase or
has contracted to purchase. Alternatively, it might sell a foreign currency on
either a spot or forward basis to hedge against an anticipated decline in the
dollar value of securities in its portfolio or which it intends or has
contracted to sell. 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
that currency.
FIXED INCOME SECURITIES. Consistent with the Fund's investment objectives, the
Fund may invest up to 10% of its net assets in fixed income securities of public
and private issuers. These securities include convertible and non-convertible
bonds and debentures, zero coupon bonds, payment-in-kind securities, increasing
rate note securities, participation interests, stripped debt securities and
other derivative debt securities. The value of fixed income securities generally
varies inversely with interest rate changes. Convertible issues, while
influenced by the level of interest rates, are also subject to the changing
value of the underlying common stock into which they are convertible.
The Fund invests only in fixed income securities that, at the time of
investment, are rated CC or higher by Standard & Poor's Ratings Group ("Standard
& Poor's") or Ca or higher by Moody's Investors Service, Inc. ("Moody's") or
their equivalent, and unrated fixed income securities of comparable quality as
determined by the Adviser. Bonds rated CC or Ca are highly speculative and are
often in default or have other marked shortcomings. Lower rated securities are
generally referred to as junk bonds. Bonds that have a rating of BBB or lower
from Standard & Poor's, Baa or lower from Moody's or an equivalent rating, and
unrated bonds of comparable quality are considered speculative. While generally
providing greater income than investments in higher quality securities, these
bonds involve greater risk of loss of principal and income, including the
possibility of default. These bonds may have greater price volatility,
especially during periods of economic uncertainty or change. In addition, the
market for bonds rated BBB, Baa or lower may be less liquid than the market for
higher rated securities. Therefore, the Adviser's judgment may at times play a
greater role in the performance and valuation of the Fund's investments in these
securities.
Maturity generally is not a significant factor in the Adviser's security
selection process. Accordingly, the Fund may invest in fixed income securities
of any maturity.
5
<PAGE> 9
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, but they involve some credit risk to the Fund if the other party
defaults on its obligations and the Fund is delayed in or prevented from
liquidating the collateral.
RESTRICTED SECURITIES. The Fund may purchase restricted securities including
those that can be offered and sold to "qualified institutional buyers" under
Rule 144A under the Securities Act of 1933 (the "Securities Act"), the Board of
Directors will monitor the Fund's investments in these securities, focusing on
certain factors, including valuation, liquidity and availability of information.
Purchases of restricted securities are subject to restrictions which limit
purchases of illiquid securities.
INVESTMENT RESTRICTIONS. The Fund has adopted certain investment restrictions
that are detailed in the Statement of Additional Information, where they are
classified as fundamental or non-fundamental. The Fund's investment objective
and those investment restrictions designated as fundamental may not be changed
without shareholder approval. The Fund's non-fundamental investment policies and
restrictions, however, may be changed by a vote of the Board of Directors
without shareholder approval. Portfolio turnover rates for recent years are
shown in the section "The Fund's Financial Highlights."
- -------------------------------------------------------------------------------
THE FUND FOLLOWS CERTAIN POLICIES, SOME OF
WHICH MAY HELP TO REDUCE INVESTMENT RISK.
- -------------------------------------------------------------------------------
AVIATION AND TECHNOLOGY RELATED COMPANIES -- CONSIDERATION AND
RISKS. Securities prices in the industries in which the Fund concentrates its
investments have tended to be subject to greater volatility than those in many
other industries, due to particular factors affecting these industries.
Companies in the aviation and related industries are particularly sensitive to
government regulation, competition, fuel prices, pressures on government budgets
for defense or aerospace contracts, and labor relations problems. Competitive
pressures may also have a significant effect on the financial condition of
companies in technology intensive industries. For example, if the development of
new technology continues to advance at an accelerated rate, and the number of
companies and product offerings continue to expand, the companies could become
increasingly sensitive to short product cycles and aggressive pricing.
Accordingly, the Fund's performance will be particularly susceptible to factors
affecting these industries as well as the economy as a whole.
While the Fund in fact normally invests (and intends to continue to invest) in
the securities of many different companies, in theory the Fund could invest in
the securities of as few as 15 companies without violating the various
restrictions now imposed on the Fund's investments by its fundamental investment
policies. To the extent the Fund is non-diversified, it will be more susceptible
to adverse developments affecting any single issuer.
In choosing brokerage firms to carry out the Fund's transactions, the Adviser
gives primary consideration to execution at the most favorable price, 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 established by the Directors, the Adviser may place securities
transactions with brokers affiliated with the Adviser. These brokers include
Tucker Anthony Incorporated, John Hancock Distributors, Inc. and Sutro &
Company, Inc., which are indirectly owned by John Hancock Mutual Life Insurance
Company, which in turn indirectly owns the Adviser.
- -------------------------------------------------------------------------------
BROKERS ARE CHOSEN BASED ON BEST PRICE AND
EXECUTION.
- -------------------------------------------------------------------------------
6
<PAGE> 10
ORGANIZATION AND MANAGEMENT OF THE FUND
The Fund is a non-diversified series of the Company, an open-end management
investment company organized as a Maryland corporation in 1990. The Company
currently has two series of shares. The Directors 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,
except that each bears different distribution and transfer agent fees. Also,
Class A and Class B shareholders have exclusive voting rights with respect to
the Rule 12b-1 distribution plan, which has been adopted by holders of those
shares in connection with the shares' distribution. The authorized capital stock
of the Company consists of 200 million shares. The Fund consists of 80 million
shares, $1.25 par value, which are divided into Class A and Class B, each with
40 million shares. The Company is generally not required to hold annual
shareholder meetings, although shareholder meetings may be called for such
purposes as electing or removing Directors, changing fundamental restrictions
and policies, or approving a management contract. Shareholders have certain
rights to remove Directors.
- -------------------------------------------------------------------------------
THE DIRECTORS ELECT OFFICERS AND RETAIN
THE INVESTMENT ADVISER AND SUBADVISER, WHO
ARE RESPONSIBLE FOR THE FUND'S DAY-TO-DAY
OPERATIONS SUBJECT TO THE DIRECTORS'
POLICIES AND SUPERVISION.
- -------------------------------------------------------------------------------
The Adviser was organized in 1968 and is a wholly-owned indirect subsidiary of
the John Hancock Mutual Life Insurance Company, a financial services company. It
provides the Fund, and other investment companies in the John Hancock group of
funds, with investment research and portfolio management services. The Fund,
under certain circumstances, will assist in shareholder communications with
other shareholders.
- -------------------------------------------------------------------------------
JOHN HANCOCK ADVISERS, INC. ADVISES
INVESTMENT COMPANIES HAVING A TOTAL ASSET
VALUE OF MORE THAN $13 BILLION.
- -------------------------------------------------------------------------------
American Fund Advisors, Inc. (the "Sub-Adviser"), which served as the Fund's
investment adviser from 1979 to 1991, is the Fund's sub-adviser. The Sub-Adviser
was incorporated in 1978 and also acts as investment manager or adviser for
other institutional and individual clients. Barry J. Gordon, Chairman and
President, and Marc H. Klee, Senior Vice President, of the Sub-Adviser, each of
whom owns more than 25% of the Sub-Adviser's voting securities, are controlling
persons of the Sub-Adviser. Messrs. Gordon and Klee carry out day-to-day
management of the Fund. Mr. Gordon was instrumental in the formation of the
Sub-Adviser. He has been co-manager of the Fund along with Mr. Klee for the past
five years. Both have been associated with the fund in a portfolio management
capacity prior to 1988.
John Hancock Funds, Inc. ("John Hancock Funds") distributes shares for all of
the John Hancock funds directly and through selected broker-dealers ("Selling
Brokers"). Certain Fund officers are also officers of the Adviser and John
Hancock Funds. Pursuant to an order granted by the Securities and Exchange
Commission, the Fund has adopted a deferred compensation plan for its
independent Directors
7
<PAGE> 11
which allows Directors' fees to be invested by the Fund in other John Hancock
funds.
In order to avoid any conflict with portfolio trades for the Fund, the Adviser,
the Sub-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: pre-clearance 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 (See "Contingent Deferred
Sales Charge Alternative -- Class B shares"). If you do not specify on your
account application that 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 you 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 0.30% 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 OF THE FUND
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 the time you make your investment, but the higher
ongoing distribution fee will cause these shares to have higher expenses than
that 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.
- -------------------------------------------------------------------------------
INVESTMENTS IN CLASS B SHARES ARE SUBJECT
TO A CONTINGENT DEFERRED SALES CHARGE.
- -------------------------------------------------------------------------------
Class B shares are not available to full-service defined contribution plans
administered by Investor Services or John Hancock Mutual Life Insurance Company
that had more than 100 eligible employees at the inception of the Fund account.
8
<PAGE> 12
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 that 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 Class A share's lower expenses. To
help you make this determination, the table under the caption "Expense
Information" on page 2 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 a reduced sales charge. See "Share
Price -- Qualifying for a Reduced Sales Charge".
- -------------------------------------------------------------------------------
YOU SHOULD CONSIDER WHICH CLASS OF SHARES
WOULD BE MORE BENEFICIAL FOR YOU.
- -------------------------------------------------------------------------------
Class A shares are subject to lower distribution and service fees and,
accordingly, pay correspondingly higher dividends per share, to the extent that
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 fees and, for a six-year period, a CDSC.
In the case of Class A shares, 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 the ongoing distribution and service fees. In
the case of Class B shares, 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 Class B
shares' CDSC and ongoing distribution and service fees are the same as those of
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.
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 will also 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."
9
<PAGE> 13
THE FUND'S EXPENSES
For managing the Fund's investment and business affairs the Fund pays a fee to
the Adviser which for the 1994 fiscal year was 1.00% of the Fund's average daily
net asset value. This fee is equal on an annual basis to a stated percentage of
its average daily net assets, as follows:
<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
--------------- -----------
<S> <C>
First $100,000,000 1.00%
Amounts over $100,000,000 0.75%
</TABLE>
Effective January 1, 1995, the Board of Directors approved a waiver of a portion
of the management fee payable by the Fund to the Adviser in an amount equal to
0.15% of the average of the daily net asset value of the first $100 million,
thereby reducing the fee payable on these assets to an annual rate of 0.85%.
In addition, the Fund pays a monthly administrative fee at the rate of $100,000
per annum to the Adviser.
The Adviser (not the Fund) pays a monthly fee to the Sub-Adviser for managing
the Fund's portfolio securities. This fee is equal on an annual basis to a
stated percentage of the Fund's average daily net assets as follows:
<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
--------------- -----------
<S> <C>
First $100,000,000 0.40%
Amounts over $100,000,000 40% of the investment
advisory fee received by the
Adviser on amounts over
$100,000,000.
</TABLE>
Currently the Sub-Adviser has waived a portion of this fee resulting in a
decrease in its fee to 0.35%.
The investment management fee paid by the Fund is higher than the fee paid by
most mutual funds, but is believed to be comparable to the fee paid by funds
that invest in similar securities.
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. Under
these Plans, the Fund will pay distribution and service fees at an aggregate
annual rate of 0.30% 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 (not
to exceed 0.75% for Class B shares) 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 it incurs in connection with the distribution of Fund
shares, and (iii) with respect to Class B shares only, interest expenses on
unreimbursed distribution expenses. The Plans provide that John Hancock Funds
will use the distribution fees to promote sales of shares, and will use the
service fees to compensate Selling Brokers for providing personal and account
maintenance services to shareholders. In the event John Hancock Funds is not
fully reimbursed for payments it makes or expenses it incurs by it under the
Class A Plan, these expenses will not be carried beyond twelve months from the
date they were incurred. Unreimbursed expenses under the Class B Plan will be
carried forward together with interest on the balance of unreimbursed expenses.
For the fiscal year ended December 31, 1994 an aggregate of $11,089 distribution
expenses or 10.16%, of the average net assets of the Class B shares of the Fund,
was not reimbursed or recovered by the John Hancock Funds through the receipt of
deferred sales charges or 12b-1 fees in prior periods.
- -------------------------------------------------------------------------------
THE FUND PAYS DISTRIBUTION AND SERVICE
FEES FOR MARKETING AND SALES-RELATED
SHAREHOLDER SERVICING.
- -------------------------------------------------------------------------------
10
<PAGE> 14
Information on the Fund's total expenses is in the Fund's Financial Highlights
section of the prospectus.
The Adviser may, from time to time, reduce its fee or make other arrangements to
limit the Fund's expenses to a specified percentage of average net assets. The
Adviser retains the right to impose such fee and recover any other payments to
the extent that annual expenses fall below the limit at the end of the fiscal
year.
If normal operating expenses of the Fund for any fiscal year, exclusive of
certain expenses prescribed by state law, exceed any limitation imposed by a
state where the shares of the Fund are registered for sale, the Adviser's fee
will be reduced to the extent required by that law and the Adviser will also
make any additional arrangements required by law.
- -------------------------------------------------------------------------------
THE FUND'S TOTAL EXPENSES ARE SUBJECT TO
CERTAIN EXPENSE LIMITATIONS.
- -------------------------------------------------------------------------------
DIVIDENDS AND TAXES
DIVIDENDS. Dividends from the Fund's net investment income and capital gains,
if any, are generally declared annually. 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. The per share
dividends, if any, on Class B shares will be lower than those for Class A shares
because of the higher expenses attributable to the Class B 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
currency 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 gains. These dividends are taxable whether received in cash or
reinvested in additional shares. Certain dividends paid in January of a given
year may be taxable as if you received them the previous December. 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 under the Internal
Revenue Code of 1986, as amended (the "Code"). 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 Code. As a regulated investment
company, the Fund will not be subject to Federal income taxes on any net
investment income and net realized capital gains that are distributed to its
shareholders at least annually. When you redeem (sell) or exchange shares, you
may realize a taxable gain or loss.
11
<PAGE> 15
On the account application, you must certify that your social security or other
taxpayer identification number is correct, and that you are not subject to
backup withholding of Federal tax. If you do not provide this information or are
otherwise subject to backup withholding, the Fund may be required to withhold
31% of your dividends and the proceeds of redemptions and exchanges.
The Fund may be subject to foreign withholding taxes on certain of its foreign
investments, if any, which will reduce the yield on those investments.
In addition to Federal taxes, you may be subject to state, local or foreign
taxes, depending on your residence. Non-U.S. shareholders and tax-exempt
shareholders are subject to different tax treatment not described above. You
should consult your tax adviser for specific advice.
PERFORMANCE
The Fund's total return shows the overall 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 of the Fund shares 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.
- -------------------------------------------------------------------------------
THE FUND MAY ADVERTISE ITS TOTAL RETURN.
- -------------------------------------------------------------------------------
Total return 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 for the Class B shares reflects 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. The total return of Class A
and Class B shares will be calculated separately and, because each class of
shares 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 the Fund performance data. The value of Fund
shares, when redeemed, may be more of less than their original cost. Total
return is a historical calculation and is not an indication of future
performance. See "Factors to Consider in Choosing an Alternative."
12
<PAGE> 16
<TABLE>
HOW TO BUY SHARES
- ------------------------------------------------------------------------------------------
The minimum initial investment in Class A and Class B shares is $1,000 ($250 for
group investments and retirement plans). Complete the Account Application attached
to this Prospectus and indicate whether you are buying Class A or Class B shares.
If you do not specify which class of shares you are purchasing, Investor Services
will assume 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 ("Fund Services").
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 and Trust
John Hancock Deposit Account No. 900000260
ABA Routing No. 211475000
For Credit To: John Hancock National Aviation &
Technology Fund
(Class A or Class B shares)
Your Account Number
Name(s) under which account is registered.
3. Deliver the completed application to your registered
representative or Selling Broker, or mail it directly to
Investor Services.
- ------------------------------------------------------------------------------------------
MONTHLY 1. Complete the "Automatic Investing" and "Bank Information"
AUTOMATIC sections on the Account Privileges Application, designating a
ACCUMULATION bank account from which funds may be drawn.
- -------------------------------------------------------------------------------
BUYING ADDITIONAL CLASS A
AND CLASS B SHARES.
- -------------------------------------------------------------------------------
PROGRAM 2. The amount you elect to invest will be automatically withdrawn
(MAAP) from your bank or credit union account.
- ------------------------------------------------------------------------------------------
BY TELEPHONE 1. Complete the "Invest-by-Phone" and "Bank Information" section
on the Account Privileges Application, designating a bank
account from which your funds may be drawn. Note that in order
to invest by phone, you 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 at 1-800-225-5291.
3. Give the Investor Services representative the name in which the
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.
- ------------------------------------------------------------------------------------------
BY CHECK 1. Either fill out the detachable stub included in 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.
- ------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE> 17
<TABLE>
- ---------------------------------------------------------------------------------------
<S> <C>
BY WIRE Instruct your bank to wire funds to:
- -------------------------------------------------------------------------------
BUYING ADDITIONAL CLASS A AND CLASS B
SHARES.
(CONTINUED)
- -------------------------------------------------------------------------------
First Signature Bank and Trust
John Hancock Deposit Account No. 900000260
ABA Routing No. 211475000
For credit to: John Hancock National Aviation & Technology 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 John Hancock Funds 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 WHICH
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 at fair value as determined in good faith
according to procedures approved by the Directors. 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
Directors believe accurately reflects fair value. The NAV is calculated once
daily as of the close of regular trading on the New York Stock 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.
- -------------------------------------------------------------------------------
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 New York
Stock Exchange, and transmit it to John Hancock Funds before its close of
business, to receive that day's offering price.
INITIAL SALES CHARGE ALTERNATIVE -- CLASS A SHARES. The offering price you pay
for Class A shares of the Fund equals the NAV next computed after your
14
<PAGE> 18
investment is received in good order by John Hancock Funds plus a sales charge,
as follows:
<TABLE>
<CAPTION>
COMBINED REALLOWANCE
REALLOWANCE TO SELLING
AND SERVICE BROKERS AS A
FEE AS A PERCENTAGE
SALES CHARGE AS SALES CHARGE AS PERCENTAGE OF THE
AMOUNT INVESTED A PERCENTAGE OF A PERCENTAGE OF OF OFFERING OFFERING
(INCLUDING SALES CHARGE) OFFERING PRICE THE AMOUNT INVESTED PRICE(+) 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%(***) 0.00%(***)
</TABLE>
- ---------------
(*) 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 given 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. Other than distribution fees, the Fund
does not bear distribution expenses. 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.
(**) No sales charge is payable at the time of purchase in Class A shares of $1
million or more, but a contingent deferred sales charge may be imposed in
the event of certain redemption transactions within one year of purchase.
(***) John Hancock Funds may pay a commission and 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 $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 at the time of sale, and thereafter 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.
Sales charges ARE NOT APPLIED to any dividends that are reinvested in additional
shares of the Fund.
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 as described below, investors in Class A shares may
be entitled to pay reduced sales charges. See "Qualifying For a Reduced Sales
Charge" below.
CONTINGENT DEFERRED SALES CHARGE -- INVESTMENTS OF $1 MILLION OR MORE IN CLASS A
SHARES. Purchases of $1 million or more in Class A shares will be made at net
asset value with no initial sales charge, but if the shares are redeemed within
15
<PAGE> 19
12 months after the end of the calendar month in which the purchase was made
(the contingent deferred sales charge period), a contingent deferred sales
charge will be imposed. The rate of the CDSC will depend on the amount invested
as follows:
<TABLE>
<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 John Hancock Mutual Life Insurance 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 contingent deferred sales
charge will be imposed at the above rate.
The charge 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 dividends 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
redemption in certain circumstances. See the discussion under "Waiver of
Contingent Deferred Sales Charges."
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 in the John Hancock funds (except
money market funds), you may qualify for a reduced sales charge on your
investments through a LETTER OF INTENTION. You may also be able to use the
ACCUMULATED PRIVILEGE and COMBINATION PRIVILEGE to take advantage of the value
of your previous investments in Class A shares of the John Hancock funds when
meeting the breakpoints for a reduced sales charge. For the ACCUMULATION
PRIVILEGE and COMBINATION PRIVILEGE, the applicable sales charge will be based
on the total of:
- -------------------------------------------------------------------------------
YOU MAY QUALIFY FOR A REDUCED SALES CHARGE
ON YOUR INVESTMENTS IN CLASS A SHARES.
- -------------------------------------------------------------------------------
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."
16
<PAGE> 20
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%. This
rate is 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 Trust/Company, 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 (an
"eligible depository institution") 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 client of the Sub-Adviser if the client's funds are transferred directly to
the Fund from accounts managed by the Sub-Adviser.
- - 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 also be purchased without an initial sales charge
in connection with certain liquidation, merger or acquisition transactions
involving other investment companies or personal holding companies.
Shareholders of the Fund who held shares of the Fund's predecessor prior to May
1, 1984 (the effective date of the imposition of a sales charge) are permitted
for an indefinite period to purchase additional shares at net asset value,
without a sales charge, provided that the purchasing shareholder (1) held Fund
shares and shares of its predecessor continuously from April 30, 1984 to the
date of the purchase in question and (2) provides at the time of purchase a
representation that the additional shares are being purchased for investment
purposes and not with a view to distribution.
- -------------------------------------------------------------------------------
SALES TO CERTAIN
SHAREHOLDERS
- -------------------------------------------------------------------------------
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 Charges"
below.
EXAMPLE:
You have purchased 100 shares at $10 per share. The second year after your
purchase, your investment's net asset value per share has increased by $2 to
$12, and you have gained 10 additional shares through dividend reinvestment. If
you redeem 50 shares at this time, your CDSC will be calculated as follows:
<TABLE>
<S> <C>
- - Proceeds of 50 shares redeemed at $12 per share $600
- - Minus proceeds of 10 shares not subject to CDSC because they were -120
acquired through dividend reinvestment (10 X $12)
- - Minus appreciation on remaining shares, also not subject to CDSC -80
(40 X $2)
-----
- - Amount subject to CDSC $400
-----
</TABLE>
Proceeds from the CDSC are paid to John Hancock Funds. John Hancock Funds uses
all or part of them to defray its expenses related to providing the Fund with
distribution services connected to the sale of the Class B shares, such as
compensating selected 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 the 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 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>
CONTINGENT DEFERRED SALES
CHARGE AS A PERCENTAGE OF
YEAR IN WHICH CLASS B SHARES DOLLAR AMOUNT SUBJECT TO
REDEEMED FOLLOWING PURCHASE 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 personal and
account maintenance services provided to shareholders during the twelve months
following the sale, and thereafter the service fee is paid in arrears.
WAIVER OF CONTINGENT DEFERRED SALES CHARGE. 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 the circumstances defined below:
- - Redemptions of Class B shares made under a 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 established your Systematic Withdrawal
Plan and 10% of the value of your subsequent investments (less redemptions) in
that account at the time you notify Investor Services. This waiver does not
apply to Systematic Withdrawal Plan redemptions of Class A shares that are
subject to a CDSC.
- -------------------------------------------------------------------------------
UNDER CERTAIN CIRCUMSTANCES,
THE CDSC ON CLASS B AND CERTAIN CLASS A
SHARE REDEMPTIONS WILL BE WAIVED.
- -------------------------------------------------------------------------------
- - Redemptions made to effect distributions from an Individual Retirement Account
either before or after age 59 1/2, as long as the distributions are based on
your 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.
- - Redemptions made under the Reinvestment Privilege, as described in "Additional
Services and Programs" of this Prospectus.
19
<PAGE> 23
- - Redemptions made pursuant to the Fund's right to liquidate your account if you
own fewer than 50 shares.
- - 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 at the end of the month eight years after the
shares were purchased and will result in lower annual distribution fees. If you
exchanged Class B shares into this 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 into Class
A shares should not be taxable for Federal income tax purposes, nor should it
change your tax basis or tax holding period for the converted shares.
20
<PAGE> 24
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 that were
recently made by check or Invest-by-Phone have been collected (which may take up
to 10 calendar days).
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 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.
- --------------------------------------------------------------------------------
<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. (Eastern Time), Monday through
Friday, excluding days on which the New York Stock Exchange
is closed. Investor Services employs the following proce-
dures 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.
- -------------------------------------------------------------------------------
TO ASSURE ACCEPTANCE OF YOUR REDEMPTION
REQUEST, PLEASE FOLLOW THESE PROCEDURES.
- -------------------------------------------------------------------------------
You may redeem up to $100,000 by telephone, but the address
on the account must not have changed for the last 30 days.
A check will be mailed to the exact name(s) and address
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 transactions procedures mentioned above.
Telephone redemption is not available for IRAs, other
tax-qualified retirement plans or Fund shares that are in
certificated 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
using 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 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
that is 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>
21
<PAGE> 25
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
TYPE OF REGISTRATION REQUIREMENTS
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, accompanied by signature
guarantee(s).
Corporation, Association A letter of instruction and a corporate
resolution, signed by person(s) authorized
to act on the account, accompanied by
signature guarantee(s).
Trusts A letter of instruction signed by the
Trustee(s) with a signature guarantee. (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.
- ---------------------------------------------------------------------------------
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 any such 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 instruction. Unless you specify to the contrary, any
outstanding Class A shares will be redeemed before Class B shares or you may not
redeem certificated shares by telephone.
Due to the proportionately high cost of maintaining smaller accounts, the Funds
reserves the right to redeem at net asset value all shares in an account which
holds fewer than 100 shares (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 funds minimum initial
investment. 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 purchase and dividend reinvestments, if any, exceeds the
number of shares redeemed, repeated redemptions from a smaller account may
eventually trigger this policy.
- ---------------------------------------------------------------------------------
</TABLE>
ADDITIONAL SERVICES AND PROGRAMS
EXCHANGE PRIVILEGE
If your investment objective changes, or if you wish to achieve further
diversification, John Hancock offers other funds with a wide range of investment
goals. Contact your registered representative or Selling Broker and request a
prospectus for the John Hancock funds that interest you. Read the prospectus
carefully before exchanging your shares. You can exchange shares of each class
of the Fund only for shares of the same class of another John Hancock fund. For
this purpose, John Hancock funds with only one class of shares will be treated
as Class A, whether or not they have been so designated.
- -------------------------------------------------------------------------------
YOU MAY EXCHANGE SHARES OF THE FUND ONLY
FOR SHARES OF THE SAME CLASS OF ANOTHER
JOHN HANCOCK FUND.
- -------------------------------------------------------------------------------
22
<PAGE> 26
Exchanges between funds 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 for 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 for
exchanges into John Hancock Short-Term Strategic Income Fund, John Hancock
Adjustable U.S. Government Trust and John Hancock Limited-Term Government Fund
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 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 continue to be
subject to the CDSC schedule that was in effect at your initial purchase date.
You may exchange Class B shares of any John Hancock 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 on the original fund at the time of the exchange.
The Fund reserves the right to require that you keep previously exchanged shares
(and reinvested dividends) in the Fund for 90 days before you are permitted 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 of another for Federal income tax purposes. An exchange may
result in a gain or loss.
When you make an exchange, your account registration must be identical in both
the existing and new account. The exchange privilege is available only in states
where the exchange can be made legally.
Under exchange agreements with Broker Services, certain dealers, brokers and
investment advisers may exchange their clients' Fund shares, subject to the
terms of those agreements and Broker Services' 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 Broker Services' 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
23
<PAGE> 27
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 fill out 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 have the telephone exchange.
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.
3. 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 the 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 that you reinvest
in 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 THE PROCEEDS IN THIS
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.
24
<PAGE> 28
3. To reinvest, you must notify Investor Services in writing. Include 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 the Application from your registered representative or by calling
1-800-225-5291.
2. To be eligible, you must have at least $5,000 in your account.
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.
- -------------------------------------------------------------------------------
YOU CAN PAY ROUTINE BILLS FROM YOUR
ACCOUNT, OR MAKE PERIODIC DISBURSEMENTS OF
FUNDS FROM YOUR RETIREMENT ACCOUNT TO
COMPLY WITH IRS REGULATIONS.
- -------------------------------------------------------------------------------
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 an initial sales charge on your purchases of Class A shares and to
a CDSC on your redemption 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 drawn automatically each month on your
bank for investment in Fund shares, in an amount under the "Automatic
Investing" and "Bank Information" section of the Account Privileges
Application.
- -------------------------------------------------------------------------------
YOU CAN MAKE AUTOMATIC INVESTMENTS AND
SIMPLIFY YOUR INVESTING.
- -------------------------------------------------------------------------------
2. You can also authorize automatic investing through payroll deduction by
completing the "Direct Deposit Investing" section of the Account Privileges
Application.
3. You can terminate your Monthly Automatic Accumulation Program 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 payment of all participants in the group must be at
least $250.
25
<PAGE> 29
3. There is no additional charge for this program. There is no obligation to
make payments beyond the minimum, and you may terminate the program at any
time.
RETIREMENT PLANS
1. You may use the Fund to fund various types of qualified retirement plans,
including Individual Retirement Accounts, Keogh Plans (H.R. 10), Pension and
Profit-Sharing Plans (including 401(k) plans), Tax Sheltered Annuity
Retirement Plans (403(b) or TSA 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.
APPENDIX
MOODY'S describes its lower ratings for corporate bonds as follows.
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.
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 are well safeguarded during
both good and bad times over the future. Uncertainty of position characterizes
bonds in this class.
Bonds which are rated B generally lack characteristics of the 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.
Bonds which are rated CAA are of poor standing. Such issues may be in default or
there may be present elements of danger with respect to principal or interest.
Bonds which are rated CA represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked shortcomings.
Bonds which are rated C are the lowest rated class of bonds and issues so rated
can be regarded as having extremely poor prospects of ever attaining any real
investment standing.
S&P describes its lower ratings for corporate bonds as follows:
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
26
<PAGE> 30
a weakened capacity to pay interest and repay principal for debt in this
category than in higher rated categories.
Debt rated BB, B, CCC, OR C is regarded, on balance, as predominantly
speculative with respect to the issuer's capacity to pay interest and repay
principal in accordance with the terms of the obligations. 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.
27
<PAGE> 31
JOHN HANCOCK
JOHN HANCOCK NATIONAL
AVIATION &
NATIONAL AVIATION & TECHNOLOGY
FUND
TECHNOLOGY FUND
INVESTMENT ADVISER
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
SUB-ADVISER
American Fund Advisors, Inc.
1415 Kellum Place, Suite 205
Garden City, New York 11530
CLASS A AND CLASS B SHARES
PRINCIPAL DISTRIBUTOR PROSPECTUS
John Hancock Broker Distribution MAY 1, 1995
Services, Inc.
101 Huntington Avenue A MUTUAL FUND SEEKING LONG-TERM
Boston, Massachusetts 02199-7603 GROWTH OF CAPITAL THROUGH INVESTMENTS
IN SECURITIES OF COMPANIES IN THE
CUSTODIAN AVIATION AND RELATED INDUSTRIES AND
Investors Bank & Trust Company COMPANIES WHICH UTILIZE TECHNOLOGY
24 Federal Street EXTENSIVELY IN THEIR PRODUCT
Boston, Massachusetts 02110 DEVELOPMENT OR OPERATIONS. INCOME IS
A SECONDARY OBJECTIVE.
TRANSFER AGENT
John Hancock Investor Services
Corporation
P.O. Box 9116
Boston, Massachusetts 02205-9116
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
160 Federal Street
Boston, Massachusetts 02110
HOW TO OBTAIN INFORMATION
ABOUT THE FUND
For Service Information
For Telephone Exchange
call 1-800-225-5291
For Investment-by-Phone 101 HUNTINGTON AVENUE
For Telephone Redemption BOSTON, MASSACHUSETTS 02199-7603
TELEPHONE 1-800-225-5291
For TDD call 1-800-554-6713
JHD-8500P 5-95 (LOGO)Printed on Recycled Paper
<PAGE> 32
JOHN HANCOCK
NATIONAL AVIATION & TECHNOLOGY FUND
CLASS A AND CLASS B SHARES
STATEMENT OF ADDITIONAL INFORMATION
MAY 1, 1995
This Statement of Additional Information provides information about John
Hancock National Aviation & Technology Fund (the "Fund") in addition to the
information that is contained in the Fund's Class A and Class B Prospectus (the
"Prospectus") dated May 1, 1995.
The Fund is a series of John Hancock Technology Series, Inc. (the
"Company"). This Statement of Additional Information 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 02205-9116
1-(800)-225-5291
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Statement of
Additional
Information
Page
<S> <C>
ORGANIZATION OF THE FUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
INVESTMENT OBJECTIVES AND POLICIES . . . . . . . . . . . . . . . . . . . . . . . . 2
INVESTMENT RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
RATINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
THOSE RESPONSIBLE FOR MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . 14
INVESTMENT ADVISORY AND OTHER SERVICES . . . . . . . . . . . . . . . . . . . . . . 19
DISTRIBUTION CONTRACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
NET ASSET VALUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
INITIAL SALES CHARGE ON CLASS A SHARES . . . . . . . . . . . . . . . . . . . . . . 25
DEFERRED SALES CHARGE ON CLASS B SHARES . . . . . . . . . . . . . . . . . . . . . . 26
SPECIAL REDEMPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ADDITIONAL SERVICES AND PROGRAMS FOR CLASS A AND B SHARES . . . . . . . . . . . . . 27
TAX STATUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
DESCRIPTION OF THE FUND'S SHARES . . . . . . . . . . . . . . . . . . . . . . . . . 32
CALCULATION OF PERFORMANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
BROKERAGE ALLOCATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
TRANSFER AGENT SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
CUSTODY OF PORTFOLIO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
</TABLE>
<PAGE> 33
<TABLE>
<S> <C>
INDEPENDENT AUDITORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
</TABLE>
ORGANIZATION OF THE FUND
The Fund is a non-diversified series of John Hancock Technology Series,
Inc. (the "Company"), an open-end management investment company organized as a
corporation under the laws of Maryland on January 5, 1990. On May 1, 1990, the
Fund succeeded to the assets and liabilities of the National Aviation &
Technology Corporation. On December 6, 1991, the Company changed its name from
AFA Funds, Inc. Effective October 1, 1992, the Fund ceased doing business as
National Aviation & Technology Fund and commenced doing business under the name
John Hancock Freedom National Aviation & Technology Fund. As of January 1,
1995, the Fund changes its name to John Hancock National Aviation & Technology
Fund. The Fund is managed by John Hancock Advisers, Inc. (the "Adviser") and
American Fund Advisors, Inc. ("AFA" or the "Sub-Adviser").
INVESTMENT OBJECTIVE AND POLICIES
The Fund's investment objectives and policies are set forth in the
Fund's Prospectus dated May 1, 1995 which is incorporated herein by reference.
The following information augments the Prospectus.
The primary investment objective of the Fund is to provide long-term
growth of capital principally through investments in companies in the aviation
and related industries and in companies which utilize technology extensively in
their product development or operations. Income is a secondary consideration
of the Fund.
Forward Foreign Currency Transactions. The foreign currency
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 contracts involving
currencies of the different countries in which it will 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 contracts
will be limited to hedging either specific transactions or portfolio positions.
The Fund will not attempt to hedge all of its foreign portfolio positions. The
Fund will not engage in speculative forward currency transactions.
If the Fund enters into a forward contract to purchase currency, its
custodian bank will segregate cash or liquid high grade 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 assets in the
separate account declines, additional cash or liquid assets will be placed in
the account so that the value of the account will equal the amount of the
Fund's commitment with respect to such contracts.
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<PAGE> 34
Hedging against a decline in the value of a 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 should rise.
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.
Characteristics and Risks of Foreign Securities Markets. The securities
markets of many countries have in the past moved relatively independently of
one another, due to differing economic, financial, political and social
factors. When markets in fact move in different directions and offset each
other, there may be a corresponding reduction in risk for the Fund's portfolio
as a whole. This lack of correlation among the movements of the world's
securities markets may also affect unrealized gains the Fund has derived from
movements in any one market.
If the securities of markets moving in different directions are combined
into a single portfolio, such as that of the Fund, total portfolio volatility
is reduced. Since the Fund will invest in securities denominated in currencies
other than U.S. dollars, changes in foreign currency exchange rates will affect
the value of its portfolio securities. Currency exchange rates may not move in
the same direction as the securities markets in a particular country. As a
result, market gains may be offset by unfavorable exchange rate fluctuations.
Investments in foreign securities may involve risks and considerations
not present in domestic investments. Since foreign securities generally may be
denominated and pay interest or dividends in foreign currencies, the value of
the assets of the Fund as measured in U.S. dollars will be affected favorably
or unfavorably by changes in the relationship of the U.S. dollar and other
currency rates. The Fund may incur costs in connection with the conversion of
foreign currencies into U.S. dollars and may be adversely affected by
restrictions on the conversion or transfer of foreign currencies. In addition,
there may be less publicly available information about foreign companies than
U.S. companies. Foreign companies may not be subject to accounting, auditing,
and financial reporting standards, practices and requirements comparable to
those applicable to U.S. companies.
Foreign securities markets, while growing in volume, have for the most
part substantially less volume than U.S. securities markets and securities of
foreign companies are generally less liquid and at times their prices may be
more volatile than securities of comparable U.S. companies. Foreign stock
exchanges, brokers and listed companies are generally subject to less
government supervision and regulation than those in the U.S. The customary
settlement time for foreign securities may be longer than the five (5) day
customary settlement time for U.S. securities, or less frequent than in the
U.S., which could affect the liquidity of the Fund's investments. The Adviser
and the Sub-Adviser will monitor the settlement time for foreign securities and
take undue settlement delays into account in considering the desirability of
allocating investments among specific countries.
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<PAGE> 35
The Fund may invest in companies located in developing countries which,
compared to the U.S. and other developed countries, may have relatively
unstable governments, economies based on only a few industries and securities
markets which trade only a small number and volume of securities. Prices on
exchanges located in developing countries tend to be volatile and, in the past,
securities traded on those exchanges have offered a greater potential for gain
(and loss) than securities traded on exchanges in the U.S. and more developed
countries. In some countries, there is the possibility of expropriation or
confiscatory taxation, seizure or nationalization of foreign bank deposits or
other assets, establishment of exchange controls, the adoption of foreign
government restrictions or other adverse political, social or diplomatic
developments that could affect investments in these countries.
High Yield "High Risk" Fixed Income Securities. As discussed in the
Fund's Prospectus, the Fund may invest up to 10% of its net assets in fixed
income securities that, at the time of investment, are rated CC or higher by
Standard & Poor's Ratings Group ("Standard & Poor's") or Ca or higher by
Moody's Investors Service, Inc. ("Moody's") or their equivalent, and unrated
fixed income securities of comparable quality as determined by the Adviser.
Ratings are based largely on the historical financial condition of the issuer.
Consequently, the rating assigned to any particular security is not necessarily
a reflection of the issuer's current financial condition, which may be better
or worse than the rating would indicate.
The values of lower-rated securities and unrated securities of
comparable quality generally fluctuate more than those of high-rated
securities. There is a greater possibility that an adverse change in the
financial condition of an issuer of lower-rated securities or unrated
securities of comparable quality will affect the issuer's ability to make
payments of interest and principal. To the extent the Fund invests in these
securities, the achievement of the Fund's investment objectives is more
dependent on the Sub-Adviser's ability than it would be if the Fund were
investing in higher quality securities.
As noted in the Fund's Prospectus, the Fund may invest in pay-in-kind
(PIK) securities, which pay interest in either cash or additional securities,
at the issuer's option, for a specified period. The Fund may also invest in
zero coupon bonds, which have a determined interest rate, but payment of the
interest is deferred until maturity of the bonds. Both types of bonds may be
more speculative and subject to greater fluctuation in value than securities
which pay interest periodically and in cash, due to changes in interest rates.
Preferred Stock. As stated in the Prospectus, the Fund may purchase
preferred stock. Preferred stocks are equity securities, but possess certain
attributes of fixed income securities. Holders of preferred stocks normally
have the right to receive dividends at a fixed rate when and as declared by the
issuer's board of directors, but do not participate in other amounts available
for distribution by the issuing corporation. Dividends on preferred stock may
be cumulative, and all cumulative dividends usually must be paid prior to
dividend payments to common stockholders. Because of this preference,
preferred stocks generally entail less risk than common stocks. Upon
liquidation, preferred stocks are entitled to a specified liquidation
preference, which is generally the same as the par or stated value, and are
senior in right of payment to common stocks. Preferred stocks are equity
securities in that they do not represent a liability of the issuer and
therefore do not offer a great a degree of protection of capital or assurance
of continued income as investments in corporate debt securities. In addition,
preferred stocks are subordinated in right
4
<PAGE> 36
of payment to all debt obligations and creditors of the issuer, and convertible
preferred stocks may be subordinated to other preferred stock of the same
issuer. See "Convertible Securities" below for a description of certain
characteristics of convertible preferred stock.
Convertible Securities. As stated in the Fund's Prospectus. the Fund
may purchase convertible fixed income securities and preferred stock.
Convertible securities are securities that may be converted at either a stated
price or stated rate into underlying shares of common stock of the same issuer.
Convertible securities have general characteristics similar to both fixed
income and equity securities. Although to a lesser extent than with straight
debt securities, the market value of convertible securities tends to decline as
interest rates increase and, conversely, tends to increase as interest rates
decline. In addition, because of the conversion feature, the market value of
convertible securities tends to vary with fluctuations in the market value of
the underlying common stocks and therefore will also react to variations in the
general market for equity securities. A unique feature of convertible
securities is that as the market price of the underlying common stock declines,
convertible securities tend to trade increasingly on a yield basis, and
consequently may not experience market value declines to the same extent as the
underlying common stock. When the market price of the underlying common stock
increases, the prices of the convertible securities tend to rise as a
reflection of the value of the underlying common stock increases, the prices
of the convertible securities tend to rise as a reflection of the value of the
underlying common stock. While no securities investments are without risk,
investments in convertible securities generally entail less risk than
investments in common stock of the same issuer. However, the issuers of
convertible securities may default on their obligations.
Restricted Securities. In accordance with its investment policies, the
Fund may purchase securities the disposition of which is restricted under
federal securities laws. These investments are generally of a high-risk
nature, carrying with them the potential of commensurate, significantly higher
gains. When the Fund purchases restricted securities, it may not have the same
freedom to dispose of them at the time of its choosing that it would have in
the case of securities traded in the open market or offered in connection with
a public distribution. Such securities, if not registered, would probably be
sold for less than the market price of unrestricted securities of the same
class. Prior to sale, registration of such securities under the Securities Act
of 1933 may be required, and, if the issuer has not agreed to bear registration
expenses, the Fund may be required to pay such expenses. Where registration is
required, a considerable period may elapse between the time when the decision
is made to sell the securities and the time when the Fund may be permitted to
sell under an effective registration statement. If adverse market conditions
develop during such a period, the Fund may not be able to obtain as favorable a
price as that prevailing at the time the decision to sell was made. The value
of restricted securities will be determined in good faith by the Board of
Directors, taking into account the market value of comparable securities where
applicable, the right to registration under the Securities Act of 1933 at the
issuer's expense, and other applicable considerations.
Lending Portfolio Securities. The Fund also may lend portfolio
securities to brokers, dealers or other financial institutions who must put up
cash or securities issued or guaranteed by the U.S. Government or its agencies
or instrumentalities as collateral in an amount equal to the market value of
the loaned securities. Cash collateral will be invested only in readily
marketable short-term interest-bearing securities issued or guaranteed by the
U.S. Government or its agencies or instrumentalities so that the Fund can
promptly return it to the borrower when due. If the
5
<PAGE> 37
collateral drops below 100% of the value of the loaned securities and the
required additional collateral is not immediately deposited by the borrower,
the loan will immediately become due and the Fund, among other remedies, will
be entitled to replace the securities by purchase. There can be no assurance
that the borrower will deposit any required additional collateral and thus the
Fund could incur a loss on the loaned securities. The Fund will exercise its
right to replace the securities within such reasonable time as it deems
appropriate under the circumstances. The Fund may pay reasonable finder's,
administrative and custodian fees in connection with security loans and is
entitled to receive an amount equal to all interest or dividends paid on the
securities loaned. It also has the right to terminate any loan upon five days'
notice, and intends to do so if necessary to vote a proxy on any material
matter affecting the portfolio security. The aggregate amount of all such
loans at any one time outstanding shall not exceed 25% of the Fund's total
assets.
Repurchase Agreements. A repurchase agreement is a contract under which
the Fund would acquire a security for a relatively short period (usually not
more than 7 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 "primary dealers" in U.S.
Government securities. The Advisers will continuously monitor the
creditworthiness of the parties with whom the Fund enters into repurchase
agreements.
The Fund may enter into repurchase agreements with respect to its
portfolio securities. 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 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.
INVESTMENT RESTRICTIONS
Fundamental Investment Restrictions
The following investment restrictions (as well as the Fund's investment
objective) will not be changed without approval of the holders of a majority of
outstanding voting securities of the Fund which, as used in the Prospectus and
this Statement of Additional Information, means approval of the lesser of (1)
the holders of 67% or more of the shares of the Fund represented at a meeting
if the holders of more than 50% of outstanding shares are present in person or
by proxy or (2) the holders of more than 50% of the outstanding shares. The
Fund observes the following fundamental restrictions: The Fund may not:
(1) Invest 25% or more of its total assets in the securities of
issuers in any one industry, except that under normal market
conditions, (i) at least 80% of the Fund's total assets
(exclusive of cash, U.S. Government securities and short-term
commercial paper) will be invested in securities of companies in
the aviation and related
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<PAGE> 38
industries and companies which utilize technology extensively in
their product development or operations, and (ii) at least 25%
of the Fund's total assets will be concentrated in the aviation
industry and in industries connected with, serving and/or
supplying the aviation industry.
(2) Change its name.
(3) Issue senior securities, except as permitted by paragraphs (4)
and (8) below. For purposes of this restriction, the issuance
of shares of common stock in multiple classes, the purchase or
sale of options, futures contracts and options on futures
contracts, forward commitments, and repurchase agreements
entered into in accordance with the Fund's investment policies,
and the pledge, mortgage or hypothecation of the Fund's assets
are not deemed to be senior securities.
(4) Borrow money, except from banks as a temporary measure for such
purposes as financing specific investments, avoiding premature
or disorderly liquidation of investments, raising cash for
immediate investment pending the realization of the proceeds of
sale of securities in the process of or scheduled for sale, or
to maintain adequate cash balances pending changes in
investment, or for other general corporate purposes, but not for
leveraging. Under the Investment Company Act of 1940, as
amended (the "1940 Act"), asset coverage of 300% of any
borrowings must be maintained. Although not as a matter of
fundamental policy, the Fund has agreed with a state securities
administrator that, as long as the Fund's shares are being
offered in his state (or until such state has eliminated or
modified its regulations), the Fund will borrow only as a
temporary measure for extraordinary or emergency purposes, and,
not as a matter of fundamental policy, the Fund currently
intends that such borrowings not exceed 5% of the value of net
assets.
(5) Act as an underwriter of securities (except to the extent that
in selling restricted securities it may be deemed to be an
underwriter for purposes of the 1933 Act), if the aggregate
amount of its underwriting commitments at any one time would
exceed 25% of the value of its total assets.
(6) Purchase real estate or any interest therein (except real estate
used exclusively in the current operation of the Fund's
affairs), but this restriction does not prevent the Fund from
investing in debt securities secured by real estate or interests
therein.
(7) Purchase or sell commodities or commodity contracts, except that
the Fund may purchase and sell options on securities, securities
indices, currency and other financial instruments, futures
contracts on securities, securities indices, currency and other
financial instruments and options on such futures contracts,
forward commitments, interest rate swaps, caps and floors,
securities index put or call warrants and repurchase agreements
entered into in accordance with the Fund's investment policies.
(8) Make loans to or guarantee the debts of other persons, other
than (a) loans to or guarantees of the debts of (i)
subsidiaries, (ii) corporations or other entities in which
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<PAGE> 39
the Fund has a substantial equity interest, and (iii)
corporations and other entities in the aviation industry, in
industries connected with, serving and/or supplying the aviation
industry, or in other industries or businesses; (b) loans as a
part of or incidental to other transactions in which the Fund
may engage; and (c) portfolio security loans secured
continuously by cash or securities issued or guaranteed by the
U.S. Government or its agencies or instrumentalities as
collateral in amounts equal at least to the market value of the
securities loaned, determined daily; provided that the aggregate
of all such loans at any time outstanding shall not exceed 25%
of the value of the Fund's total assets. The Fund does not, for
the purpose of its loan restrictions, consider the purchase of a
portion of an issue of publicly distributed bonds, debentures or
other debt securities, whether or not the purchase is made upon
the original issuance of such securities, to be the making of a
loan. The Fund's transactions in repurchase agreements are not
subject to any of the limitations described in the preceding
sentences. Although not as a matter of fundamental policy, the
Fund has agreed with certain state securities administrators
that, as long as the Fund's shares are being offered in their
respective states (or until such states have eliminated or
modified their regulations), the Fund will not make the kind of
loans described in clauses (a) and (b) above.
Non-Fundamental Investment Restrictions
The following restrictions are designated as non-fundamental and may be
changed by the Board of Directors without shareholder approval. The Fund may
not:
(1) Purchase securities issued by any other open-end investment
company.
(2) Purchase securities on margin, although the Fund may obtain such
short-term credits as may be necessary for the clearance of
securities purchases.
(3) Make short sales of securities or maintain a short position
unless, at all times when a short position is open, the Fund
owns, or has the right to obtain at no added cost, securities
identical to those sold. The Fund did not make any short sales
or maintain a short position in the past year and has no current
intention of doing so in the future.
(4) Purchase or sell puts, calls, straddles, spreads or any
combination thereof, except that (i) the Fund may sell call
options issued by The Options Clearing Corporation against its
portfolio securities where such call options remain fully
covered throughout the period when they may be exercised and
such underlying securities have an aggregate value (determined
as of the date the calls are sold) not exceeding 25% of the net
assets of the Fund and are listed on a national securities
exchange, and (ii) the Fund may purchase call options in related
"closing purchase transactions," where not more than 5% of the
total assets of the Fund are invested in such options.
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<PAGE> 40
(5) Purchase securities of an issuer which, together with any
predecessor, has been in operation for less than three years
(except investments in obligations issued or guaranteed by the
U.S. Government or its agencies) and equity securities which are
not readily marketable if, as a result, more than 5% of the
value of the Fund's total assets would then be invested in such
securities.
(6) Purchase any security, including any repurchase agreement
maturing in more than seven days, which is not readily
marketable, if more than 10% of the net assets of the Fund,
taken at market value, would be invested in such securities.
(7) Purchase or sell interests in oil, gas or other mineral
exploration or development programs (although it may invest in
companies which own or invest in such interests).
(8) Purchase securities issued by any closed-end investment company,
unless such purchase is made in the open market, with a fee or
commission no greater than the customary broker's commission,
and would not result in more than 5% of the Fund's total assets
being invested in closed-end funds.
(9) Purchase or retain the securities of an issuer any of whose
officers, directors, trustees or security holders (a) is an
officer or director of the Fund or a member, officer, director
or trustee of its investment adviser and (b) owns beneficially
more than 1/2 of 1% of the shares or securities or both (taken
at market value) of such issuer unless all such individuals
owning more than 1/2 of 1% of such shares or securities together
own beneficially less than 5% of such shares or securities or
both.
(10) Invest more than 10% of the value of its total assets in the
securities of any one issuer (except securities of the U.S.
Government or its agencies or instrumentalities) or purchase
more than 10% of the voting securities of any issuer.
(11) In addition to the restrictions set forth in Paragraphs (5) and
(6) above, invest in any securities which would cause more than
10% of its net assets at the time of such investment to be
invested in restricted securities, securities that are not
readily marketable, securities for which market quotations are
not readily available, securities of foreign issuers which are
not listed on a recognized domestic or foreign securities
exchange, and any other assets for which a bona fide market does
not exist at the time of purchase or subsequent valuation.
(12) Invest more than 5% of the value of its total assets in
warrants, nor more than 2% in warrants which are not listed on
the New York or American Stock Exchanges. In applying this
limitation, warrants will be valued at the lesser of cost or
market value unless acquired by the Fund in units with, or
attached to, debt securities, in which case no value will be
assigned.
(13) Participate on a joint or joint and several basis in any
securities trading account.
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<PAGE> 41
(14) 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.
Further, the Company has agreed with a state securities administrator
that the Fund will not purchase or sell interests in real estate limited
partnerships, oil, gas or other mineral leases.
RATINGS
Below are descriptions of the ratings of Moody's and Standard & Poor's
that may apply to the Fund's investments in fixed income securities.
Moody's describes its ratings for bonds as follows:
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 likely to impair the fundamentally strong position of such issues.
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 fluctuation
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.
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 sometime in the future.
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.
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.
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<PAGE> 42
Bonds which are rated 'B' generally lack characteristics of the
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.
Bonds which are rated 'Caa' are of poor standing. Such issues may be
in default or there may be present elements of danger with respect to principal
or interest.
Bonds which are rated 'Ca' represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
shortcomings.
Standard & Poor's describes its bond ratings as follows:
AAA. This is the highest rating assigned by Standard & Poor's to a
debt obligation and indicates an extremely strong capacity to pay principal and
interest.
AA. Bonds rated AA also qualify as high-quality debt obligations.
Capacity to pay principal and interest is very strong, and in the majority of
instances they differ from AAA issues only in small degree.
A. Bonds rated A have a strong capacity to pay principal and
interest, although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions.
BBB. Bonds rated BBB are regarded as having an adequate capacity to
pay principal and interest. Whereas they normally exhibit protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds
in this category than for bonds in the A category.
BB. Debt rated BB has less near-term vulnerability to default than
other speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which could lead
to inadequate capacity to meet timely interest and principal payments. The BB
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BBB- rating.
B. Debt rated B has a greater vulnerability to default but currently
has the capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The B rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
BB or BB- rating.
CCC. Debt rated 'CCC' has a currently identifiable vulnerability to
default, and is dependent upon favorable business, financial and economic
conditions to meet timely payment of interest and repayment of principal. In
the event of adverse business, financial, or economic conditions, it is not
likely to have the capacity to pay interest and repay principal. The 'CCC'
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied 'CCC' rating.
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CC. The rating 'CC' is typically applied to debt subordinated to
senior debt that is assigned an actual or implied 'CCC' rating.
Diversification vs. Non-Diversification of Assets
The 1940 Act classifies investment companies as "diversified" or
"non-diversified." The Fund is registered under the 1940 Act as "non-
diversified," but the Company's registration statement expressly reserves to
the Fund "freedom of action to change from a non-diversified to a diversified
company." The distinction between the two classifications does not relate to
whether investments are concentrated in particular industries, but solely to
the magnitude of the investments in particular issuers. A Fund is
"diversified" if at least 75% of the value of its total assets are invested in
a combination of cash, cash equivalents, U.S. Government securities, securities
of other investment companies, and other securities which, as to any particular
issuer, represent neither (1) in value, more than 5% of the total assets of the
Fund nor (2) more than 10% of the outstanding voting securities of the
particular issuer.
Consistent with a position of the Securities and Exchange Commission, a
company may meet the test for a diversified company for up to three years and
still revert to non-diversified status without shareholder or Securities and
Exchange Commission approval. Although the Fund has from time to time been
"diversified" within the meaning of the 1940 Act and may at any time become
"diversified," the Fund was "non- diversified" on December 31, 1993.
THOSE RESPONSIBLE FOR MANAGEMENT
The business of the Fund is managed by the Board of Directors of the
Company which elects officers who are responsible for the day-to-day
operations of the Fund and who execute policies formulated by the Board of
Directors. Several of the officers and Directors of the Company are also
officers or directors of the Adviser or Sub-Adviser, or officers or directors
of the Fund's principal distributor, John Hancock Funds, Inc. ("John Hancock
Funds").
The following table sets forth the principal occupation or employment of
the Directors and principal officers of the Company during the past five years.
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<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE COMPANY DURING THE PAST FIVE YEARS
---------------- ---------------- --------------------------
<S> <C> <C>
Edward J. Boudreau, Jr.* Chairman (1,2) Chairman and Chief Executive Officer, the
101 Huntington Avenue Adviser and The Berkeley Financial Group
Boston, MA 02199 ("Berkeley Group"); Chairman, NM Capital
Management, Inc. ("NM Capital"); John Hancock
Advisers International Limited; ("Advisers
International"); John Hancock Funds, Inc.,
("John Hancock Funds"), John Hancock Investor
Services Corporation ("Investor Services") and
Sovereign Asset Management Corporation
("SAMCorp"); (herein after the Adviser, the
Berkeley Group, NM Capital, Advisers
International, John Hancock Funds, Investor
Services and SAMCorp collectively referred to as
the "Affiliated Companies"); Chairman, First
Signature Bank & Trust; Director, John Hancock
Freedom Securities Corp., John Hancock Capital
Corp., New England/Canada Business Council;
Member, Investment Company Institute Board of
Governors; Director, Asia Strategic Growth Fund,
Inc.; Trustee, Museum of Science; President, the
Adviser (until July 1992); Chairman, John
Hancock Distributors, Inc. ("Distributors")
(until April 1994).
Thomas W.L. Cameron Director Chairman and Director, Sovereign Advisers, Inc.;
Interstate/Johnson Lane Senior Vice President, Interstate/Johnson Lane
1892 Andell Bluff Blvd. Corp. (securities dealer).
Johns Island, SC 29455
Charles F. Fretz Director (3) Consultant, self employed; Vice President and
RD #5, Box 300B Director, Towers, Perrin, Forster & Crosby, Inc.
Clothier Springs Road (international management consultants) (until
Malvern, PA 19355 1985).
</TABLE>
___________________
* An "interested person" of the Company as such term is defined in the
Investment Company Act of 1940, as amended ("The Investment Company
Act").
(1) Member of the Executive Committee. Under the Company's charter, the
Executive Committee may generally exercise most of the powers of the
Board of Directors.
(2) A member of the Investment Committee of the Adviser.
(3) Member of the Audit Committee and the Committee on Administration.
13
<PAGE> 45
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE COMPANY DURING THE PAST FIVE YEARS
---------------- ---------------- --------------------------
<S> <C> <C>
Jack P. Gould Director (1,3) Consultant and investor; Vice President,
25 Pecksland Road Secretary, Treasurer and Director of CAD Output
Greenwich, CT 06831 Inc. (laser photoplotting) (until 1993);
Director of Webb Distribution, Inc.
(distributor of electronic components) (until
1993).
Charles L. Ladner Director (3) Director, Energy North, Inc. (public utility
UGI Corporation holding company) (until 1992); Senior Vice
P.O. Box 858 President, Finance of UGI Corp. (gas
Valley Forge, PA 19482 distribution utility).
Patricia P. McCarter Director (3) Director and Secretary of the McCarter Corp.
Swedesford Road (machine manufacturer).
RD #3, Box 121
Malvern, PA 19355
Steven R. Pruchansky Director (1,3) Director and Treasurer, Mast Holdings, Inc.;
6920 Daniel Road 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 Director (3) Retired. Lieutenant General, United States
Rt. 1, Box 249 E Marine Corps; Deputy Chief of Staff for
Linden, VA 22642 Manpower and Reserve Affairs, Headquarters
Marine Corps; Commanding General, III Marine
Expeditionary Force/3rd Marine Division
(retired 1991).
</TABLE>
___________________
* An "interested person" of the Company as such term is defined in the
Investment Company Act of 1940, as amended ("The Investment Company
Act").
(1) Member of the Executive Committee. Under the Company's charter, the
Executive Committee may generally exercise most of the powers of the
Board of Directors.
(2) A member of the Investment Committee of the Adviser.
(3) Member of the Audit Committee and the Committee on Administration.
14
<PAGE> 46
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE COMPANY DURING THE PAST FIVE YEARS
---------------- ---------------- --------------------------
<S> <C> <C>
John P. Toolan Director (3) Director, The Muni Bond Funds, National
13 Chadwell Place Liquid Reserves, Inc., The Tax Free Money
Morristown, NJ 07960 Fund, Inc. and Vantage Money Market Funds
(mutual funds), and The Inefficient-Market
Fund, Inc. (closed-end investment company;
Chairman, Smith Barney Trust Company (retired
December, 1991); Director, Smith Barney,
Inc., Mutual Management Company and Smith
Barney Advisers, Inc. (investment advisers)
(until December 1991).
James F. Carlin Director Chairman and Chief Executive Officer, Carlin
233 West Central Street Consolidated, Inc. (insurance); Director,
Natick, MA 01760 Arabella Mutual Insurance Company; Receiver,
City of Chelsea, Massachusetts (until August
1992).
Harold R. Hiser, Jr. Director Executive Vice President, Schering-Plough
Schering-Plough Corporation Corporation (pharmaceuticals); Director,
One Giralda Farms ReCapital Corporation (reinsurance).
Madison, NJ 07940-1000
Robert G. Freedman* Vice Chairman and Chief Vice Chairman and Chief Investment Officer,
101 Huntington Avenue Investment Officer (2) the Adviser; President, the Adviser (until
Boston, MA 02199 December 1994).
Anne C. Hodsdon* Executive Vice President President and Chief Operations Officer, the
101 Huntington Avenue (2) Adviser; Executive Vice President, the
Boston, MA 02199 Adviser (until December 1994).
Thomas H. Drohan* Senior Vice President and Senior Vice President and Secretary of the
101 Huntington Avenue Secretary Adviser.
Boston, MA 02199
</TABLE>
___________________
* An "interested person" of the Company as such term is defined in the
1940 Act.
(1) Member of the Executive Committee. Under the Company's charter, the
Executive Committee may generally exercise most of the powers of the
Board of Directors.
(2) A member of the Investment Committee of the Adviser.
(3) Member of the Audit Committee and the Committee on Administration.
15
<PAGE> 47
<TABLE>
<CAPTION>
POSITIONS HELD WITH THE PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS COMPANY DURING THE PAST FIVE YEARS
---------------- ------- --------------------------
<S> <C> <C>
James K. Ho* Senior Vice Senior Vice President, the Adviser.
101 Huntington Avenue President (2)
Boston, MA 02199
James B. Little* Senior Vice President Senior Vice President, the Adviser.
101 Huntington Avenue and Chief Financial
Boston, MA 02199 Officer
Barry J. Gordon President President and Chairman of the Board of AFA,
1415 Kellum Place Director and President of the company and its
Suite 205 predecessors (until 1993); Chairman of the
Garden City, NY 11530 Board and President of National Value Fund,
Inc. ("NVF")(until 1992); Chairman of the
Board and Chief Executive Office (since 1990)
of Baseball Entrepreneurs, Inc. and (from 1991
until 1992) of Hamilton Baseball Associates,
Inc. (baseball club ownership); Co-Chairman of
the Board and Chief Executive Officer of Minor
League Sports Enterprises, Inc. (baseball club
ownership since 1992); vice Chairman of the
Board and Director of Kineret Acquisition
Corporation (food products) since 1993
Michael P. DiCarlo* Senior Vice President Senior Vice President, the Adviser
101 Huntington Avenue
Boston, MA 02199
</TABLE>
___________________
* An "interested person" of the Company as such term is defined in the
1940 Act.
(1) Member of the Executive Committee. Under the Company's charter, the
Executive Committee may generally exercise most of the powers of the
Board of Directors.
(2) A member of the Investment Committee of the Adviser.
(3) Member of the Audit Committee and the Committee on Administration.
16
<PAGE> 48
<TABLE>
<S> <C> <C>
Marc H. Klee* Senior Vice President Director and Senior Vice President of AFA;
1415 Kellum Place Senior Vice President of the Company and its
Suite 205 predecessors and NVF (until 1992); Director of
Garden City, NY 11530 Radyne Corp. (telecommunications equipment)
since 1990; Senior Vice President and
Treasurer (since 1990) of Baseball
Entrepreneurs, Inc. and (since 1991) of
Hamilton Baseball Associates, Inc. (baseball
club ownership); Vice President, Secretary and
Treasurer of Minor League Sports Enterprises,
Inc. (baseball club ownership) (since 1992).
Susan S. Newton* Vice President, Vice President and Assistant Secretary, the
101 Huntington Avenue Assistant Secretary and Adviser.
Boston, MA 02199 Compliance Officer
John A. Morin* Vice President Vice President, the Adviser.
101 Huntington Avenue
Boston, MA 02199
James J. Stokowski* Vice President and Vice President, the Adviser.
101 Huntington Avenue Treasurer
Boston, MA 02199
</TABLE>
________________
* An "interested person" of the Company as such term is defined in the
Investment Company Act of 1940, as amended ("The Investment Company
Act").
(1) Member of the Executive Committee. Under the Company's charter, the
Executive Committee may generally exercise most of the powers of the
Board of Directors.
(2) A member of the Investment Committee of the Adviser.
(3) Member of the Audit Committee and the Committee on Administration.
17
<PAGE> 49
The following table provides information regarding the compensation paid
b the Fund and the other investment companies in the John Hancock Fund Complex
to the Independent Directors for their services for each Fund's 1994 fiscal
year. The two non-Independent Directors, Messrs. Boudreau and Cameron, and
each of the officers of the Funds are interested persons of the Adviser, are
compensated by the Adviser and receive no compensation from the Fund for their
services.
<TABLE>
<CAPTION>
TOTAL COMPENSATION
AGGREGATE PENSION OR FROM THE FUND AND
COMPENSATION RETIREMENT BENEFITS ESTIMATED ANNUAL JOHN HANCOCK FUND
FROM ACCRUED AS PART OF BENEFITS UPON COMPLEX TO
INDEPENDENT DIRECTORS THE FUND THE FUND'S EXPENSES RETIREMENT DIRECTORS(1)(2)
- --------------------- ------------ ------------------- ---------------- ----------------
<S> <C> <C>
Charles F. Fretz $ 1,733 $ 60,350
Jack P. Gould 4,800 9,600
Charles L. Ladner 1,734 60,450
Patricia P. McCarter 1,734 60,200
Steven R. Pruchansky 1,794 62,450
Norman H. Smith 1,794 62,450
John P. Toolan 1,734 60,450
James F. Carlin 1,734 60,450
Harold R. Hiser, Jr. 1,640 56,000
Alonzo Horsey (deceased) 1,643 56,200
------- --------
$20,340 $548,600
</TABLE>
(1) The total compensation paid by the John Hancock Fund Complex to the
Independent Directors is as of the calendar year ended December 31, 1994.
(2) All Directors except Messers. Gould, Fretz and Hiser are Directors of 39
funds in the John Hancock Fund Complex. Messers. Fretz and Hiser are
Directors of 21 funds and Mr. Gould is a Director of two funds.
The nominees of the Funds may at times be the record holders of in
excess of 5% of shares of any one or more Funds by virtue of holding shares in
"street name." As of April 11, 1995 the officers and trustees of the Trusts as
a group owned less than 1% of the outstanding shares of each class of each of
the Funds.
As of April 11, 1995 the following shareholders beneficially owned 5% of
or more of the outstanding shares of the Funds listed below:
18
<PAGE> 50
<TABLE>
<CAPTION>
PERCENTAGE OF TOTAL
NUMBER OF SHARES OF OUTSTANDING SHARES OF
NAME AND ADDRESS OF SHAREHOLDER FUND AND CLASS OF SHARES BENEFICIAL INTEREST OWNED THE CLASS OF THE FUND
------------------------------- ------------------------ ------------------------- ---------------------
<S> <C> <C> <C>
REGISTRATION
NFSC FEBO #OC8-416983 Class B shares 8,645 15.59%
NFSC/FMTC IRA ROLLOVER
FBO Wlater S. Gilmore
140 Rounds Ave.
Riverside, RI 02915-1738
Tresco Construction Corp. Class B shares 6,695 12.07%
Domingo Cabrera #118
Urbanizacion Santa Rita
Rio Piedras, PR 00920
Smith Barney Inc. Class B shares 5,484 9.89%
00130113130
388 Greenwich Street
New York, NY 10013-2375
Patrick F. Fitzgerald Class B shares 3,445 6.21%
3660 East Cedar Lake Dr.
Greenbush, MI 48738-9702
NFSC FEBO #OC8-439428 Class B shares 3,259 5.88%
James P. Apostolou
Jean M. Apostoulou
Education
328 Brookline Dr.
Warwick, RI 02886-9511
</TABLE>
INVESTMENT ADVISORY AND OTHER SERVICES
As described in the Prospectus, the Fund receives its investment advice
from the Adviser and the Sub-Adviser. Investors should refer to the Prospectus
for a description of certain information concerning the investment management
contract.
Each of the Directors and principal officers affiliated with the Company
who is also an affiliated person of the Adviser or Sub-Adviser is named above,
together with the capacity in which such person is affiliated with the Company,
the Adviser or Sub-Adviser.
As described in the Fund's Prospectus under the caption "Organization
and Management of the Fund," the Company on behalf of the Fund has entered into
an investment management contract with the Adviser dated December 6, 1991 and
amended as of January 1, 1994, under which the Adviser in conjunction with the
Sub-Adviser provides the Fund with a continuous investment program, consistent
with the Fund's stated investment objectives and policies. The Adviser is
responsible for the day to day management of the Fund's portfolio assets.
19
<PAGE> 51
The Adviser has entered into a sub-advisory contract with the
Sub-Adviser, dated December 6, 1991 under which the Sub-Adviser, subject to the
review of the Board of Directors and the overall supervision of the Adviser, is
responsible for providing the Fund with investment advice.
Securities held by the Fund may also be held by other funds or
investment advisory clients for which the Adviser, the Sub-Adviser or their
respective 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 the
Sub-Adviser for the Fund or for other funds or clients for which the Adviser or
Sub-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, the Sub-Adviser or their respective affiliates may increase the demand
for securities being purchased or the supply of securities being sold, there
may be an adverse effect on price.
No person other than the Adviser and Sub-Adviser and their directors and
employees regularly furnish advice to the Fund with respect to the desirability
of the Fund's investing in, purchasing or selling securities. The Adviser and
Sub-Adviser may from time to time receive statistical or other similar factual
information, and information regarding general economic factors and trends,
from the John Hancock Mutual Life Insurance Company (the "Life Insurance
Company") and its affiliates.
Under the terms of the investment management contract with the Company,
the Adviser provides the Fund with office space, equipment, and the necessary
executive, clerical and secretarial personnel for the administration of the
affairs of the Fund. The Adviser pays the compensation and expenses of
officers and employees of the Fund and directors of the Company affiliated with
the Adviser, the office expenses of the Company, including those of the
Company's Treasurer's and Secretary's offices, and other expenses incurred by
the Adviser in connection with the performance of its duties.
All expenses which are not specifically paid by the Adviser and which
are incurred in the operation of the Fund (including fees of Directors of the
Company who are not "interested persons," as such term is defined in the
Investment Company Act but excluding certain distribution-related activities
required to be paid by the Adviser or John Hancock Funds) and the continuous
public offering of the shares of the Fund are borne by the Fund. Subject to
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 of Class A and Class B shares will be borne
exclusively by such class of shares.
As discussed in the Prospectus and as provided by the investment
management contract, the Fund pays the Adviser a fee computed daily and payable
monthly, at an annual rate of 1% of the value of the net assets of the Fund up
to $100 million, and 3/4 of 1% of the value of the net assets over $100
million, as compensation for the services rendered by the Adviser. Effective
January 1, 1995, the Adviser began waiving a portion of the management fee
amounting to 0.15% of the
20
<PAGE> 52
average daily net asset value of the first $100,000,000 of the Fund. In
addition to the management fee, the Adviser receives an annual administration
fee of $100,000. The annual rate of compensation is higher than the rate paid
by most registered investment companies, but is believed to be comparable to
the fees paid by funds with comparable objectives. The Adviser, not the Fund,
pays the Sub-Adviser a monthly fee as described in the Prospectus. For the
years ended December 31, 1994, 1993 and 1992, the Adviser received management
fees of $690,068, $780,606 and $694,265 respectively, and an administration
fee of $100,000 from the Fund for each year. Subsequent to becoming the
Fund's investment adviser on December 6, 1991, the Adviser received management
and administration fees for 1991 of $48,147 and $6,849, respectively. AFA,
the Fund's investment adviser until December 6, 1991, received management fees
totaling $660,351 for 1991 and administration services in the amount of
$106,220. Management fees paid to AFA were calculated at the same rates, and
in the same manner, as they are currently calculated under the Adviser's
investment management contract.
In the event normal operating expenses of the Fund, exclusive of certain
expenses prescribed by state law, for any fiscal year are in excess of any
limitation imposed by a state where the Fund's shares are registered for sale,
the fee payable to the Adviser with respect to such Fund will be reduced to the
extent required by such law and the Adviser will make any additional
arrangements that the Adviser is required by law to make. 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 of such
assets and 1.5% of the remaining average daily net asset value.
Pursuant to the investment management contract and sub-advisory
contract, the Adviser and Sub-Adviser are not liable for any error of judgment
or mistake of law or for any loss suffered by the Fund in connection with the
matters to which their respective contract relates, except a loss resulting
from willful misfeasance, bad faith or gross negligence on the part of the
Adviser or Sub-Adviser in the performance of their duties or from reckless
disregard of its obligations and duties under the investment management
contract.
The Adviser, located at 101 Huntington Avenue, Boston, Massachusetts
02199-7603, was organized in 1968 and currently has more than $13 billion in
assets under management in its capacity as investment adviser to the Fund and
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 an affiliate of the John Hancock Mutual Life Insurance Company (the
"Life Insurance Co."), one of the most recognized and respected financial
institutions in the nation. With total assets under management of $80 billion,
the Life Insurance Company is one of the 10 largest life insurance companies in
the United States, and carries Standard & Poor's and A.M. Best's highest
ratings. Founded in 1862, John Hancock has been serving clients for over 130
years.
The Sub-Adviser, AFA, 1415 Kellum Place, Suite 205, Garden City, New
York 11530, was incorporated under the laws of New York in 1978. The
Sub-Adviser, subject to the supervision of the Adviser, manages the Fund's
investments. AFA also provides investment advisory and management services to
individual and institutional clients.
21
<PAGE> 53
Pursuant to the sub-advisory contract, AFA provides day-to-day portfolio
management of the Fund. AFA furnishes the Adviser and the Company with advice
and recommendations, consistent with the investment policies, objectives and
restrictions of the Fund. AFA pays its own costs of maintaining staff and
personnel necessary for it to perform its obligations under the sub-advisory
contract, expenses of its office rent, telephone, telecommunications and other
facilities required by it to perform services and any other expenses, including
legal, audit and professional fees and expenses, incurred by it in connection
with the performance of its duties under the sub-advisory contract.
Each of the investment management and sub-advisory contracts has an
initial two-year term commencing upon the close of business on December 6,
1991, and thereafter continues in effect from year to year if approved annually
by a vote of a majority of the Directors who are not interested persons of one
of the parties to the contract ("Independent Directors"), cast in person at a
meeting called for the purpose of voting on such approval, and by either the
Board of Directors or the holders of a "majority" of the Fund's outstanding
voting securities as defined in the 1940 Act. Each of the contracts
automatically terminates upon assignment. Each contract may be terminated
without penalty on 60 days' notice at the option of either party to the
respective contract or by vote of a majority of the outstanding voting
securities of the Fund. The sub-advisory contract will terminate upon
termination of the Adviser's investment management contract.
DISTRIBUTION CONTRACT
The Fund has a distribution contract with John Hancock Funds. Under the
contract, John Hancock Funds is obligated to use its best efforts to sell
shares of the Fund. Shares of the Fund are also sold by selected
broker-dealers (the "Selling Brokers") which have entered into selling agency
agreements with John Hancock Funds. John Hancock Funds accepts orders for the
purchase of the shares of the Fund which are continually offered at net asset
value next determined plus the applicable sales charge. In connection with the
sale of Class A and Class B shares, John Hancock Funds and Selling Brokers
receive compensation from a sales charge imposed, in the case of Class A
shares, at the time of sale or, in the case of Class B shares, on a deferred
basis. The sales charges are discussed further in the Fund's Class A and Class
B Prospectus.
To compensate John Hancock Funds for the services which it provides as
distributor of shares of the Fund, effective January 1, 1994, the Class A
shareholders of the Fund and the Board of Directors adopted a Distribution Plan
with respect to the Class A shares (the "Class A Plan"). For the same purpose,
effective January 1, 1994, the Board of Directors adopted a Distribution Plan
with respect to the Class B shares (individually, the "Class B Plan" and
together with the Class A Plan, the "Plans"). Each Plan was adopted pursuant
to Rule 12b-1 under the Investment Company Act. Under the Class A and Class B
Plans, the Fund will pay distribution and service fees at an aggregate annual
rate of 0.30% and 1.00% respectively, of the Fund's average daily net assets
attributable to the affected class, provided that the amount of the service fee
will not exceed 0.25% of such assets attributable to each class of shares. The
distribution fees reimburse John Hancock Funds for its distribution costs
incurred in the promotion of sales of shares of the Fund, and the service fees
compensate Selling Brokers for providing personal and account
22
<PAGE> 54
maintenance services to shareholders. In the event that John Hancock Funds is
not fully reimbursed for expenses incurred by it under the Class B Plan in any
fiscal year, John Hancock Funds may carry these expenses forward, provided
however, that the Trustees may terminate the Class B Plan and thus the Fund's
obligation to make further payments at any time. Accordingly, the Fund does
not treat unreimbursed expenses relating to the Class B shares as a liability
of the Fund. The Class A Plan was approved by a majority of the voting
securities of the Fund and both Plans with all amendments were approved by a
majority of the Directors, including a majority of the Directors who are not
interested persons of the Fund and who have no direct or indirect financial
interest in the operation of the Plans (the "Independent Directors"), by votes
cast in person at meetings called for the purpose of voting on such Plans.
Pursuant to the Plans, at least quarterly, John Hancock Funds provides
the Fund with a written report of the amounts expended under the Plans and the
purpose for which such expenditures were made. The Directors review such
reports on a quarterly basis. During the fiscal year ended December 31, 1994
the Funds paid Investor Services the following amounts of expenses with respect
to the Class A shares and Class B shares of each of the Funds:
<TABLE>
<CAPTION>
Printing and
Mailing of Compensation Interest,
Prospectuses to Expenses of Carrying or
to New Selling John Hancock Other Finance
Advertising Shareholders Brokers Funds Charges
----------- ------------ -------- ----- -------
National Aviation and
---------------------
Technology Fund
---------------
<S> <C> <C> <C> <C> <C>
Class A Shares $7,110 $6,995 $25,920 $15,980 $0
Class B Shares $0 $147 $681 $235 $16
</TABLE>
Each of the Plans provides that it will continue in effect only so long
as its continuance is approved at least annually by a majority of both the
Directors and the Independent Directors. Each of the Plans provides that it
may be terminated without penalty (a) by vote of a majority of the Independent
Directors, (b) by a majority of the Fund's outstanding shares of the applicable
class upon 60 days' written notice to John Hancock Funds, and (c) automatically
in the event of assignment. 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. And
finally, each of the Plans provides that no material amendment to the Plan
will, in any event, be effective unless it is approved by a vote of a majority
of both the Directors and the Independent Directors 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 Directors concluded that, in their judgment, there is a reasonable
likelihood that each Plan will benefit the holders of the applicable class of
shares of the Fund.
23
<PAGE> 55
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 Director is, under resolutions adopted by the Directors
contemporaneously with their adoption of the Plans, committed to the discretion
of the Committee on Administration are all Independent Directors and are
identified in this Statement of Additional Information under the heading "Those
Responsible for Management."
The Fund's distribution contract, discussed above, continues in effect
from year to year if approved annually by the vote of a majority of the
Independent Directors, cast in person at a meeting called for the purpose of
voting on such approval, and by either the Directors or the holders of a
majority of the outstanding shares of each class of the Fund which has voting
rights with respect to the contract. The contract automatically terminates
upon assignment and may be terminated without penalty on 60 days' notice at the
option of either party to the contract or by vote of a majority of the
outstanding shares of each class of the Fund which has voting rights with
respect to the contract.
NET ASSET VALUE
For purposes of calculating the net asset value ("NAV") of a 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 last
available bid price.
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 a Fund's NAV.
A 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 a Fund's NAV is not calculated. Consequently,
a Fund's portfolio securities
24
<PAGE> 56
may trade and the NAV of the Fund's redeemable securities may be significantly
affected on days when a shareholder has no access to the Fund.
INITIAL SALES CHARGE ON CLASS A SHARES
The sales charges applicable to purchases of Class A shares of the Fund
are described in the Fund's Class A and Class B Prospectus. Methods of
obtaining a reduced sales charge referred to generally in the Class A and Class
B Prospectus are described in detail below. In calculating the sales charge
applicable to current purchases of Class A shares, the investor is entitled to
accumulate 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 spouse and their children under the age of 21,
purchasing securities for his or their 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 a John
Hancock Funds' or Selling Broker's representative.
Without Sales Charge. As described in the Class A and Class B
Prospectus, Class A shares of the Fund may be sold without a sales charge to
persons described in the prospectus.
Accumulation Privilege. Investors (including investors combining
purchases) who are already Class A shareholders may also obtain the benefit of
a 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 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 charges 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
investment over a specified period of (13) months. Investors who are using the
Fund as a funding medium for a qualified retirement plan, however, may opt to
make the necessary investment called for by the LOI over a (48) month period.
These qualified retirement plans include IRA's, SEP, SARSEP, TSA, 401(k) and
457 plans. Such an investment (including accumulations and combinations) must
aggregate $100,000 or more invested during the specified period from the date
of the LOI or from a date within (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
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<PAGE> 57
actually invested, the difference in the sales charge actually paid and the
sales load payable had the LOI not been in effect is due from the investor.
However, for the purchases actually made within the specified period, the sales
charge applicable will not be higher than that which would have 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 escrowed shares and adjust the sales charge, if
necessary. An LOI does not constitute a binding commitment by an investor to
purchase, or by the Fund to sell, any additional Class A 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 an initial 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 John Hancock Funds and are used in
whole or in part by John Hancock Funds 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 enables 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.
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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 by the Board of Directors. If the shareholder were to
sell 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, however, elected to be governed by Rule 18f-1 under the Investment Company
Act. Under that rule, the Fund must redeem its shares for cash except to the
extent that the redemption payments to any one shareholder during any 90-day
period would exceed the lesser of $250,000 or 1% of the Fund's net asset value
at the beginning of such period.
ADDITIONAL SERVICES AND PROGRAMS
Exchange Privilege. As described more fully in the Class A and Class B
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 the shares of the Fund 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 shares and because redemptions are taxable events.
Therefore, a shareholder should not purchase Class A and Class B 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 investing, is subject to the following conditions:
The investments will be drawn on or about the day of the month indicated.
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The privilege of making investments through the Monthly Automatic
Accumulation Program may be revoked by Investor Services without prior notice
if any investment is not honored by the shareholder's bank. The bank shall be
under no obligation to notify the shareholder as to the non-payment of any
check.
The program may be discontinued by the shareholder either by calling
Fund Services or upon notice to Investor Services which is received at least
five (5) business days prior to the processing 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 in any of the other John Hancock funds, 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. Any gain realized is recognized for tax purposes
even if the reinvestment privilege is exercised, and any loss realized by a
shareholder on the redemption or other disposition of Fund shares will be
treated as described under the caption "Tax Status."
TAX STATUS
Each series of the Company, including the Fund, is treated as a separate
entity for accounting and tax purposes. The Fund has qualified and elected to
be treated as a "regulated investment company" under Subchapter M of the
Internal Revenue Code (the "Code") and intends 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 taxable
income (including net realized capital gains) distributed to shareholders at
least annually.
Distributions of net investment income (which includes original issue
discount and certain market discount income) and any net realized capital
gains, as computed for Federal income tax purposes, will be taxable as
described in the Prospectus whether made in shares or in cash. 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 that they would have received had they elected to receive
the distributions in cash.
Options written by the Fund may cause the Fund to recognize gains or
losses from marking-to-market at the end of its taxable year even though such
options may not have lapsed, been
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closed out, or exercised and may affect the characterization as long-term or
short-term of some capital gains and losses realized by the Fund. Losses on
certain options and/or offsetting positions may also be deferred under certain
straddle rules, which may also affect the characterization of capital gains or
losses as long-term or short-term. Additionally, written covered call options
on portfolio stocks could reduce the portion of the Fund's dividend income that
potentially qualifies for the dividends-received deduction for corporate
shareholders by suspending the Fund's holding period for such stocks, unless
these options satisfy the requirements for treatment as "qualified covered call
options." The Fund will take into account the special tax rules applicable to
options, including the straddle rules, in order to minimize any potential
adverse tax consequences.
Foreign exchange gains and losses realized by the Fund in connection
with certain transactions involving foreign currency-denominated debt
securities, forward foreign currency 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 investments in stock or securities may increase the
amount of gain it is deemed to recognize from the sale of certain investments
held for less than 3 months, which gain is limited under the Code to less than
30% of its annual gross income, and may 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 were to exceed the Fund's net investment income
(computed without regard to such loss, but after considering the post-October
loss regulations) the resulting overall ordinary loss for such year would not
be deductible by the Fund or its shareholders in future years.
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 sources
that produce interest, dividend, rental, royalty or capital gain income) or
hold at least 50% of their assets in such passive sources ("passive foreign
investment companies"), the Fund could be subject to Federal income tax and
additional interest charges on "excess distributions" received from such
companies or gain from the sale of stock in such companies, even if all income
or gain actually received by the Fund is timely distributed to its
shareholders. The Fund would not be able to pass through to its shareholders
any credit or deduction for such a tax. In certain cases, an election may be
available that would ameliorate these adverse tax consequences. The Fund may
limit its investments in passive foreign investment companies and will
undertake appropriate actions, including the consideration of any available
elections, to limit its tax liability, if any, with respect to such investment.
The amount of net realized capital gains, if any, in any given year will
result from options transactions and sales of securities made with a view to
the maintenance of a portfolio believed by the Fund's management to be most
likely to attain the Fund's objective. Such sales, and any resulting gains or
losses, may therefore vary considerably from year to year. Since, at the time
of an investor's purchase of Fund shares, a portion of the per share net asset
value by which the purchase price is determined may be represented by realized
or unrealized appreciation in the Fund's portfolio or undistributed taxable
income of the Fund, subsequent distributions (or portions thereof) on such
shares may be taxable to such investor even if the net asset value of his
shares is,
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as a result of the distributions, reduced below his cost for such shares and
the distributions (or portions thereof) in reality represent a return of a
portion of the purchase price.
Upon a redemption of shares (including by exercise of the exchange
privilege) a shareholder will ordinarily realize a taxable gain or loss
depending upon his basis in his shares. This 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
holding period for the shares. A sales charge paid in purchasing Class A
shares of the Fund cannot be taken into account for purposes of determining
gain or loss on the redemption or exchange of these shares within (90) days
after their purchase to the extent Class A 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 charge
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
will be disallowed to the extent the shares disposed of are replaced within a
period of (61) days beginning (30) days before and ending (30) days after the
shares are disposed of, such as pursuant to the Dividend Reinvestment Plan. 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 at the time of redemption 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 the Fund's present intention is to distribute all net realized
capital gains, if any, the Fund reserves the right to retain and reinvest all
or any portion of 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 long-term 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 carry-forward 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 Fund shares by the difference between his pro rata
share of this excess and his pro rata share of these taxes.
For Federal income tax purposes, the Fund is permitted to carry forward
a net realized capital loss in any year to offset net realized capital gains,
if any, during the eight years following the year of the loss. To the extent
subsequent net realized 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. Presently, there are no realized
capital loss carry-forwards available to offset against future net realized
capital gains.
A portion of distributions representing dividend income is normally
eligible for the dividends-received deduction for corporations, to the extent
of qualifying dividends received by the Fund from U.S. domestic corporations.
Capital gain distributions do not qualify for the
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dividends-received deduction allowable to corporations. Corporate shareholders
which borrow to acquire or retain Fund shares may be denied a portion of the
dividends-received deduction and may not be eligible for any deduction if they
fail to meet applicable holding period requirements. The entire qualifying
dividend, including the otherwise-deductible amount, will be included in
determining the excess (if any) of a corporation's adjusted current earnings
over its alternative minimum taxable income, which may increase a corporate
shareholder's alternative minimum tax liability, if any. Such shareholder's
tax basis in its Fund shares may also be reduced to the extent of any
"extraordinary dividends," as determined under applicable Code provisions.
The Fund may be subject to withholding and other taxes imposed by
foreign countries with respect to the Fund's investments in the obligations of
foreign issuers located in such countries. Tax conventions between certain
countries and the U.S. may reduce or eliminate such taxes. Investors may be
entitled to claim U.S. foreign tax credits with respect to such taxes, subject
to certain provisions and limitations contained in the Code. Specifically, if
more than 50% of the Fund's total assets at the close of any taxable year
consists of stock or securities of foreign corporations, the Fund may file an
election with the Internal Revenue Service pursuant to which shareholders of
the Fund will be required to (i) include in ordinary gross income (in addition
to taxable dividends actually received) their pro rata shares of foreign income
taxes paid by the Fund even though not actually received, and (ii) treat such
respective pro rata portions as foreign income taxes paid by them.
Shareholders may then deduct such pro rata portions of foreign income
taxes in computing their taxable incomes, or, alternatively, use them as
foreign tax credits, subject to applicable limitations, against their U.S.
income taxes. Shareholders who do not itemize deductions for Federal income
tax purposes will not, however, be able to deduct their pro rata portion of
foreign taxes paid by the Fund, although such shareholders will be required to
include their shares of such taxes in gross income. Shareholders who claim a
foreign tax credit for such foreign taxes may be required to treat a portion of
dividends received from the Fund as separate category income for purposes of
computing the limitations on the foreign tax credit. Tax-Exempt shareholders
will ordinarily not benefit from this election. Each year that the Fund files
the election described above, its shareholders will be notified of the amount
of (i) each shareholder's pro rata share of foreign income taxes paid by the
Fund and (ii) the portion of Fund dividends which represents income from each
foreign country.
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.
The Fund will be subject to a four percent nondeductible 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.
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
this law. The discussion does not address special tax rules applicable
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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 exchange or redemption of shares may
also be subject to state and local taxes. Shareholders should consult their
own tax advisers as to the Federal, state or local tax consequences of
ownership of shares of the Fund in particular circumstances.
Foreign investors not engaged in a U.S. trade or business with which
their Fund investment is effectively connected will be subject to U.S. Federal
income tax treatment that is different from that described above, including a
possible 30% U.S. withholding tax (or lower treaty rate) on dividends
representing ordinary income, and should consult their tax advisers regarding
the treatment and the application of foreign taxes to an investment in the
Fund.
DESCRIPTION OF THE FUND'S SHARES
The Company's Articles of Incorporation permit the Board of Directors to
issue 200 million shares of capital stock of the aggregate par value of $61
million. The Fund consists of 80 million shares, $1.25 par value broken down
into two classes, A and B, of 40 million shares each. Each share represents an
equal proportionate interest in the Fund with each other share. Upon
liquidation of the Fund, holders are entitled to share pro rata in the net
assets of the Fund available for distribution to such holders. Shares have no
preemptive or conversion rights. Shares are fully paid and non assessable by
the Fund and are freely transferable. The shareholders of the Company are
entitled to a full vote for each full share held and to a fractional vote for
fractional shares on all matters in which they are entitled to vote.
The Board of Directors currently have authorized the issuance of two
series of shares: the John Hancock Freedom Global Technology Fund and the
Fund. The Board of Directors may authorize the creation of additional series
of shares with such preferences, privileges, limitations and voting and
dividend rights as the Board of Directors may determine. The proceeds of sales
of shares of any additional series would be invested in separate, independently
managed portfolios with distinct investment objectives, policies and
restrictions, and share purchase, redemption and net asset valuation
procedures. All consideration received by the Company for sales of shares of
any additional series, and all assets in which such consideration is invested,
would belong to that series (subject only to the rights of creditors of such
series) and would be subject to the liabilities related thereto. Pursuant to
the Investment Company Act, shareholders of any additional series would
normally have to approve the adoption of any management contract or
distribution plan relating to such series and of any changes in the investment
policies related thereto.
The shares of each class represent an equal proportionate interest in
the assets attributable to that class of the Fund. The holders of Class A and
Class B shares each have certain exclusive voting rights on matters relating to
their respective Rule 12b-1 distribution plans. 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.
Shares of the Fund may be exchanged only for shares of the same class in
another fund sponsored by the Adviser (and for the shares of John Hancock Cash
Management Fund, a money market fund.) 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 on the same day and will be in the same amount,
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except that (i) Class B shares will pay higher distribution fees than Class A
shares and (ii) each of Class A and Class B shares will bear any other class
expenses properly allocable to such class of shares, subject to conditions set
forth in a private letter ruling that the Fund has received from the Internal
Revenue Service relating to its multiple-class structure. Similarly, the net
asset value per share may vary depending on the class of shares purchased.
The Board of Directors has the power to alter the number and the terms
of office of the Directors, to lengthen their own terms, or to make their terms
of unlimited duration, subject to certain removal procedures, and to appoint
their own successors; provided that at least a majority of Directors has been
elected by the shareholders. The voting rights of shareholders are not
cumulative so that holders of more than 50% of the shares voting can, if they
choose, elect all Directors being selected while the holders of the remaining
shares would be unable to elect any Directors. It is the intention of the
Company not to hold annual meetings of shareholders. The Directors may call
special meetings of shareholders for action by shareholder vote as may be
required by either the Investment Company Act or the Company's Charter. At any
meeting called for the purpose of removing from office any director, the
shareholders may, by vote of the holders of a majority of the outstanding
shares entitled to vote, remove from office any director and elect a successor,
unless the number of directors constituting the whole board is accordingly
decreased.
CALCULATION OF PERFORMANCE
The average annual total return for Class A shares of the Fund for the 1
year, 5 year and 10 year periods ended December 31, 1994 was (18.48)%, 1.46%
and 8.68%, respectively. The average annual total return for Class B shares of
the Fund for the one year period ended December 31, 1994 was (18.84)%.
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:
n ____
T = V 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 10 year periods.
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This calculation assumes the maximum sales charge of 5.00% is included
in the initial investment or the CDSC is applied at the end of the period.
This calculation 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 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
5.00% 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
total return will be ranked or compared to indices of mutual funds. Such
indices may include Lipper Analytical Services, Inc.'s "Lipper-Mutual
Performance Analysis" monthly publication which tracks net assets and total
return on equity mutual funds in the United States. Ibottson and Associates,
CDA Weisenberger and F.C. Towers are also used for comparison purposes, as well
as the Russell and Wilshire Indices.
Performance rankings and ratings reported periodically in national
financial publications such as Money magazine, Forbes, Business Week, Micropal,
Inc., Morningstar Inc., The Wall Street Journal, Stanger's and Barron's etc.,
may also be utilized.
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 capital stock; 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 of
the Fund are made by the Adviser pursuant to recommendations made by its
investment committee, which consists of officers and directors of the Adviser
and officers and Directors of the Company who are interested persons of the
Company, and by the Sub-Adviser. 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
maker 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.
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<PAGE> 66
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 National Association of
Securities Dealers, Inc. and other policies that the Directors other policies
as the Directors may determine, the Adviser and the Sub-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 and Sub-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 and Sub-Adviser. The
receipt of research information is not expected to reduce significantly the
expenses of the Adviser and Sub-Adviser. The research information and
statistical assistance furnished by brokers and dealers may benefit the Life
Insurance 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. Similarly, research information and assistance provided to the
Sub-Adviser by brokers and dealers may benefit other advisory clients or
affiliates of the Sub-Adviser. The Fund will make no commitment to allocate
portfolio transactions upon any prescribed basis. While the Adviser, together
with the Sub-Adviser, will be primarily responsible for the allocation of the
Fund's brokerage business, the policies and practices of the Adviser in this
regard must be consistent with the foregoing and will at all times be subject
to review by the Board of Directors.
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 Board of Directors
that the price is reasonable in light of the services provided and to policies
that the Board of Directors may adopt from time to time. During the fiscal
year ended December 31, 1994, the Fund directed commissions in the amount of
$12,600 to compensate brokers for research services such as industry, economic
and company reviews and evaluations of securities.
The Adviser's indirect parent, Life Insurance Company, is the indirect
sole shareholder of John Hancock Freedom Securities Corporation and its
subsidiaries, two of which, Tucker Anthony Incorporated, John Hancock
Distributors and Sutro & Company, Inc., are broker-dealers ("Affiliated
Brokers"). Pursuant to procedures determined by the Directors and consistent
with the policy of obtaining best net results, the Company may execute
portfolio transactions with or through Tucker Anthony or Sutro. During the
year ended December 31, 1994, the Fund did not execute any portfolio
transactions with Affiliated Brokers.
35
<PAGE> 67
During 1992, 1993 and 1994, the Fund paid total brokerage commissions,
excluding spreads or commissions on principal transactions, of $68,478, $47,149
and $64,175, respectively. During 1994, the Fund did not pay any brokerage
commissions to any Affiliated Brokers.
TRANSFER AGENT SERVICES
John Hancock Investor Services Corporation P.O. Box 9116, Boston, MA
02205-9116, a wholly-owned indirect subsidiary of Life Insurance Co., is the
transfer and dividend paying agent for the Fund. The Fund pays Investor
Services an annual fee for Class A of $16.00 per shareholder account and for
Class B shares of $18.50 plus certain out-of-pocket expenses.
CUSTODY OF PORTFOLIO
Since July 1, 1992, the portfolio securities of the Fund have been held
by Investors Bank & Trust Company, as custodian. Prior to July 1, 1992,
portfolio securities of the Fund were held pursuant to an agreement between the
Company on behalf of the Fund and State Street Bank & Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, as custodian. The Custodian
performs custody, portfolio and Fund accounting services. The Board of
Directors has determined that, except as otherwise permitted under applicable
Securities and Exchange Commission "no- action" letters or exemptive orders, it
is in the best interest of the Fund to hold foreign assets of the Fund in
qualified foreign banks and depositories meeting the requirements of Rule 17f-5
under the Investment Company Act.
INDEPENDENT AUDITORS
The independent auditors of the Fund are Price Waterhouse LLP, Boston,
Massachusetts 02110. The independent auditors audit and render an opinion on
the Fund's annual financial statements and prepare the Fund's annual income tax
returns.
36
<PAGE> 68
FINANCIAL STATEMENTS
John Hancock Funds - National Aviation & Technology 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 DECEMBER 31, 1994. YOU'LL
ALSO FIND THE NET ASSET VALUE AND THE MAXIMUM OFFERING PRICE PER SHARE AS OF
THAT DATE.
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1994
- ---------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments at value - Note C:
Common and preferred stocks and warrants
(cost - $33,988,700)............................... $52,431,531
Bonds (cost - $1,258,358)............................ 1,186,710
Joint repurchase agreement (cost - $284,000)......... 284,000
Corporate saving account............................. 750
----------
53,902,991
Receivable for investments sold........................ 1,524,500
Receivable for shares sold............................. 1,737
Dividends receivable................................... 15,000
Interest receivable.................................... 26,856
Miscellaneous receivable............................... 16,941
----------
Total Assets................... 55,488,025
--------------------------------------------------
LIABILITIES:
Payable for shares repurchased......................... 57,138
Payable to John Hancock Advisers, Inc. and affiliates -
Note B............................................... 54,623
Accounts payable and accrued expenses.................. 51,629
----------
Total Liabilities.............. 163,390
--------------------------------------------------
NET ASSETS:
Capital paid-in - Note D............................... 36,953,452
Net unrealized appreciation of investments............. 18,371,183
----------
Net Assets..................... $55,324,635
==================================================
NET ASSET VALUE PER SHARE:
(Based on net asset values and shares of beneficial
interest outstanding - 40 million shares authorized
with $1.25 per share par value, respectively)
Class A - $54,840,078 /7,579,596....................... $ 7.24
==========================================================================
Class B - $484,557/67,821.............................. $ 7.14
==========================================================================
MAXIMUM OFFERING PRICE PER SHARE*
Class A - ($7.24 x 105.26)%............................ $ 7.62
==========================================================================
<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.
** Class B shares commenced operations on January 3, 1994.
</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 December 31, 1994
- ---------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Dividends.................................................. $ 487,545
Interest................................................... 419,567
-----------
907,112
-----------
Expenses:
Investment management fee - Note B....................... 690,068
Administration fee....................................... 100,000
Transfer agent fee - Note B
Class A.............................................. 82,679
Class B**............................................ 151
Distribution/service fee - Note B
Class A.............................................. 56,005
Class B**............................................ 1,079
Registration and filing fees............................. 48,304
Custodian fee............................................ 45,694
Auditing fee............................................. 27,500
Directors' fees.......................................... 21,767
Printing................................................. 20,492
Miscellaneous............................................ 6,577
Legal fees............................................... 4,252
-----------
Total Expenses....................... 1,104,568
----------------------------------------------------
Net Investment Loss.................. (197,456)
----------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND OPTIONS:
Net realized gain on investments sold...................... 15,688,423
Net realized gain on options............................... 43,449
Change in net unrealized appreciation/depreciation
of investments........................................... (26,248,652)
-----------
Net Realized and Unrealized
Loss on Investments
and Options.......................... (10,516,780)
----------------------------------------------------
Net Decrease in Net Assets
Resulting from Operations............ $(10,714,236)
====================================================
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE> 69
FINANCIAL STATEMENTS
John Hancock Funds - National Aviation & Technology Fund
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------
1994 1993
------------- ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment loss.............................................................. $ (197,456) $ (513,565)
Net realized gain on investments sold and options................................ 15,731,872 8,069,779
Change in net unrealized appreciation/depreciation of investments................ (26,248,652) 6,962,838
------------- ------------
Net Increase (Decrease) in Net Assets Resulting from Operations................ (10,714,236) 14,519,052
------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net realized gain on investments sold and options
Class A - ($2.4704 and $1.1714 per share, respectively)........................ (15,479,601) (7,555,479)
Class B ** - ($2.4704 and none per share, respectively)........................ (114,033) --
------------- ------------
Total Distributions to Shareholders.......................................... (15,593,634) (7,555,479)
------------- ------------
FROM FUND SHARE TRANSACTIONS -- NET*............................................... 4,071,478 (509,603)
------------- ------------
NET ASSETS:
Beginning of period.............................................................. 77,561,027 71,107,057
------------- ------------
End of period ................................................................... $ 55,324,635 $77,561,027
============= ============
<FN>
* ANALYSIS OF FUND SHARE TRANSACTIONS:
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------
1994 1993
------------------------ -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ --------- ------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold............................................................. 73,479 $ 780,882 82,066 $ 991,562
Shares issued to shareholders in reinvestment of distributions.......... 1,341,271 9,684,264 413,466 4,651,425
---------- ------------ --------- ------------
1,414,750 10,465,146 495,532 5,642,987
Less shares repurchased................................................. (685,600) (7,002,388) (520,848) (6,152,590)
---------- ------------ --------- ------------
Net increase (decrease)............................................... 729,150 $ 3,462,758 (25,316) $ (509,603)
========== ============ ========= ============
CLASS B **
Shares sold............................................................. 58,006 $ 556,005
Shares issued to shareholders in reinvestment of distributions.......... 16,130 115,006
---------- ------------
74,136 671,011
Less shares repurchased............................................... (6,315) (62,291)
---------- ------------
Net increase........................................................ 67,821 $ 608,720
========== ============
<FN>
**Class B shares commenced operations on January 3, 1994.
</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 AND OPTION 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 VALUE.
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE> 70
FINANCIAL STATEMENTS
John Hancock Funds - National Aviation & Technology 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 DECEMBER 31,
----------------------------------------------------
1994 1993 1992 1991(c) 1990(c)
------- ------- ------- ------- -------
CLASS A
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period...................................... $ 11.32 $ 10.34 $ 10.91 $ 8.84 $ 11.67
------- ------- ------- ------- -------
Net Investment Income (Loss).............................................. (0.03)(a) (0.07) (0.01)(a) 0.05 0.10
Net Realized and Unrealized Gain (Loss) on Investments and Options........ (1.58) 2.22 0.31 2.70 (2.33)
------- ------- ------- ------- -------
Total from Investment Operations....................................... (1.61) 2.15 0.30 2.75 (2.23)
------- ------- ------- ------- -------
Less Distributions:
Dividends from Net Investment Income...................................... -- -- -- (0.03) (0.10)
Distributions from Net Realized Gain on Investments Sold and Options...... (2.47) (1.17) (0.87) (0.65) (0.50)
------- ------- ------- ------- -------
Total Distributions.................................................... (2.47) (1.17) (0.87) (0.68) (0.60)
------- ------- ------- ------- -------
Net Asset Value, End of Period............................................ $ 7.24 $ 11.32 $ 10.34 $ 10.91 $ 8.84
======= ======= ======= ======= =======
Total Investment Return at Net Asset Value................................ (14.16)% 20.88% 3.02% 31.09 (19.26)%
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted)................................. $54,840 $77,561 $71,107 $73,344 $62,882
Ratio of Expenses to Average Net Assets................................... 1.60% 1.49% 1.53% 1.64% 1.67%
Ratio of Net Investment Income (Loss) to Average Net Assets............... (0.28)% (0.66)% (0.07)% 0.42% 0.95%
Portfolio Turnover Rate................................................... 44% 23% 34% 28% 29%
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE> 71
FINANCIAL STATEMENTS
John Hancock Funds - National Aviation & Technology Fund
<TABLE>
FINANCIAL HIGHLIGHTS (continued)-
- ----------------------------------------------------------------------------------------------
<CAPTION>
FOR THE PERIOD
JANUARY 3, 1994
TO DECEMBER 31, 1994
--------------------
CLASS B**
<S> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period..................................... $ 11.23(b)
-------
Net Investment Loss...................................................... (0.09)(a)
Net Realized and Unrealized Loss on Investments and options.............. (1.53)
-------
Total from Investment Operations................................... (1.62)
-------
Less Distributions:
Distributions from Net Realized Gain on Investments Sold and Options..... (2.47)
-------
Total Distributions................................................ (2.47)
-------
Net Asset Value, End of Period........................................... $ 7.14
=======
Total Investment Return at Net Asset Value............................... (14.39)%
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted)................................ $ 485
Ratio of Expenses to Average Net Assets.................................. 2.59%*
Ratio of Net Investment Income (Loss) to Average Net Assets.............. (1.13)%*
Portfolio Turnover Rate.................................................. 44%
<FN>
* On an annualized basis.
** Class B shares commenced operations on January 3, 1994.
(a) On average month end shares outstanding.
(b) Initial price to commence operations.
(c) These periods are covered by the report of other independent accountants (not included herein).
</TABLE>
THE FINANCIAL HIGHLIGHTS SUMMARIZES THE IMPACT OF THE FOLLOWING FACTORS ON A
SINGLE SHARE FOR THE PERIODS INDICATED: THE 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> 72
FINANCIAL STATEMENTS
John Hancock Funds - National Aviation & Technology Fund
THE SCHEDULE OF INVESTMENTS IS A COMPLETE LIST OF ALL SECURITIES OWNED BY
FREEDOM NATIONAL AVIATION & TECHNOLOGY FUND ON DECEMBER 31, 1994. IT'S DIVIDED
INTO FIVE MAIN CATEGORIES: COMMON STOCKS, PREFERRED STOCK, WARRANTS, BONDS, AND
SHORT-TERM INVESTMENTS. THE INVESTMENTS ARE FURTHER BROKEN DOWN BY INDUSTRY
GROUPS. UNDER EACH INDUSTRY GROUP IS A LIST OF THE SECURITIES OWNED BY THE
FUND. SHORT-TERM INVESTMENTS, WHICH REPRESENT THE FUND'S "CASH" POSITION, ARE
LISTED LAST.
<TABLE>
SCHEDULE OF INVESTMENTS
December 31, 1994
<CAPTION>
ISSUER, DESCRIPTION NUMBER OF SHARES MARKET VALUE
- ------------------- ---------------- ------------
<S> <C> <C>
COMMON STOCKS
AEROSPACE (10.27)%
Boeing Co. (The)............................ 30,000 $ 1,402,500
Loral Corp.................................. 30,000* 1,136,250
United Technologies Corp. .................. 50,000 3,143,750
-----------
5,682,500
-----------
COMPUTERS (23.93)%
BMC Software, Inc.**........................ 20,000 1,135,000
Computer Associates International, Inc. .... 50,000 2,425,000
Oracle Systems Corp.**...................... 60,000 2,647,500
S3, Inc.**.................................. 50,000* 781,250
Silicon Graphics, Inc.**.................... 50,000* 1,543,750
Stratus Computer, Inc.**.................... 70,000* 2,660,000
Symantec Corp.**............................ 100,000* 1,750,000
Telebase Systems, Inc.** (r)................ 454,500 295,425
-----------
13,237,925
-----------
DIVERSIFIED OPERATIONS (10.18)%
General Motors Corp. (Class H).............. 70,000 2,441,250
Raytheon Co................................. 50,000 3,193,750
-----------
5,635,000
-----------
ELECTRONICS (11.63)%
Applied Materials, Inc.**................... 60,000* 2,505,000
FLIR Systems, Inc.**........................ 75,000 937,500
Integrated Device Technologies, Inc.**...... 35,000* 1,032,500
Ramtron International Corp. **.............. 55,556* 263,891
Teradyne, Inc.**............................ 50,000* 1,693,750
-----------
6,432,641
-----------
MACHINERY (8.25)%
Thermo Electron Corp.**..................... 75,000 3,365,625
Thermolase Corp.**.......................... 50,000* 387,500
ThermoTrex Corp.**.......................... 60,000 810,000
-----------
4,563,125
-----------
POLLUTION CONTROL (2.56)%
Browning-Ferris Industries, Inc. ........... 50,000 1,418,750
-----------
TELECOMMUNICATIONS (5.29)%
BroadBand Technologies, Inc.**.............. 50,000* 1,500,000
Qualcomm, Inc.**............................ 60,000* 1,425,000
-----------
2,925,000
-----------
TRANSPORTATION (22.05)%
AMR Corp. **................................ 60,000 $ 3,195,000
Mesa Airlines, Inc.**....................... 125,000 1,125,000
Northwest Airlines Corp. Class A**.......... 100,000* 1,575,000
Southwest Airlines Co....................... 100,000 1,675,000
UAL Corp.................................... 50,000 4,368,750
USAir Group, Inc. **........................ 60,000 262,500
-----------
12,201,250
-----------
TOTAL COMMON STOCKS
(Cost $33,787,032) (94.16)% 52,096,191
------ -----------
PREFERRED STOCK
ELECTRONICS (0.59)%
Ramtron International Corp. Ser C Conv **... 55,556 326,392
-----------
TOTAL PREFERRED STOCK
(Cost $166,668) (0.59)% 326,392
------ -----------
WARRANTS
BIOMEDICS/GENETICS (0.02)%
Scios-Nova Inc. ** (r)...................... 36,346 8,748
-----------
MEDICAL/DENTAL (0.00)%
Biosearch Medical Products, Inc. ** (r)..... 20,000 200
-----------
TOTAL WARRANTS
(Cost $35,000) (0.02)% 8,948
------ -----------
TOTAL COMMON AND PREFERRED STOCKS
AND WARRANTS
(Cost $33,988,700) (94.77)% 52,431,531
------ -----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE> 73
FINANCIAL STATEMENTS
John Hancock Funds - National Aviation & Technology Fund
<TABLE>
<CAPTION>
INTEREST S&P PAR VALUE MARKET
ISSUER, DESCRIPTION RATE*** RATING*** (000'S OMITTED) VALUE
- ------------------- -------- --------- --------------- ------
<S> <C> <C> <C> <C>
BONDS
AEROSPACE (0.46)%
Aeronca, Inc., Conv Sub Deb, 01-31-96.............................................. 12.500% NR $ 400 $ 252,000
-----------
TRANSPORTATION (1.69)%
Northwest Airlines Inc., Bond, 11-30-00 (r)........................................ 12.092 CCC 485* 485,385
Piedmont Aviation Inc., Equip Tr Cert 1988 Ser F, 03-28-09......................... 10.350 BB 500 449,325
-----------
934,710
-----------
TOTAL BONDS
(Cost $1,258,358) (2.15)% 1,186,710
------- -----------
SHORT-TERM INVESTMENTS
JOINT REPURCHASE AGREEMENT (0.51)%
Investment in a joint repurchase agreement transaction with Lehman Brothers, Inc.
Dated 12-30-94, Due 01-03-95 (secured by U.S. Treasury Bonds, 9.25%
Due 02-15-16, and 8.125% Due 08-15-21, and U.S. Treasury Notes, 4.625%
Due 08-15-95, and 4.625% Due 08-15-95) Note A.................................... 5.850 - 284 284,000
-----------
CORPORATE SAVINGS ACCOUNT (0.00)%
Investors Bank & Trust Company Daily Interest Savings Account Current Rate 3.00%... 750
-----------
TOTAL SHORT-TERM INVESTMENTS (0.51)% 284,750
------- -----------
TOTAL INVESTMENTS (97.43)% $53,902,991
======= ===========
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS
(r) Direct placement securities are restricted to resale. They have been
valued at fair value by the Trustees after considerations of restrictions
as to resale, financial condition and prospects of the issuer, general
market conditions and pertinent information in accordance with the Fund's
By-Laws and the Investment Company Act of 1940, as amended. The Fund has
limited rights to registration under the Securities Act of 1933 with
respect to these restricted securities.
<TABLE>
Additional information on each restricted security is as follows:
<CAPTION>
VALUE AS A
PERCENTAGE MARKET
ACQUISITION ACQUISITION OF FUND'S VALUE AT
SECURITY DATE COST NET ASSETS DECEMBER 31, 1994
-------- ---- ---- ---------- -----------------
<S> <C> <C> <C> <C>
Biosearch Medical Products, Inc. - Warrants.................. 10-24-90 $ 0 0.00% $ 200
Northwest Airlines, Inc. - Bond.............................. 06-17-94 450,000 0.88 485,385
Scios-Nova Inc. - Warrants................................... 06-28-91 35,000 0.02 8,748
Telebase Systems, Inc. - Common Stock........................ 11-14-91 636,300 0.53 295,425
<FN>
* Securities other than short-term investments, newly added to the portfolio during the period ended December 31, 1994.
** Non-income producing security.
*** Credit ratings are unaudited.
NR Not Rated by either Standard & Poor's or Moody's Investors Services.
</TABLE>
The percentage shown for each investment category is the total value of that
category as a percentage of the net assets of the Fund.
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE> 74
NOTES TO FINANCIAL STATEMENTS
John Hancock Funds - National Aviation & Technology Fund
NOTE A --
ACCOUNTING POLICIES
John Hancock Technology Series, Inc. (the "Company") is an open-end investment
company registered under the Investment Company Act of 1940. The Company
consists of two series: John Hancock Global Technology Fund, a diversified
series, and John Hancock National Aviation & Technology Fund (the "Fund"), a
non-diversified series. The Directors authorized the sale of Class B shares as
of January 3, 1994 and adoption of 12b-1 distribution plans as of January 1 and
3, 1994 for Class A and Class B shares of the Fund, respectively. The shares of
each class represent an interest in the same portfolio of investments of the
Fund and have equal rights to voting, redemption, dividends and liquidation
except that certain expenses, subject to the approval of the Directors, may be
applied differently to each class of shares in accordance with current
regulations of the Securities and Exchange Commission and the Internal Revenue
Service. Shareholders of a class which bears distribution/service expenses
under the terms of a distribution plan, have exclusive voting rights to such
distribution plan. Significant accounting policies of the Fund are as follows:
VALUATION OF INVESTMENTS Securities in the Fund's portfolio are valued on the
basis of market quotations, valuations provided by independent pricing services
or, at fair value as determined in good faith in accordance with procedures
approved by the Trustees. Short-term debt investments maturing within 60 days
are valued at amortized cost which approximates market value.
JOINT REPURCHASE AGREEMENT Pursuant to an exemptive order issued by the
Securities and Exchange Commission, the Fund, along with other registered
investment companies having a management contract with John Hancock Advisers,
Inc. (the "Adviser"), a wholly-owned subsidiary of The Berkeley Financial Group,
may participate in a joint repurchase agreement transaction. Aggregate cash
balances are invested in one or more repurchase agreements, whose underlying
securities are obligations of the U.S. government and/or its agencies. The
Fund's custodian bank receives delivery of the underlying securities for the
joint account on the Fund's behalf. The Adviser is responsible for ensuring that
the agreement is fully collateralized at all times.
INVESTMENT TRANSACTIONS Investment transactions are recorded as of the date of
purchase, sale or maturity. Net realized gains and losses on sales of
investments are determined on the identified cost basis. Included in Net
realized gains on investments sold in the Statement of Operations is $8,481,000
received as a special distribution resulting from the reorganization of UALCorp.
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.
It will not be subject to Federal income tax on taxable earnings which are
distributed to shareholders.
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.
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, if any,
with respect to each class of shares will be calculated in the same manner, 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 explai ned previously.
EXPENSES The majority of the expenses of the Company are directly identifiable
to an individual Fund. Expenses which are not readily identifiable to a
specific Fund are allocated in such a manner as deemed equitable, taking into
consideration, among other things, the nature and type of expense and the
relative size 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. Trans fer
agent expenses and distribution/service fees
13
<PAGE> 75
NOTES TO FINANCIAL STATEMENTS
John Hancock Funds - National Aviation & Technology Fund
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.
OPTIONS Listed options are valued at the last quoted sales price on the
exchange on which they are primarily traded. Purchased put or call
over-the-counter options are valued at the average of the "bid" prices
obtained from two independent brokers. Written put or call over-the-counter
options are valued at the average of the "asked" prices obtained from two
independent brokers. Upon the writing of a call or put option, an amount
equal to the premium received by the Fund is included in the Statement of Asse
ts and Liabilities as an asset and corresponding liability. The amount of the
liability is subsequently marked-to-market to reflect the current market
value of the written option.
The Fund may use options contracts to manage its exposure to the
stock market. Writing puts and buying calls tend to increase the Fund's
exposure to the underlying instrument and buying puts and writing calls tend
to decrease the Fund's exposure to the underlying instrument, or hedge other
Fund investments.
The maximum exposure to loss for any purchased options is limited to
the premium initially paid for the option. In all other cases, the face (or
"notional") amount of each contract at value reflects the maximum exposure of
the Fund in these contracts, but the actual exposure is limited to the change
in value of the contract over the period the contract remains open.
Risks may also arise if counterparties do not perform under the
contracts' terms, or if the Fund is unable to offset a contract with a
counterparty on a timely basis ("liquidity risk"). Exchange-traded options
have minimal credit risk as the exchanges act as counterparties to each
transaction, and only present liquidity risk in highly unusual market
conditions. To minimize credit and liquidity risks in over-the-counter option
contracts, the Fund continuously monitors the creditworthiness of all its
counterparties.
At any particular time, except for purchased options, market or
credit risk may involve amounts in excess of those reflected in the Fund's
period-end Statement of Assets and Liabilities.
A summary of written call option transactions for the period ended
December 31, 1994 is as follows:
<TABLE>
<CAPTION>
NUMBER OF
CONTRACTS PREMIUMS
(000'S OMITTED) RECEIVED
------------- --------
<S> <C> <C>
Outstanding, beginning of period.... - -
Options written..................... 100 $ 43,449
Options expired..................... (100) (43,449)
--- -------
Outstanding, end of period.......... - -
=== =======
</TABLE>
DISCOUNT ON SECURITIES The Fund accretes discount from par value on
investment securities from either the date of issue or date of purchase over
the life of the security, as required by the Internal Revenue Code.
NOTE B --
MANAGEMENT FEE, ADMINISTRATIVE
SERVICES AND TRANSACTIONS WITH AFFILIATES
AND OTHERS
The Adviser is responsible for managing the Fund's investment business
affairs and overseeing the investment activities of the sub-adviser. The
Adviser has a sub-investment management contract with American Fund Advisors,
Inc. (the "Sub-Adviser"), under which the Sub-Adviser, subject to the review
of the Directors and the overall supervision of the Adviser, provides the
Fund with investment services and advice with respect to investment
transactions.
Under the present investment management contract, for the year ended
December 31, 1994, the Fund paid an monthly management fee to the Adviser
equivalent, on an annual basis, to the sum of (a) 1.00% of the first
$100,000,000 of the Fund's average daily net asset value and (b) 0.75% of the
Fund's average daily net asset value in excess of $100,000,000. Effective
January 1, 1995, the Adviser will waive a portion of the management fee
amounting to 0.15% of the average daily net asset value of the first
$100,000,000 of each series of the Company. Therefore, the Fund will pay a
monthly management fee to the Adviser, equivalent on an annual basis, to the
sum of
14
<PAGE> 76
NOTES TO FINANCIAL STATEMENTS
John Hancock Funds - National Aviation & Technology Fund
0.85% of the first $100,000,000 of the Fund's average daily net asset value.
The Adviser pays the Sub-Adviser a monthly management fee, equivalent on
an annual basis, to the sum of (a) 0.40% of the first $100,000,000 of the
Fund's average daily net asset value and (b) 40% of the investment advisory fee
received by the Adviser on amounts over $100,000,000. The Fund pays a monthly
administrative fee at the rate of $100,000 per annum to the Adviser for
performance of administrative services to the Fund.
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, 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.
In the event that the ratio for 1992, 1993, or 1994 of normal operating
expenses of the Fund, exclusive of extraordinary expenses including, but not
limited to litigation, to the Fund's average daily net assets for such year,
exceeds the average expense ratio for the Fund for the three years ended
December 31, 1990 (restated as if the current annual rates for calculating the
management fee and the current expense limitations had been in effect
throughout the three year period), the fees payable to the Advi ser will be
reduced to the extent required to eliminate such excess and the Adviser will
make any additional arrangements necessary to eliminate any remaining such
excess. No reduction in fees was necessary for the period ended December 31,
1994. At a shareholder meeting on December 8, 1993 the shareholders appr a
proposal which excludes the amounts payable by the Fund under the Rule 12b-1
distribution plans (effective in January 1994) from the calculation of the
expense limit described above.
The Fund has a distribution agreement with John Hancock Funds Inc.
("JH Funds"), a wholly-owned subsidiary of the Adviser. Prior to January 1,
1995, JH Funds was known as John Hancock Broker Distribution Services, Inc.
For the period ended December 31, 1994, JH Funds received net sales charges
of $9,741 with regard to sales of Class A shares. Out of this amount, $1,443
was retained and used for printing prospectuses, advertising, sales
literature and other purposes, and $3,254 was paid as sales commissions and
first year service fees to unrelated broker-dealers and $5,044 was paid as
sales commissions and first year service fees 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 are
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 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
December 31, 1994 contingent deferred sales charges received by JH Funds
amounted to $664.
In addition, to compensate JH Funds for the services it provides as
distributor of shares of the Fund, the Fund has adopted a Distribution Plan
with respect to Class A and Class B pursuant to Rule 12b-1 under the Investment
Company Act of 1940, effective January 1 and 3, 1994, respectively.
Accordingly, the Fund makes payments to JH Funds for distribution and service
expenses at an annual rate not to exceed 0.30% of Class A average daily net
assets and 1.00% of Class B average daily net assets to reimburse JH Funds for
its distribution/service costs. Up to a maximum of 0.25% of such payments may
be service fees as defined by the amended Rules of Fair Practice of the
National Association of Securities Dealers which became effective July 7, 1993.
Under the amended Rules of Fair
15
<PAGE> 77
NOTES TO FINANCIAL STATEMENTS
John Hancock Funds - National Aviation & Technology Fund
Practice, curtailment of a portion of the Fund's 12b-1 payments could
occur under certain circumstances. In order to comply with this rule, the
12b-1 fee was decreased on Class A shares to 0.05% effective May 1, 1994 and
decreased to 0.00% effective June 1, 1994.
The Fund has a transfer agent agreement with John Hancock Investor
Services Corporation ("Investor Services"), a wholly-owned subsidiary of The
Berkeley Financial Group. Prior to January 1, 1995, Investor Services was
known as John Hancock Fund Services, Inc. The Fund pays a monthly transfer
agent fee, equivalent on an annual basis, to 0.12% and 0.14% of the Fund's
average daily net asset value, attributable to Class A and Class B shares of
the Fund, respectively, plus out of pocket expenses incurred by Fund Services
on behalf of the Fund for proxy mailings. Effective January 1, 1995, the Fund
will pay transfer agent fees based on transaction volume and the number of
shareholder accounts outstanding.
Mr. Edward J. Boudreau, Jr. is a director and officer of the Adviser,
and Mr. Barry J. Gordon is a director and officer of the Sub-Adviser. Mr.
Thomas W. L. Cameron is an affiliated Director of the Fund. The compensation
of unaffiliated Directors is borne by the Fund.
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 December 31, 1994, aggregated $27,466,649 and $29,858,522,
respectively. There were no purchases or sales of obligations of the U.S.
government and its agencies during the period ended December 31, 1994.
The cost of investments owned at December 31, 1994 (including the
joint repurchase agreement) for Federal income tax purposes was $35,531,058.
Gross unrealized appreciation and depreciation of investments aggregated
$20,335,831 and $1,964,648, respectively, resulting in net unrealized
appreciation of $18,371,183.
NOTE D --RECLASSIFICATION OF CAPITAL ACCOUNTS
During the year ended December 31, 1994, the Fund has reclassified amounts to
reflect a decrease in accumulated net investment loss of $197,456, a decrease
in accumulated net realized gain on investments of $138,238 and a decrease in
capital paid-in of $59,218. This represents the cumulative amount necessary
to report these balances on a tax basis, excluding certain temporary
differences, as of December 31, 1994. Additional adjustments may be needed in
subsequent reporting periods. These reclassifications, which have no impact
on the net asset value of the Fund, are primarily attributable to certain
differences in the computation of distributable income and capital gains
under federal tax rules versus generally accepted accounting principles.
16
<PAGE> 78
John Hancock Funds - National Aviation & Technology Fund
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders of John Hancock
National Aviation and Technology Fund and the
Directors of John Hancock Technology Series, Inc.
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of John Hancock
National Aviation & Technology Fund (the "Fund") (a portfolio of John Hancock
Technology Series, Inc.) at December 31, 1994, the results of its operations
for the year then ended, the changes in its net assets and the financial
highlights for the periods indicated in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of
the Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at December 31, 1994 by
correspondence with the custodian and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
Price Waterhouse LLP
Boston, Massachusetts
February 16, 1995
TAX INFORMATION NOTICE (UNAUDITED)
For Federal Income Tax purposes, the following information is furnished with
respect to the distributions of the Fund for its fiscal year ended December
31, 1994.
The Fund designated distributions to shareholders of $15,577,000 as
long-term capital gain dividends. Shareholders were mailed a 1994 U.S.
Treasury Department Form 1099-DIV in January 1995 representing their
proportionate share.
None of the Fund's distributions qualify for the dividends received
deduction available to corporations.
United States Government Obligations: The Fund did not invest in U.S.
Treasury bonds, bills, and notes or other U.S. government agencies at year
end. The Fund did not derive any income from these investments. For specific
information on exemption provisions in your state, consult your local state
tax office or your tax adviser.
17
<PAGE> 79
JOHN HANCOCK
GLOBAL TECHNOLOGY
FUND
CLASS A AND CLASS B SHARES
PROSPECTUS
MAY 1, 1995
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Expense Information................................................................... 2
The Fund's Financial Highlights....................................................... 3
Investment Objectives and Policies.................................................... 4
Organization and Management of the Fund............................................... 8
Alternative Purchase Arrangements..................................................... 9
The Fund's Expenses................................................................... 10
Dividends and Taxes................................................................... 12
Performance........................................................................... 12
How to Buy Shares..................................................................... 14
Share Price........................................................................... 15
How to Redeem Shares.................................................................. 22
Additional Services and Programs...................................................... 23
</TABLE>
This Prospectus sets forth information about John Hancock Global Technology
Fund (the "Fund"), a diversified series of John Hancock Technology Series, Inc.
(the "Company"), that you should know before investing. Please read and retain
it for future reference.
Additional information about the Fund 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 1, 1995, and incorporated by reference into
this Prospectus, free of charge by writing or telephoning: John Hancock Investor
Services Corporation, Post Office Box 9116, Boston, Massachusetts 02199-9116,
1-800-225-5291, (1-800-554-6713 TDD).
SHARES OF THE FUNDS 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 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> 80
EXPENSE INFORMATION
The purpose of the following information is to help you understand the various
fees and expenses that 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 of the Fund's Class A and Class B
shares for the fiscal year ended December 31, 1994, adjusted to reflect current
fees and expenses. Actual fees and expenses in the future may be greater or less
than those indicated.
<TABLE>
<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 fees+.......................................................................... None None
Exchange fee.............................................................................. None None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management fee** (net of waiver).......................................................... 0.85% 0.85%
12b-1 fee***.............................................................................. 0.30% 1.00%
Other expenses............................................................................ 1.05% 0.87%
Total Fund operating expenses............................................................. 2.20% 2.72%
<FN>
- ---------------
* No sales charge is payable at the time of purchase on investments of $1
million or more, but a contingent deferred sales charge may be imposed on
these investments, as described under the caption "Share Price," in the
event of certain redemption transactions within one year of purchase.
** In the absence of waiver by the Adviser, the annual fund operating expenses
for Class A and Class B shares, respectively, or estimate to be: Management
fee 1.00% and 1.00% and total expenses 2.35% and 2.87%.
*** The amount of the 12b-1 fee used to cover service expenses will be up to
0.25% of the Fund's average daily net assets, and the remaining portion will
be used to cover distribution expenses; but the remaining portion for Class
B shares will never exceed 0.75% of average daily net assets.
+ 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...................................................................... $ 71 $ 115 $ 162 $291
Class B Shares
--Assuming complete redemption at end of period................................... $ 78 $ 114 $ 164 $293
--Assuming no redemption.......................................................... $ 31 $ 84 $ 144 $293
(This example should not be considered a representation of past or future expenses. Actual expenses may be greater or less 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 initial
front-end sales charge permitted under the National Association of Securities
Dealers 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> 81
THE FUND'S FINANCIAL HIGHLIGHTS
The following table of Financial Highlights has been examined by the Fund's
independent accountants. Price Waterhouse LLP has been the Fund's independent
accountants since January 1, 1992. Their unqualified report is included in the
Fund's 1994 Annual Report and is included in the Statement of Additional
Information. The Fund's financial highlights were audited by KPMG Peat Marwick
LLP prior to January 1, 1992. Further information about the performance of the
Fund is contained in the Fund's Annual Report to shareholders, that 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
indicated is as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989 1988
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of
Period............................... $17.45 $14.94 $15.60 $12.44 $16.93 $15.31 $13.98
------ ------- ------- ------- ------- ------- -------
Net Investment Income (Loss).......... (0.22)(a) (0.21) (0.15)(b) 0.05 (0.04) 0.10 0.15
Net Realized and Unrealized Gain
(Loss) on Investments, Options and
Foreign Currency Transactions........ 1.87 4.92 1.00 4.11 (3.09) 2.43 1.32
------ ------- ------- ------- ------- ------- -------
Total from Investment Operations... 1.65 4.71 0.85 4.16 (3.13) 2.53 1.47
------ ------- ------- ------- ------- ------- -------
Less Distributions:
Dividends from Net Investment
Income............................... -- -- -- (0.04) -- (0.13) (0.14)
Distributions from Net Realized Gain
on Investments, Options and Foreign
Currency Transactions................ (1.26) (2.20) (1.51) (0.96) (1.36) (0.78) --
------ ------- ------- ------- ------- ------- -------
Total Distributions................ (1.26) (2.20) (1.51) (1.00) (1.36) (0.91) (0.14)
------ ------- ------- ------- ------- ------- -------
Net Asset Value, End of Period........ $17.84 $17.45 $14.94 $15.60 $12.44 $16.93 $15.31
====== ======= ======= ======= ======= ====== ======
Total Investment Return at Net Asset
Value................................ 9.62% 32.06% 5.70%(c) 33.05% (18.46)% 16.61% 10.48%
------ ------- ------- ------- ------- ------- -------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's
omitted)............................. $52,193 $41,749 $32,094 $31,580 $28,864 $40,341 $38,594
Ratio of Expenses to Average Net
Assets............................... 2.16% 2.10% 2.05%(b) 2.32% 2.36% 1.90% 1.75%
Ratio of Net Investment Income (Loss)
to Average Net Assets................ (1.25)% (1.49)% (0.88)%(b) 0.34% (0.28)% 0.60% 0.89%
Portfolio Turnover Rate............... 67% 86% 76% 67% 38% 30% 12%
<CAPTION>
1987 1986 1985
------ ------ ------
<S> <C> <C> <C>
CLASS A
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of
Period............................... $13.80 $13.57 $11.89
------ ------ ------
Net Investment Income (Loss).......... 0.15 0.14 0.22
Net Realized and Unrealized Gain
(Loss) on Investments, Options and
Foreign
Currency Transactions................ 0.26 0.25 1.80
------ ------ ------
Total from Investment Operations... 0.41 0.39 2.02
------ ------ ------
Less Distributions:
Dividends from Net Investment
Income............................... (0.23) (0.16) (0.34)
Distributions from Net Realized Gain
on Investments, Options and Foreign
Currency Transactions................ -- -- --
------ ------ ------
Total Distributions................ (0.23) (0.16) (0.34)
------ ------ ------
Net Asset Value, End of Period........ $13.98 $13.80 $13.57
====== ====== ======
Total Investment Return at Net Asset
Value................................ 2.84% 2.89% 17.34%
------ ------ ------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's
omitted)............................. $44,224 $56,927 $80,223
Ratio of Expenses to Average Net
Assets............................... 1.63% 1.75% 1.30%
Ratio of Net Investment Income (Loss)
to Average Net Assets................ 0.75% 0.77% 1.65%
Portfolio Turnover Rate............... 9% 6% 9%
</TABLE>
<TABLE>
<CAPTION>
PERIOD ENDED
DECEMBER 31,
1994
-------------
<S> <C>
CLASS B(D)
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period....... $ 17.24(e)
Net Investment Loss........................ (0.35)(a)
Net Realized and Unrealized Gain on
Investments and Options................... (2.05)
-----
Total from Investment Operations........ 1.70
-----
Less Distributions:
Distributions from Net Realized Gain on
Investments Sold and Options.............. (1.26)
-----
Net Asset Value, End of Period............. $ 17.68
=======
Total Investment Return at Net Asset
Value..................................... 10.02%
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's
omitted).................................. $ 9,324
Ratio of Expenses to Average Net Assets.... 2.90%(f)
Ratio of Net Investment Loss to Average Net
Assets.................................... (1.98)%(f)
Portfolio Turnover Rate.................... 67%
</TABLE>
- ---------------
(a) On average month end shares outstanding.
(b) Reflects voluntary expense limitations in effect during the year
ended December 31, 1992. As a result of such limitations, expenses
of the Fund for 1992 reflect reductions of $0.03 per share. Absent
such limitations, for 1992, the ratio of expenses to average net assets
would have been 2.22% and the ratio of net investment income to average
net assets would have been (1.05%).
(c) Without the expense limitation, total investment return would have
been lower.
(d) Class B shares commenced operations on January 3, 1994.
(e) Initial price to commence operations.
(f) On an annualized basis.
3
<PAGE> 82
INVESTMENT OBJECTIVES AND POLICIES
The Fund's primary investment objective is long-term capital growth through
investments principally in equity securities of companies that rely extensively
on technology in their product development or operations. Income is a secondary
objective. The Fund believes that its shares are suitable for investment by
persons who are in search of above-average long-term returns. There is no
assurance that the Fund will achieve its investment objectives.
- -------------------------------------------------------------------------------
THE FUND'S INVESTMENT OBJECTIVE IS TO SEEK
LONG-TERM CAPITAL GROWTH THROUGH
INVESTMENTS PRINCIPALLY IN COMPANIES THAT
RELY EXTENSIVELY ON TECHNOLOGY.
- -------------------------------------------------------------------------------
Under normal market conditions, at least 65% of the Fund's total assets are
invested in securities of the technology companies noted above. Management
strives to realize the Fund's primary investment objective through the careful
selection and continuous supervision of the Fund's portfolio of U.S. and foreign
securities. The Fund's portfolio is primarily comprised of common stocks and
securities convertible into common stocks, including convertible bonds,
convertible preferred stocks and warrants.
Investments in U.S. and foreign companies that rely extensively on technology in
product development or operations may be expected to benefit from scientific
developments and the application of technical advances resulting from improving
technology in many different fields, such as computer software and hardware,
semiconductors, telecommunications, defense and commercial electronics, data
storage and retrieval biotechnology and others. Generally, investments will be
made in securities of a company that relies extensively on technology in product
development or operations only if a significant part of its assets are invested
in, or a significant part of its total revenue or net income is derived from,
this technology.
When market conditions suggest a need for a defensive investment strategy, the
Fund may temporarily invest in short-term obligations of or securities
guaranteed by the U.S. government or its agencies or instrumentalities, high
quality bank certificates of deposit and commercial paper. This temporary
investment strategy is not designed to achieve the Fund's primary investment
objective.
COVERED CALL OPTIONS. The Fund may sell covered call options that are listed on
a national securities exchange against its portfolio securities. Portfolio
securities underlying these call options must have an aggregate value
(determined as of the sale date) not exceeding 5% of the net assets of the Fund.
A call option gives the purchaser of the option the right to buy, and obligates
the writer to sell, the underlying security at the exercise price at any time
during the option period, regardless of the security's market price upon
exercise of the option. If the price of the underlying security rises above the
exercise price and the option is exercised, the Fund loses the opportunity to
profit from that portion of the rise which exceeds the exercise price.
- -------------------------------------------------------------------------------
THE FUND MAY EMPLOY CERTAIN INVESTMENT
STRATEGIES TO HELP ACHIEVE ITS INVESTMENT
OBJECTIVE.
- -------------------------------------------------------------------------------
SECURITIES OF FOREIGN ISSUERS. The Fund may invest in securities of foreign
issuers. Normally the Fund will invest at least 65% of its net assets in
securities of issuers in at least three countries, that may include the United
States, but will not invest more than 25% of its net assets in any one foreign
country.
4
<PAGE> 83
FOREIGN CURRENCY. The Fund may hold a portion of its assets in foreign
currencies, and enter into forward foreign currency exchange contracts, to
protect against changes in foreign currency exchange rates. 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 entering into 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 that
currency.
LOWER RATED SECURITIES. Consistent with its investment objectives, the Fund may
invest up to 10% of its net assets in fixed income securities of public and
private issuers. These securities include convertible and non-convertible bonds
and debentures, zero coupon bonds, payment-in-kind securities, increasing rate
note securities, participation interests, stripped debt securities and other
derivative debt securities. The value of fixed income securities generally
varies inversely with interest rate changes. Convertible issues, while
influenced by the level of interest rates, are also subject to the changing
value of the underlying common stock into which they are convertible.
The Fund invests only in fixed income securities that, at the time of
investment, are rated CC or higher by Standard & Poor's Ratings Group ("Standard
& Poor's") or Ca or higher by Moody's Investors Service, Inc. ("Moody's") or
their equivalent, and unrated fixed income securities of comparable quality as
determined by John Hancock Advisers, Inc. (the "Adviser"). Bonds rated CC or Ca
are highly speculative and are often in default or have other marked
shortcomings. Lower rated securities are generally referred to as junk bonds.
Bonds that have a rating of BBB or lower from Standard & Poor's, Baa or lower
from Moody's or an equivalent rating, and unrated bonds of comparable quality
are considered speculative. While generally providing greater income than
investments in higher quality securities, these bonds involve greater risk of
loss of principal and income, including the possibility of default. The bonds
may have greater price volatility, especially during periods of economic
uncertainty or change. In addition, the market for bonds rated BBB, Baa or lower
may be less liquid than the market for higher rated securities. Therefore, the
Adviser's judgment may at times play a greater role in the performance and
valuation of the Fund's investments in these securities.
Maturity generally is not a significant factor in the Adviser's security
selection process. Accordingly, the Fund may invest in fixed income securities
of any maturity.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements. In a
repurchase agreement, the Fund buys a security subject to the right and
obligation to sell it back at a higher price. These transactions must be fully
collateralized at all times, but involve some credit risk to the Fund if the
other party defaults on its obligation and the Fund is delayed in or prevented
from liquidating the collateral.
RESTRICTED SECURITIES. The Fund may purchase restricted securities including
those that can be offered and sold to "qualified institutional buyers" under
Rule 144A under the Securities Act of 1933 (the "Securities Act"). The Board of
5
<PAGE> 84
Directors will monitor the Fund's investments in these securities, focusing on
certain factors, including valuation, liquidity and availability of information.
Purchases of restricted securities are subject to restrictions, which prohibit
the Fund from investing more than 5% of its net assets in these securities and
limits all the Fund's illiquid and restricted securities to not more than 15% of
its net assets.
LENDING OF SECURITIES. The Fund may lend portfolio securities to brokers,
dealers, and financial institutions if the loan is collateralized by cash or
U.S. Government securities according to applicable regulatory requirements. The
Fund may reinvest any cash collateral in short-term securities. When the Fund
lends portfolio securities, there is a risk that the borrower may fail to return
the loaned securities. As a result, the Fund may incur a loss or, in the event
of the borrower's bankruptcy, the Fund may be delayed in or prevented from
liquidating the collateral. It is a fundamental policy of the Fund not to lend
portfolio securities having a total value in excess of 25% of its total assets.
INVESTMENT RESTRICTIONS. The Fund has adopted certain investment restrictions
that are detailed in the Statement of Additional Information where they are
classified as fundamental or non-fundamental. The Fund's investment objective
and those investment restrictions designated as fundamental may not be changed
without shareholder approval. All other investment policies and restrictions are
non-fundamental and can be changed by a vote of the Board of Directors without
shareholder approval. The Fund's portfolio turnover rates for recent years are
shown in the section "The Fund's Financial Highlights."
- -------------------------------------------------------------------------------
THE FUND FOLLOWS CERTAIN POLICIES, WHICH
MAY HELP TO REDUCE INVESTMENT RISK.
- -------------------------------------------------------------------------------
TECHNOLOGY-INTENSIVE COMPANIES -- CONSIDERATIONS AND RISKS. Securities prices
of the companies in which the Fund invests have tended to be subject to greater
volatility than securities prices in many other industries, due to particular
factors affecting these industries. Competitive pressures may also have a
significant effect on the financial condition of technology-intensive companies.
For example, if the development of new technology continues to advance at an
accelerated rate, and the number of companies and product offerings continue to
expand, the companies could become increasingly sensitive to short product
cycles and aggressive pricing. Accordingly, the Fund's performance will be
particularly susceptible to factors affecting these companies as well as the
economy as a whole.
GLOBAL RISKS. Investments in foreign securities may involve risks that are not
present in domestic investments 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 subject to the same uniform
financial reporting requirements, accounting standards and government
supervision as domestic companies, and foreign exchange markets are regulated
differently from the U.S. stock market. Security trading practices abroad may
offer less protection to investors such as the Fund. In addition, foreign
securities may be denominated in the currency of the country in which the issuer
is located. Consequently, changes
- -------------------------------------------------------------------------------
INVESTMENTS IN FOREIGN SECURITIES MAY
INVOLVE RISKS AND CONSIDERATIONS THAT ARE
NOT PRESENT IN DOMESTIC INVESTMENTS.
- -------------------------------------------------------------------------------
6
<PAGE> 85
in the foreign exchange rate will affect the value of the Fund's shares and
dividends. Finally, the expense ratios of international funds generally are
higher than those of domestic funds. This is because there are greater costs
associated with maintaining custody of foreign securities, and the increased
research necessary for international investing.
These risks may be intensified in the case of investments in emerging markets
or countries with limited or developing capital markets. These countries are
located in the Asia-Pacific region, Eastern Europe, Latin and South America,
and Africa. Security prices in these markets can be significantly more volatile
than in more developed countries, reflecting the greater uncertainties of
investing in less established markets and economies. Political, legal and
economic structures in many of these emerging market countries may be
undergoing significant evolution and rapid development, and they may lack the
social, political, legal and economic stability characteristic of more
developed countries. Emerging market countries may have failed in the past to
recognize private property rights. They may have relatively unstable
governments, present the risk of nationalization of businesses, restrictions on
foreign ownership, or prohibitions on repatriation of assets, and may have less
protection of property rights than more developed countries. Their economies
may be predominantly based on only a few industries, may be highly vulnerable
to changes in local or global trade conditions, and may suffer from extreme and
volatile debt burdens or inflation rates. Local securities markets may trade a
small number of securities and may be unable to respond effectively to
increases in trading volume, potentially making prompt liquidation of
substantial holdings difficult or impossible at times. The Fund may be required
to establish special custodial or other arrangements before making certain
investments in these countries. Securities of issuers located in these
countries may have limited marketability and may be subject to more
abrupt or erratic price movements.
In choosing brokerage firms to carry out the Fund's transactions the Adviser
gives primary consideration to execution at the most favorable price, 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 established by the Directors, the Adviser may place securities
transactions with brokers affiliated with the Adviser. These brokers include
Tucker Anthony Incorporated, John Hancock Distributors, Inc., and Sutro &
Company, Inc. which are indirectly owned by John Hancock Mutual Life Insurance
Company, which in turn indirectly owns the Adviser.
- -------------------------------------------------------------------------------
BROKERS ARE CHOSEN BASED ON BEST PRICE AND
EXECUTION.
- -------------------------------------------------------------------------------
7
<PAGE> 86
ORGANIZATION AND MANAGEMENT OF THE FUND
The Fund is a diversified series of the Company, an open-end management
investment company organized as a Maryland corporation in 1990. The Company
currently has two series of shares. The Directors 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,
except that each bears different distribution and transfer agent fees. Also,
Class A and Class B shareholders have exclusive voting rights with respect to
the Rule 12b-1 distribution plan, which has been adopted by holders of those
shares in connection with the shares' distribution. The authorized capital stock
of the Company consists of 200 million shares. The Fund consists of 100 million
shares, $0.20 par value, which are divided into Class A and Class B, each with
50 million shares. The Company is generally not required to hold annual
shareholder meetings, although special shareholder meetings may be called for
such purposes as electing or removing Directors, changing fundamental
restrictions and policies, or approving a management contract. Shareholders have
certain rights to remove Directors.
- -------------------------------------------------------------------------------
THE DIRECTORS ELECT OFFICERS AND RETAIN
THE INVESTMENT ADVISER AND SUBADVISER, WHO
ARE RESPONSIBLE FOR THE FUND'S DAY-TO-DAY
OPERATIONS SUBJECT TO THE DIRECTORS'
POLICIES AND SUPERVISION.
- -------------------------------------------------------------------------------
The Adviser was organized in 1968 and is a wholly-owned indirect subsidiary of
the John Hancock Mutual Life Insurance Company, a financial services company. It
provides the Fund, and other investment companies in the John Hancock group of
funds, with investment research and portfolio management services. The Fund,
under certain circumstances, will assist in shareholder communications with
other shareholders.
- -------------------------------------------------------------------------------
JOHN HANCOCK ADVISERS, INC. ADVISES
INVESTMENT COMPANIES HAVING A TOTAL ASSET
VALUE OF MORE THAN $13 BILLION.
- -------------------------------------------------------------------------------
American Fund Advisors, Inc. (the "Sub-Adviser"), which served as the Fund's
investment adviser from the Fund's commencement of operations in 1983 to 1991,
is the Fund's sub-adviser. The Sub-Adviser was incorporated in 1978 and acts as
investment manager or adviser for other institutional and individual clients.
Barry J. Gordon, Chairman and President, and Marc H. Klee, Senior Vice
President, of the Sub-Adviser, each of whom owns more than 25% of the
Sub-Adviser's voting securities, are controlling persons of the Sub-Adviser.
Messrs. Gordon and Klee carry out day-to-day management of the Fund. Mr. Gordon
was instrumental in the formation of the Sub-Adviser. He has been co-manager of
the Fund along with Mr. Klee for the past five years. Both have been associated
with the Fund in a portfolio management capacity prior to 1988.
John Hancock Funds, Inc. ("John Hancock Funds") distributes shares for all of
the John Hancock funds directly and through selected broker-dealers ("Selling
Brokers"). Certain Fund officers are also officers of the Adviser and John
Hancock Funds. Pursuant to an order granted by the Securities and Exchange
Commission, the Fund has adopted a deferred compensation plan for its
independent Directors which allows Directors' fees to be invested by the Fund in
other John Hancock Funds.
In order to avoid any conflict with portfolio trades for the Fund, the Adviser,
the Sub-Adviser and the Fund have adopted extensive restrictions on personal
securities trading by personnel of the Adviser and its affiliates. Some of these
8
<PAGE> 87
restrictions are: pre-clearance 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 (See "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 PURCHASE 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 you 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 0.30% 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 the time you make your investment, but the higher
ongoing distribution fee will cause these shares to have higher expenses than
that of Class A shares. To the extent that any dividends are paid by the Fund,
these higher expenses will result in lower dividends than those paid on Class A
shares.
- -------------------------------------------------------------------------------
INVESTMENTS IN CLASS B SHARES ARE SUBJECT
TO A CONTINGENT DEFERRED SALES CHARGE.
- -------------------------------------------------------------------------------
Class B shares are not available to full-service defined contribution plans
administered by Investor Services or John Hancock Mutual Life Insurance 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 agreement allows you to choose the most beneficial way
to buy shares given the amount of your purchase, the length of time that 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
- -------------------------------------------------------------------------------
YOU SHOULD CONSIDER WHICH CLASS OF SHARES
WOULD BE MORE BENEFICIAL FOR YOU.
- -------------------------------------------------------------------------------
9
<PAGE> 88
page 2 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 a reduced sales charge. See "Share Price--Qualifying for a Reduced Sales
Charge."
Class A shares are subject to lower distribution and service fees and,
accordingly, pay correspondingly higher dividends per share, to the extent that
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 fees and, for a six-year period, a CDSC.
In the case of Class A shares, 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 the ongoing distribution and service fees. In
the case of Class B shares, 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 Class B
shares' CDSC and ongoing distribution and service fees are the same as those of
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.
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 will also 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 the Fund's investment and business affairs the Fund pays a fee to
the Adviser which for the 1994 fiscal year was 1.00% of the Fund's average daily
net asset value. This fee is equal on an annual basis to a stated percentage of
its average daily net assets, as follows:
<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
--------------- -----------
<S> <C>
First $100,000,000 1.00%
Amounts over $100,000,000 0.75%
</TABLE>
In addition, the Fund pays a monthly administration fee at the rate of $100,000
per annum to the Adviser.
10
<PAGE> 89
Effective January 1, 1995, the Board of Directors approved a waiver of a portion
of the management fee payable by the Fund to the Adviser in an amount equal to
0.15% of the average of the daily net asset value of the first $100 million,
thereby reducing the fee payable on these assets to an annual rate of 0.85%.
The Adviser (not the Fund) pays a monthly fee to the Sub-Adviser for managing
the Fund's portfolio securities. This fee is equal on an annual basis to a
stated percentage of the Fund's average daily net assets, as follows:
<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
--------------- -----------
<S> <C>
First $100,000,000 0.40%
Amounts over $100,000,000 40% of the investment
advisory fee received by
the Adviser on amounts
over $100,000,000.
</TABLE>
Currently, the Sub-Adviser has waived a portion of this fee resulting in a
decrease in its fee to 0.35%.
The investment management fee paid by the Fund is higher than the fee paid by
most mutual funds, but is believed to be comparable to the fee paid by funds
that invest in similar securities.
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. Under
these Plans, the Fund will pay distribution and service fees at an aggregate
annual rate of 0.30% 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 (not
to exceed 0.75% for Class B shares) 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, and (iii) with respect to Class B shares only, interest expenses on
unreimbursed distribution expenses. The Plans provide that John Hancock Funds
will use the distribution fees to promote sales of shares, and will use the
service fees to compensate Selling Brokers for providing personal and account
maintenance services to shareholders. 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 twelve months from the date they
were incurred. Unreimbursed expenses under the Class B Plan will be carried
forward together with interest on the balance of the unreimbursed expenses. For
the fiscal year ended December 31, 1994 an aggregate of $239,098 of distribution
expenses, or 5.47% of the average net assets of the Class B shares of the Fund,
was not reimbursed or recovered by the John Hancock Funds through the receipt of
deferred sales charges or 12b-1 fees in prior periods.
- -------------------------------------------------------------------------------
THE FUND PAYS DISTRIBUTION AND SERVICE
FEES FOR MARKETING AND SALES-RELATED
SHAREHOLDER SERVICING.
- -------------------------------------------------------------------------------
Information on the Fund's total expenses is in the Fund's Financial Highlights
section of this Prospectus.
11
<PAGE> 90
DIVIDENDS AND TAXES
DIVIDENDS. The Fund generally pays dividends and capital gains annually that
represent substantially all net investment income. 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. The per
share dividends, if any, on Class B shares will be lower than those for Class A
shares because of the higher expenses attributable to the Class B shares. See
"Share Price."
TAXATION. Dividends from the Fund's net investment income, certain net foreign
currency 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. Certain dividends paid in January of a given
year may be taxable as if you received them the previous December. Corporate
shareholders may be entitled to take a corporate dividends-received deduction
for dividends received by the Fund from U.S. domestic corporations, subject to
certain restrictions under the Internal Revenue Code. 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 Code. As a regulated investment
company, the Fund will not be subject to Federal income taxes on any net
investment income and net realized capital gains that are distributed to its
shareholders at least annually. When you redeem (sell) or exchange shares, you
may realize a taxable gain or loss.
On the account application, you must certify that your social security or other
taxpayer identification number 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 backup withholding, the Fund may be required to
withhold 31% of your dividends, and the proceeds of redemptions and exchanges.
The Fund may be subject to foreign withholding taxes on certain of its foreign
investments, if any, which will reduce the yield on those investments.
In addition to Federal taxes, you may be subject to state, local or foreign
taxes with respect to your investment in and distributions from the Fund. In
some states, a portion of the Fund's dividends which represents interest
received by the Fund on direct U.S. government obligations is exempt from tax.
Non-U.S. shareholders and tax-exempt shareholders are subject to different tax
treatment not described above. You should consult your tax adviser for specific
advice.
PERFORMANCE
The Fund's total return shows the overall 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
- -------------------------------------------------------------------------------
THE FUND MAY ADVERTISE ITS TOTAL RETURN.
- -------------------------------------------------------------------------------
12
<PAGE> 91
total return shows the cumulative return of the Fund shares dividend 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 is is not the same as actual year-to-year results.
Total return 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 a lower sales charge would result in higher
performance figures. Total return for the Class B shares reflects 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. The total return of Class A
and Class B shares will be calculated separately and, because each class of
shares 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. Total
return is a historical calculation and is not an indication of future
performance. See "Factors to Consider in Choosing Alternatives."
13
<PAGE> 92
HOW TO BUY SHARES
- --------------------------------------------------------------------------------
<TABLE>
The minimum initial investment in Class A and Class B shares is $1,000 ($250 for
group investments and retirement plans). Complete the Account Application attached
to this Prospectus and indicate whether you are buying Class A or Class B shares.
If you do not specify which class of shares you are purchasing Investor Services
will assume you are investing in Class A shares.
- -------------------------------------------------------------------------------
OPENING AN ACCOUNT.
- -------------------------------------------------------------------------------
<S> <C>
- --------------------------------------------------------------------------------
BY CHECK 1. Make your check payable to John Hancock Investor Services
Corporation ("Investor Services").
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 Global Technology 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.
- -------------------------------------------------------------------------------
1. Complete the "Automatic Investing" and "Bank Information" sections on
MONTHLY the Account Privileges Application, designating a bank account from
AUTOMATIC which funds may be drawn.
ACCUMULATION
PROGRAM 2. The amount you elect to invest will be automatically withdrawn from
(MAAP) 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, you 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 and Class B shares by calling
Investor Services toll-free at 1-800-225-5291.
3. Give the Investor Services representative the name 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.
- ---------------------------------------------------------------------------------
BY CHECK 1. Either fill out the detachable stub included in 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.
- ---------------------------------------------------------------------------------
</TABLE>
14
<PAGE> 93
- --------------------------------------------------------------------------------
BUYING ADDITIONAL CLASS A AND CLASS B
SHARES.
(CONTINUED)
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
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 Freedom Global Technology 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 John Hancock Funds 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. Share 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, WHICH 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 according
to procedures approved by the Directors. 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 Directors believe
accurately reflects fair value. The NAV is calculated once daily as of the close
of regular trading on the New York Stock 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.
- -------------------------------------------------------------------------------
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 New York
Stock Exchange and transmit it to John Hancock Funds before its close of
business, to receive that day's offering price.
15
<PAGE> 94
INITIAL SALES CHARGE ALTERNATIVE--CLASS A SHARES. The offering price you pay
for Class A shares of the Fund equals the NAV next computed after your
investment is received in good order by John Hancock Funds plus a sales charge,
as follows:
<TABLE>
<CAPTION>
COMBINED REALLOWANCE
REALLOWANCE TO SELLING
AND SERVICE BROKERS AS A
FEE AS A PERCENTAGE
SALES CHARGE AS SALES CHARGE AS PERCENTAGE OF THE
AMOUNT INVESTED A PERCENTAGE OF A PERCENTAGE OF OF OFFERING OFFERING
(INCLUDING SALES CHARGE) OFFERING PRICE THE AMOUNT INVESTED PRICE(+) 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%(***) 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 given 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. Other than distribution fees, the Fund
does not bear distribution expenses. 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.
(**) No sales charge is payable at the time of purchase of Class A Shares of $1
million or more, but a contingent deferred sales charge may be imposed in
the event of certain redemption transactions made within one year of
purchase.
(***) John Hancock Funds may pay a commission and first year's service fee (as
described in (+) below) to Selling Brokers who initiate and are
responsible for purchases of Class A shares 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 $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. 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>
Sales charges ARE NOT APPLIED to any dividends that are reinvested in additional
shares of the Fund.
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 as described below, investors in Class A shares may
be entitled to pay reduced sales charges. See "Qualifying for a reduced Sales
Charge" below.
16
<PAGE> 95
CONTINGENT DEFERRED SALES CHARGE -- INVESTMENTS OF $1 MILLION OR MORE IN CLASS A
SHARES. Purchases of $1 million or more in 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 contingent deferred sales charge period), a contingent deferred sales
charge will be imposed. The rate of the CDSC will depend on the amount invested
as follows:
<TABLE>
<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 John Hancock Mutual Life Insurance 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 contingent deferred sales charge
will be imposed at the above rate.
The charge 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 dividends which have been reinvested in
additional 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
redemption in certain circumstances. See the discussion under "Waiver of
Contingent Deferred Sales Charges".
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 in the John Hancock 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 COMBINATION PRIVILEGE to take
advantage of the value of your previous investments in Class A shares of the
John Hancock funds when meeting the breakpoints for a reduced sales charge. For
the ACCUMULATION PRIVILEGE and COMBINATION PRIVILEGE, the applicable sales
charge will be based on the total of:
- -------------------------------------------------------------------------------
YOU MAY QUALIFY FOR A REDUCED SALES CHARGE
ON YOUR INVESTMENTS IN CLASS A SHARES.
- -------------------------------------------------------------------------------
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."
17
<PAGE> 96
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%. This
rate is the rate that would otherwise be applicable to investments of less than
$50,000. See "Initial Sales Charge Alternative--Class A Shares."
- -------------------------------------------------------------------------------
SPECIAL TRANSACTIONS
- -------------------------------------------------------------------------------
CLASS A SHARES MAY BE AVAILABLE WITHOUT A
SALES CHARGE TO CERTAIN INDIVIDUALS AND
ORGANIZATIONS.
- -------------------------------------------------------------------------------
If you are in one of the following categories, you may purchase Class A shares
of the Fund without paying a sales charge:
- - A Director or officer of the Company; 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.
- - 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 (an
"eligible depository institution") 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 client of the Sub-Adviser if the client's funds are transferred directly to
the Fund from accounts managed by the Sub-Adviser.
- - 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 also be purchased without an initial sales charge
in connection with certain liquidation, merger or acquisition transactions
involving other investment companies or personal holding companies.
If you were a stockholder of record of Nova Fund on May 1, 1987, you are
permitted for an indefinite period to purchase additional Class A shares at net
asset value, without a sales charge, provided that you held Nova Fund shares
continuously from May 1, 1987 to the date of the purchase in question and you
represent that you are buying the additional shares for investment purposes, not
with a view to distribution.
- -------------------------------------------------------------------------------
FUND EMPLOYEES AND AFFILIATES.
- -------------------------------------------------------------------------------
18
<PAGE> 97
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 or distributions, 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 Charges" below.
EXAMPLE:
You have purchased 100 shares at $10 per share. The second year after your
purchase, your investment's net asset value per share has increased by $2 to
$12, and you have gained 10 additional shares through dividend reinvestment. If
you redeem 50 shares at this time, your CDSC will be calculated as follows:
<TABLE>
<S> <C>
- - Proceeds of 50 shares redeemed at $12 per share $600
- - Minus proceeds of 10 shares not subject to CDSC because they were -120
acquired through dividend reinvestment (10 X $12)
- - Minus appreciation on remaining shares, also not subject to CDSC -80
(40 X $2)
-----
- - 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 the Class B shares, such as
compensating selected 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 the Class B shares without deducting a sales charge at the time of the
purchase.
19
<PAGE> 98
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 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>
CONTINGENT DEFERRED SALES
CHARGE AS A PERCENTAGE OF
YEAR IN WHICH CLASS B SHARES DOLLAR AMOUNT SUBJECT TO
REDEEMED FOLLOWING PURCHASE 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 personal and
account maintenance services provided to shareholders during the twelve months
following the sale, and thereafter the service fee is paid in arrears.
- -------------------------------------------------------------------------------
UNDER CERTRAN CIRCUMSTANCES, THE CDSC ON
CLASS B AND CERTAIN A SHARE
REDEMPTIONS WILL BE WAIVED.
- -------------------------------------------------------------------------------
WAIVER OF CONTINGENT 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 the circumstances defined below:
- -------------------------------------------------------------------------------
- - 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 established 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.
20
<PAGE> 99
- - Redemptions due to death or disability.
- - 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
own fewer than 50 shares.
- - 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 at the end of the month eight years after the
shares were purchased, and will result in lower annual distribution fees. If you
exchanged Class B shares into this 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 into Class
A shares should not be taxable for Federal income tax purposes, nor should it
change your tax basis or tax holding period for the converted shares.
21
<PAGE> 100
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).
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.
- -------------------------------------------------------------------------------
TO ASSURE ACCEPTANCE OF YOUR REDEMPTION
REQUEST, PLEASE FOLLOW THESE PROCEDURES.
- -------------------------------------------------------------------------------
<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. (Eastern Time), Monday through
Friday, excluding days on which the New York Stock Exchange
is closed. Investor Services employs the following proce-
dures 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 30 days.
A check will be mailed to the exact name(s) and address
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, other
tax-qualified retirement plans or Fund shares that are in
certificated 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
using 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 fund transfer to your assigned bank account and
the funds are usually collectible after two business days.
Your bank may or may not charge 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
that is 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>
22
<PAGE> 101
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
TYPE OF REGISTRATION REQUIREMENTS
-------------------- ------------
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 signatures
guaranteed.
Trusts A letter of instruction signed by the
Trustee(s), with a signature guarantee. (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>
- --------------------------------------------------------------------------------
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 any such 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
(iv) 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 instruction. 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 smaller accounts, the Fund
reserves the right to redeem at net asset value all shares in an account which
holds fewer than 100 shares (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. No CDSC will be imposed on involuntary redemption 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 purchase 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.
- -------------------------------------------------------------------------------
23
<PAGE> 102
Exchanges between funds 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 for 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 for
exchanges into John Hancock Short-Term Strategic Income Fund, John Hancock
Adjustable U.S. Government Trust and John Hancock Limited Term-Government Fund
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 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 that was in effect at your initial purchase date.
You may exchange Class B shares of any John Hancock 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 on the original fund at the time of the exchange.
The Fund reserves the right to require that you 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 of 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
24
<PAGE> 103
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 fill out 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.
3. 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 the 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 that you reinvest
in 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 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, account number and class from which your shares were originally
redeemed.
25
<PAGE> 104
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 the 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.
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.
- -------------------------------------------------------------------------------
YOU CAN PAY ROUTINE BILLS FROM YOUR
ACCOUNT OR MAKE PERIODIC DISBURSEMENTS OF
FUNDS FROM YOUR RETIREMENT ACCOUNT TO
COMPLY WITH IRS REGULATIONS.
- -------------------------------------------------------------------------------
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 an initial sales charge on your purchases of Class A shares or to
a CDSC on your redemption 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 drawn automatically each month on your
bank for investment in Fund shares, under the "Automatic Investing" and "Bank
Information" section of the Account Privileges Application.
- -------------------------------------------------------------------------------
YOU CAN MAKE AUTOMATIC
INVESTMENTS AND SIMPLIFY
YOUR INVESTING.
- -------------------------------------------------------------------------------
2. You can also authorize automatic investing through payroll deduction by
completing the "Direct Deposit Investing" section of the Account Privileges
Application.
3. You can terminate your Monthly Automatic Accumulation Program 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 payment 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.
26
<PAGE> 105
RETIREMENT PLANS
1. You may use the Fund to fund various types of retirement plans, including
Individual Retirement Accounts, Keogh Plans (H.R. 10), Pension and Profit-
Sharing Plans (including 401(k) plans), Tax Sheltered Annuity Retirement
Plans (403(b) or TSA Plans), and 457 Plans.
2. The initial investment minimum or aggregate minimum for any of these plans is
$250. However, accounts being established as Group IRA, SEP, SARSEP, TSA and
401(k) and 457 plans will be accepted without an initial minimum investment.
APPENDIX
MOODY'S describes its lower ratings for corporate bonds as follows.
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.
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 are well safeguarded during
both good and bad times over the future. Uncertainty of position characterizes
bonds in this class.
Bonds which are rated B generally lack characteristics of the 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.
Bonds which are rated CAA are of poor standing. Such issues may be in default or
there may be present elements of danger with respect to principal or interest.
Bonds which are rated CA represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked shortcomings.
Bonds which are rated C are the lowest rated class of bonds and issues so rated
can be regarded as having extremely poor prospects of ever attaining any real
investment standing.
S&P describes its lower ratings for corporate bonds as follows:
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.
Debt rated BB, B, CCC, OR C is regarded, on balance, as predominantly
speculative with respect to the issuer's capacity to pay interest and repay
principal in accordance with the terms of the obligations. 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.
27
<PAGE> 106
JOHN HANCOCK
JOHN HANCOCK GLOBAL GLOBAL
TECHNOLOGY FUND TECHNOLOGY
FUND
INVESTMENT ADVISER
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
SUB-ADVISER
American Fund Advisors, Inc.
1415 Kellum Place, Suite 205
Garden City, New York 11530 CLASS A AND CLASS B SHARES
PROSPECTUS
PRINCIPAL DISTRIBUTOR MAY 1, 1995
John Hancock Funds, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603 A MUTUAL FUND SEEKING LONG-TERM
CAPITAL GROWTH THROUGH INVESTMENT
CUSTODIAN PRINCIPALLY IN EQUITY SECURITIES OF
Investors Bank & Trust Company COMPANIES WHICH RELY EXTENSIVELY
24 Federal Street ON TECHNOLOGY IN THEIR PRODUCT
Boston, Massachusetts 02110 DEVELOPMENT OR OPERATIONS. INCOME
IS A SECONDARY OBJECTIVE.
TRANSFER AGENT
John Hancock Investor Services
Corporation
P.O. Box 9116
Boston, Massachusetts 02205-9116
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
160 Federal Street
Boston, Massachusetts 02110
HOW TO OBTAIN INFORMATION
ABOUT THE FUND 101 HUNTINGTON AVENUE
For Service Information BOSTON, MASSACHUSETTS 02199-7603
For Telephone Exchange TELEPHONE 1-800-225-5291
For Investment-by-Phone call 1-800-225-5291
For Telephone Redemption
For TDD call 1-800-554-6713
JHD-8300P 5/95 (LOGO) Printed on recycled paper
<PAGE> 107
JOHN HANCOCK
GLOBAL TECHNOLOGY FUND
CLASS A AND CLASS B SHARES
STATEMENT OF ADDITIONAL INFORMATION
MAY 1, 1995
This Statement of Additional Information provides information about John
Hancock Global Technology Fund (the "Fund") in addition to the information that
is contained in the Fund's Class A and Class B Prospectus (the "Prospectus")
dated May 1, 1995.
The Fund is a series of John Hancock Technology Series, Inc. (the
"Company"). This Statement of Additional Information 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 02205-9116
1-(800)-225-5291
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Statement of
Additional
Information
Page
<S> <C>
ORGANIZATION OF THE FUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
INVESTMENT OBJECTIVES AND POLICIES . . . . . . . . . . . . . . . . . . . . . . . . . . 2
INVESTMENT RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
THOSE RESPONSIBLE FOR MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
INVESTMENT ADVISORY AND OTHER SERVICES . . . . . . . . . . . . . . . . . . . . . . . . 16
DISTRIBUTION CONTRACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
NET ASSET VALUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
INITIAL SALES CHARGE ON CLASS A SHARES . . . . . . . . . . . . . . . . . . . . . . . . 21
DEFERRED SALES CHARGE ON CLASS B SHARES . . . . . . . . . . . . . . . . . . . . . . . . 22
SPECIAL REDEMPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ADDITIONAL SERVICES AND PROGRAMS . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
TAX STATUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
DESCRIPTION OF THE FUND'S SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
CALCULATION OF PERFORMANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
BROKERAGE ALLOCATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
TRANSFER AGENT SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
CUSTODY OF PORTFOLIO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
</TABLE>
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<TABLE>
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INDEPENDENT AUDITORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
</TABLE>
ORGANIZATION OF THE FUND
The Fund is a diversified series of John Hancock Technology Series, Inc.
(the "Company"), an open-end management investment company organized as a
corporation under the laws of Maryland on January 5, 1990. On May 1, 1990, the
Fund succeeded to the assets and liabilities of the National Telecommunications
& Technology Fund, Inc. On December 6, 1991, the Company changed its name from
AFA Funds, Inc. and the Fund changed its name from National Telecommunications
& Technology Fund. Effective October 1, 1992, the Fund ceased doing business
as Global Technology Fund and commenced doing business under the name John
Hancock Freedom Global Technology Fund. The Fund is managed by John Hancock
Advisers, Inc. (the "Adviser") and American Fund Advisors, Inc. ("AFA" or the
"Sub-Adviser"). As of January 1, 1995, the Fund changed its name to John
Hancock Global Technology Fund.
INVESTMENT OBJECTIVES AND POLICIES
The Fund's investment objectives and policies are set forth in the
Fund's Prospectus dated May 1, 1995 which is incorporated herein by reference.
The following information augments the Prospectus.
The Fund's primary objective is to provide long-term capital growth
principally through investments in equity securities of companies which rely
extensively on technology in product development or operations. Income is a
secondary consideration of the Fund.
Forward Foreign Currency Transactions. 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 will 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 specific transactions or portfolio
positions. The Fund will not attempt to hedge all of its foreign portfolio
positions. The Fund will not engage in speculative forward currency exchange
transactions.
If the Fund enters into a forward contract to purchase currency, its
custodian bank will segregate cash or liquid assets in a separate account of
the Fund in an amount equal to the value of the Fund's total high grade debt
securities committed to the consummation of such forward contract. Those
assets will be valued at market daily and if the value of the assets in the
separate account declines, additional cash or liquid assets will be placed in
the account so that the value of the account will equal the amount of the
Fund's commitment with respect to such contracts.
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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 should rise.
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.
Characteristics and Risks of Foreign Securities Markets. The securities
markets of many countries have in the past moved relatively independently of
one another, due to differing economic, financial, political and social
factors. When markets in fact move in different directions and offset each
other, there may be a corresponding reduction in risk for the Fund's portfolio
as a whole. This lack of correlation among the movements of the world's
securities markets may also affect unrealized gains the Fund has derived from
movements in any one market.
If the securities of markets moving in different directions are combined
into a single portfolio, such as that of the Fund, total portfolio volatility
is reduced. Since the Fund will invest in securities denominated in currencies
other than U.S. dollars, changes in foreign currency exchange rates will affect
the value of its portfolio securities. Currency exchange rates may not move in
the same direction as the securities markets in a particular country. As a
result, market gains may be offset by unfavorable exchange rate fluctuations.
Investments in foreign securities may involve risks and considerations
not present in domestic investments. Since foreign securities generally may be
denominated and pay interest or dividends in foreign currencies, the value of
the assets of the Fund as measured in U.S. dollars will be affected favorably
or unfavorably by changes in the relationship of the U.S. dollar and other
currency rates. The Fund may incur costs in connection with the conversion of
foreign currencies into U.S. dollars and may be adversely affected by
restrictions on the conversion or transfer of foreign currencies. In addition,
there may be less publicly available information about foreign companies than
U.S. companies. Foreign companies may not be subject to accounting, auditing,
and financial reporting standards, practices and requirements comparable to
those applicable to U.S. companies.
Foreign securities markets, while growing in volume, have for the most
part substantially less volume than U.S. securities markets and securities of
foreign companies are generally less liquid and at times their prices may be
more volatile than securities of comparable U.S. companies. Foreign stock
exchanges, brokers and listed companies are generally subject to less
government supervision and regulation than those in the U.S. The customary
settlement time for foreign securities may be longer than the five (5) day
customary settlement time for U.S. securities, or less frequent than in the
U.S., which could affect the liquidity of the Fund's investments. The Adviser
and the Sub-Adviser will monitor the settlement time for foreign
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securities and take undue settlement delays into account in considering the
desirability of allocating investments among specific countries.
The Fund may invest in companies located in developing countries which,
compared to the U.S. and other developed countries, may have relatively
unstable governments, economies based on only a few industries and securities
markets which trade only a small number and volume of securities. Prices on
exchanges located in developing countries tend to be volatile and, in the past,
securities traded on those exchanges have offered a greater potential for gain
(and loss) than securities traded on exchanges in the U.S. and more developed
countries.
In some countries, there is the possibility of expropriation or
confiscatory taxation, seizure or nationalization of foreign bank deposits or
other assets, establishment of exchange controls, the adoption of foreign
government restrictions or other adverse political, social or diplomatic
developments that could affect investments in these countries.
High Yield "High Risk" Fixed Income Securities. As discussed in the
Fund's Prospectus, the Fund may invest up to 10% of its net assets in fixed
income securities that, at the time of investment, are rated CC or higher by
Standard & Poor's Ratings Group ("Standard & Poor's") or Ca or higher by
Moody's Investors Service, Inc. ("Moody's") or their equivalent, and unrated
fixed income securities of comparable quality as determined by the Adviser.
Ratings are based largely on the historical financial condition of the issuer.
Consequently, the rating assigned to any particular security is not necessarily
a reflection of the issuer's current financial condition, which may be better
or worse than the rating would indicate.
The values of lower-rated securities and unrated securities of
comparable quality generally fluctuate more than those of high-rated
securities. There is a greater possibility that an adverse change in the
financial condition of an issuer of lower-rated securities or unrated
securities of comparable quality will affect the issuer's ability to make
payments of interest and principal. To the extent the Fund invests in these
securities, the achievement of the Fund's investment objectives is more
dependent on the Sub-Adviser's ability than it would be if the Fund were
investing in higher quality securities.
As noted in the Fund's Prospectus, the Fund may invest in pay-in-kind
(PIK) securities, which pay interest in either cash or additional securities,
at the issuer's option, for a specified period. The Fund may also invest in
zero coupon bonds, which have a determined interest rate, but payment of the
interest is deferred until maturity of the bonds. Both types of bonds may be
more speculative and subject to greater fluctuation in value than securities
which pay interest periodically and in cash, due to changes in interest rates.
Preferred Stock. As stated in the Prospectus, the Fund may purchase
preferred stock. Preferred stocks are equity securities, but possess certain
attributes of fixed income securities. Holders of preferred stocks normally
have the right to receive dividends at a fixed rate when and as declared by the
issuer's board of directors, but do not participate in other amounts available
for distribution by the issuing corporation. Dividends on preferred stock may
be cumulative, and all cumulative dividends usually must be paid prior to
dividend payments to common stockholders. Because of this preference,
preferred stocks generally entail less risk than common stocks. Upon
liquidation, preferred stocks are entitled to a specified liquidation
preference, which is generally
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the same as the par or stated value, and are senior in right of payment to
common stocks. Preferred stocks are equity securities in that they do not
represent a liability of the issuer and therefore do not offer a great a degree
of protection of capital or assurance of continued income as investments in
corporate debt securities. In addition, preferred stocks are subordinated in
right of payment to all debt obligations and creditors of the issuer, and
convertible preferred stocks may be subordinated to other preferred stock of
the same issuer. See "Convertible Securities" below for a description of
certain characteristics of convertible preferred stock.
Convertible Securities. As stated in the Fund's Prospectus, the Fund
may purchase convertible fixed income securities and preferred stock.
Convertible securities are securities that may be converted at either a stated
price or stated rate into underlying shares of common stock of the same issuer.
Convertible securities have general characteristics similar to both fixed
income and equity securities. Although to a lesser extent than with straight
debt securities, the market value of convertible securities tends to decline as
interest rates increase and, conversely, tends to increase as interest rates
decline. In addition, because of the conversion feature, the market value of
convertible securities tends to vary with fluctuations in the market value of
the underlying common stocks and therefore will also react to variations in the
general market for equity securities. A unique feature of convertible
securities is that as the market price of the underlying common stock declines,
convertible securities tend to trade increasingly on a yield basis, and
consequently may not experience market value declines to the same extent as the
underlying common stock. When the market price of the underlying common stock
increases, the prices of the convertible securities tend to rise as a
reflection of the value of the underlying common stock increases, the prices
of the convertible securities tend to rise as a reflection of the value of the
underlying common stock. While no securities investments are without risk,
investments in convertible securities generally entail less risk than
investments in common stock of the same issuer. However, the issuers of
convertible securities may default on their obligations.
Restricted Securities. The Fund may invest up to 5% of its net assets
in securities which are subject to restrictions on resale because they have not
been registered under the Securities Act of 1933 (the "1933 Act"), or for which
market quotations are not readily available. Limitations on the resale of such
securities may have an adverse effect on their marketability, which may prevent
the Fund from disposing of them promptly at reasonable prices. If the Fund
purchases restricted securities, it may also have to pay the cost of
registering them with the Securities and Exchange Commission. At the time the
Fund acquires any such securities, it will ordinarily attempt to obtain the
right to have them registered within a specified period of time at the issuer's
expense. There is no assurance that such right can be obtained.
The fair value of restricted securities will be determined in good faith
by the Board of Directors, taking into account the market value of comparable
securities where applicable, the right to registration under the 1933 Act at
the issuer's expense, and other applicable considerations.
Repurchase Agreements. A repurchase agreement is a contract under which
the Fund would acquire a security for a relatively short period (usually not
more than 7 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 "primary dealers" in U.S.
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Government securities. The Advisers will continuously monitor the
creditworthiness of the parties with whom the Fund enters into repurchase
agreements.
The Fund may enter into repurchase agreements with respect to its
portfolio securities. 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 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.
INVESTMENT RESTRICTIONS
Fundamental Investment Restrictions
The following investment restrictions (as well as the fund's investment
objective) will not be changed without approval of the holders of a majority of
outstanding voting securities of the Fund which, as used in the Prospectus and
this Statement of Additional Information, means approval of the lesser of (1)
the holders of 67% or more of the shares of the Fund represented at a meeting
if the holders of more than 50% of outstanding shares are present in person or
by proxy or (2) the holders of more than 50% of the outstanding shares. The
Fund observes the following fundamental restrictions; The Fund may not:
(1) Invest less than 65% of the value of its total assets (exclusive
of cash, U.S. Government securities and short-term commercial paper) in
securities of companies which rely extensively on technology in product
development or operation, except temporarily during periods when economic
conditions with respect to such companies in that industry are unfavorable.
(2) With respect to 75% of its total assets, purchase any security
(other than securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities and repurchase agreements collateralized by such
securities) if, as a result: (a) more than 5% of its total assets would be
invested in the securities of any one issuer, or (b) the Fund would own more
than 10% of the voting securities of any one issuer.
(3) Issue senior securities, except as permitted by paragraphs (4)
and (8) below. For purposes of this restriction, the issuance of shares of
common stock in multiple classes, the purchase or sale of options, futures
contracts and options on futures contracts, forward commitments, and repurchase
agreements entered into in accordance with the Fund's investment policies, and
the pledge, mortgage or hypothecation of the Fund's assets are not deemed to be
senior securities
(4) Borrow money, except from banks as a temporary measure for
extraordinary or emergency purposes (including meeting redemptions without
immediately selling securities), but
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not for leveraging or investment, in an amount not to exceed 10% of the value
of net assets at the time the borrowing is made, provided, however, that as
long as such borrowings exceed 5% of the value of net assets, the Fund will not
make any investments. Under the Investment Company Act of 1940, as amended
(the "1940 Act"), asset coverage of 300% of any borrowing must be maintained.
(5) Act as an underwriter of securities of other issuers except to
the extent that in selling portfolio securities it may be deemed to be an
underwriter for purposes of the 1933 Act.
(6) Purchase real estate or any interest therein (except real estate
used exclusively in the current operation of the Fund's affairs), but this
restriction does not prevent the Fund from investing in debt securities secured
by real estate or interests therein.
(7) Purchase or sell commodities or commodity contracts, except that
the Fund may purchase and sell options on securities, securities indices,
currency and other financial instruments, futures contracts on securities,
securities indices, currency and other financial instruments and options on
such futures contracts, forward commitments, interest rate swaps, caps and
floors, securities index put or call warrants and repurchase agreements entered
into in accordance with the Fund's investment policies.
(8) Make loans to or guarantee the debts of other persons other than
portfolio security loans secured by cash or securities issued or guaranteed by
the U.S. Government or its agencies or instrumentalities as collateral in
amounts at all times equal at least to the market value of the securities
loaned, determined daily; provided that the aggregate of all such loans at any
time outstanding shall not exceed 25% of the value of the Fund's total assets.
The Fund's transactions in repurchase agreements are not subject to any of the
limitations described in the preceding sentence.
If the Fund adheres to a percentage restriction on investment or
utilization of assets as set forth above at the time an investment is made, it
will not be considered to have violated the restriction if a later percentage
change results from changes in the values or the total costs of the Fund's
assets.
Non-Fundamental Investment Restrictions
The following restrictions are designated as non-fundamental and may be
changed by the Board of Directors without shareholder approval. The Fund may
not:
(1) Purchase securities issued by any other investment company,
except in connection with a merger, acquisition or other reorganization or in
compliance with the provisions of Section 12 of the Investment Company Act.
(2) Purchase securities on margin, although it may obtain such
short-term credits as may be necessary for the clearance of securities
purchases.
(3) Make short sales of securities or maintain a short position.
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(4) Purchase or sell puts, calls, straddles, spreads or any
combination thereof, except that (i) it may sell call options listed on a
national securities exchange against its portfolio securities if such call
options remain fully covered throughout the exercise period and where such
underlying securities have an aggregate value (determined as of the date the
calls are sold) not exceeding 5% of the total assets of the Fund, and (ii) the
Fund may purchase call options in related "closing purchase transactions,"
where not more than 5% of its total assets are invested in such options.
(5) Purchase securities of an issuer which, together with any
predecessor, has been in operation for less than three years (except
investments in obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities), if, as a result, more than 5% of the Fund's
total assets would be invested in such securities.
(6) Purchase or sell interests in real estate limited partnerships
or in oil, gas or other mineral leases or exploration or development programs
(although it may invest in companies which own or invest in such interests).
(7) Purchase or retain the securities of an issuer any of the
officers, directors, trustees or security holders of which (a) is an officer or
director of the Company or a member, officer, director or trustee of its
investment adviser and (b) owns beneficially more than 1/2 of 1% of the shares
or securities of both (taken at market value) of such issuer, unless all such
individuals owning more than 1/2 of 1% of such shares or securities together
own beneficially less than 5% of such shares or securities or both.
(8) Invest more than 5% of the value of its total assets in warrants
(other than those that have been acquired in units or attached to other
securities). No more than 2% of the Fund's total assets may be invested in
warrants which are not listed on the New York Stock Exchange or the American
Stock Exchange. In applying this limitation, warrants will be valued at the
lesser of cost or market value unless acquired by the Fund in units with, or
attached to, debt securities, in which case no value will be assigned.
(9) Invest in companies for the purpose of exercising control.
(10) 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
such securities. (The staff of the Securities and Exchange Commission
considers over-the-counter options to be illiquid securities subject to the 15%
limit.)
(11) Enter into repurchase agreements if, as a result thereof, more
than 10% of the value of the Fund's total assets would be invested in such
repurchase agreements.
(12) 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
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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 the Board of Directors who elects
officers who are responsible for the day-to-day operations of the Fund and who
execute policies formulated by the Board of Directors. Several of the officers
and Directors of the Company are also officers or directors of the Adviser or
Sub-Adviser, or officers or directors of the Fund's principal distributor, John
Hancock Funds, Inc. ("John Hancock Funds").
The following table sets forth the principal occupation or employment of
the Directors and principal officers of the Company during the past five years:
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<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE COMPANY DURING THE PAST FIVE YEARS
---------------- ---------------- --------------------------
<S> <C> <C>
Edward J. Boudreau, Jr.* Chairman (1,2) Chairman and Chief Executive Officer, the
101 Huntington Avenue Adviser and The Berkeley Financial Group
Boston, MA 02199 ("Berkeley Group"); Chairman, NM Capital
Management, Inc. ("NM Capital"); John Hancock
Advisers International Limited; ("Advisers
International"); John Hancock Funds, Inc.,
("John Hancock Funds"), John Hancock Investor
Services Corporation ("Investor Services") and
Sovereign Asset Management Corporation
("SAMCorp"); (herein after the Adviser, the
Berkeley Group, NM Capital, Advisers
International, John Hancock Funds, Investor
Services and SAMCorp collectively referred to as
the "Affiliated Companies"); Chairman, First
Signature Bank & Trust; Director, John Hancock
Freedom Securities Corp., John Hancock Capital
Corp., New England/Canada Business Council;
Member, Investment Company Institute Board of
Governors; Director, Asia Strategic Growth Fund,
Inc.; Trustee, Museum of Science; President, the
Adviser (until July 1992); Chairman, John
Hancock Distributors, Inc. ("Distributors")
(until April 1994).
Thomas W.L. Cameron Director Chairman and Director, Sovereign Advisers, Inc.;
Interstate/Johnson Lane Senior Vice President, Interstate/Johnson Lane
1892 Andell Bluff Blvd. Corp. (securities dealer).
Johns Island, SC 29455
Charles F. Fretz Director (3) Consultant, self employed; Vice President and
RD #5, Box 300B Director, Towers, Perrin, Forster & Crosby, Inc.
Clothier Springs Road (international management consultants) (until
Malvern, PA 19355 1985).
</TABLE>
___________________
* An "interested person" of the Company as such term is defined in the
Investment Company Act of 1940, as amended ("The Investment Company Act").
(1) Member of the Executive Committee. Under the Company's charter, the
Executive Committee may generally exercise most of the powers of the Board
of Directors.
(2) A member of the Investment Committee of the Adviser.
(3) Member of the Audit Committee and the Committee on Administration.
(4) A Member of the Audit, Administration and Compensation Committees.
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<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE COMPANY DURING THE PAST FIVE YEARS
---------------- ---------------- --------------------------
<S> <C> <C>
Jack P. Gould Director (1,3) Consultant and investor; Vice President,
25 Pecksland Road Secretary, Treasurer and Director of CAD Output
Greenwich, CT 06831 Inc. (laser photoplotting) (until 1993);
Director of Webb Distribution, Inc.
(distributor of electronic components) (until
1993).
Charles L. Ladner Director (3) Director, Energy North, Inc. (public utility
UGI Corporation holding company) (until 1992); Senior Vice
P.O. Box 858 President, Finance of UGI Corp. (gas
Valley Forge, PA 19482 distribution utility).
Patricia P. McCarter Director (3) Director and Secretary of the McCarter Corp.
Swedesford Road (machine manufacturer).
RD #3, Box 121
Malvern, PA 19355
Steven R. Pruchansky Director (1,3) Director and Treasurer, Mast Holdings, Inc.;
6920 Daniel Road 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 Director (3) Retired. Lieutenant General, United States
Rt. 1, Box 249 E Marine Corps; Deputy Chief of Staff for
Linden, VA 22642 Manpower and Reserve Affairs, Headquarters
Marine Corps; Commanding General, III Marine
Expeditionary Force/3rd Marine Division
(retired 1991).
</TABLE>
___________________
* An "interested person" of the Company as such term is defined in the
Investment Company Act of 1940, as amended ("The Investment Company Act").
(1) Member of the Executive Committee. Under the Company's charter, the
Executive Committee may generally exercise most of the powers of the Board
of Directors.
(2) A member of the Investment Committee of the Adviser.
(3) Member of the Audit Committee and the Committee on Administration.
(4) A Member of the Audit, Administration and Compensation Committees.
11
<PAGE> 118
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE COMPANY DURING THE PAST FIVE YEARS
---------------- ---------------- --------------------------
<S> <C> <C>
John P. Toolan Director (3) Director, The Muni Bond Funds, National
13 Chadwell Place Liquid Reserves, Inc., The Tax Free Money
Morristown, NJ 07960 Fund, Inc. and Vantage Money Market Funds
(mutual funds), and The Inefficient-Market
Fund, Inc. (closed-end investment company;
Chairman, Smith Barney Trust Company (retired
December, 1991); Director, Smith Barney,
Inc., Mutual Management Company and Smith
Barney Advisers, Inc. (investment advisers)
(until December 1991).
James F. Carlin Director Chairman and Chief Executive Officer, Carlin
233 West Central Street Consolidated, Inc. (insurance); Director,
Natick, MA 01760 Arabella Mutual Insurance Company; Receiver,
City of Chelsea, Massachusetts (until August
1992).
Harold R. Hiser, Jr. Director Executive Vice President, Schering-Plough
Schering-Plough Corporation Corporation (pharmaceuticals); Director,
One Giralda Farms ReCapital Corporation (reinsurance).
Madison, NJ 07940-1000
Robert G. Freedman* Vice Chairman and Chief Vice Chairman and Chief Investment Officer,
101 Huntington Avenue Investment Officer (2) the Adviser; President, the Adviser (until
Boston, MA 02199 December 1994).
Anne C. Hodsdon* Executive Vice President President and Chief Operations Officer, the
101 Huntington Avenue (2) Adviser; Executive Vice President, the
Boston, MA 02199 Adviser (until December 1994).
Thomas H. Drohan* Senior Vice President and Senior Vice President and Secretary of the
101 Huntington Avenue Secretary Adviser.
Boston, MA 02199
</TABLE>
___________________
* An "interested person" of the Company as such term is defined in the
1940 Act.
(1) Member of the Executive Committee. Under the Company's charter, the
Executive Committee may generally exercise most of the powers of the
Board of Directors.
(2) A member of the Investment Committee of the Adviser.
(3) Member of the Audit Committee and the Committee on Administration.
(4) A Member of the Audit, administration and Compensation Committee.
12
<PAGE> 119
<TABLE>
<CAPTION>
POSITIONS HELD WITH THE PRINCIPAL OCCUPATION(S)
----
NAME AND ADDRESS COMPANY DURING THE PAST FIVE YEARS
---------------- ------- --------------------------
<S> <C> <C>
James K. Ho* Senior Vice Senior Vice President, the Adviser.
101 Huntington Avenue President (2)
Boston, MA 02199
James B. Little* Senior Vice President Senior Vice President, the Adviser.
101 Huntington Avenue and Chief Financial
Boston, MA 02199 Officer
Marc H. Klee* Senior Vice President Director and Senior Vice President of AFA;
1415 Kellum Place Senior Vice President of the Company and its
Suite 205 predecessors and NVF (until 1992); Director of
Garden City, NY 11530 Radyne Corp. (telecommunications equipment)
since 1990; Senior Vice President and
Treasurer (since 1990) of Baseball
Entrepreneurs, Inc. and (since 1991) of
Hamilton Baseball Associates, Inc. (baseball
club ownership); Vice President, Secretary and
Treasurer of Minor League Sports Enterprises,
Inc. (baseball club ownership) (since 1992).
Michael P. DiCarlo* Senior Vice President Senior Vice President, the Adviser.
101 Huntington Avenue (2)
Boston, MA 02199
</TABLE>
________________
* An "interested person" of the Company as such term is defined in the
Investment Company Act of 1940, as amended ("The Investment Company Act").
(1) Member of the Executive Committee. Under the Company's charter, the
Executive Committee may generally exercise most of the powers of the Board
of Directors.
(2) A member of the Investment Committee of the Adviser.
(3) Member of the Audit Committee and the Committee on Administration.
(4) A Member of the Audit, Administration and Compensation Committees.
13
<PAGE> 120
<TABLE>
<CAPTION>
POSITIONS HELD WITH PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS THE COMPANY DURING THE PAST FIVE YEARS
---------------- ----------- --------------------------
<S> <C> <C>
Susan S. Newton* Vice President, Vice President and Assistant Secretary, the
101 Huntington Avenue Assistant Secretary and Adviser.
Boston, MA 02199 Compliance Officer
John A. Morin* Vice President Vice President, the Adviser.
101 Huntington Avenue
Boston, MA 02199
Barry J. Gordon President President and Chairman of the Board of AFA,
1415 Kellum Place Director and President of the company and its
Suite 205 predecessors (until 1993); Chairman of the
Garden City, NY 11530 Board and President of National Value Fund,
Inc. (""NVF")(until 1992); Chairman of the
Board and Chief Executive Office of Minor
League Sports Enterprises, Inc. (baseball
club ownership since 1992); Vice Chairman of
the Board and Director of Kineret Acquisition
Corporation (food products)(since 1993).
James J. Stokowski* Vice President and Vice President, the Adviser.
101 Huntington Avenue Treasurer
Boston, MA 02199
</TABLE>
________________
* An "interested person" of the Company as such term is defined in the
Investment Company Act of 1940, as amended ("The Investment Company Act").
(1) Member of the Executive Committee. Under the Company's charter, the
Executive Committee may generally exercise most of the powers of the Board
of Directors.
(2) A member of the Investment Committee of the Adviser.
(3) Member of the Audit Committee and the Committee on Administration.
(4) A Member of the Audit, Administration and Compensation Committees.
14
<PAGE> 121
As of the date of this Statement of Additional Information, the officers
and directors of the Fund as a group owned less than 1% of the outstanding
shares of the fund and to the knowledge of the registrant, no persons owned of
record or beneficially 5% or more of any class of registrants outstanding
securities.
All of the officers listed are officers or employees of the Adviser or
the Affiliated Companies. Some of the directors and officers may also be
officers and/or directors and/or trustees of one or more other funds for which
the Adviser serves as investment adviser.
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 Directors for their services for each Fund's 1994 fiscal
year. The two non-Independent Directors, Messrs. Boudreau and Cameron, and
each of the officers of the Funds are interested persons of the Adviser, are
compensated by the Adviser and receive no compensation from the Fund for their
services.
<TABLE>
<CAPTION>
TOTAL COMPENSATION
PENSION OR FROM THE FUND AND
AGGREGATE RETIREMENT BENEFITS ESTIMATED ANNUAL JOHN HANCOCK FUND
COMPENSATION ACCRUED AS PART OF BENEFITS UPON COMPLEX TO
INDEPENDENT DIRECTORS FROM THE FUND THE FUND'S EXPENSES RETIREMENT DIRECTORS(1)(2)
--------------------- ------------- ------------------- ---------------- ------------------
<S> <C> <C>
Charles F. Fretz $ 1,028 $ 60,350
Jack P. Gould 4,800 9,600
Charles L. Ladner 1,028 60,450
Patricia P. McCarter 1,028 60,200
Steven R. Pruchansky 1,061 62,450
Norman H. Smith 1,061 62,450
John P. Toolan 1,028 60,450
James F. Carlin 1,028 60,450
Harold R. Hiser, Jr. 957 56,000
Alonzo Horsey (deceased) 943 56,200
------- --------
$13,963 $548,600
</TABLE>
(1) The total compensation paid by the John Hancock Fund Complex to the
Independent Directors is as of the calendar year ended December 31, 1994.
(2) All Directors except Messrs. Gould, Fretz and Hiser are Directors of 39
funds in the John Hancock Complex. Messers. Fretz and Hiser are Directors
of 21 funds and Mr. Gould is a Director of two funds.
15
<PAGE> 122
INVESTMENT ADVISORY AND OTHER SERVICES
As described in the Prospectus, the Fund receives its investment advice
from the Adviser and the Sub-Adviser. Investors should refer to the Prospectus
for a description of certain information concerning the investment management
contract.
Each of the Directors and principal officers affiliated with the Company
who is also an affiliated person of the Adviser or Sub-Adviser is named above,
together with the capacity in which such person is affiliated with the Company,
the Adviser or Sub-Adviser.
As described in the Fund's Prospectus under the caption "Organization
and Management of the Fund," the Company on behalf of the Fund has entered into
an investment management contract with the Adviser dated December 6, 1991, and
amended as of January 1, 1994, under which the Adviser in conjunction with the
Sub-Adviser provides the Fund with a continuous investment program, consistent
with the Fund's stated investment objectives and policies. The Adviser is
responsible for the day to day management of the Fund's portfolio assets. The
Adviser has entered into a sub-advisory contract with the Sub-Adviser dated
December 6, 1991, under which the Sub-Adviser, subject to the review of the
Board of Directors and the overall supervision of the Adviser, is responsible
for providing the Fund with investment advice.
Securities held by the Fund may also be held by other funds or
investment advisory clients for which the Adviser, the Sub-Adviser or their
respective 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 the
Sub-Adviser for the Fund or for other funds or clients for which the Adviser or
Sub-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, the Sub-Adviser or their respective affiliates may increase the demand
for securities being purchased or the supply of securities being sold, there
may be an adverse effect on price.
No person other than the Adviser and Sub-Adviser and their directors and
employees regularly furnishes advice to the Fund with respect to the
desirability of the Fund's investing in, purchasing or selling securities. The
Adviser and Sub-Adviser may from time to time receive statistical or other
similar factual information, and information regarding general economic factors
and trends, from the John Hancock Mutual Life Insurance Company and its
affiliates.
Under the terms of the investment management contract with the Company,
the Adviser provides the Fund with office space, equipment, and the necessary
executive, clerical and secretarial personnel for the administration of the
affairs of the Fund. The Adviser pays the compensation and expenses of
officers and employees of the Fund, and directors of the Company affiliated
with the Adviser, the office expenses of the Fund, including those of the
Company's Treasurer's and Secretary's offices and other expenses incurred by
the Adviser in connection with the performance of its duties. All expenses
which are not specifically paid by the Adviser and which are incurred in the
operation of the Fund (including fees of Directors of the Company who
16
<PAGE> 123
are not "interested persons," as such term is defined in the Investment Company
Act but excluding certain distribution-related activities required to be paid
by the Adviser or John Hancock Funds) and the continuous public offering of the
shares of the Fund are borne by the Fund. Subject to 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 of Class A or Class B shares will be borne exclusively by such
class of shares.
As discussed in the Prospectus and as provided by the investment
management contract, the Fund pays the Adviser a fee computed daily and payable
monthly, at an annual rate of 1% of the value of the net assets of the Fund up
to $100 million, and 3/4 of 1% of the value of the net assets over $100
million, as compensation for the services rendered by the Adviser. Effective
January 1, 1995, the Adviser began waiving a portion of the management fee
amounting to 0.15% of the average daily net asset value of the first
$100,000,000 of the Fund. In addition to the management fee, the Adviser
receives an annual administration fee of $100,000. The annual rate of
compensation is higher than the rate paid by most registered investment
companies, but is believed to be comparable to the fees paid by funds with
comparable objectives. The Adviser, not the Fund, pays the Sub-Adviser a
monthly fee as described in the Prospectus. For the years ended December 31,
1994, 1993 and 1992, the Adviser received management fees of $522,041, $361,474
and $253,876 ($307,838 less the $53,962 expense limitation), respectively and
administration fees of $100,000 from the Fund for each year. Subsequent to
becoming the Fund's investment adviser on December 6, 1991, the Adviser
received management and administration fees for 1991 of $21,251 and $6,849,
respectively. AFA, the Fund's investment adviser until December 6, 1991,
received management fees totaling $305,212 for 1991. Management fees paid to
AFA were calculated at the same rates, and in the same manner, as they are
currently calculated under the Adviser's investment management contract.
In the event normal operating expenses of the Fund, exclusive of certain
expenses prescribed by state law, for any fiscal year are in excess of any
limitation imposed by a state where the shares of the Fund are registered for
sale, the fee payable to the Adviser will be reduced to the extent required by
such law and the Adviser will make any additional arrangements that the Adviser
is required by law to make. 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 of such assets and 1.5% of the
remaining average daily net asset value. Pursuant to the investment management
contract and sub-advisory contract, the Adviser and Sub-Adviser are not liable
for any error of judgment or mistake of law or for any loss suffered by the
Fund in connection with the matters to which their respective contract relates,
except a loss resulting from willful misfeasance, bad faith or gross negligence
on the part of the Adviser or Sub-Adviser in the performance of their duties
or from their reckless disregard of the obligations and duties under the
applicable contract.
The Adviser, located at 101 Huntington Avenue, Boston, Massachusetts
02199-7603, was organized in 1968 and currently has more than $13 billion in
assets under management in its capacity as investment adviser to the Fund and
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 an affiliate of John Hancock Mutual Life Insurance Company (the
"Life Insurance Company"), one of the most recognized and respected financial
institutions in the nation. With total assets under management of $80 billion,
the Life Insurance Company is one of
17
<PAGE> 124
the 10 largest life insurance companies in the United States, and carries
Standard & Poor's and A.M. Best's highest ratings. Founded in 1862, John
Hancock has been serving clients for over 130 years.
The Sub-Adviser, AFA, 1415 Kellum Place, Suite 205, Garden City, New
York, 11530, was incorporated under the laws of New York in 1978. The
Sub-Adviser, subject to the supervision of the Adviser, manages the Fund's
investments. AFA also provides investment advisory and management services to
individual and institutional clients.
Pursuant to the sub-advisory contract, AFA provides day-to-day portfolio
management of the Fund. AFA furnishes the Adviser and the Fund with investment
advice and recommendations consistent with the investment policies, objectives
and restrictions of the Fund. AFA pays its own costs of maintaining staff and
personnel necessary for it to perform its obligations under the sub-advisory
contract, expenses of its office rent, telephone, telecommunications and other
facilities required by it to perform services and any other expenses, including
legal, audit and professional fees and expenses, incurred by it in connection
with the performance of its duties under the sub-advisory contract.
Each of the investment management and sub-advisory contracts has an
initial two-year term commencing upon the close of business on December 6,
1991, and thereafter continues in effect from year to year if approved annually
by a vote of a majority of the Directors who are not interested persons of one
of the parties to the contract ("Independent Directors"), cast in person at a
meeting called for the purpose of voting on such approval, and by either the
Board of Directors or the holders of a "majority" of the Fund's outstanding
voting securities as defined in the 1940 Act. Each of the contracts
automatically terminates upon assignment. Each contract may be terminated
without penalty on 60 days' notice at the option of either party to the
respective contract or by vote of a majority of the outstanding voting
securities of the Fund. The sub-advisory contract will terminate upon
termination of the Adviser's investment management contract.
DISTRIBUTION CONTRACT
The Fund has a distribution contract with John Hancock Funds. Under the
contract, John Hancock Funds is obligated to use its best efforts to sell
shares of the Fund. Shares of the Fund are also sold by selected
broker-dealers (the "Selling Brokers") which have entered into selling agency
agreements with John Hancock Funds. John Hancock Funds accepts orders for the
purchase of the shares of the Fund which are continually offered at net asset
value next determined plus the applicable sales charge. In connection with the
sale of Class A and Class B shares, John Hancock Funds and Selling Brokers
receive compensation from a sales charge imposed, in the case of Class A
shares, at the time of sale or, in the case of Class B shares, on a deferred
basis in connection with the sale of shares of the Fund. The sales charges are
discussed further in the Fund's Class A and Class B Prospectus.
The Fund's Directors have adopted Distribution Plans with respect to
Class A and Class B shares (together, the "Plans") pursuant to Rule 12b-1 under
the Investment Company Act. Under the Class A and Class B Plans, the Fund will
pay distribution and service fees at an aggregate annual rate of up to 0.30%
and 1.00%, respectively, of the Fund's average daily net assets.
18
<PAGE> 125
However, the service fee will not exceed 0.25% of the Fund's average daily net
assets attributable to each class of shares. The distribution fees reimburse
John Hancock Funds for its distribution costs incurred in the promotion of
sales of Fund shares, and the service fees compensate Selling Brokers for
providing personal and account maintenance services to shareholders. In the
event that John Hancock Funds is not fully reimbursed for expenses incurred by
it under the Class B Plan in any fiscal year, John Hancock Funds may carry
these expenses forward, provided however, that the Directors may terminate the
Class B Plan and thus the Fund's obligation to make further payments at any
time. Accordingly, the Fund does not treat unreimbursed expenses relating to
the Class B shares as a liability of the Fund. Both Plans were approved by a
majority of the Directors, including a majority of the Directors who are not
interested persons of the Fund and who have no direct or indirect financial
interest in the operation of the Plans (the "Independent Directors"), by votes
cast in person at meetings called for the purpose of voting on such Plans.
Pursuant to the Plans, at least quarterly, John Hancock Funds provides
the Fund with a written report of the amounts expended under the Plans and the
purpose for which such expenditures were made. The Directors review such
reports on a quarterly basis.
During the fiscal year ended December 31, 1994 the Funds paid Investor
Services the following amounts of expenses with respect to the Class A shares
and Class B shares of each of the Funds:
Expense Items
<TABLE>
<CAPTION>
Printing and
Mailing of
Prospectuses Compensation Interest,
to to Expenses of Carrying or
New Selling John Hancock Other Finance
Advertising Shareholders Brokers Funds Charges
----------- ------------ ------------ ------------ -------------
Global Technology Fund
----------------------
<S> <C> <C> <C> <C> <C>
Class A Shares $24,105 $6,108 $69,411 $44,011 $0
Class B Shares $2,074 $91 $36,468 $4,041 $584
</TABLE>
Each of the Plans provides that it will continue in effect only so long
as its continuance is approved at least annually by a majority of both the
Directors and the Independent Directors. Each of the Plans provides that it
may be terminated without penalty (a) by vote of a majority of the Independent
Directors, (b) by a majority of the Fund's outstanding shares of the applicable
class upon 60 days' written notice to John Hancock Funds, and (c) automatically
in the event of assignment. 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. And
finally, each of the Plans provides that no material amendment to the Plan
will, in any event, be effective unless it is approved by a vote of a majority
of both the Directors and the Independent Directors of the Fund. The holders
of Class A shares and Class B shares have
19
<PAGE> 126
exclusive voting rights with respect to the Plan applicable to their respective
class of shares. In adopting the Plans the Directors concluded that, in their
judgment, there is a reasonable likelihood that each Plan will benefit the
holders of the applicable class of shares of the Fund.
When the Fund seeks an Independent Director to fill a vacancy or as a
nominee for election by shareholders, the selection or nomination of the
Independent Director is, under resolutions adopted by the Directors
contemporaneously with their adoption of the Plans, committed to the discretion
of the Committee on Administration of the Directors. The members of the
Committee on Administration are all Independent Directors and are identified in
this Statement of Additional Information under the heading "Those Responsible
for Management."
The Fund's distribution contract, discussed above, continues in effect
from year to year if approved annually by the vote of a majority of the
Independent Directors, cast in person at a meeting called for the purpose of
voting on such approval, and by either the Directors or the holders of a
majority of the outstanding shares of each class of the Fund which has voting
rights with respect to the contract. The contract automatically terminates
upon assignment and may be terminated without penalty on 60 days' notice at the
option of either party to the contract or by vote of a majority of the
outstanding shares of each class of the Fund which has voting rights with
respect to the contract.
NET ASSET VALUE
For purposes of calculating the net asset value ("NAV") of a 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 last
available bid price.
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 a Fund's NAV.
A 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;
20
<PAGE> 127
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 a
Fund's NAV is not calculated. Consequently, a Fund's portfolio securities may
trade and the NAV of the Fund's redeemable securities may be significantly
affected on days when a shareholder has no access to the Fund.
INITIAL SALES CHARGE ON CLASS A SHARES
The sales charges applicable to purchases of Class A shares of the Fund
are described in the Fund's Class A and Class B Prospectus. Methods of
obtaining a reduced sales charge referred to generally in the Class A and Class
B 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 spouse and their children under the age of 21,
purchasing securities for his or their 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 a Investor
Services or Selling Broker's representative.
Without Sales Charges. As described in the Class A and Class B
Prospectus, Class A shares of the Fund may be sold without a sales charge to
persons described in the Prospectus.
Accumulation Privilege. Investors (including investors combining
purchases) who are already Class A shareholders may also obtain the benefit of
a reduced sales charge by taking into account not only the amount then being
invested but also the purchase price 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 charges 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 specified period of (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 (48) month
period. These qualified retirement plans include IRA's, SEP, SARSEP, TSA,
401(k), 403(b) and 457 plans. Such an investment (including accumulations and
21
<PAGE> 128
combinations) must aggregate $100,000 or more invested during the specified
period from the date of the LOI or from a date within (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 load payable had the LOI not been in effect is due from the investor.
However, for the purchases actually made within the specified period, the sales
charge applicable will not be higher than that which would have 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 Letter of Intention, the investor authorizes Investor Services to act as
his attorney-in-fact to redeem any escrowed 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 Class A 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 an initial 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 John Hancock Funds and are used in
whole or in part by John Hancock Funds 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
22
<PAGE> 129
distribution and service fees enables the Fund to sell the Class B shares
without a sales charge being deducted at the time of the purchase. See the
Class A and Class B Prospectus for additional information regarding the CDSC.
SPECIAL REDEMPTIONS
Although it would not normally do so, the Fund has the right to pay the
redemption price of shares of the Fund in whole or in part in portfolio
securities as prescribed by the Directors. When the shareholder were to sell
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, however, elected to be governed by Rule 18f-1 under the Investment Company
Act. Under that rule, the Fund must redeem its shares for cash except to the
extent that the redemption payments to any one shareholder during any 90-day
period would exceed the lesser of $250,000 or 1% of the Fund's net asset value
at the beginning of such period.
ADDITIONAL SERVICES AND PROGRAMS
Exchange Privilege. As described more fully in the Class A and Class B
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 the shares of the
Fund 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 shares and because redemptions are
taxable events.
Therefore, a shareholder should not purchase Class A and Class B 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 Account
Privileges Application. The program, as it relates to automatic investing, 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 Automatic Investing
Program may be revoked by Investor Services without prior notice if any
investment is not honored by the
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Shareholder's bank. The bank shall be under no obligation to notify the
shareholder as to the non-payment of any check.
The Program may be discontinued by the shareholder either by calling
Investor Services or upon notice to Investor Services which is received at
least five (5) business days prior to the processing 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 in any of the other John Hancock mutual funds, 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 any of the other
John Hancock mutual funds. If a CDSC was paid upon a redemption, a shareholder
may reinvest the proceeds from such 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 as described under the heading "Tax
Status."
TAX STATUS
Each series of the Company, including the Fund, is treated as a separate
entity for accounting and tax purposes. The Fund has qualified and elected to
be treated as a "regulated investment company" under Subchapter M of the
Internal Revenue Code of 1986, as amended (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 taxable income (including net realized capital
gains) distributed to shareholders at least annually in accordance with the
timing requirements of the Code.
The Fund will be subject to a four percent nondeductible 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
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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 that they would have received had they elected to receive the
distributions in cash divided by the number of shares received.
Options written by the Fund may cause the Fund to recognize gains or
losses from marking-to-market at the end of its taxable year even though such
options may not have lapsed, been closed out, or exercised and may affect the
characterization as long-term or short-term of some capital gains and losses
realized by the Fund. Losses on certain options and/or offsetting portfolio
positions may also be deferred rather than being taken into account currently
in calculating the Fund's taxable income under certain straddle rules, which
may also affect the characterization of capital gains or losses as long-term or
short-term. These transactions may therefore affect the amount, timing and
character of the Fund's distributions to shareholders. Additionally, written
covered call options on portfolio stocks could reduce the portion of the Fund's
dividend income that potentially qualifies for the dividends-received
deduction for corporate shareholders by suspending the Fund's holding period
for such stocks, unless these options satisfy the requirements for treatment as
"qualified covered call options." The Fund will take into account the special
tax rules applicable to options, including the straddle rules, in order to
minimize any potential adverse tax consequences.
Foreign exchange gains and losses realized by the Fund in connection
with certain transactions involving foreign currency- denominated debt
securities, forward foreign currency 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 investments in stock or securities may increase the
amount of gain it is deemed to recognize from the sale of certain investments
held for less than 3 months, which gain is limited under the Code to less than
30% of its annual gross income, and may 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 were to exceed the Fund's investment company taxable
income, 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, (computed without
regard to such loss, but after considering the post-October loss regulations)
the resulting overall ordinary loss for such year would not be deductible by
the Fund or its shareholders in future years.
If the Fund acquires stock in certain non-U.S. corporations that receive
at least 75% of their annual gross income from passive sources (such as
interest, dividends, rents, royalties or capital gain) or hold at least 50% of
their assets in investments producing such passive income ("passive foreign
investment companies"), the Fund could be subject to Federal income tax and
additional interest charges on "excess distributions" received from such
companies or gain from the sale of stock in such companies, even if all income
or gain actually received by the Fund is timely distributed to its
shareholders. The Fund would not be able to pass through to its shareholders
any credit or deduction for such a tax. Certain elections may, if available,
ameliorate these adverse tax consequences, but any such election could 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.
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The amount of net realized capital gains, if any, realized in any given
year will result from options transactions and sales of securities made with a
view to the maintenance of a portfolio believed by the Fund's management to be
most likely to attain the Fund's objective. Such sales, and any resulting
gains or losses, may therefore vary considerably from year to year. At the
time of an investor's purchase of Fund shares, a portion of the purchase price
often attributable to is realized or unrealized appreciation in the Fund's
portfolio or undistributed taxable income of the Fund. Consequently,
subsequent distributions from such appreciation or income 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 (including by exercise of the exchange
privilege) a shareholder will ordinarily 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 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 Class A 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 charge 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 the Dividend Reinvestment Plan. 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 the Fund's present intention is to distribute all net capital
gains, if any, the Fund reserves the right to retain and reinvest all or any
portion of 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 long-term 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 carry forward 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 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 Fund shares by the difference between his pro rata share of this
excess and the pro rata share of these taxes.
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For Federal income tax purposes, the Fund is permitted to carry forward
a net capital loss in any year to offset 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. Presently, there are no realized capital loss carry
forwards available to offset future net capital gains.
If the Fund invests in certain PIKs, zero coupon securities or certain
increasing rate securities (and, in general, any other securities with original
issue discount or with market discount if the Fund elects to include market
discount in income currently,), the Fund will be required to 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.
Investment in debt obligations that are at risk of or in default
presents special tax issues for the Fund. Tax rules are not entirely clear
about issues such as when the Fund may cease to accrue interest, original issue
discount, or market discount, when and to what extent deductions may be taken
for bad debts or worthless securities, how payments received on obligations in
default should be allocated between principal and income, and whether exchanges
of debt obligations in a workout context are taxable. These and other issues
will be addressed by the Fund, in the event it acquires or holds any such
obligations, in order to reduce the risk of distributing insufficient income to
preserve its status as a regulated investment company and seek to avoid
becoming subject to Federal income or excise tax.
For purposes of the dividends received deduction available to
corporations, dividends received by the Fund, if any, from U.S. domestic
corporations in respect of the stock of such corporations held by the Fund, for
U.S. Federal income tax purposes, for at least 46 days (91 days in the case of
certain preferred stock) and distributed and designated by the Fund may be
treated as qualifying dividends. Corporate shareholders must meet the minimum
holding period requirement stated above (46 or 91 days) with respect to their
shares of the Fund in order to qualify for the deduction and, if they borrow to
acquire such shares, may be denied a portion of the dividends received
deduction. The entire qualifying dividend, including the otherwise deductible
amount, will be included in determining the excess (if any) of a corporate
shareholder's adjusted current earnings over its alternative minimum taxable
income, which may increase its alternative minimum tax liability.
Additionally, any corporate shareholder should consult its tax adviser
regarding the possibility that its basis in its shares may be reduced, for
Federal income tax purposes, by reason of "extraordinary dividends" received
with respect to the shares, for the purpose of computing its gain or loss on
redemption or other disposition of the shares.
The Fund may be subject to withholding and other taxes imposed by
foreign countries with respect to the Fund's investments in certain foreign
securities. Tax conventions between certain countries and the U.S. may reduce
or eliminate such taxes. Investors may be entitled to claim U.S. foreign tax
credits or deductions with respect to such taxes, subject to certain provisions
and limitations contained in the Code. Specifically, if more than 50% of the
value of Fund's total
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assets at the close of any taxable year consists of stock or securities of
foreign corporations, the Fund may file an election with the Internal Revenue
Service pursuant to which shareholders of the Fund will be required to (i)
include in ordinary gross income (in addition to taxable dividends actually
received) their pro rata shares of foreign income taxes paid by the Fund even
though not actually received by them, and (ii) treat such respective pro rata
portions as foreign income taxes paid by them.
If the Fund makes this election, shareholders may then deduct such pro
rata portions of foreign income taxes in computing their taxable incomes, or,
alternatively, use them as foreign tax credits, subject to applicable
limitations, against their U.S. Federal income taxes. Shareholders who do not
itemize deductions for Federal income tax purposes will not, however, be able
to deduct their pro rata portion of foreign income taxes paid by the Fund,
although such shareholders will be required to include their shares of such
taxes in gross income. Shareholders who claim a foreign tax credit for such
foreign taxes may be required to treat a portion of dividends received from the
Fund as separate category of income for purposes of computing the limitations
on the foreign tax credit. Tax-exempt shareholders will ordinarily not benefit
from this election. Each year that the Fund files the election described
above, its shareholders will be notified of the amount of (i) each
shareholder's pro rata share of foreign income taxes paid by the Fund and (ii)
the portion of Fund dividends which represents income from each foreign
country.
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.
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
this 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. A state income (and
possibly local income and/or intangible property) tax exemption is generally
available to the extent, if any, 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. Shareholders should consult their own tax advisers
as to the Federal, state or local tax consequences of, and receipt of
distributions from, ownership of shares of the Fund in their particular
circumstances.
Non-U.S. investors not engaged in a U.S. trade or business with which
their Fund investment 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 non-resident 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.
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DESCRIPTION OF THE FUND'S SHARES
The Company's Articles of Incorporation permit the Board of Directors to
issue 200 million shares of capital stock of the aggregate par value of $61
million. The Fund consists of 100 million shares, $0.20 par value which
consists of 50 million shares for each of Class A and Class B. Each share
represents an equal proportionate interest in the Fund with each other share.
Upon liquidation of the Fund, holders are entitled to share pro rata in the net
assets of the Fund available for distribution to such holders. Shares have no
preemptive or conversion rights. Shares are fully paid and non assessable by
the Fund and are freely transferable. The shareholders of the Company are
entitled to a full vote for each full share held and to a fractional vote for
fractional shares on all matters on which they are entitled to vote.
The Board of Directors currently have authorized the issuance of two
series of shares: John Hancock National Aviation & Technology Fund and the
Fund. The Board of Directors may authorize the creation of additional series
of shares with such preferences, privileges, limitations and voting and
dividend rights as the Board of Directors may determine. The proceeds of sales
of shares of any additional series would be invested in separate, independently
managed portfolios with distinct investment objectives, policies and
restrictions, and share purchase, redemption and net asset valuation
procedures. All consideration received by the Company for sales of shares of
any additional series, and all assets in which such consideration is invested,
would belong to that series (subject only to the rights of creditors of such
series) and would be subject to the liabilities related thereto. Pursuant to
the 1940 Act, shareholders of any additional series would normally have to
approve the adoption of any management contract relating to such series and of
any changes in the investment policies related thereto.
The shares of each class represent an equal proportionate interest in
the assets attributable to that class of the Fund. The holders of Class A and
Class B shares each have certain exclusive voting rights on matters relating to
their respective Rule 12b-1 distribution plans. 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.
Shares of the Fund may be exchanged only for shares of the same class in
another fund sponsored by the Adviser (and for the shares of John Hancock Cash
Management Fund, a money market fund.) 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 on the same day and will be in the same amount, except that (i)
Class B shares will pay higher distribution and fees than Class A shares and
(ii) each of Class A and Class B shares will bear any other class expenses
properly allocable to such class of shares, subject to conditions set forth in
a private letter ruling that the Fund has received from the Internal Revenue
Service relating to its multiple-class structure. Similarly, the net asset
value per share may vary depending on the class of shares purchased.
The Board of Directors has the power to alter the number and the terms
of office of the Directors, to lengthen their own terms, or to make their terms
of unlimited duration, subject to certain removal procedures, and to appoint
their own successors; provided that at least a majority of Directors has been
elected by the shareholders. The voting rights of shareholders are not
cumulative so that holders of more than 50% of the shares voting can, if they
choose, elect all Directors being selected while the holders of the remaining
shares would be unable to elect any
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Directors. It is the intention of the Company not to hold annual meetings of
shareholders. The Directors may call special meetings of shareholders for
action by shareholder vote as may be required by either the Investment Company
Act or the Company's Charter. At any meeting called for the purpose of
removing from office any director, the shareholders may, by vote of the holders
of a majority of the outstanding shares entitled to vote, remove from office
any director and elect a successor, unless the number of directors constituting
the whole board is accordingly decreased.
CALCULATION OF PERFORMANCE
The average annual total return of the Class A shares of the Fund for
the 1 year, 5 year and 10 year periods ended December 31, 1994 was 4.13%,
9.54%, and 9.69%, respectively.
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:
n ____
T = V 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, 5 and 10 year periods.
This calculation assumes the maximum sales charge of 5.00% is included
in the initial investment or the CDSC is applied at the end of the period and
also assumes that all dividends and distributions are reinvested at net asset
value on the reinvestment dates during the period. In addition to average
annual total returns, the Fund may quote unaveraged or cumulative total returns
reflecting the change in value of an investment over a stated 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 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 5.00% 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 return figure.
From time to time, in reports and promotional literature, the Fund's
total return will be ranked or compared to stock indices and indices of mutual
funds. Such indices may include
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Lipper Analytical Services, Inc.'s "Lipper-Mutual Performance Analysis,"
monthly publications which track net assets and total return on equity mutual
funds in the United States. Ibottson and Associates, CDA Weisenberger and F.C.
Towers are also used for comparison purposes, as well as 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., Morning Star Inc., Stanger's and Barron's,
etc., will also be utilized.
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 capital stock; 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 Adviser pursuant to
recommendations made by its investment committee, which consists of officers
and directors of the Adviser and officers and Directors of the Company who are
interested persons of the Company, and by the Sub-Adviser. 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 maker reflect a "spread." 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 National Association of
Securities Dealers, Inc. and other policies as the Directors may determine, the
Adviser and the Sub-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 and Sub-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 and Sub-Adviser. The
receipt of research information is not expected to reduce significantly the
expenses of the Adviser and Sub-Adviser. The research information and
statistical assistance furnished by brokers
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and dealers may benefit the John Hancock Mutual Life Insurance 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. Similarly,
research information and assistance provided to the Sub-Adviser by brokers and
dealers may benefit other advisory clients or affiliates of the Sub-Adviser.
The Fund will make no commitment to allocate portfolio transactions upon any
prescribed basis. While the Adviser, together with the Sub-Adviser, will be
primarily responsible for the allocation of the Fund's brokerage business, the
policies and practices of the Adviser in this regard must be consistent with
the foregoing and will at all times be subject to review by the Board of
Directors.
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 Board of Directors
that the price is reasonable in light of the services provided and policies
that the Board of Directors may adopt from time to time. During the fiscal
year ended December 31, 1994, the Fund directed commissions in the amount of
$10,277 to compensate brokers for research services such as industry, economic
and company reviews and evaluations of securities.
The Adviser's indirect parent, Life Insurance Company, is the indirect
sole shareholder of John Hancock Freedom Securities Corporation and its
subsidiaries, two of which, Tucker Anthony Incorporated, John Hancock
Distributors, Inc. and Sutro & Company, Inc. are broker-dealers ("Affiliated
Brokers"). Pursuant to procedures determined by the Directors and consistent
with the above policy of obtaining best net results, the Fund may execute
portfolio transactions with or through Affiliated Brokers. During the year
ended December 31, 1994, the Fund did not execute any portfolio transactions
with Affiliated Brokers.
During 1992, 1993 and 1994, the Fund paid total brokerage commissions,
excluding spreads or commissions on principal transactions, of $37,280, $40,949
and $81,677, respectively. In 1991, the Fund paid $1,000 in brokerage
commissions to Noyes Partners Incorporated. Mr. Howard E. Buhse, a former
Director of the Company, was a stockholder of Noyes Partners Incorporated
during the relevant period.
TRANSFER AGENT SERVICES
John Hancock Investor Services Corporation, P.O. Box 9116, Boston, MA
02205-9116, a wholly-owned indirect subsidiary of the Life Insurance Company,
is the transfer and dividend paying agent for the Fund. Investor Services,
P.O. Box 9116, Boston, MA 02205- 9116, a wholly-owned indirect subsidiary of
the Life Insurance Company, is the transfer and dividend paying agent for the
Fund. The Fund pays Investor Services an annual fee for Class A of $16.00 per
shareholder account and for Class B shares of $18.50 plus out-of-pocket
expenses.
CUSTODY OF PORTFOLIO
Portfolio securities of the Fund are held by Investors Bank & Trust
Company, as custodian.
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INDEPENDENT AUDITORS
The independent auditors of the Fund are Price Waterhouse LLP, Boston,
Massachusetts 02110. Price Waterhouse audits and renders an opinion on the
Fund's annual financial statements and prepares the Fund's annual income tax
returns.
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APPENDIX A
DESCRIPTION OF BOND RATINGS*
Moody's Bond ratings
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 likely to
impair the fundamentally strong position of such issues.
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 fluctuation
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 .
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 sometime in the future.
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.
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.
Bonds which are rated 'B' generally lack characteristics of the
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.
Bonds which are rated 'Caa' are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
_______________________
*As described by the rating companies themselves.
34
<PAGE> 141
Bonds which are rated 'Ca' represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
shortcomings.
Standard & Poor's Bond ratings
AAA. This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.
AA. Bonds rated AA also qualify as high-quality debt obligations.
Capacity to pay principal and interest is very strong, and in the majority of
instances they differ from AAA issues only in small degree.
A. Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions.
BBB. Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection parameters,
adverse economic conditions or changing circumstances are more likely to lead
to a weakened capacity to pay principal and interest for bonds in this category
than for bonds in the A category.
BB. Debt rated BB has less near-term vulnerability to default than
other speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which could lead
to inadequate capacity to meet timely interest and principal payments. The BB
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BBB- rating.
B. Debt rated B has a greater vulnerability to default but currently
has the capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The B rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
BB or BB- rating.
CCC. Debt rated 'CCC' has a currently identifiable vulnerability to
default, and is dependent upon favorable business, financial and economic
conditions to meet timely payment of interest and repayment of principal. In
the event of adverse business, financial, or economic conditions, it is not
likely to have the capacity to pay interest and repay principal. The 'CCC'
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied 'CCC' rating.
CC. The rating 'CC' is typically applied to debt subordinated to senior
debt that is assigned an actual or implied 'CCC' rating.
35
<PAGE> 142
Financial Statements
John Hancock Funds - Global Technology Fund
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1994
- ---------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments at value - Note C:
Common stocks (cost - $46,164,020)...................... $57,779,001
Rights and warrants (cost - $69,000).................... 71,250
Bonds (cost - $804,125)................................. 797,500
Joint repurchase agreement (cost - $2,951,000).......... 2,951,000
Corporate savings account............................... 7,899
-----------
61,606,650
Receivable for shares sold.............................. 41,962
Dividends receivable.................................... 17,200
Interest receivable..................................... 19,391
-----------
Total Assets........................ 61,685,203
---------------------------------------------------
LIABILITIES:
Payable for shares repurchased.......................... 48,915
Payable to John Hancock Advisers, Inc.
and affiliates - Note B............................... 66,496
Accounts payable and accrued expenses................... 52,490
-----------
Total Liabilities................... 167,901
---------------------------------------------------
NET ASSETS:
Capital paid-in......................................... 49,906,696
Net unrealized appreciation of investments.............. 11,610,606
-----------
Net Assets.......................... $61,517,302
===================================================
NET ASSET VALUE PER SHARE:
(Based on net asset values and shares of beneficial
interest outstanding _ 50 million shares authorized
with $0.20 per share par value, respectively)
Class A - $52,193,442/2,925,484......................... $ 17.84
=======================================================================
Class B - $9,323,860/527,263............................ $ 17.68
=======================================================================
MAXIMUM OFFERING PRICE PER SHARE*
Class A - ($17.84 x 105.26%)............................ $ 18.78
=======================================================================
</TABLE>
* On single retail sales of less than $50,000. On sales of $50,000 or
more and on group sales the offering price is reduced.
** Class B shares commenced operations on January 3, 1994.
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 DECEMBER 31, 1994. YOU'LL ALSO FIND
THE NET ASSET VALUE AND THE MAXIMUM OFFERING PRICE PER
SHARE AS OF THAT DATE.
THE STATEMENT OF OPERATIONS SUMMARIZES THE FUND'S
INVESTMENT INCOME EARNED AND EXPENSES INCURRED IN
OPERATING THE FUND. IT ALSO SHOWS NET GAINS (LOSSES) FOR
THE PERIOD STATED.
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
Year ended December 31, 1994
- --------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Interest.................................................. $ 283,388
Dividends (net of foreign withholding taxes of $20,500)... 193,642
----------
477,030
----------
Expenses:
Investment management fee - Note B...................... 522,041
Transfer agent fee - Note B
Class A............................................... 153,211
Class B**............................................. 14,708
Distribution/service fee - Note B
Class A............................................... 143,635
Class B**............................................. 43,258
Administration fee...................................... 100,000
Registration and filing fees............................ 53,452
Custodian fee........................................... 50,343
Auditing fee............................................ 27,000
Printing................................................ 25,537
Directors' fees......................................... 15,147
Miscellaneous........................................... 6,939
Legal fees.............................................. 4,612
----------
Total Expenses...................... 1,159,883
--------------------------------------------------
Net Investment Loss................. ( 682,853)
--------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on investments sold..................... 4,596,638
Net realized gain on options.............................. 139,495
Change in net unrealized appreciation/depreciation
of investments.......................................... ( 78,528)
----------
Net Realized and Unrealized
Gain on Investments................. 4,657,605
--------------------------------------------------
Net Increase in Net Assets
Resulting from Operations............ $3,974,752
==================================================
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE> 143
Financial Statements
John Hancock Funds - Global Technology Fund
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
- ---------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------
1994 1993
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment loss......................................... ($ 682,853) ($ 562,465)
Net realized gain on investments sold and options........... 4,736,133 5,253,292
Change in net unrealized appreciation/depreciation of
investments............................................... ( 78,528) 5,168,267
----------- -----------
Net Increase in Net Assets Resulting from Operations...... 3,974,752 9,859,094
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net realized gain on investments and
options
Class A - ($1.2625 and $2.2029 per share, respectively)... ( 3,443,707) ( 4,686,441)
Class B** - ($1.2625 and none per share, respectively).... ( 614,018) ----
----------- -----------
Total Distributions to Shareholders..................... ( 4,057,725) ( 4,686,441)
----------- -----------
FROM FUND SHARE TRANSACTIONS - NET*........................... 19,850,814 4,482,712
----------- -----------
NET ASSETS:
Beginning of period......................................... 41,749,461 32,094,096
----------- -----------
End of period............................................... $61,517,302 $41,749,461
=========== ===========
*ANALYSIS OF FUND SHARE TRANSACTIONS:
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1994 1993
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
CLASS A
Shares sold.............................................. 1,628,280 $29,997,844 511,180 $ 8,883,674
Shares issued to shareholders in reinvestment of
distributions.......................................... 184,986 3,235,355 257,052 4,334,760
--------- ----------- ------- -----------
1,813,266 33,233,199 768,232 13,218,434
Less shares repurchased.................................. (1,279,970) ( 22,995,150) ( 524,177) ( 8,735,722)
--------- ----------- ------- -----------
Net increase 533,296 $10,238,049 244,055 $ 4,482,712
========= =========== ======= ===========
CLASS B**
Shares sold................................................ 563,553 $10,264,273
Shares issued to shareholders in reinvestment of
distributions............................................ 33,535 581,498
--------- -----------
597,088 10,845,771
Less shares repurchased.................................... ( 69,825) ( 1,233,006)
--------- -----------
Net increase............................................... 527,263 $ 9,612,765
========= ===========
</TABLE>
** Class B shares commenced operations on January 3, 1994.
THE STATEMENT OF CHANGES IN NET ASSETS SHOWS HOW THE VALUE OF THE FUND'S NET
ASSETS HAVE CHANGED SINCE THE END OF THE PREVIOUS FISCAL PERIOD. THE
DIFFERENCE REFLECTS EARNINGS LESS EXPENSES, ANY INVESTMENT AND OPTION 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 VALUE.
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE> 144
Financial Statements
John Hancock Funds - Global Technology Fund
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout the
periods indicated, investment returns, key ratios and supplemental data are
as follows:
- ------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------
CLASS A 1994 1993 1992 +1991+ +1990+
--------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period.......................... $ 17.45 $ 14.94 $ 15.60 $ 12.44 $ 16.93
------- ------- ------- ------- -------
Net Investment Income (Loss).................................. ( 0.22)(a) ( 0.21) ( 0.15)(b) 0.05 ( 0.04)
Net Realized and Unrealized Gain (Loss) on Investments,
Options and Foreign Currency Transactions................. 1.87 4.92 1.00 4.11 ( 3.09)
------- ------ ------- ------- -------
Total from Investment Operations........................... 1.65 4.71 0.85 4.16 ( 3.13)
------- ------ ------- ------- -------
Less Distributions:
Dividends from Net Investment Income.......................... -- -- -- ( 0.04) --
Distributions from Net Realized Gain on Investments Sold,
Options and Foreign Currency Transactions................... ( 1.26) ( 2.20) ( 1.51) ( 0.96) ( 1.36)
------- ------ ------- ------- -------
Total Distributions...................................... ( 1.26) ( 2.20) ( 1.51) ( 1.00) ( 1.36)
------- ------ ------- ------- -------
Net Asset Value, End of Period................................ $ 17.84 $ 17.45 $ 14.94 $ 15.60 $ 12.44
======= ======= ======= ======= =======
Total Investment Return at Net Asset Value.................... 9.62% 32.06% 5.70%(c) 33.05% (18.46%)
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted)..................... $52,193 $41,749 $32,094 $31,580 $28,864
Ratio of Expenses to Average Net Assets....................... 2.16% 2.10% 2.05%(b) 2.32% 2.36%
Ratio of Net Investment Income (Loss) to Average Net Assets... ( 1.25%) ( 1.49%) ( 0.88%)(b) 0.34% ( 0.28%)
Portfolio Turnover Rate....................................... 67% 86% 76% 67% 38%
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE> 145
Financial Statements
John Hancock Funds - Global Technology Fund
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (continued)
- --------------------------------------------------------------------------------------------
PERIOD ENDED
DECEMBER 31,
1994
------------
<S> <C>
Class B(d)
PER SHARE OPERATING PERFORMANCE
Net Assets Value, Beginning of Period ....................................... $ 17.24 (e)
--------
Net Investment Loss ......................................................... ( 0.35)(a)
Net Realized and Unrealized Gain on Investments and Options ................. 2.05
--------
Total from Investment Operations ............................................ 1.70
--------
Less Distributions:
Distributions from Net Realized Gain on Investments Sold and Options ........ ( 1.26)
--------
Net Asset Value, End of Period .............................................. $ 17.68
========
Total Investment Return at Net Asset Value .................................. 10.02%
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted) ................................... $ 9,324
Ratio of Expenses to Average Net Assets ..................................... 2.90%(f)
Ratio of Net Investment Loss to Average Net Assets .......................... ( 1.98%)(f)
Portfolio Turnover Rate ..................................................... 67%
</TABLE>
(a) On average month end shares outstanding.
(b) Reflects voluntary expense limitations in effect during the year ended
December 31, 1992 (see Note B to the Notes to the Financial Statements). As
a result of such limitations, expenses of the Fund for 1992 reflect
reductions of $0.03 per share. Absent such limitations, for 1992, the ratio
of expenses to average net assets would have been 2.22% and the ratio of
net investment income to average net assets would have been (1.05%).
(c) Without the reimbursement, total investment return would have been lower.
(d) Class B shares commenced operations on January 3, 1994.
(e) Initial price to commence operations.
(f) On an annualized basis.
+ These periods are covered by the report of other independent accountants
(not included herein).
THE FINANCIAL HIGHLIGHTS SUMMARIZE THE IMPACT OF THE FOLLOWING FACTORS ON A
SINGLE SHARE FOR THE PERIODS INDICATED: THE 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> 146
Financial Statements
John Hancock Funds - Global Technology Fund
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS
December 31, 1994
- --------------------------------------------------------------------------------------
ISSUER, DESCRIPTION NUMBER OF SHARES MARKET VALUE
- ------------------- ---------------- ------------
<S> <C> <C>
COMMON STOCKS
BROADCASTING (5.74%)
Tele-Communications, Inc. (Class A)** ...... 50,000 $ 1,087,500
Telewest Communications PLC,
American Depositary
Receipt (ADR) (United Kingdom)** ......... 50,000* 1,325,000
Viacom, Inc. (Class A) ..................... 3,200 133,200
Viacom, Inc. (Class B) ..................... 24,246 984,994
-----------
3,530,694
-----------
COMPUTERS - PERIPHERAL (8.54%)
Adaptec, Inc.** .............................. 100,000 2,350,000
EMC Corp.** .................................. 80,000* 1,730,000
S3, Inc.** ................................... 75,000* 1,171,875
-----------
5,251,875
-----------
COMPUTERS - SOFTWARE (19.76%)
Applix, Inc.** ............................... 42,500* 531,250
BMC Software, Inc.** ......................... 25,000 1,418,750
Cheyenne Software, Inc.** .................... 75,000 993,750
Computer Associates International, Inc. ...... 50,000 2,425,000
Electro Brain International Corp.** .......... 165,000 46,398
FTP Software, Inc.** ......................... 50,000* 1,575,000
Oracle Systems Corp.** ....................... 50,000 2,206,250
Parametric Technology Co. .................... 40,000* 1,370,000
Pinnacle Systems, Inc.** ..................... 100,000* 1,450,000
Telebase Systems, Inc.** (r) ................. 217,360 141,284
-----------
12,157,682
-----------
COMPUTERS - MINI/MICRO (9.66%)
Compaq Computer Corp.** ...................... 50,000* 1,975,000
Silicon Graphics, Inc.** ..................... 50,000 1,543,750
Stratus Computer, Inc.** ..................... 30,000* 1,140,000
Tandem Computers, Inc.** ..................... 75,000* 1,284,375
-----------
5,943,125
-----------
ELECTRONICS (25.61%)
ADFlex Solutions, Inc.** ..................... 100,000* 1,675,000
Applied Materials, Inc.** .................... 50,000 2,087,500
GaSonics International Corp.** ............... 60,000* 945,000
Integrated Device Technology, Inc.** ......... 90,000* 2,655,000
Lam Research Corp.** ......................... 50,000* 1,862,500
Level One Communications, Inc.** ............. 75,000 1,125,000
LSI Logic Corp.** ............................ 50,000* 2,018,750
PRI Automation, Inc.** ....................... 50,000* 787,500
SGS-Thomson Microelectronics N.V.** .......... 10,000* 227,500
Teradyne, Inc.** ............................. 70,000 2,371,250
-----------
15,755,000
-----------
</TABLE>
THE SCHEDULE OF INVESTMENTS IS A COMPLETE LIST OF ALL SECURITIES OWNED BY
FREEDOM GLOBAL TECHNOLOGY FUND ON DECEMBER 31, 1994. IT'S DIVIDED INTO FOUR MAIN
CATEGORIES: COMMON STOCKS, RIGHTS, WARRANTS, BONDS AND SHORT-TERM INVESTMENTS.
THE STOCKS, RIGHTS, WARRANTS AND BONDS ARE FURTHER BROKEN DOWN BY INDUSTRY
GROUPS. UNDER EACH INDUSTRY GROUP IS A LIST OF THE SECURITIES OWNED BY THE FUND.
SHORT-TERM INVESTMENTS, WHICH REPRESENT THE FUND'S "CASH" POSITION, ARE LISTED
LAST.
<TABLE>
<CAPTION>
ISSUER, DESCRIPTION NUMBER OF SHARES MARKET VALUE
- ------------------- ---------------- ------------
<S> <C> <C>
TELECOMMUNICATIONS (24.61%)
3Com Corp.** ................................. 40,000 $ 2,060,000
Allen Group, Inc. ............................ 70,000 1,671,250
cisco Systems, Inc.** ........................ 60,000 2,100,000
DSC Communications Corp.** ................... 60,000* 2,160,000
Empresas Telex-Chile,
S.A. (ADR) (Chile) ........................... 50,000* 531,250
General Instrument Corp.** ................... 75,000* 2,250,000
Hong Kong Telecommunications, Ltd.
(ADR) (Hong Kong) ............................ 25,000* 478,125
Nextel Communications, Inc. (Class A)** ...... 50,000* 718,750
Nokia Corp. (ADR) (Finland) .................. 10,000* 750,000
SSE Telecom, Inc.** .......................... 125,000 781,250
Telefonos de Mexico,
S.A. de C.V. (ADR) (Mexico) .................. 40,000 1,640,000
-----------
15,140,625
-----------
TOTAL COMMON STOCKS
(Cost $46,164,020) (93.92%) 57,779,001
------ -----------
<CAPTION>
NUMBER OF RIGHTS
OR WARRANTS
----------------
<S> <C> <C>
RIGHTS & WARRANTS
BROADCASTING (0.07%)
Viacom, Inc., Variable Common Rights.** ...... 40,000* 45,000
-----------
ELECTRONICS (0.04%)
Ibis Technology Corp., Warrants** ............ 70,000* 26,250
-----------
TOTAL RIGHTS & WARRANTS
(Cost $69,000) ( 0.11%) 71,250
------ -----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE> 147
Financial Statements
John Hancock Funds - Global Technology Fund
<TABLE>
<CAPTION>
PAR VALUE
INTEREST S&P (000'S MARKET
ISSUER, DESCRIPTION RATE RATING*** OMITTED) VALUE
- ------------------- -------- --------- --------- ----------
<S> <C> <C> <C> <C>
BONDS
ELECTRONICS (0.53%)
Kulicke & Soffa Industries, Inc.,
Conv Sub Deb, 03-01-08 ..................................................... 8.000% B- $ 300 $ 322,500
-----------
TELECOMMUNICATIONS (0.77%)
Tele 2000 Conv Note, 04-14-97 (Peru) (R) ..................................... 9.750 NR 500* 475,000
-----------
TOTAL BONDS
(Cost $804,125) ( 1.30%) 797,500
------- -----------
SHORT-TERM INVESTMENTS
JOINT REPURCHASE AGREEMENT (4.80%)
Investment in a joint repurchase agreement transaction with
Lehman Brothers,Inc., Dated 12-30-94, Due 01-03-95,
(secured by U.S. Treasury Bonds, 9.25% due 2-15-16,
8.125% due 8-15-21, and U.S. Treasury Notes, 7.875%
due 7-31-96, 4.625% due 8-15-95) Note A ................................... 5.850 -- 2,951 2,951,000
-----------
CORPORATE SAVINGS ACCOUNT (0.01%)
Investors Bank & Trust Company Daily Interest Savings Account Current Rate 3.00% 7,899
-----------
TOTAL SHORT-TERM INVESTMENTS ( 4.81%) 2,958,899
-------- -----------
TOTAL INVESTMENTS (100.14%) $61,606,650
======== ===========
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS
(R) This security is exempt from registration under Rule 144A of the Securities
Act of 1933. Such securities may be resold, normally to qualified
institutional buyers, in transactions exempt from registration. See Note A
of the Notes to Financial Statements for valuation policy. Rule 144A
securities amounted to $475,000, as of December 31, 1994.
(r) Direct placement securities are restricted to resale. They have been valued
at fair value by the Trustees after considerations of restrictions as to
resale, financial condition and prospects of the issuer, general market
conditions and pertinent information in accordance with the Fund's By-Laws
and the Investment Company Act of 1940, as amended. The Fund has limited
rights to registration under the Securities Act of 1933 with respect to
these restrictedes. Additional information on each restricted security is
as follows:
<TABLE>
<CAPTION>
MARKET
VALUE AS A
PERCENTAGE MARKET
ACQUISITION ACQUISITION OF FUND'S VALUE AT
SECURITY DATE COST NET ASSETS DECEMBER 31, 1994
- -------- ----------- ----------- ---------- -----------------
<S> <C> <C> <C> <C>
Telebase Systems, Inc. - Common Stock .................. 11-14-91 $ 304,304 0.23% $ 141,284
</TABLE>
*Securities, other than short-term investments, newly added to the portfolio
during the period ended December 31, 1994.
**Non-income producing security.
***Credit ratings are unaudited.
NR Not Rated by either Standard & Poor's or Moody's Investors Services.
Parenthetical disclosure of a foreign country in the security description
represents country of foreign issuer, however, security is U.S. dollar
denominated.
The percentage shown for each investment category is the total value of that
category as a percentage of the net assets of the Fund.
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE> 148
Notes to Financial Statements
John Hancock Funds - Global Technology Fund
NOTE A -
ACCOUNTING POLICIES
John Hancock Technology Series, Inc. ( the "Company") is an open-end investment
company registered under the Investment Company Act of 1940. The Company
consists of two series: John Hancock Global Technology Fund (the "Fund"), a
diversified series, and John Hancock National Aviation & Technology Fund, a
non-diversified series. The Directors authorized the sale of Class B shares as
of January 3, 1994 and adoption of 12b-1 distribution plans as of January 1 and
3, 1994 for Class A and Class B shares of the Fund, respectively. The shares of
each class represent an interest in the same portfolio of investments of the
Fund and have equal rights to voting, redemption, dividends and liquidation
except that certain expenses, subject to the approval of the Directors, may be
applied differently to each class of shares in accordance with current
regulations of the Securities and Exchange Commission and the Internal
Revenue Service. Shareholders of a class which bears distribution/service
expenses under the terms of a distribution plan, have exclusive voting
rights to such distribution plan. Significant accounting policies of the Fund
are as follows:
VALUATION OF INVESTMENTS Securities in the Fund's portfolio are valued on the
basis of market quotations, valuations provided by independent pricing services
or, at fair value as determined in good faith in accordance with procedures
approved by the Trustees. Short-term debt investments maturing within 60
days are valued at amortized cost which approximates market value.
JOINT REPURCHASE AGREEMENT Pursuant to an exemptive order issued by the
Securities and Exchange Commission, the Fund, along with other registered
investment companies having a management contract with John Hancock Advisers,
Inc., (the "Adviser"), a wholly-owned subsidiary of The Berkeley Financial
Group, may participate in a joint repurchase agreement transaction.
Aggregate cash balances are invested in one or more repurchase agreements,
whose underlying securities are obligations of the U.S. government and/or its
agencies. The Fund's custodian bank receives delivery of the underlying
securities for the joint account on the Fund's behalf. The Adviser is
responsible for ensuring that the agreement is fully collateralized at all
times.
INVESTMENT TRANSACTIONS Investment transactions are recorded as of the date of
purchase, sale, or maturity. Net realized gains and losses on sales of
investments are determined on the identified cost basis.
FEDERAL INCOME TAXES The Fund's policy is to comply with the requirements of
the Internal Revenue Code that are applicable to regulated investment
companies. It will not be subject to Federal income tax on taxable earnings
which are distributed to shareholders.
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, 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 Company are directly
identifiable to an individual Fund. Expenses which are not readily
identifiable to a specific Fund are allocated in such a manner as deemed
equitable, taking into consideration, among other things, the nature and type
of expense and the relative size 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. Transfer agent expenses and 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.
13
<PAGE> 149
Notes to Financial Statements
John Hancock Funds - Global Technology Fund
OPTIONS Listed options are valued at the last quoted sales price on the
exchange on which they are primarily traded. Purchased put or call
over-the-counter options are valued at the average of the "bid" prices obtained
from two independent brokers. Written put or call over-the-counter options are
valued at the average of the "asked" prices obtained from two independent
brokers. Upon the writing of a call or put option, an amount equal to the
premium received by the Fund is included in the Statement of Assets and
Liabilities as an asset and corresponding liability. The amount of the
liability is subsequently marked-to-market to reflect the current market
value of the written option.
The Fund may use options contracts to manage its exposure to the
stock market. Writing puts and buying calls tend to increase the Fund's
exposure to the underlying instrument and buying puts and writing calls tend to
decrease the Fund's exposure to the underlying instrument, or hedge other Fund
investments.
The maximum exposure to loss for any purchased options is limited to
the premium initially paid for the option. In all other cases, the face (or
"notional") amount of each contract at value reflects the maximum exposure of
the Fund in these contracts, but the actual exposure is limited to the change
in value of the contract over the period the contract remains open.
Risks may also arise if counterparties do not perform under the
contracts' terms, or if the Fund is unable to offset a contract with a
counterparty on a timely basis ("liquidity risk"). Exchange-traded options
have minimal credit risk as the exchanges act as counterparties to each
transaction, and only present liquidity risk in highly unusual market
conditions. To minimize credit and liquidity risks in over-the-counter
option contracts, the Fund continuously monitors the creditworthiness of all
its counterparties.
At any particular time, except for purchased options, market or credit
risk may involve amounts in excess of those reflected in the Fund's
period-end Statement of Assets and Liabilities.
A summary of written call option transactions for the period ended
December 31, 1994 is as follows:
<TABLE>
<CAPTION>
NUMBER OF
CONTRACTS PREMIUMS
(000's OMITTED) RECEIVED
--------------- --------
<S> <C> <C>
Outstanding, beginning of period................ ---- ----
Options written................................. 1,000 $139,495
Options expired................................. (1,000) (139,495)
------ --------
Outstanding, end of period...................... ---- ----
====== ========
</TABLE>
DISCOUNT ON SECURITIES The Fund accretes discount from par value on investment
securities from either the date of issue or date of purchase over the life
of the security, as required by the Internal Revenue Code.
NOTE B -
MANAGEMENT FEE, ADMINISTRATIVE
SERVICES AND TRANSACTIONS WITH AFFILIATES
AND OTHERS
The Adviser is responsible for managing the Fund's investment business
affairs and overseeing the investment activities of the sub-adviser. The
Adviser has a sub-investment management contract with American Fund Advisors,
Inc. (the "Sub-Adviser"), under which the Sub-Adviser, subject to the review
of the Directors and the overall supervision of the Adviser, provides the Fund
with investment services and advice with respect to investment transactions.
Under the present investment management contract, for the period ended
December 31, 1994, the Fund paid a monthly management fee to the Adviser,
equivalent on an annual basis, to the sum of (a) 1.00% of the first
$100,000,000 of the Fund's average daily net asset value and (b) 0.75% of the
Fund's average daily net asset value in excess of $100,000,000. Effective
January 1, 1995, the Adviser will waive a portion of the management fee
amounting to 0.15% of the average daily net asset value of the first
$100,000,000 of each series of the Fund. Therefore, the Fund will pay a monthly
management fee to the
14
<PAGE> 150
Notes to Financial Statements
John Hancock Funds - Global Technology Fund
Adviser, equivalent on an annual basis, to the sum of 0.85% of the first
$100,000,000 of the Fund's average daily net asset value. The Adviser pays the
Sub-Adviser a monthly management fee, equivalent on an annual basis, to the sum
of (a) 0.40% of the first $100,000,000 of the Fund's average daily net asset
value and (b) 40% of the investment advisory fee received by the Adviser on
amounts over $100,000,000. The Fund pays a monthly administrative fee at the
rate of $100,000 per annum to the Adviser for performance of administrative
services to the Fund. 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, 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.
In the event that the ratio for 1992, 1993, or 1994 of normal operating
expenses of the Fund, exclusive of extraordinary expenses including, but not
limited to litigation, to the Fund's average daily net assets for such year,
exceeds the average expense ratio for the Fund for the three years ended
December 31, 1990 (restated as if the current annual rates for calculating the
management fee and the current expense limitations had been in effect
throughout the three year period), the fees payable to the Adviser will be
reduced to the extent required to eliminate such excess and the Adviser will
make any additional arrangements necessary to eliminate any remaining such
excess. No such reduction in fees was necessary under such arrangement for the
period ended December 31, 1994. At a shareholder meeting on December 8, 1993 the
shareholders approved a proposal which excludes the amounts payable by the
Fund under the Rule 12b-1 distribution plans (effective in January 1994)
from the calculation of the expense limit described above.
The Fund has a distribution agreement with John Hancock Funds, Inc.
("JH Funds"), a wholly-owned subsidiary of the Adviser. Prior to January 1,
1995, JH Funds was known as John Hancock Broker Distribution Services, Inc. For
the period ended December 31, 1994, JH Funds received net sales charges of
$231,773 with regard to sales of Class A shares. Out of this amount, $35,779
was retained and used for printing prospectuses, advertising, sales literature
and other purposes, and $89,166 was paid as sales commissions and first year
service fees to unrelated broker-dealers and $106,830 was paid as sales
commissions and first year service fees 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 are
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 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 December 31,
1994 contingent deferred sales charges received by JH Funds amounted to $8,869.
In addition, to compensate JH Funds for the services it provides as
distributor of shares of the Fund, the Fund has adopted a Distribution Plan with
respect to Class A and Class B pursuant to Rule 12b-1 under the Investment
Company Act of 1940 effective January 1 and 3, 1994, respectively. Accordingly,
the Fund makes payments to JH Funds, for distribution and service expenses at an
annual rate not to exceed 0.30% of Class A average daily net assets and 1.00%
of Class B average daily net assets to reimburse JH Funds for its
distribution/service costs. Up to a maximum of 0.25% of such payments may be
service fees as defined by the amended Rules of Fair Practice of the National
Association of Securities Dealers which became effective July 7, 1993. Under
the amended Rules of Fair Practice, curtail-
15
<PAGE> 151
ment of a portion of the Fund's 12b-1 payments could occur under
certain circumstances.
The Fund has a transfer agent agreement with John Hancock Investor
Services Corporation ("Investor Services"), a wholly-owned subsidiary of The
Berkeley Financial Group. Prior to January 1, 1995, JH Investor Services was
known as John Hancock Funds Services, Inc. For the period ended December 31,
1994, the Fund paid a monthly transfer agent fee, equivalent on an annual basis,
to 0.32% and 0.34% of the Fund's average daily net asset value, attributable to
Class A and Class B shares of the Fund, respectively, plus out of pocket
expenses incurred by Investor Services on behalf of the Fund for proxy
mailings. Effective January 1, 1995, the Fund will pay transfer agent fees
based on transaction volume and the number of shareholder accounts.
Mr. Edward J. Boudreau, Jr. is a director and officer of the Adviser,
and Mr. Barry J. Gordon is a director and officer of the Sub-Adviser. Mr.
Thomas W.L. Cameron is an affiliated Director of the Fund. The compensation of
unaffiliated Directors is borne by the Fund.
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 December 31, 1994, aggregated $47,249,821 and $31,950,402,
respectively. There were no purchases or sales of obligations of the U.S.
government and its agencies during the period ended December 31, 1994.
The cost of investments owned at December 31, 1994 for Federal income
tax purposes was $49,988,145. Gross unrealized appreciation and depreciation
of investments aggregated $14,913,919 and $3,303,313, respectively, resulting
in net unrealized appreciation of $11,610,606.
NOTE D -
RECLASSIFICATION OF CAPITAL ACCOUNTS
During the year ended December 31, 1994, the Fund has reclassified amounts to
reflect a decrease in accumulated net investment loss of $682,853, a decrease
in accumulated net realized gain on investments of $682,794 and a decrease in
capital paid-in of $59. This represents the cumulative amount necessary to
report these balances on a tax basis, excluding certain temporary differences,
as of December 31, 1994. Additional adjustments may be needed in subsequent
reporting periods. These reclassifications, which have no impact on the net
asset value of the Fund, are primarily attributable to certain differences
in the computation of distributable income and capital gains under federal tax
rules versus generally accepted accounting principles.
16
<PAGE> 152
John Hancock Funds - Global Technology Fund
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders of
John Hancock Global Technology Fund and the
Directors of John Hancock Technology Series, Inc.
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of John Hancock
Global Technology Fund (the "Fund") (a portfolio of John Hancock Technology
Series, Inc.) at December 31, 1994, the results of its operations for the year
then ended, the changes in its net assets and the financial highlights for the
periods indicated in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred to
as "financial statements") are the responsibility of the Fund's management;
our responsibility is to express an opinion on these financial statements
based on our audits. We conducted our audits of these financial statements
in accordance with generally accepted auditing standards which require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included
confirmation of securities at December 31, 1994 by correspondence with the
custodian and brokers and the application of alternative auditing procedures
where confirmations from brokers were not received, provide a reasonable
basis for the opinion expressed above.
TAX INFORMATION NOTICE (UNAUDITED)
For Federal Income Tax purposes, the following information is
furnished with respect to the distributions of the Fund for its fiscal year
ended December 31, 1994.
With respect to the Fund's ordinary taxable income for the fiscal year
ended December 31, 1994, none of the dividends qualify for the corporate
dividends received deduction.
The Fund designated distributions to shareholders of $2,745,000 as
long-term capital gain dividends. Shareholders were mailed a 1994 U.S.
Treasury Department Form 1099-DIV in January 1995 representing their
proportionate share.
United States Government Obligations: The Fund did not have any assets
invested in U.S. Treasury bonds, bills, and notes or other U.S. government
agencies at year end. The Fund did not derive any income from these
investments. For specific information on exemption provisions in your state,
consult your local state tax office or your tax adviser.
Price Waterhouse LLP
Boston, Massachusetts
February 16, 1995
17
<PAGE> 153
PART C.
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements included in the Registration Statement:
John Hancock Global Technology Fund
-----------------------------------
Statement of Assets and Liabilities as of December 31,1994.
Statement of Operations for the period ended December 31, 1994.
Statement of Changes in Net Assets for the period ended
December 31, 1994.
Notes to Financial Statements.
Financial Highlights for each of the 10 years in the period ended
December 31, 1994.
Schedule of Investments as of December 31, 1994.
John Hancock National Aviation & Technology Fund
------------------------------------------------
Statement of Assets and Liabilities as of December 31, 1994.
Statement of Operations for the period ended December 31, 1994.
Statement of Changes in Net Assets for the period ended
December 31, 1994.
Notes to Financial Statements.
Financial Highlights for each of the 10 years in the period ended
December 31, 1994.
Schedule of Investments as of December 31, 1994.
(b) Exhibits:
The exhibits to this Registration Statement are listed in the Exhibits
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
<TABLE>
As of April 7, 1995, the number of record holders of shares of
Registrant was as follows:
<CAPTION>
TITLE OF CLASS NUMBER OF RECORD HOLDERS
-------------- ------------------------
GLOBAL TECHNOLOGY
-----------------
FUND
----
<S> <C>
Class A Shares 8,979
Class B Shares 1,881
</TABLE>
C-1
<PAGE> 154
<TABLE>
<CAPTION>
TITLE OF CLASS NUMBER OF RECORD HOLDERS
-------------- ------------------------
NATIONAL AVIATION
-----------------
AND TECHNOLOGY
--------------
FUND
----
<S> <C>
Class A Shares 6,465
Class B Shares 60
</TABLE>
(b) Registrant's Articles and By-Laws.
---------------------------------
Under the Registrant's Amended and Restated Articles of Incorporation,
directors and officers of the Registrant, and under the Registrant's By-Laws,
all corporate representatives, are entitled to indemnification by the
Registrant to the fullest extent permitted under Maryland law and the
Investment Company Act of 1940 ("1940" Act"). Reference is made to Article
VII of the Registrant's Amend and Restated Articles of Incorporation and to
Article 10 of Registrant's By-Laws and section 2-418 of the Maryland General
Corporation Law.
(c) Investment Company Act of 1940.
-------------------------------
Section 17(h) of the 1940 Act prohibits the Registrant from
indemnifying any director or officer of the Registrant against any liability
to the Registrant or to its security holders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office
("disabling conduct").
In the absence of a final decision on the merits by a court or other
body before whom a proceeding is brought that the corporate representative to
be indemnified (indemnitee") was not liable by reason of disabling conduct, an
indemnitee may nevertheless by indemnified if a reasonable determination is
made, based upon a review of the facts, that the indemnitee was not so liable
by (a) the vote of majority of a quorum of directors who are neither
"interested persons" of the Registrant as defined in Section 2(a)(19) of the
1940 Act, nor parties to the proceeding, or (b) an independent legal counsel
in a written opinion.
(d) Underwriting Agreement.
----------------------------
Under Section 12 of the Distribution Agreement, (the "Distribution
Agreement") between the Registrant and John Hancock Funds, Inc., the principal
underwriter has agreed to indemnify the Registrant and its Directors, officers
and controlling persons against claims arising out of certain acts and
statements of the underwriter.
(e) Under the By-Laws of the John Hancock Mutual Life Insurance
Company ("the Insurance Company"), John Hancock Funds, Inc. ("John Hancock
Funds") and John Hancock Advisers, Inc. (the "Adviser"). Section 9a of the
By-Laws of the 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 Insurance
C-2
<PAGE> 155
Company who serves as a director or employee 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 by 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 mater settled without final
adjudication unless such settlement shall have been approved as in the best
interests of the Insurance Commune 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 to be entitled to indemnification .
Article IX of the respective by-laws of John Hancock Funds and the
Adviser provides 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 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 as person."
Under the Investment Management Contract of Registrant. Section 8 of
the Registrant's Investment Management Contract provides that 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 matters to which the contract
relates, except a loss resulting from willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard by the Adviser of its obligations and duties under the contract.
Any person, even though also employed by the Adviser, who may be or become an
employee of the 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.
C-3
<PAGE> 156
Insofar as indemnification for liabilities under the Securities Act of
1933 (the "Act") may be permitted to Trustees, officers and controlling
persons of Registrant pursuant to Section 0.1 of the Registrant's By-Laws,
Section 13 of the Underwriting Agreement filed as Exhibit 6 to the original
Registration Statement, the By-Laws of the Registrant, the By-laws of the John
Hancock Funds, the Adviser, or the Insurance Company or otherwise. Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
Trustee, officer or controlling person in connection with the securities being
registered, 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, herein incorporated by reference.
ITEM 29. PRINCIPAL UNDERWRITERS
(a) John Hancock Funds acts as principal underwriter for the Registrant
and also serves as principal underwriter or distributor of shares for John
Hancock Cash Reserve, Inc., John Hancock Bond Fund, John Hancock Capital Growth
Fund, John Hancock Current Interest, John Hancock Special Series, Inc., John
Hancock Tax-Free Bond Fund, John Hancock California Tax-Free Income Fund, John
Hancock Capital Series, John Hancock Limited-Term Government Fund, John
Hancock Tax-Exempt Income Fund, John Hancock Sovereign Investors Fund, Inc.,
John Hancock Cash Management Fund, John Hancock Special Equities Fund, John
Hancock Sovereign Bond Fund, John Hancock Tax-Exempt Series, John Hancock
Strategic Series, John Hancock Technology Series, Inc. and 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-4
<PAGE> 157
<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 None
John Hancock Place Senior Vice President
P.O. Box 111
Boston, Massachusetts
C. Troy Shaver, Jr. President, Chief None
101 Huntington Avenue Executive Officer
Boston, Massachusetts and Director
Robert G. Freedman Director Vice Chairman, Chief
101 Huntington Avenue Investment Officer
Boston, Massachusetts
Stephen M. Blair Executive Vice None
101 Huntington Avenue President-Sales
Boston, Massachusetts
Thomas H. Drohan Senior Vice President Senior Vice President
101 Huntington Avenue and Secretary
Boston, Massachusetts
David A. King Senior Vice President None
101 Huntington Avenue
Boston, Massachusetts
James W. McLaughlin Senior Vice President None
101 Huntington Avenue and Chief Financial
Boston, Massachusetts Officer
James B. Little Senior Vice President Senior Vice President
101 Huntington Avenue and
Boston, Massachusetts Chief Financial Officer
John A. Morin Vice President Vice President
101 Huntington Avenue
Boston, Massachusetts
</TABLE>
C-5
<PAGE> 158
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
- ------------------ --------------------- ---------------------
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
- ---------------- ---------------- ---------------
<S> <C> <C>
Susan S. Newton Vice President Vice President, Assistant
101 Huntington Avenue and Secretary Secretary and Compliance
Boston, Massachusetts Officer
William S. Nichols Senior Vice President None
101 Huntington Avenue
Boston, Massachusetts
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
Richard O. Hansen Director None
John Hancock Place
P.O. Box 111
Boston, Massachusetts
</TABLE>
C-6
<PAGE> 159
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
- ------------------ --------------------- ---------------------
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
- ---------------- ---------------- ---------------
<S> <C> <C>
John M. DeCiccio Director None
John Hancock Place
P.O. Box 111
Boston, Massachusetts
Foster Aborn Director None
John Hancock Place
P.O. Box 111
Boston, Massachusetts
Hugh A. Dunlap, Jr. Director None
101 Huntington Avenue
Boston, Massachusetts
William C. Fletcher Director None
53 State Street
Boston, Massachusetts
James V. Bowhers Executive Vice None
101 Huntington Avenue President
Boston, Massachsuetts
</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-a(b), and 31a-2(a) under the Investment Company Act of
1940 as its principal executive offices at 101 Huntington Avenue, Boston
Massachusetts 02199-7603. Certain records, including records relating to
Registrant's shareholders and the physical possession of its securities, may be
maintained pursuant to Rule 31a-3 at the main office of Registrant's Transfer
Agent and Custodian.
ITEM 31. MANAGEMENT SERVICES
Not applicable.
ITEM 32. UNDERTAKINGS
(a) Not applicable.
(b) Not applicable.
C-7
<PAGE> 160
(c) 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.
C-8
<PAGE> 161
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) unless 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
24th day of April, 1995.
JOHN HANCOCK TECHNOLOGY SERIES, INC.
By: *
_______________________________
Edward J. Boudreau, Jr.
Chairman
<TABLE>
Pursuant to the requirements of the Securities Act of 1933, the
Registration has been signed below by the following persons in the capacities
and on the dates indicated.
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* Chairman April 24, 1995
- ----------------------- (Principal Executive
Edward J. Boudreau, Jr. Officer)
Senior Vice President April 24, 1995
and Chief Financial
/s/James B. Little Officer (Principal
- ----------------------- Financial and
James B. Little Accounting Officer)
*
- ----------------------- Director April 24, 1995
Charles F. Fretz
*
- ----------------------- Director April 24, 1995
Thomas W. L. Cameron
*
- -----------------------
Jack P. Gould Director April 24, 1995
*
- ----------------------- Director April 24, 1995
Charles L. Ladner
</TABLE>
C-9
<PAGE> 162
<TABLE>
<S> <C> <C>
*
- ----------------------- Director April 24, 1995
Patricia P. McCarter
*
- ----------------------- Director April 24, 1995
Norman H. Smith
*
- ----------------------- Director April 24, 1995
Steven R. Pruchansky
*
- ----------------------- Director April 24, 1995
James F. Carlin
*
- ----------------------- Director April 24, 1995
John P. Toolan
*
- ----------------------- Director April 24, 1995
Harold R. Hiser, Jr.
*By:
/s/Thomas H. Drohan
- -------------------
Thomas H. Drohan April 24, 1995
(Attorney-in-Fact)
</TABLE>
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<PAGE> 163
<TABLE>
EXHIBIT INDEX
<CAPTION>
EXHIBIT NO. EXHIBIT DESCRIPTION PAGE NUMBER
- ----------- ------------------- -----------
<S> <C> <C>
99.B1 Articles of Incorporation of Registrant of Registrant dated
December 8, 1993.
99.B1.1 Articles Supplementary dated December 8, 1993.
99.B1.2 Articles Supplementary dated December 4, 1994.
99.B2 Amended By-Laws of Registrant as of November 30, 1993.
99.B4 Specimen share certificate for the Registrant
99.B5 Investment Management Contract between Registrant and John
Hancock Advisers, Inc. dated December 6, 1991 as amended
January 1, 1994.
99.B5.1 Sub-Advisery Agreement between Registrant and American Fund
Advisor, Inc.
99.B6 Distribution Agreement with Registrant and John Hancock
Broker Distribution Services, Inc. dated December 6, 1991.
99.B6.1 Form of Soliciting Dealer Agreement between John Hancock
Broker Distribution Services, Inc. and Selected Dealers.
99.B6.2 Form of Financial Institution Sales and Service Agreement.
99.B7 None
99.B8 Master Custodian Agreement between John Hancock Mutual
Funds and Investors Bank and Trust Company dated December
15, 1992.
99.B9 Transfer Agency Agreement between Registrant and John
Hancock Fund Services, Inc. dated December 6, 1991.
99.B10 Rule 24(e) opinion
99.B11 Auditor's Consent.
99.B11.1 Auditor's Consent.
99.B12 Financial Statement of the John Hancock Global Technology
Fund for the fiscal year ended December 31, 1994 included in
Parts A and B.
99.B12.1 Financial Statement of the John Hancock National Aviation Fund
for the fiscal year ended December 31, 1994 included in Parts
A and B.
99.B13 None.
</TABLE>
<PAGE> 164
<TABLE>
<S> <C>
99.B14 None
99.B15 Class A Distribution Plan between John Hancock Global Technology Fund
and John Hancock Broker Services, Inc.
99.B15.1 Class B Distribution Plan between John Hancock Global Technology
Fund and John Hancock Broker Services, Inc.
99.B15.2 Class A Distribution Plan between John Hancock National Aviation
Fund and John Hancock Broker Services, Inc.
99.B15.3 Class B Distribution Plan between John Hancock National Aviation
Fund and John Hancock Broker Services, Inc.
99.B16 Schedule for Computation of Yield and Total Return.
99.B17 Powers of Attorney dated March 31, 1992, April 2, 1993, April 3,
1992, April 4, 1995, April 14, 1992, April 28, 1992, April 30,
1992, December 8, 1992, August 31, 1993
99.27.1A Global Technology
99.27.1B Global Technology
99.27.2A National Aviation
99.27.2B National Aviation
</TABLE>
<PAGE> 1
EXHIBIT 99.B1
ARTICLES OF AMENDMENT AND RESTATEMENT
OF
JOHN HANCOCK TECHNOLOGY SERIES, INC.
John Hancock Technology Series, Inc., a Maryland corporation having
its principal office in Baltimore City, Maryland (which is hereinafter called
the "Corporation") hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: The Charter of the Corporation is hereby amended and restated
in its entirety as follows:
ARTICLE II
The name of the Corporation (which is hereinafter called the
"Corporation") is John Hancock Technology Series, Inc.
ARTICLE III
The Corporation's principal office in the State of Maryland is located
at 32 South Street, Baltimore, Maryland 21202. The name and post office
address of its resident agent is The Corporation Trust Incorporated, 32 South
Street, Baltimore, Maryland 21202. Said resident agent is a Maryland
corporation.
ARTICLE IV
The Corporation is formed for the following purposes:
(1) To operate and carry on the business of an open-end
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), and to exercise all powers necessary and appropriate
to the conduct of such business.
(2) To subscribe for, invest in, purchase or otherwise
acquire, own, hold, sell, exchange, pledge or otherwise dispose of, securities
of every nature and kind, including, without limitation, all types of stocks,
bonds, debentures, notes or other securities or obligations or evidences of
indebtedness or ownership issued or created by any and all persons,
associations, agencies, trusts or corporations, public or private, whether
created, established or organized under the laws of the United States, and of
the States, or any territory or district or colony or possession thereof, or
under the laws of any foreign country, and also foreign and domestic government
and municipal obligations, bank acceptances, and commercial paper; to pay for
the same in cash or by the issue of stock, bonds or notes of this Corporation
or otherwise; and while owning and holding any such securities, to exercise all
the rights, powers and privileges of a stockholder or owner,
<PAGE> 2
including, and without limitation, the right to delete and assign to one or more
persons, firms, associations or corporations the power to exercise any of said
rights, powers and privileges in respect of any such securities; to borrow money
or otherwise obtain credit and, if required, to secure the same by mortgaging,
pledging or otherwise encumbering as security the assets of this Corporation.
(3) To engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of Maryland;
and to have all the powers of a corporation under the applicable corporation
laws, as in effect from time to time, of the State of Maryland.
ARTICLE V
(1) The total number of shares ("Shares") of all series
("Series") of capital stock the Corporation is authorized to issue one hundred
million shares (100,000,000) of the aggregate par value of sixty-one million
dollars ($61,000,000). Ninety million (90,000,000) of such Shares shall be
classified in separate Series as follows: (i) forty million (40,000,000)
Shares shall be classified as a Series to be known as the "John Hancock Freedom
National Aviation & Technology Fund" and shall be of the par value of $1.25 per
Shares; and (ii) fifty million (50,000,000) Shares shall be classified as a
Series to be known as the "John Hancock Freedom Global Technology Fund" and
shall be of the par value of $.20 per Share. The balance of ten million
(10,000,000) Shares shall be unclassified as to Series and shall be of the par
value of $.10 per Shares.
(2) The Board of Directors is authorized, from time to time,
to classify or to reclassify, as the case may be, any unissued Shares of the
Corporation, whether now or hereafter authorized, in separate Series or classes
("Classes"), from time to time, by setting or changing in any one or more
respects the preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications, and terms and
conditions of redemption of such Shares.
(3) Unless otherwise prohibited by Law, so long as the
Corporation is registered as an open-end company under the Investment Company
Act, the Board of Directors shall have the power and authority, without the
approval of the holders of any outstanding Shares, to increase or decrease the
number of Shares of capital stock of any class or Series that the Corporation
has authority to issue but the number of Shares of any Class or Series shall
not be decreased by the Board of Directors below the number of Shares thereof
then outstanding.
(4) Without limiting the authority of the Board of Directors
set forth herein to establish and designate any further Series, and to classify
and reclassify any unissued Shares, Shares of each Series, now authorized and
hereafter authorized, shall be subject to the following provisions:
<PAGE> 3
(a) As more fully set forth hereafter, the assets
and liabilities and the income and expenses of each Series
shall be determined separately and, accordingly, the net asset
value, the dividends payable to holders, and the amounts
distributable in the event of dissolution of the Corporation
to holders of Shares of the Corporation's stock may vary from
Series to Series. Except for these differences and any other
differences provided by the Board of Directors or applicable
law with respect to any Series, each Series shall have the
same preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications and
terms and conditions of and rights to require redemptions.
(b) All consideration received by the Corporation
for the issue or sale of Shares of a particular Series,
together with all the assets in which such consideration is
invested or reinvested, all income, earnings, profits, and
proceeds thereof, 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
that Series for all purposes, subject only to the rights of
creditors and shall be referred to as "assets belonging to"
that Series. The assets belonging to a particular Series
shall be so recorded upon the books of the Corporation.
(c) The assets belonging to each particular Series
shall be charged with all liabilities, expenses, costs,
charges and reserves attributable to that Series and that
Series' shares of the liabilities, expenses, costs, charges or
reserves of the Corporation not attributable to any particular
Series, in the latter case in the proportion that the net
asset value of that Series (determined without regard to such
liabilities) bears to the net asset value of all Series
(determined without regard to such liabilities) as determined
in accordance with Article VIII of this Charter. The
determination of the Board of Directors shall be conclusive as
to the allocation of liabilities, including accrued expenses
and reserves, and assets to a particular Series or Series.
(d) Each holder of Shares of the Corporation, upon
request to the Corporation (accompanied by surrender of the
appropriate stock certificates have been issued to represent
such Shares) shall be entitled to require the Corporation to
redeem, to the extent that the Corporation may lawfully effect
such redemption under the laws of the State of Maryland, all
or any part of the Shares of capital stock of the Corporation
standing in the name of the holder on the books of the
Corporation at a price per Shares equal to the net asset value
per Share computed in accordance with Article VIII hereof,
less such redemption fee or other charge, if any, as may be
determined by the Board of Directors.
<PAGE> 4
(e) Without limiting the generality of the
foregoing, the Corporation shall, to the extent permitted by
applicable law, have the right at any time to redeem the
Shares owned by any holder of Shares of the Corporation (i) if
the redemption is, in the opinion of the Board of Directors of
the Corporation, desirable in order to prevent the Corporation
from being deemed a "personal holding company" within the
meaning of the Internal Revenue Code of 1986, as from time to
time amended, (ii) if the number of the Shares in the account
maintained by the Corporation or its transfer agent for any
stockholder is less than a specified number determined by the
Board of Directors of the Corporation, from time to time but
in no event more than one hundred (100) Shares, and the
stockholder has been given at least thirty (30) days' written
notice of the redemption and has failed to make additional
purchases of Shares in an amount sufficient to bring the
number of shares in his account to the specified number of
shares or more before the redemption is effected by the
Corporation or (iii) if the stockholder has failed to furnish
a correct certified social security or tax identification
number required to be obtained by the Corporation.
(f) Payment by the Corporation for Shares
surrendered to it for redemption shall be made by the
Corporation within seven business days after such surrender
out of assets legally available therefor, provided that the
Corporation may suspend the right of redemption or postpone
the date of payment of the redemption price when permitted
and, with respect to the postponement of the date of payment,
until all checks used to purchase the Shares being redeemed
have been collected. Payment of the aggregate price of Shares
surrendered for redemption may be made in cash, or, at the
option of the Corporation, wholly or partly by securities or
other property included in the assets belonging or allocable
to the Series of the Shares redemption of which is being
sought.
(g) The right of any holder of Shares redeemed by
the Corporation as provided in subsections (d) or (e) of this
section (4) to receive dividends thereon and all other rights
of such holder with respect to such Shares shall terminate at
the time as of which the purchase or redemption price of such
Shares is determined, except the right of such holder to
receive (i) the redemption price of such Shares from the
Corporation or its designated agent and (ii) any dividend or
distribution to which such holder had previously become
entitled as the record holder of such Shares on the record
date for such dividend or distribution. If Shares are
redeemed by the Corporation pursuant to subsection (e) of this
Section (4) and certificates representing the redeemed shares
have been issued, the redemption price need not be paid by the
Corporation until the certificates have been received by the
Corporation or its agent duly endorsed for transfer.
<PAGE> 5
(h) The Corporation shall be entitled to purchase
Shares, to the extent that the Corporation may lawfully effect
such purchase under the laws of the State of Maryland, upon
such terms and conditions and for such consideration as the
Board of Directors shall deem advisable, by agreement with the
stockholder at a price not exceeding the net asset value per
share computed in accordance with Article VIII hereof.
(i) In the absence of any contrary specification,
all Shares redeemed or purchased by the Corporation shall
constitute authorized but unissued Shares and the number of
the authorized Shares of the Corporation shall not be reduced
by the number of any Shares redeemed or purchased by it.
Until their classification is changed in accordance with
section (2) of this Article V, all Shares so redeemed or
purchased shall retain the same classification to which they
belonged at the time of their redemption or purchase.
(j) Shares of each Series shall be entitled to such
dividends and distributions, in Shares or in cash or both, as
may be declared from time to time by the Board of Directors,
acting in its sole discretion, with respect to such Series,
provided that dividends and distributions shall be paid on
shares of a Series only out of lawfully available assets
belonging to that Series. Dividends may be declared daily or
otherwise pursuant to a standing resolution or resolutions
adopted only once or with such frequency as the Board of
Directors may determine. Any such dividend or distribution
paid in Shares will be paid at the current net asset value
thereof as defined in Article VIII, after giving effect to any
charges applicable to the reinvestment of dividends or
distributions.
(k) For the purpose of allowing the net asset value
per Share of a Series to remain constant, the Corporation
shall be entitle to declare, pay and credit as dividends daily
the net income (which may include or give effect to realized
and unrealized gains and losses, as determined in accordance
with the Corporation's accounting and portfolio valuation
policies) of the Corporation allocated to that Series. If the
amount so determined for any day is negative, the Corporation
shall be entitled, without the payment of monetary
compensation but in consideration of the interest of the
Corporation and its stockholders in maintaining a constant net
asset value per Share of the Series, to redeem pro rata from
all the stockholders of record of Shares of the Series at the
time of such redemption (in proportion to their respective
holdings thereof) sufficient outstanding shares of the Series,
or fractions thereof, as shall permit the net asset value per
Share of the Series to remain constant.
<PAGE> 6
(l) In the event of the liquidation or dissolution
of the Corporation, the stockholders of a Series shall be
entitled to receive, as a class, out of the assets of the
Corporation available for distribution to stockholders, the
assets belonging to that Series. The assets so distributable
to the stockholders of a Series shall be distributed among
such stockholders in proportion to the number of shares of
that Series held by them and recorded on the books of the
Corporation. In the event that there are any assets available
for distribution that are not attributable to any particular
Series, such assets shall be allocated to all Series in
proportion to the net assets of the respective Series and then
distributed to the holders of stock of each Series in
proportion to the number of Shares of that Series hold by the
respective holders.
(m) On each matter submitted to a vote of the
stockholders, each holder of a Share shall be entitled to one
vote for each such Share outstanding in his name on the books
of the Corporation; provided, however, that when required by
the 1940 Act or regulation thereunder, or the laws of the
State of Maryland or when the Board of Directors has
determined that the matter affects only the interests of one
Series, matters may be submitted to a vote of the stockholders
of a particular Series, and each holder of Shares thereof
shall be entitled to one vote for each Share of the Series
outstanding in his name on the books of the Corporation.
(n) The presence in person or by proxy of the
holders of a majority of the Shares of capital stock of the
Corporation outstanding and entitled to vote thereat shall
constitute a quorum for the transaction of business at a
stockholders' meeting, except that where any provision of law
or of this Charter permit or require that holders of any
Series shall vote as a Series, then a majority of the
aggregate number of Shares of capital stock of that Series
outstanding and entitled to vote shall constitute a quorum for
the transaction of business by that Series.
(o) The Corporation may issue Shares in fractional
denominations to the same extent as its whole Shares, and any
fractional Share shall carry proportionately the rights of a
whole share including, without limitation, the right to vote,
the right to receive dividends and distributions and the right
to participate upon liquidation of the corporation. The
holder of a fractional Share shall not, however, have the
right to receive a certificate evidencing such fractional
share.
(p) In all sales of Shares the Corporation shall
receive not less than the net asset value per Share as
provided by the Charter, the By-Laws of the Corporation and
the Board of Directors of the Corporation, nor less than the
par value per Share.
<PAGE> 7
(5) The Board of Directors is authorized, from time to time,
to classify or to reclassify, as the case may be, any unissued Shares of a
Series (whether or not such Shares have been previously classified or
reclassified). Any class of a Series shall be referred to herein individually
as a "Class" and collectively, together with any further class or classes of
such Series from time to time established, as the "Classes".
(6) All classes of a particular Series of the Corporation
shall represent the same interest in the Corporation and shall have identical
voting, dividend, liquidation and other rights with any other Shares of that
Series; provided, however, that notwithstanding anything in the Charter of the
Corporation to the contrary:
(a) Shares of each Class may be issued and
sold subject to such different front-end sales loads,
contingent deferred sales charges, or front-end sales
loads and contingent deferred sales charges as the
Board of Directors shall from time to time establish
with respect to each such Class in accordance with
the 1940 Act, the terms of any exemptive order
granted by the Securities and Exchange Commission
pursuant to the 1940 Act, and applicable rules and
regulations of the Securities and Exchange Commission
and the National Association of Securities Dealers,
Inc.;
(b) Expenses related solely to a particular
Class (including, without limitation, distribution
expenses under a Rule 12b-1 plan and administrative
expenses under an administration or service
agreement, plan or other arrangement, however
designated) shall be borne by that Class and shall be
appropriately reflected (in the manner determined by
the Board of Directors) in the net asset value,
dividends, distribution and liquidation rights of the
shares of that Class.
(c) The Shares of any Class may be subject
to such different conversion terms as may be provided
by the Board of Directors;
(d) As to any matter with respect to which
a separate vote of the holders of a particular Class
of Shares of any Series is required by the 1940 Act,
the terms of any exemptive order granted by, or any
rule or regulation promulgated by, the Securities and
Exchange Commission pursuant to the 1940 Act or the
Maryland General Corporation Law (including, without
limitation, approval of any plan, agreement or other
arrangement referred to in subsection (b) above),
such requirement as to a separate vote by the Class
shall apply, and if permitted by the 1940 Act, the
terms of any exemptive order granted by the
Securities and Exchange Commission pursuant to the
1940 Act or the Maryland General
<PAGE> 8
Corporation Law, the Classes of more than one Series
shall vote together as a single class on any such
matter which shall have the same effect on each such
Class. As to any matter which does not affect the
interest of a particular Class, only the holders of
shares of the affected Classes shall be entitled to
vote.
(e) The Classes may have such different
exchange privileges as may be provided by the Board
of Directors.
(7) No holder of stock of the Corporation by virtue of being
such a holder shall have any right to purchase, subscribe for, or otherwise
acquire any Shares of the Corporation that the Corporation may issue or sell
(whether out of the number of Shares authorized by this Charter or out of any
Shares of the Corporation's capital stock that the Corporation may acquire)
other than a right that the Board of Directors in its discretion may determine
to grant.
(8) As to any action for which the General Corporation Law
of Maryland otherwise requires authorization by a greater proportion than a
majority of the total number of outstanding Shares of all Classes and Series or
of the total number of outstanding Shares of any class or Series entitled to
vote on the matter as a separate class, such action shall be valid and
effective if authorized by the affirmative vote of the holders of a majority of
the total number of Shares of all Classes and Series outstanding and entitled
to vote thereon, or of the Class or Series entitled to vote thereon as a
separate class, as the case may be, except as otherwise provided in the Charter
of the Corporation.
(9) All persons who shall acquire stock in the Corporation
shall acquire the same subject to the provisions of this Charter and the
By-Laws of the Corporation, as from time to time amended.
ARTICLE VI
BOARD OF DIRECTORS
(1) The number of directors constituting the Board of
Directors shall be 12. This number may be changed pursuant to the By-Laws of
the corporation, but shall at no time be less than the minimum number required
under the General Corporation Law of Maryland.
(2) In furtherance, and not in limitation, of the powers
conferred by the laws of the State of Maryland, the Board of Directors is
expressly authorized:
(a) To make, alter or repeal the By-Laws of the
corporation, except where such power is reserved by the
By-Laws to the stockholders, and except as otherwise required
by the 1940 Act.
<PAGE> 9
(b) From time to time to determine whether and to
what extent and at what times and placed and under what
conditions and regulations the books and accounts of the
corporation, or any of them other than the stock ledger, shall
be open to the inspection of the stockholders. No stockholder
shall have any right to inspect any account or book or
document of the Corporation, except as conferred by law or
authorized by resolutions of the Board of Directors or of the
stockholders.
(c) Without the assent or vote of the stockholders,
to approve the issuance from time to time of Shares of any
Series, whether now or hereafter authorized, and securities
convertible into Shares of any Series, whether now or
hereafter authorized, for such consideration as the Board of
Directors may deem advisable.
(d) Notwithstanding anything in these Articles of
Incorporation to the contrary, to establish in its absolute
discretion the basis or method for determining the value of
the assets belonging to any Series, the amount of the
liabilities attributable to any Series and the net asset value
of each Share of any Series for purposes of sales,
redemptions, repurchases of Shares or otherwise.
(e) In addition to the powers and authorities
granted herein and by statute expressly conferred upon it, the
Board of Directors is authorized to exercise all powers and do
all acts that may be exercised or done by the Corporation
pursuant to the provisions of the laws of the State of
Maryland, this Charter and the By-Laws of the Corporation.
(3) Any determination made in good faith by or pursuant to
the direction of the Board of Directors, with respect to the amount of assets,
obligations or liabilities of the Corporation, as to the amount of net income
of the Corporation from dividends and interest for any period or amounts at any
time legally available for the payment of dividends, as to the amount of any
reserves or charges set up and the propriety thereof, as to the time of or
purpose for creating reserves or as to the use, alteration or cancellation of
any reserves or charges (whether or not any obligation or liability for which
the reserves or charges have been created has been paid or discharged or is
then or thereafter required to be paid or discharged), as to the value of any
security owned by the Corporation, the determination of the net asset value of
Shares of any Series or Class of the Corporation's capital stock, or as to any
other matters relating to the issuance, sale, redemption or other acquisition
or disposition of securities or Shares of the Corporation, and any reasonable
determination made in good faith by the Board of Directors whether any
transaction constitutes a purchase of securities on "margin", a sale of
securities "short", or an underwriting of the sale of, or a participation in
any underwriting or selling group in
<PAGE> 10
connection with the public distribution of, any securities, shall be final and
conclusive, and shall be binding upon the Corporation and all holders of its
capital stock, past, present and future, and Shares of the Corporation are
issued and sold on the condition and understanding, evidenced by the purchase of
Shares of capital stock or acceptance of share certificates, that any and all
such determinations shall be binding as aforesaid.
ARTICLE VII
LIABILITY AND INDEMNIFICATION OF DIRECTORS AND OFFICERS
(1) To the fullest extent that limitations on the liability
of directors and officers are permitted by the General Corporation Law of
Maryland , no director or officer of the Corporation shall have any liability
to the Corporation or its stockholders for monetary damages. This limitation
on liability applies to events occurring at the time a person serves as a
director or officer of the Corporation whether or not such person is a director
or officer at the time of any proceeding in which liability is asserted.
(2) The Corporation shall indemnify and advance expenses to
its currently acting and its former directors to the fullest extent that
indemnification of directors is permitted by the General Corporation Law of
Maryland. The Corporation shall indemnify and advance expenses to its officers
to the same extent as its directors and to such further extent as is consistent
with law. The Board of Directors may by By-Law, resolution or agreement make
further provision for indemnification of directors, officers, employees and
agents to the fullest extent permitted by the General Corporation Law of
Maryland. This indemnification applies to events occurring at the time a
person serves as a director or officer of the Corporation whether or not such
person is a director or officer at the time of any proceeding in which
liability is asserted.
(3) References to the General Corporation Law of Maryland in
this article are to that law as from time to time amended. No amendment to the
Charter of the Corporation shall affect any right of any person under this
Article based on any event, omission or proceeding prior to the amendment.
(4) No provision of the Charter shall be effective to (i)
require a waiver of compliance with any provision of the Securities Act of
1933, as amended, or the 1940 Act, as amended, or of any valid rule, regulation
order of the Securities and Exchange Commission under those Acts or (ii)
protect or purport to protect any director or officer of the Corporation
against any liability to the Corporation or its security holders to which he
would otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office.
<PAGE> 11
ARTICLE VIII
NET ASSET VALUE
The net asset value of each Share of each Series or Class as at the
time of a particular determination shall be the quotient obtained by dividing
the amount at such time of the net assets of the Series or Class (being the
amount of the assets belonging to the Series or attributable to the Class less
the actual and accrued liabilities attributable to the Series or Class
exclusive of the capital stock and surplus) by the total number of Shares of
the Series or Class outstanding at the time. The Board of Directors shall have
the power and duty to determine from time to time the net asset value per Share
at such times and by such methods as it shall determine subject to any
restrictions or requirements under the 1940 Act and the rules, regulations and
interpretations thereof promulgated or issued by the Securities and Exchange
Commission or insofar as permitted by any order of the Securities and Exchange
Commission applicable to the Corporation. The Board of Directors may delegate
such power and duty to any one or more of the directors and officers of the
Corporation, to the Corporation's investment manager, to the investment
adviser(s) of particular Series, to the custodian or depository of the
Corporation's assets, to the Corporation's transfer agent, or to another agent
of the Corporation.
ARTICLE IX
AMENDMENTS
The Corporation reserves the right from time to time to make any
amendment to its Charter, now or hereafter authorized by law, including any
amendment that alters the contract rights, as expressly set forth in the
Charter, of any outstanding stock.
SECOND: The amendment does not increase the authorized stock
of the Corporation.
THIRD: The foregoing amendment to the Charter of the
Corporation has been advised by the Board of Directors and approved by the
stockholders of the Corporation.
IN WITNESS WHEREOF, John Hancock Technology Series, Inc. have
caused these presents to be signed in its name and on its behalf by a duly
authorized officer and witnessed by its Secretary on December 8, 1993.
WITNESS:
/s/Thomas H. Drohan /s/John A. Morin
- ----------------------------- -----------------------------
Thomas H. Drohan John A. Morin
Secretary Vice President
<PAGE> 12
OFFICER'S CERTIFICATE
The undersigned, Vice President of John Hancock Technology Series,
Inc., who executed on behalf of the Corporation the foregoing Articles of
Amendment and Restatement of which this certificate is made a part, hereby
acknowledges in the name and on behalf of said Corporation the foregoing
Articles of Amendment and Restatement to be the corporate act of said
Corporation and hereby certifies that to the best of his knowledge, information
and belief the matters and facts set forth therein with respect to the
authorization and approval thereof are true in all material respects under
penalties of perjury.
/s/John A. Morin
-----------------------------
John A. Morin
Vice President
<PAGE> 1
EXHIBIT 99.B1.1
JOHN HANCOCK TECHNOLOGY SERIES, INC.
Articles Supplementary
John Hancock Technology Series, Inc., a Maryland corporation having
its principal office in Baltimore City, Maryland (which is hereinafter called
the "Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: The Corporation is registered as an open-end investment
company under the Investment Company Act of 1940.
SECOND: In accordance with Section 2-105(c) of the Maryland General
Corporation Law, the Board of Directors has increased the authorized capital
stock of the Corporation.
THIRD: (a) As of immediately before the increase, the total number
of shares of stock of all classes which the Corporation had authority to issue
was 100,000,000 shares, of which no shares were Preferred Stock and 100,000,000
shares were Common Stock. The Common Stock has been divided into 40,000,000
shares of the "John Hancock Freedom National Aviation & Technology Fund" series
with a par value of $1.25 per shares, 50,000,000 shares of the "John Hancock
Freedom Global Technology Fund" series with a par value of $.20 per share and
10,000,000 shares are unclassified as to series with a par value of $.10 per
share.
(b) As increased, the total number of shares of stock of all
classes which the Corporation has authority to issue is 200,000,000 shares, of
which no shares are Preferred Stock and 200,000,000 shares are Common Stock.
Such Common Stock is hereby divided into 80,000,000 shares of the "John Hancock
Freedom National Aviation & Technology Fund" series with a par value of $1.25
per share, 100,000,000 shares of the "John Hancock Freedom Global Technology
Fund" series with a par value of $.20 per share and 20,000,000 shares are
unclassified as to series with a par value of $.10 per shares.
(c) The aggregate par value of all shares having a par value
is $61,000,000 before the increase and $122,000,000 as increased.
FOURTH: Pursuant to authority expressly vesting in the Board of
Directors of the Corporation by Article V, Paragraph (2) of the Charter of the
Corporation, the Board of Directors has duly divided and classified 40,000,000
of the newly authorized shares of the John Hancock Freedom National Aviation &
Technology Fund as Class B shares. The remaining 40,000,000 shares of the John
Hancock Freedom National Aviation & Technology Fund, including shares currently
issued and outstanding, shall be referred to as
<PAGE> 2
Class A shares with the result that 40,000,000 shares of the John Hancock
Freedom National Aviation & Technology Fund series are now classified as Class
A shares and 40,000,000 of such shares are now classified as Class B shares.
FIFTH: Pursuant to authority expressly vesting in the Board of
Directors of the Corporation by Article V, Paragraph (2) of the Charter of the
Corporation, the Board of Directors has duly divided and classified 50,000,000
of the newly authorized shares of the John Hancock Freedom Global Technology
Fund as Class B shares. The remaining 50,000,000 shares of the John Hancock
Freedom Global Technology Fund, including shares currently issued and
outstanding, shall be referred to as Class A shares with the result that
50,000,000 shares of the John Hancock Freedom Global Technology Fund series are
now classified as Class A shares and 50,000,000 of such shares are now
classified as Class B shares.
SIXTH: The Class A and Class B shares of the John Hancock Freedom
National Aviation & Technology Fund shall represent the same interest in the
corporation and have identical voting, dividend, liquidation, and other rights
and the Class A and Class B shares of the John Hancock Freedom Global
Technology Fund shall represent the same interest in the Corporation and have
identical voting, dividend, liquidation, and other rights; provided, however,
that notwithstanding anything in the Charter to the contrary:
(1) The Class A shares of each series shall be subject to
such front-end sales loads as may be established by the Board
of Directors from time to time in accordance with the
Investment Company Act of 1940 and applicable rules and
regulations of the National Association of Securities Dealers,
Inc.
(2) The Class B shares of each series shall be subject to
such contingent deferred sales charges as may be established
from time to time by the Board of Directors in accordance with
the Investment Company Act of 1940 and applicable rules and
regulations of the National Association of Securities Dealers,
Inc.
(3) Expenses related solely to a particular Class of each
series (including, without limitation, distribution expenses
under a Rule 12b-1 plan and administrative expenses under an
administration or service agreement, plan or other
arrangement, however, designated) shall be borne by the Class
and shall be appropriately reflected (in the manner determined
by the Board of Directors) in the net asset value, dividends,
distribution and liquidation rights of the shares of that
Class.
<PAGE> 3
(4) At such time as may be determined by the Board of
Directors in accordance with the Investment Company Act of
1940 and applicable rules and regulations of the National
Association of Securities Dealers, Inc. and reflected in the
current registration statement relating to a series, shares of
a particular Class of a series may be automatically converted
into shares of another Class; provided, however, that such
conversion shall be subject to the continuing availability of
an opinion of counsel to the effect that such conversion does
not constitute a taxable event under federal income tax law
and shall otherwise be in accordance with the Investment
Company Act of 1940. The Board of Directors, in its sole
discretion, may suspend any conversion rights if such opinion
is no longer available.
(5) As to any matter with respect to which a separate
vote of any Class of a series is required by the Investment
Company Act of 1940 or by the Maryland General Corporation Law
(including, without limitation, approval of any plan,
agreement or other arrangement referred to in subsection (3)
above), such requirement as to a separate vote by that Class
shall apply in lieu of Single Class Voting, and if permitted
by the Investment Company Act of 1940 or the Maryland General
Corporation Law, the classes of more than one series shall
vote together as a single class on any such matter which shall
have the same effect on each such Class. As to any matter
which does not affect the interest of a particular Class, only
the holders of shares of the affected Classes shall be
entitled to vote.
SEVENTH: The shares aforesaid have been duly classified by the Board
of Directors pursuant to authority and power contained in the Charter of the
Corporation.
IN WITNESS WHEREOF, John Hancock Technology Series, Inc. has caused
these presents to be signed in its name and on its behalf by a duly authorized
officer and witnessed by its Secretary on December 8, 1993.
<TABLE>
<S> <C>
WITNESS: JOHN HANCOCK TECHNOLOGY
SERIES, INC.
/s/Thomas H. Drohan By: /s/John A. Morin
- ----------------------------------- -------------------------------
Thomas H. Drohan John A. Morin
Senior Vice President and Secretary Vice President
</TABLE>
<PAGE> 4
THE UNDERSIGNED, John A. Morin, Vice President of John Hancock
Technology Series Inc., who executed on behalf of the Corporation the foregoing
Articles Supplementary of which this certificate is made a part, hereby
acknowledges in the name and on behalf of said Corporation the foregoing
Articles Supplementary to be the corporate act of said Corporation and hereby
certifies that to the best of his knowledge, information, and belief the
matters and facts set forth therein with respect to the authorization and
approval thereof are true in all material respects under the penalties of
perjury.
/s/John A. Morin
----------------
John A. Morin
<PAGE> 1
EXHIBIT 99.B1.2
JOHN HANCOCK TECHNOLOGY SERIES, INC.
Articles Supplementary
John Hancock Technology Series, Inc., a Maryland corporation having
its principal Maryland office in Baltimore City, Maryland (which is hereinafter
called the "Corporation"), hereby certifies to the State Department of
Assessments and Taxation of the State of Maryland that:
FIRST: The Corporation is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended.
SECOND: In accordance with Section 2-605(A) (4) of the Maryland
General Corporation Law, the names of John Hancock Freedom National Aviation &
Technology Fund and John Hancock Freedom Global Technology Fund, each a series
of the Corporation, are hereby changed by deleting the term "Freedom" from such
series' names so that the new names of such series are John Hancock National
Aviation & Technology Fund and John Hancock Global Technology Fund,
respectively.
THIRD: This amendment to the Charter of the Corporation shall become
effective as of January 1, 1995.
FOURTH: This amendment to the Charter of the Corporation has been duly
authorized and approved by the Board of Directors of the Corporation pursuant to
authority and power contained in the Charter of the Corporation.
IN WITNESS WHEREOF, John Hancock Technology Series, Inc. has
caused these presents to be signed in its name and on its behalf by a duly
authorized officer and witnessed by it Secretary on December 4, 1994.
<TABLE>
<CAPTION>
Witness: JOHN HANCOCK TECHNOLOGY
SERIES, INC.
<S> <C>
/s/ Thomas H. Drohan /s/ John A. Morin
- --------------------------- -----------------------------
Thomas H. Drohan, Secretary John A. Morin, Vice President
</TABLE>
<PAGE> 2
OFFICER'S CERTIFICATE
The undersigned, John A. Morin, Vice President of John Hancock
Technology Series, Inc., who executed on behalf of the Corporation the
foregoing Articles Supplementary of which this Certificate is made a part,
hereby acknowledges in the name and on behalf of said Corporation and hereby
certifies that, to the best of his knowledge, information and belief, the
matters and facts set forth therein with respect to the authorization and
approval thereof are true in all material respects under the penalties of
perjury.
/s/ John A. Morin
-----------------------------
John A. Morin, Vice President
<PAGE> 1
EXHIBIT 99.B2
BY-LAWS
OF
JOHN HANCOCK TECHNOLOGY SERIES, INC.
ARTICLE 1
Stockholders Meetings
1.01 Place of Meetings. All meetings of the stockholders of John Hancock
Technology Series, Inc., hereinafter called "the corporation," shall be held at
such place within or without the state of Maryland as is stated in the notice
of meeting.
1.02 Annual Meetings. An annual meeting of stockholders may not be required
to be held in any year in which the election of directors is not required to be
acted upon under the Investment Company Act of 1940, as amended (the
"Investment Company Act"). If an annual meeting of stockholders is held in any
year, it shall be at such time and on such day as the directors may determine,
for the purpose of electing directors and conducting such other business as may
come before the meeting.
1.03 Special Meetings. Special meetings of the stockholders shall be held
whenever called by the chairman of the board, the president or a majority of
the board of directors. Special meetings shall also be called by the president
at the request of the holders of a majority of the outstanding shares entitled
to vote at such meeting.
1.04 Notice of Stockholders Meetings. Notice of each meeting of
stockholders stating the place, date and hour of the meeting and the purpose or
purposes for which the meeting is called, shall be given by mailing such notice
to each stockholder of record entitled to notice thereof at his address as it
appears on the records of the corporation not less than ten nor more than sixty
days prior to the date of the meeting.
1.05 Quorum. At any meeting of stockholders of the corporation or any
series or class thereof, the presence of a quorum for the transaction of
business at any stockholders' meeting shall be determined in accordance with
the Articles of Incorporation. If a quorum shall not be present at any meeting
of stockholders of the corporation or any series or class thereof, the
stockholders present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
1.06 Proxies. Stockholders of record may vote at any meeting either in
person or by proxy in writing dated not more than twelve months before the date
of the meeting. Proxies shall be filed with the secretary of the meeting
before being voted.
1.07 Voting. On each matter submitted to a vote of the stockholders, each
holder of a share shall be entitled to such voting rights granted with respect
to such share in the Articles of Incorporation or pursuant thereto.
<PAGE> 2
1.08 Treatment of Abstentions. Shares of the corporation represented in
person or by proxy at a meeting of the corporation's stockholders, including
shares of stock that abstain or do not vote with respect to one or more
proposals presented for stockholder approval, will be counted for purposes of
determining whether a quorum is present. Abstentions will be treated as shares
of stock that are present and entitled to vote with respect to any particular
proposal, but will not be counted as votes in favor of such proposal. An
abstention from voting on a proposal will have the same effect as a vote
against such proposal.
1.09 Voting of Shares Held in Street Name. If a broker or nominee holding
shares in "street name" indicates on a proxy that it does not have discretionary
authority to vote those shares as to a particular proposal presented for
stockholder approval, those shares will be considered to be outstanding, but
will not be considered as present and entitled to vote with respect to such
proposal.
1.10 Record Dates. The board of directors may fix in advance a date, not
exceeding ninety days preceding the date of any meeting of stockholders, or the
date for the payment of any dividend, or the date for the allotment of rights,
or the date when any change or conversion or exchange of capital stock shall go
into effect, or a date in connection with obtaining any consent or for any
other lawful purpose, as a record date for the determination of the
stockholders entitled to notice of and to vote at any such meeting, and any
adjournment thereof, or entitled to receive payment of any such dividend, or to
any such allotment of rights, or to exercise the rights in respect of any such
change, conversion or exchange of capital, or to give such consent, and in such
case such stockholders and only such stockholders as shall be stockholders of
record on the date as fixed shall be entitled to such notice of and to vote at
such meeting, and any adjournment thereof, or to receive payment of such
dividend, or to receive such allotment of rights, or to exercise such rights,
or to give such consent, as the case may be, notwithstanding any transfer of
any shares on the books of the corporation after any such record date fixed as
aforesaid.
ARTICLE 2
Board of Directors
2.01 Number. The corporation shall have a board of directors consisting of
not less than three and not more than 15 members. The initial board of
directors shall consist of seven directors. The number of directors to
constitute the whole board within the limits stated above shall be fixed by the
board of directors and shall be stated in the notice of each meeting of
stockholders for the election of directors.
2.02 Term of Office. Except as provided in paragraph 4.02 of Article 4,
directors shall be elected at the annual meeting of stockholders and each
director shall hold office until the next annual meeting of stockholders or
until his successor is elected and qualified. No director need be a
stockholder or a resident of the state of Maryland.
2.03 Powers. The business and affairs of the corporation shall be managed
under the direction of the board of directors. In the management and control
of the property, business and affairs of
2
<PAGE> 3
the corporation the board of directors is hereby vested with all the powers
possessed by the corporation itself so far as this designation of authority is
not inconsistent with the laws of the state of Maryland, but subject to the
limitations contained in the Articles of Incorporation and these by-laws.
2.04 Executive Committee and Other Committees. The board of directors may
elect from its members an executive committee of not less than three which may
exercise all the powers of the board of directors, consistent with these
by-laws and applicable law, including the Investment Company Act, when the
board is not in session. The executive committee may make rules for the
holding and conduct of its meetings and keeping the records thereof, and shall
report its action to the board of directors.
The board of directors may elect from its members such other committees from
time to time as it may desire. The number composing such committees and the
powers conferred upon them shall be determined by the board of directors.
2.05 Meetings. Regular meetings of the board of directors may be held at
such places within or without the state of Maryland, and at such times as the
board may from time to time determine, and if so determined, notices thereof
need not be given. Special meetings of the board of directors may be held at
any time or place whenever called by the chairman of the board, the president
or a majority of the directors, notice thereof being given by the secretary,
the chairman of the board or the president, or the directors calling the
meeting, to each director. Special meetings of the board of directors may also
be held upon three days notice or without formal notice provided all directors
are present or those not present have waived notice thereof.
2.06 Quorum. Except as otherwise required by law, including the Investment
Company Act, a majority of the members of the board of directors shall
constitute a quorum for the transaction of business. A lesser number may
adjourn a meeting from time to time and the adjourned meeting may be held
without further notice. When a quorum is present at any meeting, a majority of
the members present thereat shall decide any question brought before such
meeting, except as otherwise required by law, including the Investment Company
Act, the Articles of Incorporation or these by-laws.
2.07 Informal Action. Except as otherwise required by law, including the
Investment Company Act, any action to be taken by the board of directors may be
taken without a meeting if written consent to such action is signed by all
members of the board and such written consent is filed with the minutes of the
board's proceedings.
ARTICLE 3
Officers
3.01 Selection. The officers of the corporation shall be a president, one
or more vice presidents, a secretary and a treasurer. The board of directors
may also elect a chairman of the
3
<PAGE> 4
board. All officers shall be elected by the board of directors and shall serve
at the pleasure of the board. The same person may hold any number of offices,
except both the office of the president and vice president.
3.02 Additional Officers and Agents. The board of directors may appoint one
or more assistant treasurers, one or more assistant secretaries and such other
officers or agents as it may deem advisable and may prescribe the duties
thereof.
3.03 Chairman of the Board of Directors. The chairman of the board, if any,
shall preside at all meetings of the board of directors at which he is present.
He shall have such other authority and duties as the board of directors shall
from time to time determine.
3.04 The President. The president shall be the chief executive officer of
the corporation. Subject to the control of the board of directors, he shall
have general and active management of the business, affairs and property of the
corporation, and shall see that all orders and resolutions of the board of
directors are carried into effect. He shall preside at meetings of
stockholders, and of the board of directors unless a chairman of the board has
been elected and is present.
3.05 The Vice Presidents. Each vice president shall have such powers and
perform such duties as may be assigned to him by the board of directors or the
president. In the absence or disability of the president, the vice president
designated by the board of directors shall perform the duties and exercise the
powers of the president.
3.06 The Secretary. The secretary shall keep accurate minutes of all
meetings of the stockholders and directors; shall give required notices of
meetings; shall have custody of all books, records and papers of the
corporation, except such as shall be in the custody of the treasurer or other
agent designated by the board of directors and shall perform all duties
commonly incident to his office. The offices of secretary and treasurer may be
held by the same person.
3.07 The Treasurer. The treasurer shall, subject to the order of the board
of directors and any arrangements for the performance of services as custodian,
transfer agent or disbursing agent approved by the board, have the care and
custody of the money, funds, securities, valuable papers and documents of the
corporation, and shall have and exercise all powers and duties commonly
incident to his office. He shall keep or cause to be kept accurate books of
account of the corporation's transactions which shall be subject at all times
to the inspection and control of the board of directors. He shall deposit all
funds of the corporation in such bank or banks, trust company or trust
companies or such firm or firms doing a banking business as the board of
directors shall designate.
3.08 Assistant Secretaries and Treasurers. The assistant secretaries and
the assistant treasurers, in order of seniority, shall, in the absence or
disability of the secretary or treasurer, as the case may be, perform the
duties and exercise the powers of the secretary and treasurer, respectively.
They shall perform such other duties and have such other powers as the
president or the board of directors may from time to time prescribe.
4
<PAGE> 5
ARTICLE 4
Vacancies
4.01 Removals. The stockholders may at any meeting called for the purpose,
by vote of the holders of a majority of the outstanding shares entitled to
vote, remove from office any director and, unless the number of directors
constituting the whole board is accordingly decreased, elect a successor.
Subject to the requirements of the Investment Company Act, the board of
directors may by vote of not less than a majority of the directors then in
office remove from office any director, officer or agent elected or appointed
by them and may for misconduct remove any director elected by the stockholders.
4.02 Vacancies. If the office of any director becomes or is vacant by
reason of death, resignation, removal, disqualification or otherwise, the
remaining directors may by vote of a majority of the remaining directors choose
a successor or successors who shall hold office until the next annual meeting
or special meeting held for the purpose of electing directors; provided that
vacancies on the board of directors may be so filled only if, after the filling
of the same, at least two-thirds of the directors then holding office would be
directors elected to such office by the stockholders at a meeting or meetings
called for the purpose. In the event that at any time less than a majority of
the directors are so elected by the stockholders, a special meeting of the
stockholders shall be called forthwith and held as promptly as possible and in
any event within sixty days (unless the Securities and Exchange Commission
shall by order extend such period) for the purpose of electing the necessary
new members to the board of directors.
ARTICLE 5
Certificates for Shares
5.01 Certificates. Upon request in writing, each stockholder shall be
entitled to a certificate or certificates representing whole but not fractional
shares of the corporation owned by such stockholder in such form as shall be
prescribed from time to time by the board of directors. Such certificates
shall be signed by the president or a vice president and by the treasurer or an
assistant treasurer or the secretary or an assistant secretary. If such
certificates are countersigned by a transfer agent or registrar other than the
corporation or an employee of the corporation, the signatures of the
aforementioned officers upon such certificates may be facsimile. In case any
officer or officers who have signed or whose facsimile signature or signatures
have been used on any such certificate or certificates shall cease to be such
officer or officers of the corporation before such certificate or certificates
are issued, they may be issued and delivered as though the person or persons
who signed such certificate or certificates or whose facsimile signature or
signatures have been used thereon had not ceased to be such officer or officers
of the corporation. All certificates for shares shall be consecutively
numbered or otherwise identified.
5
<PAGE> 6
5.02 Replacement of Certificates. The board of directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates, theretofore issued by the corporation, alleged to have been lost
or destroyed. When authorizing such issue of a new certificate or
certificates, the board of directors may require the owner of such lost or
destroyed certificate or certificates to give the corporation a bond in such
sum as the board of directors may direct as indemnity against any claim that
may be made against the corporation with respect to the certificate alleged to
have been lost or destroyed.
5.03 Stockholder Open Accounts. The corporation may maintain or cause to be
maintained for each stockholder a stockholder open account in which shall be
recorded such stockholder's ownership of shares and all changes therein, and
certificates need not be issued for shares so recorded in a stockholder open
account unless requested by such stockholder.
5.04 Transfers. Transfers of shares for which certificates have been issued
will be made only upon surrender to the corporation or its transfer agent of
the certificates for shares duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, whereupon a new certificate
will be issued to the person or other entity entitled thereto, and the
corporation or its transfer agent shall cancel the old certificate and record
the transaction on its books. Transfers of stock evidenced by open account
authorized by Section 5.03 will be made upon delivery to the corporation or its
transfer agent of instructions for transfer or evidence of assignment or
succession, in each case executed in such manner and with such supporting
evidence as the corporation or transfer agent may reasonably require.
5.05 Registered Ownership. The corporation shall be entitled to recognize
the exclusive right of a person registered on its books as the owner of shares
to receive dividends and to vote as such owner and shall not be bound to
recognize any equitable or other claim to or interest in such share or shares
on the part of any other person, whether or not it shall have express or other
notice thereof, except as otherwise provided by the laws of Maryland.
ARTICLE 6
Notices
6.01 Manner of Giving. Whenever, under any provision of law or the Articles
of Incorporation or these by-laws, notice is required to be given to any
director, committee member, officer or stockholder, it shall not be construed
to mean personal notice, but such notice may be given, in the case of
stockholders, in writing, by depositing the same in the United States mail, in
a postpaid sealed wrapper, addressed to such stockholder, at such address as
appears on the books of the corporation, and, in the case of directors,
committee members and officers, by telephone, or by mail or by telegram to the
last business address known to the secretary of the corporation, and such
notice shall be deemed to be given at the time when the same shall be thus
mailed or telegraphed or telephoned.
6
<PAGE> 7
6.02 Waiver. Whenever any notice is required to be given under any
provision of law or the Articles of Incorporation or these by-laws, a waiver
thereof in writing, signed by the person or persons entitled to said notice,
whether before or after the time stated therein, shall be deemed equivalent
thereto. Attendance at any meeting notice of which is required shall be deemed
a waiver of the requirement for such notice.
ARTICLE 7
General Provisions
7.01 Disbursement of Funds. All checks, drafts, orders or instructions for
the payment of money and all notes of the corporation shall be signed by such
officer or officers or such other person or persons as the board of directors
may from time to time designate.
7.02 Voting Shares of Other Corporations. Unless otherwise ordered by the
board of directors, the president or any vice president or the treasurer or any
assistant treasurer shall have full power and authority to attend, act and vote
at any meeting of stockholders of any other corporation in which this
corporation may own shares, and at any such meeting may exercise any and all
the rights and powers incident to the ownership of such shares. The president
or any vice president or the treasurer or any assistant treasurer of the
corporation may execute proxies to vote shares of other corporations standing
in the name of this corporation.
7.03 Execution Instruments. Except as otherwise provided in these by-laws,
all deeds, mortgages, bonds, contracts, stock powers, reports and other
instruments may be executed on behalf of the corporation by the president or
any vice president or by any other officer or agent authorized to act in such
matters. If the corporate seal is required, it shall be affixed by the
secretary or an assistant secretary.
7.04 Seal. The corporate seal shall be circular in form and shall have
inscribed thereon the name of the corporation, the year of its organization and
the words "Corporate Seal, Maryland." The seal may be used by causing it or a
facsimile thereof to be impressed or affixed or in another manner reproduced.
7.05 Fiscal Year. Except as otherwise from time to time provided by the
board of directors, the fiscal year of the corporation shall begin January 1
and end December 31.
ARTICLE 8
Net Asset Value of Shares
8.01 Net Asset Value. The net asset value of each share of capital stock of
each series or class thereof of the corporation at the time of a particular
determination shall be the quotient obtained by dividing the value at such time
of the net assets of that series of the corporation
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<PAGE> 8
(being the value of the total assets belonging to that series less its actual
and accrued liabilities, exclusive of capital stock and surplus) by the total
number of shares of that series outstanding at such time, in accordance with
the Articles of Incorporation.
(a) The assets and liabilities of each series or class thereof of the
corporation shall be determined in accordance with generally accepted
accounting principles. In determining the value of the assets of each series
or class thereof of the corporation for the purpose of obtaining the net asset
value, each security traded on the New York Stock Exchange or American Stock
Exchange shall be valued on the basis of the last sale price on that exchange
on the date as of which the value is being determined; if there is no sale on
that day, then the security shall be valued on the basis of the closing bid
price on that day; if no bid price is quoted for that day, then the security
shall be valued by such method as the board of directors shall deem in good
faith to reflect its fair market value; securities listed on other stock
exchanges shall be valued in like manner as securities listed on the New York
or American stock exchanges; securities traded in the over-the-counter market
shall be valued at the most recently quoted bid price, or by such other method
as the board of directors shall in good faith deem to reflect their fair market
value; and all other assets of the corporation and all securities as to which
the corporation might be considered an "underwriter" (as that term is used in
the Securities Act of 1933), whether or not such securities are listed or
traded in the over-the-counter market, shall be valued by such method as the
board of directors shall deem in good faith to reflect their fair market value.
For the purpose hereof:
(i) Capital stock subscribed for shall be deemed to be outstanding as of
the time of acceptance of any subscription and the entry thereof on the books
of the corporation and the net price thereof shall be deemed to be an asset of
the corporation; and
(ii) Capital stock surrendered for redemption by the corporation shall be
deemed to be outstanding until the time as of which the redemption price for
such shares is determined and thereupon and until paid the price thereof shall
be deemed to be a liability of the corporation.
(b) The net asset value of a share of the capital stock of each series or
class thereof of the corporation, as of any time other than the close of
trading on any day, may be determined by applying to the net asset value as of
the close of trading on the preceding trading day such adjustments as are
authorized by or pursuant to the direction of the board of directors and
designed reasonably to reflect any material changes in the market value of
securities and other assets held and any other material changes in the assets
or liabilities of that series or class thereof of the corporation and in the
number of its outstanding shares which shall have taken place since the close
of trading on such preceding trading day.
(c) In addition to the foregoing, the board of directors is empowered, in
its absolute discretion, to establish other bases or times, or both, for
determining the net asset value of each share of capital stock of each series
and class of the corporation, and to authorize the purchase by the corporation,
either directly or through an agent, of shares of capital stock of each series
of the corporation upon such terms and conditions and for such consideration as
the board of directors shall deem advisable.
(d) In addition to the foregoing, the following rules shall apply in
calculating net asset value:
1. Debt instruments with remaining maturities of 60 days or less
shall be valued at cost adjusted for amortization or premiums and
accretion of discounts; accumulated unrealized appreciation or
depreciation on the sixty-first day, if any, shall be amortized
to maturity.
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<PAGE> 9
2. Changes in holdings of portfolio securities shall be reflected
no later than in the first calculation on the first business day
following the trade date.
3. Changes in the number of outstanding shares of each series and
class of the corporation resulting from sales, reinvestments or
other distributions and redemptions shall be reflected no later
than in the first calculation on the first business day following
such change.
4. Dividends receivable shall be included to the date of
calculation either at ex-dividend dates or record dates, as
appropriate.
5. Interest income and other income shall be included to date of
calculation.
6. Expense, including any investment advisory fees, shall be
included to the date of calculation.
7. Items which would otherwise be required to be reflected by
paragraphs 5 and 6 above need not be so reflected as to any
series if cumulatively, when netted, they do not amount to as
much as one cent per outstanding share of such series or class.
ARTICLE 9
Fractional Shares
9.01 The corporation may issue shares of the corporation in fractional
denominations to the same extent as its whole shares, and any fractional share
shall carry proportionately the rights of a whole share including, without
limitation, the right to vote, the right to receive dividends and distributions
and the right to participate upon liquidation of the corporation. The holder
of a fractional share shall not, however, have the right to receive a
certificate evidencing such fractional share.
ARTICLE 10
Indemnification
10.01 The provisions of the Article of Incorporation with respect to
indemnification and advancement of expenses shall apply to every person (and
his heirs, executors or administrators) who is or was a director, officer,
employee, or agent of the corporation, or who, while a director, officer,
employee, or agent of the corporation, is or was serving at the request of the
corporation as a director, officer, partner, trustee, employee, or agent of
another foreign or domestic corporation, partnership, joint venture, trust,
other enterprise, or employee benefit plan, and shall entitle each such person
to indemnification by the corporation to the full extent permitted by
applicable law, against all liability, judgments, fines, penalties, settlements
and reasonable expenses incurred by him in connection with or resulting from
any threatened or actual claim,
9
<PAGE> 10
action, suit, investigation, or proceeding, whether criminal, civil or
administrative, in which he may become involved as a party or otherwise by
reason of his being or having been a director, officer, employee, or agent, as
aforesaid, subject to the limitations specified in the Articles of
Incorporation.
ARTICLE 11
Amendments
11.01 By Board of Directors. The board of directors shall have the power,
by a majority vote of the entire board of directors at any meeting thereof, to
make, alter or repeal the by-laws of the corporation.
11.02 By Stockholders. The power of the board of directors to make, alter
or repeal the by-laws is subject to the power vested in and reserved to the
stockholders to modify or rescind any such action by the affirmative vote or
written order, direction or consent of the holders of a majority of the
outstanding shares of the corporation.
Amended: November 30, 1993
10
<PAGE> 1
EXHIBIT 99.B4
NATIONAL AVIATION & TECHNOLOGY FUND
A SERIES OF JOHN HANCOCK TECHNOLOGY SERIES, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND
CLASS A
fully paid and non-assessable shares with a par value of $1.25 each of the
CAPITAL STOCK of NATIONAL AVIATION & TECHNOLOGY FUND, a series of JOHN HANCOCK
TECHNOLOGY SERIES, INC., transferable on the books of the Corporation in person
or by duly authorized attorney upon surrender of this Certificate properly
endorsed. This Certificate is not valid until countersigned by the Transfer
Agent.
- --------------------------------------------------------
Update Date 1/3/94 jjm
Maryland Fund
Signed by Barry Gordon, President
fund #85
<PAGE> 2
JOHN HANCOCK GLOBAL TECHNOLOGY FUND
A SERIES OF JOHN HANCOCK TECHNOLOGY SERIES, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND
CLASS A
fully paid and non-assessable shares with a par value of $0.20 each of the
CAPITAL STOCK of JOHN HANCOCK GLOBAL TECHNOLOGY FUND, a series of JOHN HANCOCK
TECHNOLOGY SERIES, INC., transferable on the books of the Corporation in person
or by duly authorized attorney upon surrender of this Certificate properly
endorsed. This Certificate is not valid until countersigned by the Transfer
Agent.
- ------------------------------------------------------
Update Date 1/3/94 jjm
Maryland fund
signed by Barry Gordon, President
fund #83
<PAGE> 3
JOHN HANCOCK GLOBAL TECHNOLOGY FUND
A SERIES OF JOHN HANCOCK TECHNOLOGY SERIES, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND
CLASS B
- ------------------------------------------------------
Update Date 1/3/94 jjm
Maryland fund
signed by Barry Gordon, President
fund #183
<PAGE> 4
NATIONAL AVIATION & TECHNOLOGY FUND
A SERIES OF JOHN HANCOCK TECHNOLOGY SERIES, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND
CLASS B
- --------------------------------------------------------
Update Date 1/3/94 jjm
Maryland Fund
Signed by Barry Gordon, President
fund #185
<PAGE> 1
EXHIBIT 99.B5
JOHN HANCOCK TECHNOLOGY SERIES, INC.
Investment Management Contract
Dated: December 6, 1991
Amended: January 1, 1994
<PAGE> 2
JOHN HANCOCK TECHNOLOGY SERIES, INC.
Boston, Massachusetts
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199
Investment Management Contract
Ladies and Gentlemen:
John Hancock Technology Series, Inc. (the "Fund"), is incorporated in
Maryland with its principal place of business at 101 Huntington Avenue, Boston,
Massachusetts, to engage in the business of an investment company. The Fund's
shares of capital stock may be classified into series, each series representing
the entire undivided interest in a separate portfolio of assets (each such
present and future series a "Series"). As of the date hereof, the Fund has two
Series, representing John Hancock Freedom National Aviation & Technology Fund
and John Hancock Freedom Global Technology Fund.
The Board of Directors of the Fund (the "Directors") 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 Fund and the Advier agree as follows:
1. Delivery of Documents. The Fund has furnished the Adviser with
copies, properly certified or otherwise authenticated, of each of the
following:
(a) The Amended and Restated Articles of Incorporation, dated December 8, 1993,
(the "Articles");
(b) By-Laws of the Fund as in effect on the date hereof;
(c) Resolutions of the Directors selecting the Adviser as the investment adviser
for the Fund and approving the form of this Agreement, and
(d) commitments, limitations and undertakings made by the Fund to state
securities or "blue sky" authorities for the purpose of qualifying shares of
any Series of the Fund for sale in such states.
<PAGE> 3
The Fund 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 policies, objectives and
restrictions of each Series of the Fund. In the performance of the Adviser's
duties hereunder, subject always (x) to the provisions contained in the
documents delivered to the Adviser pursuant to Section 1, as each of the same
may from time to time be amended or supplemented, and (y) to the limitations
set forth in the registration statement of the Fund as in effect from time to
time under the Securities Act of 1933, as amended, and the Investment Company
Act of 1940, as amended (the "1940 Act"), the Adviser will, at its own expense:
(a) furnish the Fund with advice and recommendations, consistent with the
investment policies, objectives and restrictions of each Series of the Fund
with respect to the purchase, holding and disposition of portfolio
securities including the purchase and sale of options, alone or in
consultation with any sub-adviser or sub-advisers appointed pursuant to this
Agreement and subject to the provisions of any sub-investment management
contract respecting the responsibilities of such sub-adviser or
sub-advisers;
(b) advise the Fund in connection with policy decisions to be made by the
Directors 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 Directors may reasonably request;
(e) assist the Fund in any negotiations relating to the Fund's investments with
issuers, investment banking firms, securities brokers or dealers and other
institutions or investors;
(f) consistent with provisions of Section 7 of this Agreement, place orders for
the purchase, sale or exchange of portfolio securities with brokers or
dealers selected by the Adviser, 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 Directors and set forth in the Prospectus and
Statement of Additional Information of the Fund as in effect from time to
time;
<PAGE> 4
(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 and at any time requested by the Directors, 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 sub- paragraphs (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;
(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; and
(m) appoint and employ one or more sub-advisers satisfactory to the Fund under
sub-investment management agreements.
3. 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 by agreed upon by the Adviser and the
Directors.
<PAGE> 5
4. 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 3, the Adviser will not
be required to pay under this Agreement:
(a) any and all, expenses, taxes and governmental fees incurred by the Fund
prior to the effective date of this Agreement;
(b) without limiting the generality of the foregoing clause (a), the expenses of
organizing the Fund (including without limitation, legal, accounting and
auditing fees and expenses incurred in connection with the matters referred
to in this clause (b)), of initially registering shares of the Fund under
the Securities Act of 1933, as amended, and of qualifying the shares for
sale under state securities laws for the initial offering and sale of
shares;
(c) the compensation and expenses of Directors 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, 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 and, 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.
5. Compensation of the Adviser. For all services to be rendered, facilities
furnished and expenses paid or assumed by the Adviser as herein provided, the
Fund will pay the Adviser monthly in arrears:
(a) a management fee equal to a stated percentage of the average of the daily
net asset value of each Series as set forth below:
<PAGE> 6
<TABLE>
<CAPTION>
Net Asset Value of Each Series Annual Rate
------------------------------- -----------
<S> <C>
First $100 million 1.00%
Amount over $100 million 0.75%
</TABLE>
The "average daily net assets" of each Series 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 any Series of the Fund for
less than a full month.
(b) an administrative fee of $100,000 per year, payable monthly, for each
Series.
In the event normal operating expenses of any Series 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 shares of such Series are registered
for sale, the fee payable to the Adviser, with respect to such Series, are
registered for sale, the fee payable to the Advisers with respect to such
Series, will be reduced, to the extent required by law, and the Adviser will
make any additional arrangements that is required by law to make.
In the event that the ratio for 1992, 1993 or 1994 of (i) normal operating
expenses of a Series of the Fund, exclusive of any distribution or service fees
payable under a Rule 12b-1 distribution plan adopted by the Fund or any Series
thereof in accordance with the 1940 Act and exclusive of extraordinary expenses
including but not limited to litigation, to (ii) the Series' average daily net
assets for such year, exceeds the average expense ratio for the Series for the
three years ended December 31, 1990 (restated as if the current annual rates
for calculating the management fee and the current expense limitations had been
in effect throughout the three-year period), the fees payable to the Adviser
with respect to the Series will be reduced to the extent required to eliminate
such excess and the Adviser will make any additional arrangements necessary to
eliminate any remainting such excess.
In addition to the foregoing, the Adviser may from time to time agree not
to impose all or a portion of its fee otherwise payable hereunder (in advance
of the time such fee or portion thereof would otherwise accrue) and/or
undertake to pay or reimburse the Fund for all or a portion of its expenses not
otherwise required to be borne or reimbursed by the Adviser. Any such fee
reduction or undertaking may be discontinued or modified by the Adviser at any
time.
6. 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 entitly, whether or not
having investment policies or portfolios similar to any Series of the Fund; 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
<PAGE> 7
addvice 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.
7. 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
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 any Series 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. The Fund acknowledges
that the Adviser and its officers, affiliates, and employees, and its other
clients may at any time have, acquire, increase, decrease or dispose of
positions in investments which are at the same time being acquired or disposed
of hereunder. The 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. No Partnership or Joint Venture. The Fund and the Adviser are not
partners of or joint venturers with each other and nothing herein shall be
construed so as to make them such partners or joint venturers or impose any
liability as such on any of them.
9. Name of the Fund. The Fund may use the name "John Hancock" or any name
derived from or similar to the name "John Hancock Advisers, Inc." or "John
Hancock Mutual Life Insurance Company" only for so long as this Agreement
remains in effect. At such time as this Agreement shall no longer be in
effect, the Fund will (to the extent that it 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 Technology Series, Inc." through permission of John Hancock
Mutual Life Insurance Company, a Massachusetts insurance company, and agrees
that John Hancock Mutual Life Insurance Company reserves to itself and any
successor to its business the right to grant the non-exclusive right to use the
name "John Hancock" or any similar name to any other corporation or entity,
including but not limited to any investment company of which John Hancock
Mutual Life Insurance Company or any subsidiary or affiliate thereof shall be
the investment adviser.
10. Limitation of Liability of the Advisers. 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
<PAGE> 8
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.
11. Duration and Termination of this Agreement. This Agreement shall remain
in force until the second anniversary of the date upon which this Agreement was
executed by the parties hereto, and from year to year thereafter, but only so
long as such continuance is specifically approved at least annually by (a) a
majority of the Directors 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 Directors or
(ii) with respect to each Series of the Fund, a majority of the outstanding
voting securities of such Series. This Agreement may, on 60 days' written
notice, be terminated at any time without the payment of any penalty by the
Fund with respect to any Series by vote of a majority of the outstanding voting
securities of such Series, by the Directors or by the Adviser. Termination of
this Agreement with respect to any Series of the Fund shall not be deemed to
terminate or otherwise invalidate this Agreement or any other contract with
respect to any other Series of the Fund. This Agreement shall automatically
terminate in the event of its assignment. In interpreting the provisions of
this Section 9, the definitions contained in Section 2(a) of the Investment
Company Act of 1940, as amended (particularly the definitions of "assignment,"
"interested person" or "voting security"), shall be applied.
12. Amendment of this Agreement. No provision of this Agreement relating to
any Series 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 Directors, including a majority of the Directors 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) a majority of the outstanding voting securities of such
Series, as defined in the 1940 Act.
13. Governing Law. This Agreement shall be governed and construed in
accordance with the law of the Commonwealth of Massachusetts.
14. Severability. The provisions of this Agreement are independent of and
separable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be deemed invalid or unenforceable in whole or in part.
<PAGE> 9
15. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. The name John Hancock Technology Series, Inc. is
the designation of the Directors under the Amended and Restated Articles of
Incorporation, dated February 16, 1990. The Amended and Restated Articles of
Incorporation have been filed with the Secretary of the State of Maryland. The
obligations of the Fund are not personally binding upon, nor shall resort be
had to the private property of, any of the Directors, shareholders, officers,
employees or agents of the Fund, but only the Fund's property shall be bound.
The Fund shall not be liable for the obligations of any other Series of the
Fund.
Yours very truly,
JOHN HANCOCK TECHNOLOGY SERIES, INC
By /s/ John A Morin
Title: Vice President
The foregoing contract is hereby agreed
to as of the date hereof.
JOHN HANCOCK ADVISERS, INC.
By /s/ Thomas H. Drohan
---------------------
Senior Vice President
<PAGE> 1
EXHIBIT 99.B5.1
JOHN HANCOCK ADVISERS, INC.
Boston, Massachusetts
December 6, 1991
AMERCIAN FUND ADVISORS, INC.
1527 Franklin Avenue, Suite 103
Mineola, New York 11501
Sub-Advisory Agreement
----------------------
Dear Sir:
John Hancock Technology Series, Inc. (the "Fund") has been
incorporated under the laws of the state of Maryland to engage in the business
of an investment company. The Fund's shares of capital stock may be classified
into series, each series representing the entire undivided interest in a
separate portfolio of assets. As of the date hereof, the Fund has two series
of shares, representing National Aviation & Technology Fund and John Hancock
Global Technology Fund (each a "Series").
Subject to the approval of the Fund's shareholders, the Fund's
Director (the "Directors") have selected John Hancock Advisers, Inc. (the
"Adviser") to provide overall investment advice and management for the Fund,
and to provide certain other services, under the terms and conditions provided
in the Investment Management Contract, dated as of the date hereof, between the
Fund and the Adviser (the "Investment Management Contract").
The Adviser and the Fund have selected American Fund Advisors, Inc.
(the "Sub-Adviser") to provide the Adviser and the Fund with the advice and
services set forth below, and the Sub-Adviser is willing to provide such advice
and services, subject to the review of the Fund and the overall supervision of
the Adviser, under the terms and conditions hereinafter set forth. The Sub-
Adviser hereby represents and warrants that it is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended. Accordingly,
the Adviser agrees with the Sub-Adviser as follows:
1. Delivery of Documents: The Adviser has furnished the
Sub-Adviser with copies, properly certified or otherwise
authenticated, of each of the following:
(a) The Amended and Restated Articles of Incorporation, dated
February 16, 1990 (the "Articles").
(b) By-Laws of the Fund as in effect on the date hereof.
(c) Resolutions of the Board of Directors approving the form of
this
<PAGE> 2
Agreement.
(d) Resolutions of the Board of Directors selecting the Adviser as
investment adviser to the Fund and approving the form of the
Investment Management Contract and resolutions adopted by the
shareholders of each Series;
approving the form of the Investment Management Contract.
(e) The Adviser's Investment Management Contract.
(f) Commitments, limitations and undertakings made by the Fund to
state "blue sky" authorities for the purpose of qualifying
shares of any Series for sale in such states.
(g) The Fund's portfolio compliance checklists.
(h) The Fund's Prospectus and Statement of Additional Information.
The Adviser will furnish the Sub-Adviser from time to time with copies,
properly certified or otherwise authenticated, of all amendments of or
supplements to the foregoing, if any.
2. Investment Services. The Sub-Adviser will use it best efforts
to provide to the Fund continuing and suitable investment advice with respect
to investments, consistent with the investment policies, objectives and
restrictions of each Series as set forth in the Fund's Prospectus and Statement
of Additional Information. In the performance of the Sub-Adviser's duties
hereunder, subject always to the provisions contained in the documents
delivered to the Sub-Adviser pursuant to Section 1 above, as each of the same
may from time to time be amended or supplemented, the Sub-Adviser will, at it
own expense:
(a) Furnish the Adviser and the Fund with advice and recommendations,
consistent with the investment policies, objectives and restriction of each
Series as set forth above, with respect to the purchase, holding and
disposition of portfolio securities including the purchase and sale of options.
(b) furnish the Adviser and the Fund with advice as to the manner in
which voting rights, subscriptions rights, rights to consent to corporate
action and any other rights pertaining to the Fund's assets shall be exercised,
the Fund having the responsibility to exercise such voting and other rights;
(c) furnish the Adviser and the Fund with research, economic and
statistical data in connection with the Fund's investments and investment
policies;
(d) submit such reports relating to the valuation of the Fund's
securities as the Adviser may reasonably request;
(e) subject to prior consultation with the Adviser, engage in
negotiations relating to the Fund's investments with issuers, investment
banking firms, securities brokers or dealers and other institutions or
investors;
(f) consistent with the provisions of Section 7 of this Agreement,
place orders for the purchase, sale or exchange of portfolio securities for the
Fund's account with brokers or dealers selected by the Adviser or the
Sub-Adviser, provided that in connection with the placing of such orders and
the selection of such brokers or dealers the Sub-Advisers shall seek to obtain
execution and pricing within the policy guidelines determined by the
<PAGE> 3
Funds and set forth in the Prospectus and Statement of Additional Information
of the Fund;
(g) from time to time or at any time requested by the Adviser or the
Fund, make reports to the Adviser or the Fund, as requested, of the
Sub-Adviser's performance of the forgoing services;
(h) subject to the supervision of the Adviser, maintain and preserve
the records required by the Investment Company Act of 1940 to be maintained by
the Sub-Adviser (the Sub-Adviser agrees that such records are the property of
the Fund and copies will be surrendered to the Fund promptly upon request
therefor);
(i) give instructions to the custodian of the Fund as to deliveries
of securities to and from such custodian and payments of cash for the account
of the Fund, and advise the Adviser on the same day such instructions are
given; and
(j) cooperate generally with the Fund and the Adviser to provide
information necessary for the preparation of registration statements and
periodic reports to be filed with the Securities and Exchange Commission,
including Form N-1A, periodic statements, shareholder communications and proxy
materials furnished to holders of shares of the Fund, filings with state "blue
sky" authorities and with United States agencies responsible for tax matters,
and other reports and filings of like nature.
3. Expenses Paid by the Sub-Adviser. The Sub-Adviser will pay the cost
of maintaining its own staff and personnel necessary for it to perform its
obligations under this Agreement, the expenses of its office rent, telephone,
telecommunications and other facilities required by it to perform the services
specified in Section 2, and any other expenses, including legal, audit and
professional fees and expenses, incurred by it in connection with the
performance of its duties hereunder.
4. Expenses Not Paid by the Sub-Adviser. The Sub-Adviser will not be
required to pay any expenses which this Agreement does not expressly state
shall be payable by the Sub-Advisers. In particular, and without limiting the
generality of the foregoing but subject to the provisions of Section 3, the
Sub-Adviser will not be required to pay any Fund expenses or to reimburse the
Adviser for any such expenses the Advisers is required to pay.
5. Compensation of the Sub-Adviser. For all services to be rendered,
facilities furnished and expenses paid or assumed by the Sub-Adviser as herein
provided, for the Fund, the Adviser will pay the Sub-Adviser monthly, based on
the average daily net asset value of each Series for the preceding month, in
arrears a fee at the annual rate of 0.40% of the first $100,000,000 of the
average daily net asset value of such Series during such month plus forty
percent (40%) of all management fees paid in connection with the net assets of
each Series in excess of such first $100,000,000. The Sub-Adviser will receive
a pro rata portion of such monthly fee for any periods in which the Sub-Adviser
advises the Fund with respect to any Series less than a full month. The
Sub-Adviser understands and agrees that the Fund has no liability for the
Sub-Adviser's compensation hereunder. Calculations of the Sub-Adviser fee will
be based on average net asset values as provided by the Advisers.
<PAGE> 4
6. Other Activities of the Sub-Advisers and Its Affiliates. Nothing
herein contained shall prevent the Sub-Adviser or any of its affiliates or
associates 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 portfolio similar to the Fund. It is
specifically understood that officers, directors and employees of the
Sub-Adviser and those of it affiliates may engage in providing portfolio
management services and advice to other investment advisory clients of the
Sub-Adviser or if its affiliates.
7. Avoidance of Inconsistent Position. In connection with purchases or
sales of portfolio securities for the account of the Fund, neither The
Sub-Adviser nor any of its directors, officers or employees will act as
principal or agent or receive any commission. The Sub-Adviser shall not
knowingly recommend that the Fund purchase, sell or retain securities of any
issuer in which the Sub-Adviser has a financial interest without obtaining
prior approval of the Adviser prior to the execution of any such transaction.
Access persons (as defined in Rule 17j-l under the Investment Company Act of
1940, as amended) of the Sub-Adviser will provide quarterly personal trading
reports to a designated representative of the Adviser in accordance with the
Funds' Code of Ethics.
8. No Partnership or Joint Venture. The Adviser and the Sub-Adviser are
not partners of or joint venturers with each other and nothing herein shall be
construed so as to make them such partners or joint venturers or impose an
liability as such on any of them.
9. Limitation of Liability of the Sub-Adviser. The Sub-Adviser shall not
be liable for any error of judgment or mistake of law or for any loss suffered
by the Fund or the Adviser in connection with the matters to which this
Agreement relates, except a loss resulting from willful misfeasance, bad faith
or gross negligence on the Sub-Adviser's part in the performance of its duties
or form reckless disregard by it of its obligations and duties under this
Agreement.
10. Duration and Termination of this Agreement. Unless terminated as
provided below, this Agreement shall remain in force until the second
anniversary of the date upon which this Agreement was executed by the parties
hereto, and from year to year thereafter, but only so long as such continuance
is specifically approved at least annually by (a) a majority of the Board of
Directors of the Fund who are not interested persons of the Advisers, of the
Sub-Adviser or of the Fund (other than as Board members), cast in person at a
meeting called for the purpose of voting on such approval, and (b) either (i)
the Board of Directors of the Fund or (ii) with respect to each Series, a
majority of the outstanding voting securities of such Series. This Agreement
may, on 60 days' written notice, be terminated at any time, without the payment
of any penalty, with respect to any Series by vote of a majority of the
outstanding voting securities of such Series, by the Adviser or by the
Sub-Adviser. Termination of this Agreement with respect to any Series shall
not be deemed to terminate or otherwise invalidate any provision of this
Agreement with respect to any other Series of the Fund or any other contract
between you and any
<PAGE> 5
other Series of the Fund. This Agreement shall automatically terminate in the
event of its assignment or upon the termination of the Adviser's Investment
Management Contract. In interpreting the provisions of this Section 10, the
definitions contained in Section 2(a) of the Investment company Act of 1940, as
amended (particularly the definitions of "assignment," "interest person" or
"voting security"), shall be applied.
11. Amendment of This Agreement. No provision of this Agreement relating
to any Series may be changed or waived, orally, but only by an instrument in
writing signed by the party against which enforcement of the change or waiver,
is sought, and no amendment, transfer, assignment, sale, hypothecation or
pledge of this Agreement shall be effective until approved by (a) the Board of
Directors of the Fund, including a majority of the Directors who are not
interested persons of the Advisers, the Sub-Adviser or the Fund, cast in person
at a meeting called for the purpose of voting on such approval, and (b) a
majority of the outstanding voting securities of such Series, as defined in the
Investment Company Act of 1940, as amended.
12. Miscellaneous.
(a) The captions in this Agreement are included for convenience of
reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute on and the same
instrument. (b) Nothing herein contained shall limit or restrict the
Sub-Adviser or any of its officers, affiliates or employees from buying,
selling or trading in any securities for its own account or s. The Fund
acknowledges that the Adviser or sub-advisers engaged by it and their
respective officers, affiliates and employees, and their other clients may at
any time have, acquire, increase, decrease or dispose of positions in
investments which are at the same time being acquired or disposed of by the
Fund. The Sub-Adviser shall have no obligation to acquire with respect to the
Fund, a position in any investment which the Sub-Adviser, its officers,
affiliates or employees may acquire for its or their own accounts or for the
account of another client, if in the sole discretion of the Sub- Adviser, it is
not feasible or desirable to acquire a position in such investment on behalf of
the Fund. Nothing herein contained shall prevent the Sub-Adviser from
purchasing or recommending the purchase of a particular security for one or
more funds or clients while other funds or clients may be selling the same
security.
(c) Any information supplied by the Sub-Adviser, which is not
otherwise in the public domain, in connection with the performance of its
duties hereunder is to be regarded as confidential and for use only by the Fund
and/or its agents, and only in connection with the Fund and its investments.
13. Governing Law. This Agreement shall be construed in accordance with
the laws of the Commonwealth of Massachusetts and the applicable provisions of
the Investment Company Act of 1940.
<PAGE> 6
Yours very truly,
JOHN HANCOCK ADVISERS, INC.
By /s/ Edward J. Boudreau, Jr.
---------------------------
Chairman of the Board
President and Chief
Executive Officer
AMERICAN FUND ADVISORS, INC.
By /s/ Barry Gordon
----------------
President
<PAGE> 1
EXHIBIT 99.B6
JOHN HANCOCK TECHNOLOGY SERIES, INC.
Distribution Agreement
Dated December 6, 1991
<PAGE> 2
JOHN HANCOCK TECHNOLOGY SERIES, INC.
101 HUNTINGTON AVENUE
BOSTON, MASSACHUSETTS 02199
December 6, 1991
John Hancock Broker Distribution Services, Inc.
Boston, Massachusetts
Distribution Agreement
Dear Sir:
John Hancock Technology Series, Inc. (the "Fund") is incorporated in Maryland
to engage in the business of an investment company. The Fund's shares of
capital stock may be classified into series, each series representing the
entire undivided interest in a separate portfolio of assets (each such present
and future series a "Series"). As of the date hereof, the Fund has two Series,
representing National Aviation & Technology Fund and John Hancock Global
Technology Fund. The Fund's Board of Directors has selected you to act as
principal underwriter (as such term is defined in Section 2(a)(29) of the
Investment Company Act of 1940, as amended) of the shares of capital stock
("shares") of each Series of the Fund and you are willing, as agent for the
Fund, to sell the shares to the public, to broker-dealers or to both, in the
manner and on the conditions hereinafter set forth. Accordingly, the Fund
hereby agrees with you as follows:
1. Delivery of Documents. The Fund will furnish you promptly with copies,
properly certified or otherwise authenticated, of any registration statements
filed by it with the Securities and Exchange Commission under the Securities
Act of 1933, as amended, or the Investment Company Act of 1940, as amended,
together with any financial statements and exhibits included therein, and all
amendments or supplements thereto hereafter filed.
2. Registration and Sale of Additional Shares. The Fund will from time to
time use its best efforts to register under the Securities Act of 1933, as
amended, such shares not already so registered as you may reasonably be
expected to sell as agent on behalf of the Fund. This Agreement relates to the
issue and sale of shares that are duly authorized and registered and available
for sale by the Fund if, but only if, the Fund sees fit to sell them. You and
the Fund will cooperate in taking such action as may be necessary from time to
time to qualify shares for sale in Massachusetts and in any other states
mutually agreeable to you and the Fund, and to maintain such qualification if
and so long as such shares are duly registered under the Securities Act of
1933, as amended.
3. Solicitation of Orders. You will use your best efforts (but only in
states in which you may lawfully do so) to obtain from investors unconditional
orders for shares authorized for issue by the Fund and registered under the
Securities Act of 1933, as amended, provided that you may in your discretion
refuse to accept orders for such shares from any particular applicant.
4. Sale of Shares. Subject to the provisions of Sections 5 and 6 hereof
and to such minimum purchase requirements as may from time to time be currently
indicated in the Fund's prospectus, you are authorized to sell as agent on
behalf of the Fund authorized and issued shares registered under the Securities
Act of 1933, as amended. Such sales may be made by you on behalf of the
2
<PAGE> 3
Fund by accepting unconditional orders to purchase such shares placed with your
investors. The sales price to the public of such shares shall be the public
offering price as defined in Section 6 hereof.
5. Sale of Shares to Investors by the Fund. Any right granted to you to
accept orders for shares or make sales on behalf of the Fund will not apply to
shares issued in connection with the merger or consolidation of any other
investment company with the Fund or its acquisition, by purchase or otherwise,
of all or substantially all the assets of any investment company or
substantially all the outstanding shares of any such company, and such right
shall not apply to shares that may be offered or otherwise issued by the Fund
to shareholders by virtue of their being shareholders of the Fund.
6. Public Offering Price. All shares sold by you as agent for the Fund
will be sold at the public offering price, which will be determined in the
manner provided in the Fund's prospectus or statement of additional
information, as now in effect or as it may be amended .
7. No Sales Discount. The Fund shall receive the applicable net asset
value on all sales of shares by you as agent of the Fund.
8. Delivery of Payments. You will deliver to the Transfer Agent all
payments made pursuant to orders accepted by you, and accompanied by proper
applications for the purchase of shares, no later than the first business day
following the receipt by you in your home office of such payments and
applications.
9. Suspension of Sales. If and whenever a suspension of the right of
redemption or a postponement of the date of payment or redemption has been
declared pursuant to the Fund's Articles of Incorporation and has become
effective, then, until such suspension or postponement is terminated, no
further orders for shares shall be accepted by you except such unconditional
orders placed with you before you have knowledge of the suspension. The Fund
reserves the right to suspend the sale of shares and your authority to accept
orders for shares on behalf of the Fund if, in the judgment of a majority of
the Fund's Board of Directors, it is in the best interests of the Fund to do
so, such suspension to continue for such period as may be determined by such
majority; and in that event, no shares will be sold by the Fund or by you on
behalf of the Fund while such suspension remains in effect except for shares
necessary to cover unconditional orders accepted by you before you had received
notice of the suspension.
10. Expenses. The Fund will pay (or will enter into arrangements providing
that persons other than you will pay) all fees and expenses in connection with
the preparation and filing of any registration statement and prospectus or
amendments thereto under the Securities Act of 1933, as amended, covering the
issue and sale of shares and in connection with the qualification of shares for
sale in the various states in which the Fund shall determine it advisable to
qualify such shares for sale. It will also pay the issue taxes or (in the case
of shares redeemed) any initial transfer taxes thereon. You will pay all
expenses of printing and distributing prospectuses and other sales literature,
all fees and expenses in connection with your qualification as a dealer in
various states, and all other expenses in connection with the sale and offering
for sale of the shares of the Fund which have not been herein specifically
allocated to the Fund.
11. Conformity with Law. You agree that in selling the shares you will duly
conform in all respects with the laws of the United States and any state in
which such shares may be offered for sale by you pursuant to this Agreement.
12. Indemnification. You agree to indemnify and hold harmless the Fund and
each of its Board members and officers and each person, if any, who controls
the Fund within the meaning of Section 15 of the Securities Act of 1933, as
amended, against any and all losses, claims,
3
<PAGE> 4
damages, liabilities or litigation (including legal and other expenses) to
which the Fund or such Board members, officers or controlling person may become
subject under such Act, under any other statute, at common law or otherwise,
arising out of the acquisition of any shares by any person which (a) may be
based upon any wrongful act by you or any of your employees or representatives
or (b) may be based upon any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus or statement of
additional information covering shares of the Fund or any amendment thereof or
supplement thereto or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading if such statement or omission was made in reliance upon
information furnished or confirmed in writing to the Fund by you, or (c) may be
incurred or arise by reason of your acting as the Fund's agent instead of
purchasing and reselling shares as principal in distributing shares to the
public, provided that in no case is your indemnity in favor of a Board member
or officer of the Fund or any other person deemed to protect such Board member
or officer of the Fund or other person against any liability to which any such
person would otherwise be subject by reason of willful misfeasance, bad faith,
or gross negligence in the performance of his duties or by reason of his
reckless disregard of obligations and duties under this Agreement.
You are not authorized to give any information or to make any
representations on behalf of the Fund or in connection with the sale of shares
other than the information and representations contained in a registration
statement, prospectus, or statement of additional information covering shares,
as such registration statement, prospectus and statement of additional
information may be amended or supplemented from time to time. No person other
than you is authorized to act as principal underwriter for the Fund.
13. Duration and Termination of this Agreement. This Agreement shall remain
in force from year to year with respect to each Series, but only so long as
such continuance is specifically approved at least annually by (a) a majority
of the Board of Directors who are not interested persons of you (other than as
Board members) or of the Fund, cast in person at a meeting called for the
purpose of voting on such approval, and (b) either (i) the Board of Directors
of the Fund, or (ii) a majority of the outstanding voting securities of such
Series. This Agreement may, on 60 days' written notice, be terminated at any
time, without the payment of any penalty with respect to any Series, by the
Board of Directors of the Fund, by a vote of a majority of the outstanding
voting securities of such Series, or by you. This Agreement will automatically
terminate in the event of its assignment by you. In interpreting the
provisions of this Section 13, the definitions contained in Section 2(a) of the
Investment Company Act of 1940 (particularly the definitions of "interested
person", "assignment" and "voting security") shall be applied.
14. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. If the Fund should at any time deem it
necessary or advisable in the best interests of the Fund that any amendment of
this agreement be made in order to comply with the recommendations or
requirements of the Securities and Exchange Commission or other governmental
authority or to obtain any advantage under state or federal tax laws and should
notify you of the form of such amendment, and the reasons therefor, and if you
should decline to assent to such amendment, the Fund may terminate this
agreement forthwith. If you should at any time request that a change be made
in the Fund's Articles of Incorporation or By-Laws, or in its methods of doing
business, in order to comply with any requirements of federal law or
regulations of the Securities and Exchange Commission or of a national
securities association of which you are or may be a member, relating to the
sale of shares, and the Fund should not make such necessary change within a
reasonable time, you may terminate this Agreement forthwith.
15. Miscellaneous. The captions in this Agreement are included for
convenience of reference
4
<PAGE> 5
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.
Very truly yours,
JOHN HANCOCK TECHNOLOGY SERIES, INC.
By: /s/ Edward J. Boudreau, Jr.
---------------------------
The foregoing Agreement is hereby
accepted as of the date hereof.
JOHN HANCOCK BROKER DISTRIBUTION SERVICES, INC.
By: /s/ C. Troy Shaver, Jr.
-----------------------
President
5
<PAGE> 1
EXHIBIT 99.B6.1
SOLICITING DEALER AGREEMENT
[LOGO]
JOHN HANCOCK FUNDS, INC.
BOSTON -- MASSACHUSETTS -- 02199-7603
<PAGE> 2
JOHN HANCOCK FUNDS, INC.
101 HUNTINGTON AVENUE
BOSTON, MA 02199-7603
SOLICITING DEALER AGREEMENT
Date
------------------------------
John Hancock Funds, Inc. ("the Distributor" or "Distributor") is the
principal distributor of the shares of beneficial interest (the "securities")
of each of the John Hancock Funds, ("We" or "us"), (the "Funds"). Such Funds
are those listed on Schedule A hereto which may be amended or supplemented from
time to time by the Distributor to include additional Funds for which the
Distributor is the principal distributor. You represent that you are a member
of the National Association of Securities Dealers, Inc., (the "NASD") and,
accordingly, we invite you to become a non-exclusive soliciting dealer to
distribute the securities of the Funds and you agree to solicit orders for the
purchase of the securities on the following terms. Securities are offered
pursuant to each Fund's prospectus and statement of additional information, as
such prospectus and statement of additional information may be amended from
time to time. To the extent that the prospectus or statement of additional
information contains provisions that are inconsistent with the terms of this
Agreement, the terms of the prospectus or statement of additional information
shall be controlling.
OFFERINGS
1. You agree to abide by the Rules of Fair Practice of the NASD and to all
other rules and regulations that are now or may become applicable to
transactions hereunder.
2. As principal distributor of the Funds, we shall have full authority to
take such action as we deem advisable in respect of all matters pertaining to
the distribution. This offer of shares of the Funds to you is made only in
such jurisdictions in which we may lawfully sell such shares of the Funds.
3. You shall not make any representation concerning the Funds or their
securities except those contained in the then- current prospectus or
statement of additional information for each Fund.
4. With the exception of listings of product offerings, you agree not to
furnish or cause to be furnished to any person or display, or publish any
information or materials relating to any Fund (including, without limitation,
promotional materials, sales literature, advertisements, press releases,
announcements, posters, signs and other similar materials), except such
information and materials as may be furnished to you by the Distributor or the
Fund. All other materials must receive written approval by the Distributor
before distribution or display to the public. Use of all approved advertising
and sales literature materials is restricted to appropriate distribution
channels.
5. You are not authorized to act as our agent. Nothing shall constitute you
as a syndicate, association, joint venture, partnership, unincorporated
business, or other separate entity or otherwise partners with us, but you shall
be liable for your proportionate share of any tax, liability or expense based
on any claim arising from the sale of shares of the Funds under this Agreement.
We shall not be under any liability to you, except for obligations expressly
assumed by us in this Agreement and liabilities under Section 11(f) of the
Securities Act of 1933, and no obligations on our part shall be implied or
inferred herefrom.
-2-
<PAGE> 3
6. DEALER COMPLIANCE/SUITABILITY STANDARDS (CLASS A AND CLASS B SHARES) -
Certain mutual funds distributed by the Distributor are being offered with two
or more classes of shares of the same investment portfolio ("Fund") - refer to
each Fund prospectus for availability and details. It is essential that the
following minimum compliance/suitability standards be adhered to in offering
and selling shares of these Funds to investors. All dealers offering shares of
the Funds and their associated persons agree to comply with these general
suitability and compliance standards.
SUITABILITY
With two classes of shares of certain funds available to individual
investors, (Class A and Class B), it is important that each investor purchases
not only the fund that best suits his or her investment objective but also the
class of shares that offers the most beneficial distribution financing method
for the investor based upon his or her particular situation and preferences.
Fund share recommendations and orders must be carefully reviewed by you and
your registered representatives in light of all the facts and circumstances, to
ascertain that the class of shares to be purchased by each investor is
appropriate and suitable. These recommendations should be based on several
factors, including but not limited to:
(A) the amount of money to be invested initially and over a period of
time;
(B) the current level of front-end sales load or back-end sales load
imposed by the Fund;
(C) the period of time over which the client expects to retain the
investment;
(D) the anticipated level of yield from fixed income funds' Class A and
Class B shares;
(E) any other relevant circumstances such as the availability of
reduced sales charges under letters of intent and/or rights of
accumulation.
There are instances when one distribution financing method may be more
appropriate than another. For example, shares subject to a front-end sales
charge may be more appropriate than shares subject to a contingent deferred
sales charge for large investors who qualify for a significant quantity
discount on the front-end sales charge. In addition, shares subject to a
contingent deferred sales charge may be more appropriate for investors whose
orders would not qualify for quantity discounts and who, therefore, may prefer
to defer sales charges and also for investors who determine it to be
advantageous to have all of their funds invested without deduction of a
front-end sales commission. However, if it is anticipated that an investor may
redeem his or her shares within a short period of time, the investor may,
depending on the amount of his or her purchase, bear higher distribution
expenses by purchasing contingent deferred sales charge shares than if he or
she had purchased shares subject to a front-end sales charge.
COMPLIANCE
Your supervisory procedures should be adequate to assure that an
appropriate person reviews and approves transactions entered into pursuant to
this Soliciting Dealer Agreement for compliance with the foregoing standards.
In certain instances, it may be appropriate to discuss the purchase with the
registered representatives involved or to review the advantages and
disadvantages of selecting one class of shares over another with the client.
The Distributor will not accept orders for Class B Shares in any Fund from you
for accounts maintained in street name. Trades for Class B Shares will only be
accepted in the name of the shareholder.
7. CLASS C SHARES - Certain mutual funds distributed by the Distributor may be
offered with Class C shares. Refer to each Fund prospectus for availability
and details. Class C shares are designed for institutional investors and
qualified benefit plans, including pension funds, and are sold without a sales
charge or 12b-1 fee. If a commission is paid to you for transactions in Class
C shares, it will be paid by the Distributor out of its own resources.
SALES
8. Orders for securities received by you from investors will be for the sale
of the securities at the public offering price, which will be the net asset
value per share as determined in the manner provided in the relevant Fund's
prospectus, as now in effect or as amended from time to time, next after
receipt by us (or the relevant Fund's transfer agent) of the purchase
application and payment for the securities, plus the relevant sales charges set
forth in the relevant Fund's then- current prospectus (the "Public Offering
Price"). The procedures relating to the handling of orders shall be subject to
our instructions which we will forward from time to time to you. All orders
are subject to acceptance by us, and we reserve the right in our sole
discretion to reject any order.
-3-
<PAGE> 4
In addition to the foregoing, you acknowledge and agree to the initial
and subsequent investment minimums, which may vary from year to year, as
described in the then-current prospectus for each Fund.
9. You agree to sell the securities only (a) to your customers at the public
offering price then in effect, or (b) back to the Funds at the currently quoted
net asset value.
10. The amount of sales charge to be reallowed to you (the "Reallowance") as a
percentage of the offering price is set forth in the then-current prospectus of
each Fund.
If a sales charge on the purchase is reduced in accordance with the
provisions of the relevant Fund's then-current prospectus pertaining to
"Methods of Obtaining Reduced Sales Charges," the Reallowance shall be reduced
pro rata.
11. We shall pay a Reallowance subject to the provisions of this agreement as
set forth in Schedule B hereto on all purchases made by your customers pursuant
to orders accepted by us (a) where an order for the purchase of securities is
obtained by a registered representative in your employ and remitted to us
promptly by you, (b) where a subsequent investment is made to an account
established by a registered representative in your employ or (c) where a
subsequent investment is made to an account established by a broker/dealer
other than you and is accompanied by a signed request from the account
shareholder that your registered representative receive the Reallowance for
that investment and/or for subsequent investments made in such account. If for
any reason, a purchase transaction is reversed, you shall not be entitled to
receive or retain any part of the Reallowance on such purchase and shall pay to
us on demand in full the amount of the Reallowance received by you in
connection with any such purchase. We may withhold and retain from the amount
of the Reallowance due you a sum sufficient to discharge any amount due and
payable by you to us.
12. Certain of the Funds have adopted a plan under Investment Company Act
Rule 12b-1 ("Distribution Plan" as described in the the prospectus). To the
extent you provide distribution and marketing services in the promotion of the
sale of shares of these Funds, including furnishing services and assistance to
your customers who invest in and own shares of such Funds and including, but
not limited to, answering routine inquiries regarding such Funds and assisting
in changing distribution options, account designations and addresses, you may
be entitled to receive compensation from us as set forth in Schedule C hereto.
All compensation, including 12b-1 fees, shall be payable to you only to the
extent that funds are received and in the possession of the Distributor.
13. We will advise you as to the jurisdictions in which we believe the shares
have been qualified for sale under the respective securities or "blue sky" laws
of such jurisdictions, but we assume no responsibility or obligations as to
your right to sell the shares of the Funds in any state or jurisdiction.
14. Orders may be placed through:
John Hancock Funds, Inc.
101 Huntington Avenue
Boston, MA 02199-7603
1-800-338-4265
SETTLEMENT
15. Settlements for wire orders shall be made within five business days after
our acceptance of your order to purchase shares of the Funds. Certificates,
when requested, will be delivered to you upon payment in full of the sum due
for the sale of the shares of the Funds. If payment is not so received or
made, we reserve the right forthwith to cancel the sale, or, at our option, to
liquidate the shares of the Fund subject to such sale at the then prevailing
net asset value, in which latter case you will agree to be responsible for any
loss resulting to the Funds or to us from your failure to make payments as
aforesaid.
-4-
<PAGE> 5
INDEMNIFICATION
16. The parties to this agreement hereby agree to indemnify and hold harmless
each other, their officers and directors, and any person who is or may be
deemed to be a controlling person of each other, from and against any losses,
claims, damages, liabilities or expenses (including reasonable fees of
counsel), whether joint or several, to which any such person or entity may
become subject insofar as such losses, claims, damages, liabilities or expenses
(or actions in respect thereof) arise out of or are based upon, (a) any untrue
statement or alleged untrue statement of material fact, or any omission or
alleged omission to state a material fact made or omitted by it herein, or, (b)
any willful misfeasance or gross misconduct by it in the performance of its
duties and obligations hereunder.
17. NSCC INDEMNITY - SHAREHOLDER AND HOUSE ACCOUNTS - In consideration of the
Distributor and John Hancock Investor Services Corporation ("Investor
Services") liquidating, exchanging, and/or transferring unissued shares of the
Funds for your customers without the use of original or underlying
documentation supporting such instructions (e.g., a signed stock power or
signature guarantee), you hereby agree to indemnify the Distributor, Investor
Services and each respective Fund against any losses, including reasonable
attorney's fees, that may arise from such liquidation exchange, and/or
transfer of unissued shares upon your direction. This indemnification shall
apply only to the liquidation, exchange and/or transfer of unissued shares in
shareholder and house accounts executed as wire orders transmitted via NSCC's
Fund/SERVsystem. You represent and warrant to the Funds, the Distributor and
Investor Services that all such transactions shall be properly authorized by
your customers.
The indemnification in this Section 16 shall not apply to any losses
(including attorney's fees) caused by a failure of the Distributor, Investor
Services or a Fund to comply with any of your instructions governing any of the
above transactions, or any negligent act or omission of the Distributor,
Investor Services or a Fund, or any of their directors, officers, employees or
agents. All transactions shall be settled upon your confirmation through NSCC
transmission to Investor Services.
The Distributor, Investor Services or you may revoke the indemnity
contained in this Section 16 upon prior written notice to each of the other
parties hereto, and in the case of such revocation, this indemnity agreement
shall remain effective as to trades made prior to such revocation.
MISCELLANEOUS
18. We will supply to you at our expense additional copies of the prospectus
and statement of additional information for each of the Funds and any printed
information supplemental to such material in reasonable quantities upon
request.
19. Any notice to you shall be duly given if mailed or telegraphed to you at
your address as registered from time to time with the NASD.
20. Miscellaneous provisions, if any, are attached hereto and incorporated
herein by reference.
21. This agreement, which shall be construed in accordance with the laws of
the Commonwealth of Massachusetts, may be terminated by any party hereto at any
time upon written notice.
-5-
<PAGE> 6
SOLICITING DEALER
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Name of Organization
By:-------------------------------------------------
Authorized Signature of Soliciting Dealer
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Please Print or Type Name
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Title
-------------------------------------------------
Print or Type Address
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Telephone Number
Date:
-------------------------------------------------
In order to service you efficiently, please provide the following
information on your Mutual Funds Operations Department:
OPERATIONS MANAGER:
---------------------------------------------
ORDER ROOM MANAGER:
---------------------------------------------
OPERATIONS ADDRESS:
---------------------------------------------
---------------------------------------------
TELEPHONE: FAX:
-------------------------------- ------------------------------
<TABLE>
<S> <C>
TO BE COMPLETED BY: TO BE COMPLETED BY:
JOHN HANCOCK FUNDS, INC. JOHN HANCOCK INVESTOR
SERVICES CORPORATION
BY: BY:
------------------------------------------- -------------------------------------------
- ---------------------------------------------- ----------------------------------------------
TITLE TITLE
</TABLE>
DEALER NUMBER:
------------------------------------
-6-
<PAGE> 7
JOHNHANCOCK
MUTUAL FUNDS
John Hancock Broker Distrubution Services, Inc.
101 Huntington Avenue Boston, MA 02199-7608 1-800-225-5291
/s/ John Hancock
<PAGE> 8
JOHN HANCOCK FUNDS, INC.
SCHEDULE A
DATED JANUARY 1, 1995 TO THE
SOLICITING DEALER AGREEMENT RELATING TO SHARES OF
JOHN HANCOCK FUNDS
<TABLE>
<S> <C>
John Hancock Sovereign Achievers Fund John Hancock National Aviation & Technology Fund
John Hancock Sovereign Investors Fund John Hancock Regional Bank Fund
John Hancock Sovereign Balanced Fund John Hancock Gold and Government Fund
John Hancock Sovereign Bond Fund John Hancock Global Rx Fund
John Hancock Sovereign U.S. Government Income Fund John Hancock Global Technology Fund
John Hancock Special Equities Fund* John Hancock Global Fund
John Hancock Special Opportunities Fund John Hancock Pacific Basin Equities Fund
John Hancock Discovery Fund John Hancock Global Income Fund
John Hancock Growth Fund John Hancock International Fund
John Hancock Strategic Income Fund John Hancock Global Resources Fund
John Hancock Limited-Term Government Fund John Hancock Emerging Growth Fund
John Hancock Cash Management Fund John Hancock Capital Growth Fund
John Hancock Managed Tax-Exempt Fund John Hancock Growth & Income Fund
John Hancock Tax-Exempt Income Fund John Hancock High Yield Bond Fund
John Hancock Tax-Exempt Series Fund John Hancock Investment Quality Bond Fund
John Hancock Special Value Fund John Hancock Government Securities Fund
John Hancock Strategic Short-Term Income Fund John Hancock U.S. Government Fund
John Hancock CA Tax-Free Fund John Hancock Government Income Fund
John Hancock High Yield Tax-Free Fund John Hancock Intermediate Government Fund
John Hancock Tax-Free Bond Fund John Hancock Adjustable U.S. Government Fund
John Hancock U.S. Government Cash Reserve Fund John Hancock Cash Reserve Money Market B Fund
</TABLE>
From time to time John Hancock Funds, Inc., as principal distributor of the
John Hancock funds, will offer additional funds for sale. These funds will
automatically become part of this Agreement and will be subject to all its
provisions unless otherwise directed by John Hancock Funds, Inc.
*Closed to new investors as of 9/30/94
<PAGE> 9
JOHN HANCOCK FUNDS, INC.
SCHEDULE B
DATED JANUARY 1, 1995 TO THE
SOLICITING DEALER AGREEMENT RELATING TO SHARES OF
JOHN HANCOCK FUNDS
I. REALLOWANCE
The Reallowance paid to the selling Brokers for sales of John Hancock
Funds is set forth in each Fund's then- current prospectus. No Commission will
be paid on sales of John Hancock Cash Management Fund or any John Hancock Fund
that is without a sales charge. Purchases of Class A shares of $1 million or
more, or purchases into an account or accounts whose aggregate value of fund
shares is $1 million or more will be made at net asset value with no initial
sales charge. On purchases of this type, John Hancock Funds, Inc. will pay a
commission as set forth in each Fund's then-current prospectus. John Hancock
Funds, Inc. will pay Brokers for sales of Class B shares of the Funds a
marketing fee as set forth in each Fund's then-current prospectus.
<PAGE> 10
JOHN HANCOCK FUNDS, INC.
SCHEDULE C
DATED JANUARY 1, 1995 TO THE
SOLICITING DEALER AGREEMENT RELATING TO SHARES OF
JOHN HANCOCK FUNDS
FIRST YEAR SERVICE FEES
Pursuant to the Distribution Plan applicable to each of the Funds
listed in Schedule A, John Hancock Funds, Inc. will advance to you a First Year
Service Fee related to the purchase of Class A shares (only if subject to sales
charge) or Class B shares of any of the Funds, as the case may be, sold by your
firm. This Service Fee will be compensation for your personal service and/or
the maintenance of shareholder accounts ("Customer Servicing") during the
twelve-month period immediately following the purchase of such shares, in the
amount not to exceed .25 of 1% of net assets invested in Class A shares or
Class B shares of the Fund, as the case may be, purchased by your customers.
SERVICE FEE SUBSEQUENT TO THE FIRST YEAR
Pursuant to the Distribution Plan applicable to each of the Funds
listed in Schedule A, the Distributor will pay you quarterly, in arrears, a
Service Fee commencing at the end of the twelve month period immediately
following the purchase of Class A shares (only if subject to sales charge) or
Class B shares, as the case may be, sold by your firm, for Customer Servicing,
in an amount not to exceed .25 of 1% of the average daily net assets
attributable to the Class A shares or Class B shares of the Fund, as the case
may be, purchased by your customers, provided your firm has under management
with the Funds combined average daily net assets for the preceding quarter of
no less than $1 million, or an individual representative of your firm has under
management with the Funds combined average daily net assets for the preceding
quarter of no less than $250,000 (an "Eligible Firm").
<PAGE> 11
JOHN HANCOCK BROKER DISTRIBUTION SERVICES, INC.
SCHEDULE D
DATED JULY 1, 1992 TO THE
SOLICITING DEALER AGREEMENT RELATING TO SHARES OF
JOHN HANCOCK MUTUAL FUNDS
No broker/dealer shall represent the FUnds or Distribution Services in any
written communications without prior receipt of written approval from John
Hancock Broker Distribution Services, Inc. This includes but is not limited to
all advertising, public relations, marketing and sales literature, and media
contacts.
Further, subsequent to the creation of such materialsbefore written
approval from JHBDS will be given, a copy of the NASD review document
applicable to such materials must be furnished to John Hancock Broker
Distribution Services, Inc. for its review and files.
FOR PURPOSES OF THIS SCHEDULE D, THE FOLLOWING TERMS ARE DEFINED:
Advertising:
materials designed for the mass market, e.g. print ads, radio and tv
commercials, billboards, etc.
Sales literature:
materials designed for a directed market, e.g. prospecting letters,
brochures, mailers, stuffers, etc.
Coop Advertising:
advertising materials (as defined above) used by selling group members
for which John Hancock pays some or all of the costs of publication
whether the materials were developed by JHBDS Marketing or not.
John Hancock Broker Distribution Services, Inc. Approval of Advertising:
Approval has four meanings:approval of the material itself from a
marketing perspective (JHBDS product managers), proactive compliance
officer), parent company corporate advertising approval (John Hancock
Mutual Life Insurance Company Advertising Dept. personnel) and
approval for use and related cost-sharing arrangements (national sales
coordinators).
NASD Filing:
Materials created by JHBDS will be filed with the NASD by the JHBDS
Compliance Department. Materials not created by JHBDS but to be
included in the coop program will be filed with the NASD by the
broker-dealer creating the materials. However, prior to use of the
materials in our coop program, we will need a copy of the final
version of the material as well as the NASDcomment letter. When this
is received, the above approvals can be obtained.
<PAGE> 1
EXHIBIT 99.B6.2
FINANCIAL INSTITUTION
SALES AND SERVICE AGREEMENT
[LOGO]
JOHN HANCOCK FUNDS, INC.
Boston - Massachusetts - 02199-7603
<PAGE> 2
JOHN HANCOCK FUNDS, INC.
101 HUNTINGTON AVENUE
BOSTON, MA 02199-7603
FINANCIAL INSTITUTION
SALES AND SERVICE AGREEMENT
Date
--------------------------------
John Hancock Funds, Inc. ("The Distributor", or "Distributor"), ("We" or
"us"), is the principal distributor of the shares of beneficial interest (the
"securities") of each of the John Hancock Funds (the "Funds"). Such Funds are
those listed on Schedule A hereto which may be amended or supplemented from
time to time by the Distributor to include additional Funds for which the
Distributor is the principal distributor. You hereby represent that you are a
"bank" as defined in Section 3(a)(b) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and at the time of each transaction in shares of
the Funds, are not required to register as a broker/dealer under the Exchange
Act or regulations thereunder. We invite you to become a non-exclusive
soliciting financial institution ("Financial Institution") to distribute the
securities of the Funds and you agree to solicit orders for the purchase of the
securities on the following terms. Securities are offered pursuant to each
Fund's prospectus and statement of additional information, as such prospectus
and statement of additional information may be amended from time to time. To
the extent that the prospectus or statement of additional information contains
provisions that are inconsistent with the terms of this Agreement, the terms of
the prospectus or statement of additional information shall be controlling.
OFFERINGS
1. You represent and warrant that you will use your best efforts to ensure
that any purchase of shares of the Funds by your customers constitutes a
suitable investment for such customers. You acknowledge that you will base
such a decision of suitability on all the facts you have gathered about your
customer's financial situation, investment objectives, risk tolerance and
sophistication.
2. You represent and warrant that a copy of the then-current prospectus of a
Fund will be delivered to your customer before any purchase of shares of that
Fund are effected for that customer. You shall not effect any transaction in,
or induce any purchase or sale of, any shares of the Funds by means of any
manipulative, deceptive or other fraudulent device or contrivance, and shall
otherwise deal equitably and fairly with your customers with respect to
transactions in shares of a Fund.
3. You represent and warrant that you will not make shares of any Fund
available to your customers, including your fiduciary customers, except in
compliance with all Federal and state laws and rules and regulations of
regulatory agencies or authorities applicable to you, or any of your affiliates
engaging in such activity, which may affect your business practices. You
confirm that you are not in violation of any banking law or regulations as to
which you are subject. You agree that you will comply with the requirements of
Banking Circular 274 issued by the Office of the Comptroller of the Currency in
offering shares of the Funds to your customers. We agree that we will comply
with all Federal and state laws and rules and regulations of regulatory
agencies or authorities applicable to us. We and you acknowledge and agree
that the offering of shares of the Funds pursuant to this agreement is subject
to the oversight of your management and the regulatory authorities by which you
are subject to review, and that appropriate records and materials relating to
any activity by you or us undertaken pursuant to this agreement may be accessed
by bank examiners in the due course of any regulatory review to which you may
be subject.
4. As principal distributor of the Funds, we shall have full authority to take
such action as we deem advisable in respect of all matters pertaining to the
distribution. This offer of shares of the Funds to you is made only in such
jurisdictions in which we may lawfully sell such shares of the Funds.
-2-
<PAGE> 3
5. You shall not make any representation concerning the Funds or their
securities except those contained in the then-current prospectus or statement
of additional information for each Fund.
6. We will supply to you at our expense additional copies of the then-current
prospectus and statement of additional information for each of the Funds and
any printed information supplemental to such material in reasonable quantities
upon request. It shall be your obligation to ensure that all such information
and materials are distributed to your customers who own or seek to own shares
of the Funds in accordance with securities and/or banking law and regulations
and any other applicable regulations.
7. With the exception of listings of product offerings, you agree not to
furnish or cause to be furnished to any person or display, or publish any
information or materials relating to any Fund (including, without limitation,
promotional materials, sales literature, advertisements, press releases,
announcements, posters, signs and other similar materials), except such
information and materials as may be furnished to you by us the Distributor or
the Fund. All other materials must receive written approval by the Distributor
before distribution or display to the public. Use of all approved advertising
and sales literature materials is restricted to appropriate distribution
channels.
8. You are not authorized to act as our agent. In making available shares of
the Funds under this Financial Institution Sales and Service Agreement, nothing
herein shall be construed to constitute you or any of your agents, employees or
representatives as our agent or employee, or as an agent or employee of the
Funds, and you shall not make any representations to the contrary. Nothing
shall constitute you as a syndicate, association, unincorporated business, or
other separate entity or partners with us, but you shall be liable for your
proportionate share of any tax, liability or expense based on any claim arising
from the sale of shares of the Funds under this Agreement. We shall not be
under any liability to you, except for obligations expressly assumed by us in
this Agreement and liabilities under Section 11(f) of the Securities Act of
1933, and no obligations on our part shall be implied or inferred herefrom.
9. DEALER COMPLIANCE/SUITABILITY STANDARDS (CLASS A AND CLASS B SHARES) -
Certain mutual funds distributed by the Distributor are being offered with two
or more classes of shares of the same investment portfolio ("Fund") - refer to
each Fund prospectus for availability and details. It is essential that the
following minimum compliance/suitability standards be adhered to in offering
and selling shares of these Funds to investors. All soliciting financial
institutions offering shares of the Funds and their agents, employees and
representatives agree to comply with these general suitability and compliance
standards.
SUITABILITY
With two classes of shares of certain funds available to individual
investors, (Class A and Class B), it is important that each investor purchases
not only the fund that best suits his or her investment objective but also the
class of shares that offers the most beneficial distribution financing method
for the investor based upon his or her particular situation and preferences.
Fund share recommendations and orders must be carefully reviewed by you and
your agents, employees and representatives in light of all the facts and
circumstances, to ascertain that the class of shares to be purchased by each
investor is appropriate and suitable. These recommendations should be based on
several factors, including but not limited to:
(A) the amount of money to be invested initially and over
a period of time;
(B) the current level of front-end sales load or back-end
sales load imposed by the Fund;
(C) the period of time over which the customer expects to
retain the investment;
(D) the anticipated level of yield from fixed income
funds' Class A and Class B shares;
(E) any other relevant circumstances such as the
availability of reduced sales charges under letters
of intent and/or rights of accumulation.
There are instances when one distribution financing method may be more
appropriate than another. For example, shares subject to a front-end sales
charge may be more appropriate than shares subject to a contingent deferred
sales charge for large investors who qualify for a significant quantity
discount on the front-end sales charge. In addition, shares subject to a
contingent deferred sales charge may be more appropriate for investors whose
orders would not qualify for quantity discounts and who, therefore, may prefer
to defer sales charges and also for investors who determine it to be
advantageous to have all of their funds invested without deduction of a
front-end sales commission. However, if it is anticipated that an investor may
redeem his or her shares within a short period of time, the investor may,
depending on the amount of his or her purchase, bear higher distribution
expenses by purchasing contingent deferred sales charge shares than if he or
she had purchased shares subject to a front-end sales charge.
-3-
<PAGE> 4
COMPLIANCE
Your supervisory procedures should be adequate to assure that an
appropriate person reviews and approves transactions entered into pursuant to
this Financial Institution Sales and Service Agreement for compliance with the
foregoing standards. In certain instances, it may be appropriate to discuss
the purchase with the agents, employees and representatives involved or to
review the advantages and disadvantages of selecting one class of shares over
another with the client. The Distributor will not accept orders for Class B
Shares in any Fund from you for accounts maintained in your name or in the name
of your nominee for the benefit of certain of your customers. Trades for Class
B Shares will only be accepted in the name of the shareholder.
10. CLASS C SHARES - Certain mutual funds distributed by the Distributor may
be offered with Class C shares. Refer to each Fund prospectus for availability
and details. Class C shares are designed for institutional investors and
qualified benefit plans, including pension funds, and are sold without a sales
charge or 12b-1 fee. If a commission is paid to you for transactions in Class
C shares, it will be paid by the Distributor out of its own resources.
SALES
11. With respect to any and all transactions in the shares of any Fund
pursuant to this Financial Institution Sales and Service Agreement it is
understood and agreed in each case that: (a) you shall be acting solely as
agent for the account of your customer; (b) each transaction shall be initiated
solely upon the order of your customer; (c) we shall execute transactions only
upon receiving instructions from you acting as agent for your customer or upon
receiving instructions directly from your customer; (d) as between you and your
customer, your customer will have full beneficial ownership of all shares; (c)
each transaction shall be for the account of your customer and not for your
account; and (f) unless otherwise agreed in writing we will serve as a clearing
broker for you on a fully disclosed basis, and you shall serve as the
introducing agent for your customers' accounts. Subject to the foregoing,
however, and except for Class B shares, as described in Section 8 above, you
may maintain record ownership of such customers' shares in an account
registered in your name or the name of your nominee, for the benefit of such
customers. Each transaction shall be without recourse to you provided that you
act in accordance with the terms of this Financial Institution Sales and
Service Agreement. You represent and warrant to us that you will have full
right, power and authority to effect transactions (including, without
limitation, any purchases and redemptions) in shares of the Funds on behalf of
all customer accounts provided by you.
12. Orders for securities received by you from your customers will be for the
sale of the securities at the public offering price, which will be the net
asset value per share as determined in the manner provided in the relevant
Fund's prospectus, as now in effect or as amended from time to time, next after
receipt by us (or the relevant Fund's transfer agent) of the purchase
application and payment for the securities, plus the relevant sales charges set
forth in the relevant Fund's then-current prospectus (the "Public Offering
Price"). The procedures relating to the handling of orders shall be subject to
our instructions which we will forward from time to time to you. All orders
are subject to acceptance by us, and we reserve the right in our sole
discretion to reject any order.
In addition to the foregoing, you acknowledge and agree to the initial and
subsequent investment minimums, which may vary from year to year, as described
in the then-current prospectus for each Fund.
13. You agree to sell the securities only (a) to your customers at the public
offering price then in effect, or (b) back to the Funds at the currently quoted
net asset value.
14. The amount of sales charge to be reallowed to you (the "Reallowance") as a
percentage of the offering price is set forth in the then-current prospectus of
each Fund.
If a sales charge on the purchase is reduced in accordance with the
provisions of the relevant Fund's then- current prospectus pertaining to
"Methods of Obtaining Reduced Sales Charges," the Reallowance shall be reduced
pro rata.
15. We shall pay a Reallowance subject to the provisions of this agreement as
set forth in Schedule B hereto on all purchases made by your customers pursuant
to orders accepted by us (a) where an order for the purchase of securities is
obtained by you and remitted to us promptly by you, (b) where a subsequent
investment is made to an account established by you or (c) where a subsequent
investment is made to an account established by a financial institution or
-4-
<PAGE> 5
registered broker/dealer other than you and is accompanied by a signed request
from the account shareholder that you receive the Reallowance for that
investment and/or for subsequent investments made in such account. If for any
reason, a purchase transaction is reversed, you shall not be entitled to
receive or retain any part of the Reallowance on such purchase and shall pay to
us on demand in full the amount of the Reallowance received by you in
connection with any such purchase. We may withhold and retain from the amount
of the Reallowance due you a sum sufficient to discharge any amount due and
payable by you to us.
16. Certain of the Funds have adopted a plan under Investment Company Act
Rule 12b-1 ("Distribution Plan" as described in the prospectus). To the extent
you provide distribution and marketing services in the promotion of the sale of
shares of these Funds, including furnishing services and assistance to your
customers who invest in and own shares of such Funds and including, but not
limited to, answering routine inquiries regarding such Funds and assisting in
changing distribution options, account designations and addresses, you may be
entitled to receive compensation from us as set forth in Schedule C hereto.
All compensation, including 12b-1 fees, shall be payable to you only to the
extent that funds are received and in the possession of the Distributor.
17. We will advise you as to the jurisdictions in which we believe the shares
have been qualified for sale under the respective securities or "blue sky" laws
of such jurisdictions, but we assume no responsibility or obligations as to
your right to sell the shares of the Funds in any state or jurisdiction.
18. Orders may be placed through:
John Hancock Funds, Inc.
101 Huntington Avenue
Boston, MA 02199-7603
1-800-338-4265
SETTLEMENT
19. Settlements for wire orders shall be made within five business days after
our acceptance of your order to purchase shares of the Funds. Certificates,
when requested, will be delivered to you upon payment in full of the sum due
for the sale of the shares of the Funds. If payment is not so received or
made, we reserve the right forthwith to cancel the sale, or, at our option, to
liquidate the shares of the Fund subject to such sale at the then prevailing
net asset value, in which latter case you will agree to be responsible for any
loss resulting to the Funds or to us from your failure to make payments as
aforesaid.
INDEMNIFICATION
20. The parties to this agreement hereby agree to indemnify and hold harmless
each other, their officers and directors, and any person who is or may be
deemed to be a controlling person of each other, from and against any losses,
claims, damages, liabilities or expenses (including reasonable fees of
counsel), whether joint or several, to which any such person or entity may
become subject insofar as such losses, claims, damages, liabilities or expenses
(or actions in respect thereof) arise out of or are based upon, (a) any untrue
statement or alleged untrue statement of material fact, or any omission or
alleged omission to state a material fact made or omitted by it herein, or, (b)
any willful misfeasance or gross misconduct by it in the performance of its
duties and obligations hereunder.
MISCELLANEOUS
21. Any notice to you shall be duly given if mailed or telegraphed to you at
your address as most recently furnished to us by you.
22. Miscellaneous provisions, if any, are attached hereto and incorporated
herein by reference.
23. This agreement, which shall be construed in accordance with the laws of
the Commonwealth of Massachusetts, may be terminated by any party hereto at any
time upon written notice.
-5-
<PAGE> 6
FINANCIAL INSTITUTION
-------------------------------------------------
Financial Institution
By:
-------------------------------------------------
Authorized Signature of Financial Institution
-------------------------------------------------
Please Print or Type Name
-------------------------------------------------
Title
-------------------------------------------------
Print or Type Address
-------------------------------------------------
Telephone Number
Date:
-------------------------------------------------
In order to service you efficiently, please provide the
following information on your Mutual Funds Operations Department:
OPERATIONS MANAGER:
---------------------------------------------
ORDER ROOM MANAGER:
---------------------------------------------
OPERATIONS ADDRESS:
---------------------------------------------
---------------------------------------------
TELEPHONE: FAX:
--------------------- ----------------------------
TO BE COMPLETED BY: JOHN HANCOCK INVESTOR
JOHN HANCOCK FUNDS, INC. SERVICES CORPORATION
By: By:
--------------------------------- ------------------------------------
- ------------------------------------ ------------------------------------
Title Title
TO BE COMPLETED BY:
FINANCIAL INSTITUTION NUMBER:
----------------------------------------------
-6-
<PAGE> 7
JOHN HANCOCK FUNDS, INC.
SCHEDULE A
DATED JANUARY 1, 1995 TO THE
FINANCIAL INSTITUTION SALES AND SERVICE
AGREEMENT RELATING TO SHARES OF
JOHN HANCOCK FUNDS
<TABLE>
<S> <C>
John Hancock Sovereign Achievers Fund John Hancock National Aviation & Technology Fund
John Hancock Sovereign Investors Fund John Hancock Regional Bank Fund
John Hancock Sovereign Balanced Fund John Hancock Gold and Government Fund
John Hancock Sovereign Bond Fund John Hancock Global Rx Fund
John Hancock Sovereign U.S. Government Income Fund John Hancock Global Technology Fund
John Hancock Special Equities Fund* John Hancock Global Fund
John Hancock Special Opportunities Fund John Hancock Pacific Basin Equities Fund
John Hancock Discovery Fund John Hancock Global Income Fund
John Hancock Growth Fund John Hancock International Fund
John Hancock Strategic Income Fund John Hancock Global Rescources Fund
John Hancock Limited Term Government Fund John Hancock Emerging Growth Fund
John Hancock Cash Management Fund John Hancock Capital Growth Fund
John Hancock Managed Tax-Exempt Fund John Hancock Growth & Income Fund
John Hancock Tax-Exempt Income Fund John Hancock High Yield Bond Fund
John Hancock Tax-Exempt Series Fund John Hancock Investment Quality Bond Fund
John Hancock Special Value Fund John Hancock Government SecurritiesFund
John Hancock Strategic Short-Term Income Fund John Hancock U.S. Government Fund
John Hancock CA Tax-Free Fund John Hancock Governtment Income Fund
John Hancock High Yield Tax-Free Fund John Hancock Intermediate Government Fund
John Hancock Tax-Free Bond Fund John Hancock Adjustable U.S. Government Fund
John Hancock U.S. Government Cash Reserve Fund John Hancock Cash Reserve Money Market B Fund
</TABLE>
From time to time John Hancock Funds, as principal distributor of the
John Hancock Funds, will offer additional funds for sale. These funds will
automatically become part of this Agreement and will be subject to all its
provisions unless otherwise directed by John Hancock Funds, Inc.
* Closed to new invstors as of 9/30/94.
<PAGE> 8
JOHN HANCOCK FUNDS, INC.
SCHEDULE B
DATED JANUARY 1, 1995 TO THE
FINANCIAL INSTITUTION SALES AND SERVICE
AGREEMENT RELATING TO SHARES OF
JOHN HANCOCK FUNDS
I. REALLOWANCE
The Reallowance paid to Financial Institutions for sales of John Hancock
Funds is the same as that paid to Selling Brokers described and set forth
in each Fund's then-current prospectus. No Commission will be paid on
sales of John Hancock Cash Management Fund or any John Hancock Fund that is
without a sales charge. Purchases of Class A shares of $1 million or more,
or purchases into an account or accounts whose aggregate value of fund
shares is $1 million or more will be made at net asset value with no
initial sales charge. On purchases of this type, the Distributor will pay a
commission as set forth in each Fund's then-current prospectus. John
Hancock Funds, Inc. will pay Financial Institutions for sales of Class B
shares of the Funds a marketing fee as set forth in each Fund's then-
current prospectus for Selling Brokers.
<PAGE> 9
JOHN HANCOCK FUNDS, INC.
SCHEDULE C
DISTRIBUTION PLAN SCHEDULE OF COMPENSATION
DATED JANUARY 1, 1995 TO THE
FINANCIAL INSTITUTION SALES AND SERVICE
AGREEMENT RELATING TO SHARES OF
JOHN HANCOCK FUNDS
FIRST YEAR SERVICE FEE
Pursuant to the Distribution Plan applicable to each of the Funds
listed in Schedule A, the Distributor will advance to you a First Year Service
Fee related to the purchase of Class A shares (only if subject to sales charge)
or Class B shares of any of the Funds, as the case maybe, sold by your firm on
or after July 1, 1993. This Service Fee will be compensation for your personal
service and/or the maintenance of shareholder accounts ("Customer Servicing")
during the twelve-month period immediately following the purchase of such
shares, in an amount not to exceed .25 of 1% of the average daily net assets
attributable to Class A shares or Class B shares of the Fund, as the case may
be, purchased by your customers.
SERVICE FEE SUBSEQUENT TO THE FIRST YEAR
Pursuant to the Distribution Plan applicable to each of the Funds
listed in Schedule A, the Distributor will pay you quarterly, in arrears, a
Service Fee commencing at the end of the twelve-month period immediately
following the purchase of Class A shares (only if subject to sales charge) or
Class B shares, as the case may be, sold by your firm, for Customer Servicing,
in an amount not to exceed .25 of 1% of the average daily net assets
attributable to the Class A shares or Class B shares of the Fund, as the case
may be, purchased by your customers, provided your Financial Institution has
under management with the Funds combined average daily net assets for the
preceding quarter of no less than $1 million, or an individual representative
of your Financial Institution has under management with the Funds combined
average daily net assets for the preceding quarter of no less than $250,000 (an
"Eligible Financial Institution").
<PAGE> 1
EXHIBIT 99.B8
MASTER CUSTODIAN AGREEMENT
between
JOHN HANCOCK MUTUAL FUNDS
and
INVESTORS BANK & TRUST COMPANY
<PAGE> 2
<TABLE>
TABLE OF CONTENTS
-----------------
<S> <C> <C>
1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-3
2. Employment of Custodian and Property to be held by it . . . . . . . . . . . . . . . 3-4
3. Duties of the Custodian with Respect toProperty of the Fund . . . . . . . . . . . . 4
A. Safekeeping and Holding of Property . . . . . . . . . . . . . . . . . . . . . 4
B. Delivery of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-8
C. Registration of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 8
D. Bank Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-9
E. Payments for Shares of the Fund . . . . . . . . . . . . . . . . . . . . . . . 9
F. Investment and Availability of Federal Funds . . . . . . . . . . . . . . . . . 9
G. Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-10
H. Payment of Fund Moneys . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10-12
I. Liability for Payment in Advance of Receipt of Securities Purchased . . . . . 12-13
J. Payments for Repurchases of Redemptions of Shares of the Fund . . . . . . . . 13
K. Appointment of Agents by the Custodian . . . . . . . . . . . . . . . . . . . . 13
L. Deposit of Fund Portfolio Securities in Securities Systems . . . . . . . . . . 13-16
M. Deposit of Fund Commercial Paper in an Approved
Book-Entry System for Commercial Paper . . . . . . . . . . . . . . . . . . 16-18
N. Segregated Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18-19
O. Ownership Certificates for Tax Purposes . . . . . . . . . . . . . . . . . . . 19
P. Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Q. Communications Relating to Fund Portfolio Securities . . . . . . . . . . . . . 19-20
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
R. Exercise of Rights; Tender Offers . . . . . . . . . . . . . . . . . . . . . . 20
S. Depository Receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20-21
T. Interest Bearing Call or Time Deposits . . . . . . . . . . . . . . . . . . . . 21
U. Options, Futures Contracts and Foreign Currency Transactions . . . . . . . . . 21-23
V. Actions Permitted Without Express Authority . . . . . . . . . . . . . . . . . 23-24
4. Duties of Bank with Respect to Books of Account and
Calculations of Net Asset Value . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5. Records and Miscellaneous Duties . . . . . . . . . . . . . . . . . . . . . . . . . . 24-25
6. Opinion of Fund`s Independent Public Accountants . . . . . . . . . . . . . . . . . . 25
7. Compensation and Expenses of Bank . . . . . . . . . . . . . . . . . . . . . . . . . 25-26
8. Responsibility of Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26-27
9. Persons Having Access to Assets of the Fund . . . . . . . . . . . . . . . . . . . . 27
10. Effective Period, Termination and Amendment; Successor Custodian . . . . . . . . . . 27-28
11. Interpretive and Additional Provisions . . . . . . . . . . . . . . . . . . . . . . . 28-29
12. Certification as to Authorized Officers . . . . . . . . . . . . . . . . . . . . . . 29
13. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
14. Massachusetts Law to Apply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
15. Adoption of the Agreement by the Fund . . . . . . . . . . . . . . . . . . . . . . . 30
</TABLE>
<PAGE> 4
MASTER CUSTODIAN AGREEMENT
This Agreement is made as of December 15, 1992 between each investment
company advised by John Hancock Advisers, Inc. which has adopted this Agreement
in the manner provided herein and Investors Bank & Trust Company (hereinafter
called "Bank", "Custodian" and "Agent"), a trust company established under the
laws of Massachusetts with a principal place of business in Boston,
Massachusetts.
Whereas, each such investment company is registered under the Investment
Company Act of 1940 and has appointed the Bank to act as Custodian of its
property and to perform certain duties as its Agent, as more fully hereinafter
set forth; and
Whereas, the Bank is willing and able to act as each such investment
company's Custodian and Agent, subject to and in accordance with the provisions
hereof;
Now, therefore, in consideration of the premises and of the mutual
covenants and agreements herein contained, each such investment company and the
Bank agree as follows:
1. Definitions
-----------
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
(a) "Fund" shall mean the investment company which has adopted this
Agreement and is listed on Appendix A hereto. If the Fund is a Massachusetts
business trust or Maryland corporation, it may in the future establish and
designate other separate and distinct series of shares, each of which may be
called a "portfolio"; in such case, the term "Fund" shall also refer to each
such separate series or portfolio.
(b) "Board" shall mean the board of directors/trustees/managing general
partners/director general partners of the Fund, as the case may be.
(c) "The Depository Trust Company", a clearing agency registered with
the Securities and Exchange Commission under Section 17A of the Securities
Exchange Act of 1934 which acts as a securities depository and which has been
specifically approved as a securities depository for the Fund by the Board.
(d) "Authorized Officer", shall mean any of the following officers of
the Trust: The Chairman of the Board of Trustees, the President, a Vice
President, the Secretary, the Treasurer or Assistant Secretary or Assistant
Treasurer, or any other officer of the Trust duly authorized to sign by
appropriate resolution of the Board of Trustees of the Trust.
(e) "Participants Trust Company", a clearing agency registered with the
Securities and Exchange Commission under Section 17A of the Securities Exchange
Act of 1934 which acts as a securities depository and which has been
specifically approved as a securities depository for the Fund by the Board.
<PAGE> 5
(f) "Approved Clearing Agency" shall mean any other domestic clearing
agency registered with the Securities and Exchange Commission under Section 17A
of the Securities Exchange Act of 1934 which acts as a securities depository
but only if the Custodian has received a certified copy of a vote of the Board
approving such clearing agency as a securities depository for the Fund.
(g) "Federal Book-Entry System" shall mean the book-entry system
referred to in Rule 17f-4(b) under the Investment Company Act of 1940 for
United States and federal agency securities (i.e., as provided in Subpart O of
Treasury Circular No. 300, 31 CFR 306, Subpart B of 31 CFR Part 350, and the
book-entry regulations of federal agencies substantially in the form of Subpart
O).
(h) "Approved Foreign Securities Depository" shall mean a foreign
securities depository or clearing agency referred to in rule 17f-4 under the
Investment Company Act of 1940 for foreign securities but only if the Custodian
has received a certified copy of a vote of the Board approving such depository
or clearing agency as a foreign securities depository for the Fund.
(i) "Approved Book-Entry System for Commercial Paper" shall mean a
system maintained by the Custodian or by a subcustodian employed pursuant to
Section 2 hereof for the holding of commercial paper in book-entry form but
only if the Custodian has received a certified copy of a vote of the Board
approving the participation by the Fund in such system.
(j) The Custodian shall be deemed to have received "proper
instructions" in respect of any of the matters referred to in this Agreement
upon receipt of written or facsimile instructions signed by such one or more
person or persons as the Board shall have from time to time authorized to give
the particular class of instructions in question. Electronic instructions for
the purchase and sale of securities which are transmitted by John Hancock
Advisers, Inc. to the Custodian through the John Hancock equity trading system
and the John Hancock fixed income trading system shall be deemed to be proper
instructions; the Fund shall cause all such instructions to be confirmed in
writing. Different persons may be authorized to give instructions for
different purposes. A certified copy of a vote of the Board may be received
and accepted by the Custodian as conclusive evidence of the authority of any
such person to act and may be considered as in full force and effect until
receipt of written notice to the contrary. Such instructions may be general or
specific in terms and, where appropriate, may be standing instructions. Unless
the vote delegating authority to any person or persons to give a particular
class of instructions specifically requires that the approval of any person,
persons or committee shall first have been obtained before the Custodian may
act on instructions of that class, the Custodian shall be under no obligation
to question the right of the person or persons giving such instructions in so
doing. Oral instructions will be considered proper instructions if the
Custodian reasonably believes them to have been given by a person authorized to
give such instructions with respect to the transaction involved. The Fund
shall cause all oral
<PAGE> 6
instructions to be confirmed in writing. The Fund authorizes the Custodian to
tape record any and all telephonic or other oral instructions given to the
Custodian. Upon receipt of a certificate signed by two officers of the Fund as
to the authorization by the President and the Treasurer of the Fund accompanied
by a detailed description of the communication procedures approved by the
President and the Treasurer of the Fund, "proper instructions" may also include
communications effected directly between electromechanical or electronic
devices provided that the President and Treasurer of the Fund and the Custodian
are satisfied that such procedures afford adequate safeguards for the Fund's
assets. In performing its duties generally, and more particularly in
connection with the purchase, sale and exchange of securities made by or for
the Fund, the Custodian may take cognizance of the provisions of the governing
documents and registration statement of the Fund as the same may from time to
time be in effect (and votes, resolutions or proceedings of the shareholders or
the Board), but, nevertheless, except as otherwise expressly provided herein,
the Custodian may assume unless and until notified in writing to the
contrary that so-called proper instructions received by it are not in conflict
with or in any way contrary to any provisions of such governing documents and
registration statement, or votes, resolutions or proceedings of the
shareholders or the Board.
2. Employment of Custodian and Property to be Held by It
-----------------------------------------------------
The Fund hereby appoints and employs the Bank as its Custodian and Agent
in accordance with and subject to the provisions hereof, and the Bank hereby
accepts such appointment and employment. The Fund agrees to deliver to the
Custodian all securities, participation interests, cash and other assets owned
by it, and all payments of income, payments of principal and capital
distributions and adjustments received by it with respect to all securities and
participation interests owned by the Fund from time to time, and the cash
consideration received by it for such new or treasury shares ("Shares") of the
Fund as may be issued or sold from time to time. The Custodian shall not be
responsible for any property of the Fund held by the Fund and not delivered by
the Fund to the Custodian. The Fund will also deliver to the Bank from time to
time copies of its currently effective charter (or declaration of trust or
partnership agreement, as the case may be), by-laws, prospectus, statement of
additional information and distribution agreement with its principal
underwriter, together with such resolutions, votes and other proceedings of the
Fund as may be necessary for or convenient to the Bank in the performance of
its duties hereunder.
The Custodian may from time to time employ one or more subcustodians to
perform such acts and services upon such terms and conditions as shall be
approved from time to time by the Board. Any such subcustodian so employed by
the Custodian shall be deemed to be the agent of the Custodian, and the
Custodian shall remain primarily responsible for the securities, participation
interests, moneys and other property of the Fund held by such subcustodian.
Any foreign subcustodian shall be a bank or trust company which is an eligible
foreign custodian within the meaning of Rule 17f-5 under the Investment Company
Act of 1940, and the foreign custody arrangements shall be approved by the
Board and shall be in accordance with and subject to the provisions of said
Rule. For
<PAGE> 7
the purposes of this Agreement, any property of the Fund held by any such
subcustodian (domestic or foreign) shall be deemed to be held by the Custodian
under the terms of this Agreement.
3. Duties of the Custodian with Respect to Property of the Fund
------------------------------------------------------------
A. SAFEKEEPING AND HOLDING OF PROPERTY The Custodian shall keep
safely all property of the Fund and on behalf of the Fund shall
from time to time receive delivery of Fund property for
safekeeping. The Custodian shall hold, earmark and segregate on
its books and records for the account of the Fund all property of
the Fund, including all securities, participation interests and
other assets of the Fund (1) physically held by the Custodian, (2)
held by any subcustodian referred to in Section 2 hereof or by any
agent referred to in Paragraph K hereof, (3) held by or maintained
in The Depository Trust Company or in Participants Trust Company
or in an Approved Clearing Agency or in the Federal Book- Entry
System or in an Approved Foreign Securities Depository, each of
which from time to time is referred to herein as a "Securities
System", and (4) held by the Custodian or by any subcustodian
referred to in Section 2 hereof and maintained in any Approved
Book-Entry System for Commercial Paper.
B. DELIVERY OF SECURITIES The Custodian shall release and deliver
securities or participation interests owned by the Fund held (or
deemed to be held) by the Custodian or maintained in a Securities
System account or in an Approved Book-Entry System for Commercial
Paper account only upon receipt of proper instructions, which may
be continuing instructions when deemed appropriate by the parties,
and only in the following cases:
1) Upon sale of such securities or participation interests
for the account of the Fund, BUT ONLY against receipt of
payment therefor; if delivery is made in Boston or New
York City, payment therefor shall be made in accordance
with generally accepted clearing house procedures or by
use of Federal Reserve Wire System procedures; if delivery
is made elsewhere payment therefor shall be in accordance
with the then current "street delivery" custom or in
accordance with such procedures agreed to in writing from
time to time by the parties hereto; if the sale is
effected through a Securities System, delivery and payment
therefor shall be made in accordance with the provisions
of Paragraph L hereof; if the sale of commercial paper is
to be effected through an Approved Book-Entry System for
Commercial Paper, delivery and payment therefor shall be
made in accordance with the provisions of Paragraph M
hereof; if the securities are to be sold outside the
United States, delivery may be made in accordance with
procedures agreed to in writing from time to time by the
parties hereto; for the purposes of this subparagraph, the
term "sale" shall include the disposition of a portfolio
<PAGE> 8
security (i) upon the exercise of an option written by the
Fund and (ii) upon the failure by the Fund to make a
successful bid with respect to a portfolio security, the
continued holding of which is contingent upon the making
of such a bid;
2) Upon the receipt of payment in connection with any
repurchase agreement or reverse repurchase agreement
relating to such securities and entered into by the Fund;
3) To the depository agent in connection with tender or other
similar offers for portfolio securities of the Fund;
4) To the issuer thereof or its agent when such securities or
participation interests are called, redeemed, retired or
otherwise become payable; provided that, in any such case,
the cash or other consideration is to be delivered to the
Custodian or any subcustodian employed pursuant to Section
2 hereof;
5) To the issuer thereof, or its agent, for transfer into the
name of the Fund or into the name of any nominee of the
Custodian or into the name or nominee name of any agent
appointed pursuant to Paragraph K hereof or into the name
or nominee name of any subcustodian employed pursuant to
Section 2 hereof; or for exchange for a different number
of bonds, certificates or other evidence representing the
same aggregate face amount or number of units; provided
that, in any such case, the new securities or
participation interests are to be delivered to the
Custodian or any subcustodian employed pursuant to Section
2 hereof;
6) To the broker selling the same for examination in
accordance with the "street delivery" custom; provided
that the Custodian shall adopt such procedures as the Fund
from time to time shall approve to ensure their prompt
return to the Custodian by the broker in the event the
broker elects not to accept them;
7) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or
readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion of
such securities, or pursuant to any deposit agreement;
provided that, in any such case, the new securities and
cash, if any, are to be delivered to the Custodian or any
subcustodian employed pursuant to Section 2 hereof;
<PAGE> 9
8) In the case of warrants, rights or similar securities, the
surrender thereof in connection with the exercise of such
warrants, rights or similar securities, or the surrender
of interim receipts or temporary securities for definitive
securities; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the
Custodian or any subcustodian employed pursuant to Section
2 hereof;
9) For delivery in connection with any loans of securities
made by the Fund (such loans to be made pursuant to the
terms of the Fund's current registration statement), but
only against receipt of adequate collateral as agreed upon
from time to time by the Custodian and the Fund, which may
be in the form of cash or obligations issued by the United
States government, its agencies or instrumentalities.
10) For delivery as security in connection with any borrowings
by the Fund requiring a pledge or hypothecation of assets
by the Fund (if then permitted under circumstances
described in the current registration statement of the
Fund), provided, that the securities shall be released
only upon payment to the Custodian of the monies borrowed,
except that in cases where additional collateral is
required to secure a borrowing already made, further
securities may be released for that purpose; upon receipt
of proper instructions, the Custodian may pay any such
loan upon redelivery to it of the securities pledged or
hypothecated therefor and upon surrender of the note or
notes evidencing the loan;
11) When required for delivery in connection with any
redemption or repurchase of Shares of the Fund in
accordance with the provisions of Paragraph J hereof;
12) For delivery in accordance with the provisions of any
agreement between the Custodian (or a subcustodian
employed pursuant to Section 2 hereof) and a broker-dealer
registered under the Securities Exchange Act of 1934 and,
if necessary, the Fund, relating to compliance with the
rules of The Options Clearing Corporation or of any
registered national securities exchange, or of any similar
organization or organizations, regarding deposit or escrow
or other arrangements in connection with options
transactions by the Fund;
13) For delivery in accordance with the provisions of any
agreement among the Fund, the Custodian (or a subcustodian
employed pursuant to Section 2 hereof),
and a futures commission merchant, relating to compliance
with the rules of the Commodity Futures Trading Commission
and/or of any
<PAGE> 10
contract market or commodities exchange or similar
organization, regarding futures margin account deposits or
payments in connection with futures transactions by
the Fund;
14) For any other proper corporate purpose, but only upon
receipt of, in addition to proper instructions, a
certified copy of a vote of the Board specifying the
securities to be delivered, setting forth the purpose for
which such delivery is to be made, declaring such purpose
to be proper corporate purpose, and naming the person or
persons to whom delivery of such securities shall be made.
C. REGISTRATION OF SECURITIES Securities held by the Custodian
(other than bearer securities) for the account of the Fund shall
be registered in the name of the Fund or in the name of any
nominee of the Fund or of any nominee of the Custodian, or in the
name or nominee name of any agent appointed pursuant to Paragraph
K hereof, or in the name or nominee name of any subcustodian
employed pursuant to Section 2 hereof, or in the name or nominee
name of The Depository Trust Company or Participants Trust Company
or Approved Clearing Agency or Federal Book-Entry System or
Approved Book-Entry System for Commercial Paper; provided, that
securities are held in an account of the Custodian or of such
agent or of such subcustodian containing only assets of the Fund
or only assets held by the Custodian or such agent or such
subcustodian as a custodian or subcustodian or in a fiduciary
capacity for customers. All certificates for securities accepted
by the Custodian or any such agent or subcustodian on behalf of
the Fund shall be in "street" or other good delivery form or shall
be returned to the selling broker or dealer who shall be advised
of the reason thereof.
D. BANK ACCOUNTS The Custodian shall open and maintain a separate
bank account or accounts in the name of the Fund, subject only to
draft or order by the Custodian acting in pursuant to the terms of
this Agreement, and shall hold in such account or accounts,
subject to the provisions hereof, all cash received by it from or
for the account of the Fund other than cash maintained by the Fund
in a bank account established and used in accordance with Rule
17f-3 under the Investment Company Act of 1940. Funds held by the
Custodian for the Fund may be deposited by it to its credit as
Custodian in the Banking Department of the Custodian or in such
other banks or trust companies as the Custodian may in its
discretion deem necessary or desirable; provided, however, that
every such bank or trust company shall be qualified to act as a
custodian under the Investment Company Act of 1940 and that each
such bank or trust company and the funds to be deposited with each
such bank or trust company shall be approved in writing by two
officers of the Fund. Such funds shall be deposited by the
Custodian in its capacity as Custodian and shall be subject to
withdrawal only by the Custodian in that capacity.
<PAGE> 11
E. PAYMENT FOR SHARES OF THE FUND The Custodian shall make
appropriate arrangements with the Transfer Agent and the principal
underwriter of the Fund to enable the Custodian to make certain it
promptly receives the cash or other consideration due to the Fund
for such new or treasury Shares as may be issued or sold from time
to time by the Fund, in accordance with the governing documents
and offering prospectus and statement of additional information of
the Fund. The Custodian will provide prompt notification to the
Fund of any receipt by it of payments for Shares of the Fund.
F. INVESTMENT AND AVAILABILITY OF FEDERAL FUNDS Upon agreement
between the Fund and the Custodian, the Custodian shall, upon the
receipt of proper instructions, which may be continuing
instructions when deemed appropriate by the parties, invest in
such securities and instruments as may be set forth in such
instructions on the same day as received all federal funds
received after a time agreed upon between the Custodian and the
Fund.
G. COLLECTIONS The Custodian shall promptly collect all income and
other payments with respect to registered securities held
hereunder to which the Fund shall be entitled either by law or
pursuant to custom in the securities business, and shall promptly
collect all income and other payments with respect to bearer
securities if, on the date of payment by the issuer, such
securities are held by the Custodian or agent thereof and shall
credit such income, as collected, to the Fund's custodian account.
The Custodian shall do all things necessary and proper in connection with such
prompt collections and, without limiting the generality of the foregoing, the
Custodian shall
1) Present for payment all coupons and other income items
requiring presentations;
2) Present for payment all securities which may mature or be
called, redeemed, retired or otherwise become payable;
3) Endorse and deposit for collection, in the name of the
Fund, checks, drafts or other negotiable instruments;
4) Credit income from securities maintained in a Securities
System or in an Approved Book-Entry System for Commercial
Paper at the time funds become available to the Custodian;
in the case of securities maintained in The Depository
Trust Company funds shall be deemed available to the Fund
not later than the opening of business on the first
business day after receipt of such funds by the Custodian.
<PAGE> 12
The Custodian shall notify the Fund as soon as reasonably practicable whenever
income due on any security is not promptly collected. In any case in which the
Custodian does not receive any due and unpaid income after it has made demand
for the same, it shall immediately so notify the Fund in writing, enclosing
copies of any demand letter, any written response thereto, and memoranda of all
oral responses thereto and to telephonic demands, and await instructions from
the Fund; the Custodian shall in no case have any liability for any nonpayment
of such income provided the Custodian meets the standard of care set forth in
Section 8 hereof. The Custodian shall not be obligated to take legal action
for collection unless and until reasonably indemnified to its satisfaction.
The Custodian shall also receive and collect all stock dividends, rights and
other items of like nature, and deal with the same pursuant to proper
instructions relative thereto.
H. PAYMENT OF FUND MONEYS Upon receipt of proper instructions, which
may be continuing instructions when deemed appropriate by the
parties, the Custodian shall pay out moneys of the Fund in the
following cases only:
1) Upon the purchase of securities, participation interests,
options, futures contracts, forward contracts and options
on futures contracts purchased for the account of the Fund
but only (a) against the receipt of
(i) such securities registered as provided in
Paragraph C hereof or in proper form for
transfer or
(ii) detailed instructions signed by an officer of the
Fund regarding the participation interests to be
purchased or
(iii) written confirmation of the purchase by the Fund
of the options, futures contracts, forward
contracts or options on futures contracts
by the Custodian (or by a subcustodian employed pursuant
to Section 2 hereof or by a clearing corporation of a
national securities exchange of which the Custodian is a
member or by any bank, banking institution or trust
company doing business in the United States or abroad
which is qualified under the Investment Company Act of
1940 to act as a custodian and which has been designated
by the Custodian as its agent for this purpose or by the
agent specifically designated in such instructions as
representing the purchasers of a new issue of privately
placed securities); (b) in the case of a purchase effected
through a Securities System, upon receipt of the
securities by the Securities System in accordance with the
conditions set forth in Paragraph L hereof; (c) in the
case of a purchase of commercial paper effected through an
Approved Book-Entry System for Commercial Paper, upon
<PAGE> 13
receipt of the paper by the Custodian or subcustodian in
accordance with the conditions set forth in Paragraph M
hereof; (d) in the case of repurchase agreements entered
into between the Fund and another bank or a broker-
dealer, against receipt by the Custodian of the securities
underlying the repurchase agreement either in certificate
form or through an entry crediting the Custodian's
segregated, non-proprietary account at the Federal Reserve
Bank of Boston with such securities along with written
evidence of the agreement by the bank or broker-dealer to
repurchase such securities from the Fund; or (e) with
respect to securities purchased outside of the United
States, in accordance with written procedures agreed to
from time to time in writing by the parties hereto;
2) When required in connection with the conversion, exchange
or surrender of securities owned by the Fund as set forth
in Paragraph B hereof;
3) When required for the redemption or repurchase of Shares
of the Fund in accordance with the provisions of Paragraph
J hereof;
4) For the payment of any expense or liability incurred by
the Fund, including but not limited to the following
payments for the account of the Fund: advisory fees,
distribution plan payments, interest, taxes, management
compensation and expenses, accounting, transfer agent and
legal fees, and other operating expenses of the Fund
whether or not such expenses are to be in whole or part
capitalized or treated as deferred expenses;
5) For the payment of any dividends or other distributions to
holders of Shares declared or authorized by the Board; and
6) For any other proper corporate purpose, but only upon
receipt of, in addition to proper instructions, a
certified copy of a vote of the Board, specifying the
amount of such payment, setting forth the purpose for
which such payment is to be made, declaring such purpose
to be a proper corporate purpose, and naming the person or
persons to whom such payment is to be made.
I. LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES
PURCHASED In any and every case where payment for purchase of
securities for the account of the Fund is made by the Custodian in
advance of receipt of the securities purchased in the absence of
specific written instructions signed by two officers of the Fund
to so pay in advance, the Custodian shall be absolutely liable to
the Fund for such securities to the same extent as if the
securities had been received by the Custodian; EXCEPT that in the
case of a repurchase agreement
<PAGE> 14
entered into by the Fund with a bank which is a member of the
Federal Reserve System, the Custodian may transfer funds to the
account of such bank prior to the receipt of (i) the securities in
certificate form subject to such repurchase agreement or (ii)
written evidence that the securities subject to such repurchase
agreement have been transferred by book-entry into a segregated
non-proprietary account of the Custodian maintained with the
Federal Reserve Bank of Boston or (iii) the safekeeping receipt,
PROVIDED that such securities have in fact been so transferred by
book-entry and the written repurchase agreement is received by the
Custodian in due course; AND EXCEPT that if the securities are to
be purchased outside the United States, payment may be made in
accordance with procedures agreed to from time to time by the
parties hereto.
J. PAYMENTS FOR REPURCHASES OR REDEMPTIONS OF SHARES OF THE FUND
From such funds as may be available for the purpose, but subject
to any applicable votes of the Board and the current redemption
and repurchase procedures of the Fund, the Custodian shall, upon
receipt of written instructions from the Fund or from the Fund's
transfer agent or from the principal underwriter, make funds
and/or portfolio securities available for payment to holders of
Shares who have caused their Shares to be redeemed or repurchased
by the Fund or for the Fund's account by its transfer agent or
principal underwriter.
The Custodian may maintain a special checking account upon which
special checks may be drawn by shareholders of the Fund holding
Shares for which certificates have not been issued. Such checking
account and such special checks shall be subject to such rules and
regulations as the Custodian and the Fund may from time to time
adopt. The Custodian or the Fund may suspend or terminate use of
such checking account or such special checks (either generally or
for one or more shareholders) at any time. The Custodian and the
Fund shall notify the other immediately of any such suspension or
termination.
K. APPOINTMENT OF AGENTS BY THE CUSTODIAN The Custodian may at any
time or times in its discretion appoint (and may at any time
remove) any other bank or trust company (provided such bank or
trust company is itself qualified under the Investment Company Act
of 1940 to act as a custodian or is itself an eligible foreign
custodian within the meaning of Rule 17f-5 under said Act) as the
agent of the Custodian to carry out such of the duties and
functions of the Custodian described in this Section 3 as the
Custodian may from time to time direct; provided, however, that
the appointment of any such agent shall not relieve the Custodian
of any of its responsibilities or liabilities hereunder, and as
between the Fund and the Custodian the Custodian shall be fully
responsible for the acts and omissions of any such agent. For the
purposes of this Agreement, any property of the Fund held by any
such agent shall be deemed to be held by the Custodian hereunder.
<PAGE> 15
L. DEPOSIT OF FUND PORTFOLIO SECURITIES IN SECURITIES SYSTEMS The
Custodian may deposit and/or maintain securities owned by the Fund
(1) in The Depository Trust Company;
(2) in Participants Trust Company;
(3) in any other Approved Clearing Agency;
(4) in the Federal Book-Entry System; or
(5) in an Approved Foreign Securities Depository
in each case only in accordance with applicable Federal Reserve
Board and Securities and Exchange Commission rules and
regulations, and at all times subject to the following
provisions:
(a) The Custodian may (either directly or through one or more
subcustodians employed pursuant to Section 2) keep securities of
the Fund in a Securities System provided that such securities are
maintained in a non-proprietary account ("Account") of the
Custodian or such subcustodian in the Securities System which
shall not include any assets of the Custodian or such subcustodian
or any other person other than assets held by the Custodian or
such subcustodian as a fiduciary, custodian, or otherwise for its
customers.
(b) The records of the Custodian with respect to securities of the
Fund which are maintained in a Securities System shall identify by
book-entry those securities belonging to the Fund, and the
Custodian shall be fully and completely responsible for
maintaining a recordkeeping system capable of accurately and
currently stating the Fund's holdings maintained in each such
Securities System.
(c) The Custodian shall pay for securities purchased in book-entry
form for the account of the Fund only upon (i) receipt of notice
or advice from the Securities System that such securities have
been transferred to the Account, and (ii) the making of any entry
on the records of the Custodian to reflect such payment and
transfer for the account of the Fund. The Custodian shall
transfer securities sold for the account of the Fund only upon (i)
receipt of notice or advice from the Securities System that
payment for such securities has been transferred to the Account,
and (ii) the making of an entry on the records of the Custodian to
reflect such transfer and payment for the account of the Fund.
Copies of all notices or advises from the Securities System of
transfers of securities for the account of the Fund shall identify
the Fund, be maintained for the Fund by the Custodian and be
promptly provided to the Fund at its request.
<PAGE> 16
The Custodian shall promptly send to the Fund confirmation
of each transfer to or from the account of the Fund in the form
of a written advice or notice of each such transaction, and shall
furnish to the Fund copies of daily transaction sheets reflecting
each day's transactions in the Securities System for the account
of the Fund on the next business day.
(d) The Custodian shall promptly send to the Fund any report or other
communication received or obtained by the Custodian relating to
the Securities System's accounting system, system of internal
accounting controls or procedures for safeguarding securities
deposited in the Securities System; the Custodian shall promptly
send to the Fund any report or other communication relating to the
Custodian's internal accounting controls and procedures for
safeguarding securities deposited in any Securities System; and
the Custodian shall ensure that any agent appointed pursuant to
Paragraph K hereof or any subcustodian employed pursuant to
Section 2 hereof shall promptly send to the Fund and to the
Custodian any report or other communication relating to such
agent's or subcustodian's internal accounting controls and
procedures for safeguarding securities deposited in any Securities
System. The Custodian's books and records relating to the Fund's
participation in each Securities System will at all times during
regular business hours be open to the inspection of the Fund's
authorized officers, employees or agents.
(e) The Custodian shall not act under this Paragraph L in the absence
of receipt of a certificate of an officer of the Fund that the
Board has approved the use of a particular Securities System; the
Custodian shall also obtain appropriate assurance from the
officers of the Fund that the Board has annually reviewed and
approved the continued use by the Fund of each Securities System,
so long as such review and approval is required by Rule 17f-4
under the Investment Company Act of 1940, and the Fund shall
promptly notify the Custodian if the use of a Securities System is
to be discontinued; at the request of the Fund, the Custodian will
terminate the use of any such Securities System as promptly as
practicable.
(f) Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage to
the Fund resulting from use of the Securities System by reason of
any negligence, misfeasance or misconduct of the Custodian or any
of its agents or subcustodians or of any of its or their employees
or from any failure of the Custodian or any such agent or
subcustodian to enforce effectively such rights as it may have
against the Securities System or any other person; at the election
of the Fund, it shall be entitled to be
<PAGE> 17
subrogated to the rights of the Custodian with respect to any claim
against the Securities System or any other person which the
Custodian may have as a consequence of any such loss or damage
if and to the extent that the Fund has not been made whole for any
such loss or damage.
M. DEPOSIT OF FUND COMMERCIAL PAPER IN AN APPROVED BOOK-ENTRY SYSTEM FOR
COMMERCIAL PAPER Upon receipt of proper instructions with respect to
each issue of direct issue commercial paper purchased by the Fund, the
Custodian may deposit and/or maintain direct issue commercial paper
owned by the Fund in any Approved Book-Entry System for Commercial
Paper, in each case only in accordance with applicable Securities and
Exchange Commission rules, regulations, and no-action correspondence,
and at all times subject to the following provisions:
(a) The Custodian may (either directly or through one or more
subcustodians employed pursuant to Section 2) keep
commercial paper of the Fund in an Approved Book-Entry
System for Commercial Paper, provided that such paper is
issued in book entry form by the Custodian or subcustodian
on behalf of an issuer with which the Custodian or
subcustodian has entered into a book-entry agreement and
provided further that such paper is maintained in a
non-proprietary account ("Account") of the Custodian or
such subcustodian in an Approved Book-Entry System for
Commercial Paper which shall not include any assets of the
Custodian or such subcustodian or any other person other
than assets held by the Custodian or such subcustodian as
a fiduciary, custodian, or otherwise for its customers.
(b) The records of the Custodian with respect to commercial
paper of the Fund which is maintained in an Approved
Book-Entry System for Commercial Paper shall identify by
book-entry each specific issue of commercial paper
purchased by the Fund which is included in the System and
shall at all times during regular business hours be open
for inspection by authorized officers, employees or agents
of the Fund. The Custodian shall be fully and completely
responsible for maintaining a recordkeeping system capable
of accurately and currently stating the Fund's holdings of
commercial paper maintained in each such System.
(c) The Custodian shall pay for commercial paper purchased in
book-entry form for the account of the Fund only upon
contemporaneous (i) receipt of notice or advice
from the issuer that such paper has been issued, sold and
transferred to the Account, and (ii) the making of an
entry on the records of the Custodian to reflect such
purchase, payment and transfer for the account of the
Fund. The Custodian shall transfer such commercial
<PAGE> 18
paper which is sold or cancel such commercial paper which
is redeemed for the account of the Fund only upon
contemporaneous (i) receipt of notice or advice that
payment for such paper has been transferred to the Account,
and (ii) the making of an entry on the records of the
Custodian to reflect such transfer or redemption and
payment for the account of the Fund. Copies of all notices,
advises and confirmations of transfers of commercial paper
for the account of the Fund shall identify the Fund, be
maintained for the Fund by the Custodian and be
promptly provided to the Fund at its request. The
Custodian shall promptly send to the Fund confirmation of
each transfer to or from the account of the Fund in the
form of a written advice or notice of each such
transaction, and shall furnish to the Fund copies of daily
transaction sheets reflecting each day's transactions in
the System for the account of the Fund on the next business
day.
(d) The Custodian shall promptly send to the Fund any report
or other communication received or obtained by the
Custodian relating to each System's accounting system,
system of internal accounting controls or procedures for
safeguarding commercial paper deposited in the System; the
Custodian shall promptly send to the Fund any report or
other communication relating to the Custodian's internal
accounting controls and procedures for safeguarding
commercial paper deposited in any Approved Book-Entry
System for Commercial Paper; and the Custodian shall
ensure that any agent appointed pursuant to Paragraph K
hereof or any subcustodian employed pursuant to Section 2
hereof shall promptly send to the Fund and to the
Custodian any report or other communication relating to
such agent's or subcustodian's internal accounting
controls and procedures for safeguarding securities
deposited in any Approved Book-Entry System for Commercial
Paper.
(e) The Custodian shall not act under this Paragraph M in the
absence of receipt of a certificate of an officer of the
Fund that the Board has approved the use of a particular
Approved Book-Entry System for Commercial Paper; the
Custodian shall also obtain appropriate assurance from the
officers of the Fund that the Board
has annually reviewed and approved the continued use by
the Fund of each Approved Book-Entry System for Commercial
Paper, so long as such review and approval is required by
Rule 17f-4 under the Investment Company Act of 1940, and
the Fund shall promptly notify the Custodian if the use of
an Approved Book-Entry System for Commercial Paper is to
be discontinued; at the request of the Fund, the Custodian
will terminate the use of any such System as promptly as
practicable.
<PAGE> 19
(f) The Custodian (or subcustodian, if the Approved Book-Entry
System for Commercial Paper is maintained by the
subcustodian) shall issue physical commercial paper or
promissory notes whenever requested to do so by the Fund
or in the event of an electronic system failure which
impedes issuance, transfer or custody of direct issue
commercial paper by book-entry.
(g) Anything to the contrary in this Agreement
notwithstanding, the Custodian shall be liable to the Fund
for any loss or damage to the Fund resulting from use of
any Approved Book-Entry System for Commercial Paper by
reason of any negligence, misfeasance or misconduct of the
Custodian or any of its agents or subcustodians or of any
of its or their employees or from any failure of the
Custodian or any such agent or subcustodian to enforce
effectively such rights as it may have against the System,
the issuer of the commercial paper or any other person; at
the election of the Fund, it shall be entitled to be
subrogated to the rights of the Custodian with respect to
any claim against the System, the issuer of the commercial
paper or any other person which the Custodian may have as
a consequence of any such loss or damage if and to the
extent that the Fund has not been made whole for any such
loss or damage.
N. SEGREGATED ACCOUNT The Custodian shall upon receipt of proper
instructions establish and maintain a segregated account or
accounts for and on behalf of the Fund, into which account or
accounts may be transferred cash and/or securities, including
securities maintained in an account by the Custodian pursuant to
Paragraph L hereof, (i) in accordance with the provisions of any
agreement among the Fund, the Custodian and any registered
broker-dealer (or any futures commission merchant), relating to
compliance with the rules of the Options Clearing Corporation and
of any registered national securities exchange (or of the
Commodity Futures Trading Commission or of any contract market or
commodities exchange), or of any similar
organization or organizations, regarding escrow or deposit or
other arrangements in connection with transactions by the Fund,
(ii) for purposes of segregating cash or U.S. Government
securities in connection with options purchased, sold or written
by the Fund or futures contracts or options thereon purchased or
sold by the Fund, (iii) for the purposes of compliance by the Fund
with the procedures required by Investment Company Act Release No.
10666, or any subsequent release or releases of the Securities and
Exchange Commission relating to the maintenance of segregated
accounts by registered investment companies and (iv) for other
proper purposes, but only, in the case of clause (iv), upon
receipt of, in addition to proper instructions, a certificate
signed by two officers of the Fund, setting forth the purpose such
segregated account and declaring such purpose to be a proper
purpose.
<PAGE> 20
O. OWNERSHIP CERTIFICATES FOR TAX PURPOSES The Custodian shall
execute ownership and other certificates and affidavits for all
federal and state tax purposes in connection with receipt of
income or other payments with respect to securities of the Fund
held by it and in connection with transfers of securities.
P. PROXIES The Custodian shall, with respect to the securities held
by it hereunder, cause to be promptly delivered to the Fund all
forms of proxies and all notices of meetings and any other notices
or announcements or other written information affecting or
relating to the securities, and upon receipt of proper
instructions shall execute and deliver or cause its nominee to
execute and deliver such proxies or other authorizations as may be
required. Neither the Custodian nor its nominee shall vote upon
any of the securities or execute any proxy to vote thereon or give
any consent or take any other action with respect thereto (except
as otherwise herein provided) unless ordered to do so by proper
instructions.
Q. COMMUNICATIONS RELATING TO FUND PORTFOLIO SECURITIES The
Custodian shall deliver promptly to the Fund all written
information (including, without limitation, pendency of call and
maturities of securities and participation interests and
expirations of rights in connection therewith and notices of
exercise of call and put options written by the Fund and the
maturity of futures contracts purchased or sold by the Fund)
received by the Custodian from issuers and other persons relating
to the securities and participation interests being held for the
Fund. With respect to tender or exchange offers, the Custodian
shall deliver promptly to the Fund all written information
received by the Custodian from issuers and other persons relating
to the securities and participation interests whose tender or
exchange is sought and from the party (or his agents) making the
tender or exchange offer.
R. EXERCISE OF RIGHTS; TENDER OFFERS In the case of tender offers,
similar offers to purchase or exercise rights (including, without
limitation, pendency of calls and maturities of securities and
participation interests and expirations of rights in connection
therewith and notices of exercise of call and put options and the
maturity of futures contracts) affecting or relating to securities
and participation interests held by the Custodian under this
Agreement, the Custodian shall have responsibility for promptly
notifying the Fund of all such offers in accordance with the
standard of reasonable care set forth in Section 8 hereof. For
all such offers for which the Custodian is responsible as provided
in this Paragraph R, the Fund shall have responsibility for
providing the Custodian with all necessary instructions in timely
fashion. Upon receipt of proper instructions, the Custodian shall
timely deliver to the issuer or trustee thereof, or to the agent
of either, warrants, puts, calls, rights or similar
<PAGE> 21
securities for the purpose of being exercised or sold upon proper
receipt therefor and upon receipt of assurances satisfactory to
the Custodian that the new securities and cash, if any,
acquired by such action are to be delivered to the Custodian or
any subcustodian employed pursuant to Section 2 hereof. Upon
receipt of proper instructions, the Custodian shall timely deposit
securities upon invitations for tenders of securities upon proper
receipt therefor and upon receipt of assurances satisfactory to
the Custodian that the consideration to be paid or delivered or
the tendered securities are to be returned to the Custodian or
subcustodian employed pursuant to Section 2 hereof.
Notwithstanding any provision of this Agreement to the contrary,
the Custodian shall take all necessary action, unless otherwise
directed to the contrary by proper instructions, to comply with
the terms of all mandatory or compulsory exchanges, calls,
tenders, redemptions, or similar rights of security ownership, and
shall thereafter promptly notify the Fund in writing of such
action.
S. DEPOSITORY RECEIPTS The Custodian shall, upon receipt of proper
instructions, surrender or cause to be surrendered foreign
securities to the depository used by an issuer of American
Depository Receipts, European Depository Receipts or International
Depository Receipts (hereinafter collectively referred to as
"ADRs") for such securities, against a written receipt therefor
adequately describing such securities and written evidence
satisfactory to the Custodian that the depository has acknowledged
receipt of instructions to issue with respect to such securities
ADRs in the name of a nominee of the Custodian or in the name or
nominee name of any subcustodian employed pursuant to Section 2
hereof, for delivery to the Custodian or such subcustodian at such
place as the Custodian or such subcustodian may from time to time
designate. The Custodian shall, upon receipt of proper
instructions, surrender ADRs to the issuer thereof against a
written receipt therefor adequately describing the ADRs
surrendered and written evidence satisfactory to the Custodian
that the issuer of the ADRs has acknowledged receipt of
instructions to cause its depository to deliver the securities
underlying such ADRs to the Custodian or to a subcustodian
employed pursuant to Section 2 hereof.
T. INTEREST BEARING CALL OR TIME DEPOSITS The Custodian shall, upon
receipt of proper instructions, place interest bearing fixed term
and call deposits with the banking department of such banking
institution (other than the Custodian) and in such amounts as the
Fund may designate. Deposits may be denominated in U.S. Dollars
or other currencies. The Custodian shall include in its records
with respect to the assets of the Fund appropriate notation as to
the amount and currency of each such deposit, the accepting
banking institution and other appropriate details and shall retain
such forms of advice or receipt evidencing the deposit, if any, as
may be forwarded to the Custodian by the banking
<PAGE> 22
institution. Such deposits shall be deemed portfolio securities
of the applicable Fund for the purposes of this Agreement, and the
Custodian shall be responsible for the collection of income from
such accounts and the transmission of cash to and from such
accounts.
U. Options, Futures Contracts and Foreign Currency Transactions
------------------------------------------------------------
1. OPTIONS. The Custodians shall, upon receipt of proper
instructions and in accordance with the provisions of any
agreement between the Custodian, any registered
broker-dealer and, if necessary, the Fund, relating to
compliance with the rules of the Options Clearing
Corporation or of any registered national securities
exchange or similar organization or organizations, receive
and retain confirmations or other documents, if any,
evidencing the purchase or writing of an option on a
security, securities index, currency or other financial
instrument or index by the Fund;
deposit and maintain in a segregated account for each Fund
separately, either physically or by book-entry in a
Securities System, securities subject to a covered call
option written by the Fund; and release and/or transfer
such securities or other assets only in accordance with a
notice or other communication evidencing the expiration,
termination or exercise of such covered option furnished
by the Options Clearing Corporation, the securities or
options exchange on which such covered option is traded or
such other organization as may be responsible for handling
such options transactions. The Custodian and the
broker-dealer shall be responsible for the sufficiency of
assets held in each Fund's segregated account in
compliance with applicable margin maintenance
requirements.
2. FUTURES CONTRACTS The Custodian shall, upon receipt of
proper instructions, receive and retain confirmations and
other documents, if any, evidencing the purchase or sale
of a futures contract or an option on a futures contract
by the Fund; deposit and maintain in a segregated account,
for the benefit of any futures commission merchant, assets
designated by the Fund as initial, maintenance or
variation "margin" deposits (including mark- to-market
payments) intended to secure the Fund's performance of its
obligations under any futures contracts purchased or sold
or any options on futures contracts written by Fund, in
accordance with the provisions of any agreement or
agreements among the Fund, the Custodian and such futures
commission merchant, designed to comply with the rules of
the Commodity Futures Trading Commission and/or of any
contract market or commodities exchange or similar
organization regarding such margin deposits or payments;
and release and/or transfer assets in such margin accounts
only in
<PAGE> 23
accordance with any such agreements or rules. The
Custodian and the futures commission merchant shall be
responsible for the sufficiency of assets held in the
segregated account in compliance with the applicable
margin maintenance and mark-to-market payment requirements.
3. FOREIGN EXCHANGE TRANSACTIONS The Custodian shall,
pursuant to proper instructions, enter into or cause a
subcustodian to enter into foreign exchange contracts,
currency swaps or options to purchase and sell foreign
currencies for spot and future delivery on behalf and for
the account of the Fund. Such transactions may be
undertaken by the Custodian or subcustodian with such
banking or financial institutions or other currency
brokers, as set forth in proper instructions. Foreign
exchange contracts, swaps and options shall be deemed to
be portfolio securities of the Fund; and accordingly, the
responsibility of the Custodian therefor shall be the same
as and no greater than the Custodian's responsibility in
respect of other portfolio securities of the Fund. The
Custodian shall be responsible for the transmittal to and
receipt of cash from the currency broker or banking or
financial institution with which the contract or option is
made, the maintenance of proper records with respect to
the transaction and the maintenance of any segregated
account required in connection with the transaction. The
Custodian shall have no duty with respect to the selection
of the currency brokers or banking or financial
institutions with which the Fund deals or for their
failure to comply with the terms of any contract or
option. Without limiting the foregoing, it is agreed that
upon receipt of proper instructions and insofar as funds
are made available to the Custodian for the purpose, the
Custodian may (if determined necessary by the Custodian to
consummate a particular transaction on behalf and for the
account of the Fund) make free outgoing payments of cash
in the form of U.S. dollars or foreign currency before
receiving confirmation of a foreign exchange contract or
swap or confirmation that the countervalue currency
completing the foreign exchange contract or swap has been
delivered or received. The Custodian shall not be
responsible for any costs and interest charges which may
be incurred by the Fund or the Custodian as a result of
the failure or delay of third parties to deliver foreign
exchange; provided that the Custodian shall nevertheless
be held to the standard of care set forth in, and shall be
liable to the Fund in accordance with, the provisions of
Section 8.
V. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY The Custodian may in its
discretion, without express authority from the Fund:
<PAGE> 24
1) make payments to itself or others for minor expenses of
handling securities or other similar items relating to its
duties under this Agreement, PROVIDED, that all such
payments shall be accounted for by the Custodian to the
Treasurer of the Fund;
2) surrender securities in temporary form for securities in
definitive form;
3) endorse for collection, in the name of the Fund, checks,
drafts and other negotiable instruments; and
4) in general, attend to all nondiscretionary details in
connection with the sale, exchange, substitution,
purchase, transfer and other dealings with the securities
and property of the Fund except as otherwise directed by
the Fund.
4. Duties of Bank with Respect to Books of Account and Calculations of Net
Asset Value
-----------------------------------------------------------------------
The Bank shall as Agent (or as Custodian, as the case may be) keep such books
of account and render as at the close of business on each day a detailed
statement of the amounts received or paid out and of securities received or
delivered for the account of the Fund during said day and such other
statements, including a daily trial balance and inventory of the Fund's
portfolio securities; and shall furnish such other financial information and
data as from time to time requested by the Treasurer or any authorized officer
of the Fund; and shall compute and determine, as of the close of regular
trading on the New York Stock Exchange, or at such other time or times as the
Board may determine, the net asset value of a Share in the Fund, such
computation and determination to be made in accordance with the governing
documents of the Fund and the votes and instructions of the Board at the time
in force and applicable, and promptly notify the Fund and its investment
adviser and such other persons as the Fund may request of the result of such
computation and determination. In computing the net asset value the Custodian
may rely upon security quotations received by telephone or otherwise from
sources or pricing services designated by the Fund by proper instructions, and
may further rely upon information furnished to it by any authorized officer of
the Fund relative (a) to liabilities of the Fund not appearing on its books of
account, (b) to the existence, status and proper treatment of any reserve or
reserves, (c) to any procedures established by the Board regarding the
valuation of portfolio securities, and (d) to the value to be assigned to any
bond, note, debenture, Treasury bill, repurchase agreement, subscription right,
security, participation interest or other asset or property for which market
quotations are not readily available.
5. Records and Miscellaneous Duties
--------------------------------
The Bank shall create, maintain and preserve all records relating to its
activities and obligations under this Agreement in such manner as will meet the
obligations of the Fund
<PAGE> 25
under the Investment Company Act of 1940, with particular attention to Section
31 thereof and Rules 31a-1 and 31a-2 thereunder, applicable federal and state
tax laws and any other law or administrative rules or procedures which may be
applicable to the Fund. All books of account and records maintained by the Bank
in connection with the performance of its duties under this Agreement shall be
the property of the Fund, shall at all times during the regular business hours
of the Bank be open for inspection by authorized officers, employees or agents
of the Fund, and in the event of termination of this Agreement shall be
delivered to the Fund or to such other person or persons as shall be designated
by the Fund. Disposition of any account or record after any required period of
preservation shall be only in accordance with specific instructions received
from the Fund. The Bank shall assist generally in the preparation of
reports to shareholders, audits of accounts, and other ministerial matters of
like nature; and, upon request, shall furnish the Fund's auditors with an
attested inventory of securities held with appropriate information as to
securities in transit or in the process of purchase or sale and with such other
information as said auditors may from time to time request. The Custodian shall
also maintain records of all receipts, deliveries and locations of such
securities, together with a current inventory thereof, and shall conduct
periodic verifications (including sampling counts at the Custodian) of
certificates representing bonds and other securities for which it is responsible
under this Agreement in such manner as the Custodian shall determine from time
to time to be advisable in order to verify the accuracy of such inventory. The
Bank shall not disclose or use any books or records it has prepared or
maintained by reason of this Agreement in any manner except as expressly
authorized herein or directed by the Fund, and the Bank shall keep confidential
any information obtained by reason of this Agreement.
6. Opinion of Fund's Independent Public Accountants
------------------------------------------------
The Custodian shall take all reasonable action, as the Fund may from time to
time request, to enable the Fund to obtain from year to year favorable opinions
from the Fund's independent public accountants with respect to its activities
hereunder in connection with the preparation of the Fund's registration
statement and Form N-SAR or other periodic reports to the Securities and
Exchange Commission and with respect to any other requirements of such
Commission.
7. Compensation and Expenses of Bank
---------------------------------
The Bank shall be entitled to reasonable compensation for its services as
Custodian and Agent, as agreed upon from time to time between the Fund and the
Bank. The Bank shall entitled to receive from the Fund on demand reimbursement
for its cash disbursements, expenses and charges, including counsel fees, in
connection with its duties as Custodian and Agent hereunder, but excluding
salaries and usual overhead expenses.
8. Responsibility of Bank
----------------------
<PAGE> 26
So long as and to the extent that it is in the exercise of reasonable care, the
Bank as Custodian and Agent shall be held harmless in acting upon any notice,
request, consent, certificate or other instrument reasonably believed by it to
be genuine and to be signed by the proper party or parties.
The Bank as Custodian and Agent shall be entitled to rely on and may act upon
advice of counsel (who may be counsel for the Fund) on all matters, and shall
be without liability for any action reasonably taken or omitted pursuant to
such advice.
The Bank as Custodian and Agent shall be held to the exercise of reasonable
care in carrying out the provisions of this Agreement but shall be liable only
for its own negligent or bad faith acts or failures to act. Notwithstanding
the foregoing, nothing contained in this paragraph is intended to nor shall it
be construed to modify the standards of care and responsibility set forth in
Section 2 hereof with respect to subcustodians and in subparagraph f of
Paragraph L of Section 3 hereof with respect to Securities Systems and in
subparagraph g of Paragraph M of Section 3 hereof with respect to an Approved
Book-Entry System for Commercial Paper.
The Custodian shall be liable for the acts or omissions of a foreign banking
institution to the same extent as set forth with respect to subcustodians
generally in Section 2 hereof, provided that, regardless of whether assets are
maintained in the custody of a foreign banking institution, a foreign
securities depository or a branch of a U.S. bank, the Custodian shall not be
liable for any loss, damage, cost, expense, liability or claim resulting from,
or caused by, the direction of or authorization by the Fund to maintain custody
of any securities or cash of the Fund in a foreign county including, but not
limited to, losses resulting from nationalization, expropriation, currency
restrictions, acts of war, civil war or terrorism, insurrection, revolution,
military or usurped powers, nuclear fission, fusion or radiation, earthquake,
storm or other disturbance of nature or acts of God.
If the Fund requires the Bank in any capacity to take any action with respect
to securities, which action involves the payment of money or which action may,
in the opinion of the Bank, result in the Bank or its nominee assigned to the
Fund being liable for the payment of money or incurring liability of some other
form, the Fund, as a prerequisite to requiring the Custodian to take such
action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
9. Persons Having Access to Assets of the Fund
-------------------------------------------
(i) No trustee, director, general partner, officer, employee
or agent of the Fund shall have physical access to the
assets of the Fund held by the Custodian or be authorized
or permitted to withdraw any investments of the Fund, nor
shall the Custodian deliver any assets of the Fund to any
such person. No officer or director, employee or agent of
the Custodian who holds any similar position with the Fund
or the
<PAGE> 27
investment adviser of the Fund shall have access to the
assets of the Fund.
(ii) Access to assets of the Fund held hereunder shall only be
available to duly authorized officers, employees,
representatives or agents of the Custodian or other
persons or entities for whose actions the Custodian shall
be responsible to the extent permitted hereunder, or to
the Fund's independent public accountants in connection
with their auditing duties performed on behalf of the
Fund.
(iii) Nothing in this Section 9 shall prohibit any officer,
employee or agent of the Fund or of the investment adviser
of the Fund from giving instructions to the Custodian or
executing a certificate so long as it does not result in
delivery of or access to assets of the Fund prohibited by
paragraph (i) of this Section 9.
10. Effective Period, Termination and Amendment; Successor Custodian
----------------------------------------------------------------
This Agreement shall become effective as of its execution, shall continue in
full force and effect until terminated as hereinafter provided, may be amended
at any time by mutual agreement of the parties hereto and may be terminated by
either party by an instrument in writing delivered or mailed, postage prepaid
to the other party, such termination to take effect not sooner than sixty (60)
days after the date of such delivery or mailing; provided, that the Fund may at
any time by action of its Board, (i) substitute another bank or trust company
for the Custodian by giving notice as described above to the Custodian, or (ii)
immediately terminate this Agreement in the event of the appointment of a
conservator or receiver for the Custodian by the Federal Deposit Insurance
Corporation or by the Banking Commissioner of The Commonwealth of Massachusetts
or upon the happening of a like event at the direction of an appropriate
regulatory agency or court of competent jurisdiction. Upon termination of the
Agreement, the Fund shall pay to the Custodian such compensation as may be due
as of the date of such termination and shall likewise reimburse the Custodian
for its costs, expenses and disbursements.
Unless the holders of a majority of the outstanding Shares of the Fund vote to
have the securities, funds and other properties held hereunder delivered and
paid over to some other bank or trust company, specified in the vote, having
not less than $2,000,000 of aggregate capital, surplus and undivided profits,
as shown by its last published report, and meeting such other qualifications
for custodians set forth in the Investment Company Act of 1940, the Board
shall, forthwith, upon giving or receiving notice of termination of this
Agreement, appoint as successor custodian, a bank or trust company having such
qualifications. The Bank, as Custodian, Agent or otherwise, shall, upon
termination of the Agreement, deliver to such successor custodian, all
securities then held hereunder and all funds or other properties of the Fund
deposited with or held by the Bank hereunder and all books of account and
records kept by the Bank pursuant to this Agreement, and all documents held by
the Bank relative thereto. In the event that no such vote has been
<PAGE> 28
adopted by the shareholders and that no written order designating a successor
custodian shall have been delivered to the Bank on or before the date when such
termination shall become effective, then the Bank shall not deliver the
securities, funds and other properties of the Fund to the Fund but shall have
the right to deliver to a bank or trust company doing business in Boston,
Massachusetts of its own selection, having an aggregate capital, surplus and
undivided profits, as shown by its last published report, of not less than
$2,000,000, all funds, securities and properties of the Fund held by or
deposited with the Bank, and all books of account and records kept by the Bank
pursuant to this Agreement, and all documents held by the Bank relative
thereto. Thereafter such bank or trust company shall be the successor of the
Custodian under this Agreement.
11. Interpretive and Additional Provisions
--------------------------------------
In connection with the operation of this Agreement, the Custodian and the Fund
may from time to time agree on such provisions interpretive of or in addition
to the provisions of this Agreement as may in their joint opinion be consistent
with the general tenor of this Agreement. Any such interpretive or additional
provisions shall be in a writing signed by both parties and shall be annexed
hereto, provided that no such interpretive or additional provisions shall
contravene any applicable federal or state regulations or any provision of the
governing instruments of the Fund. No interpretive or additional provisions
made as provided in the preceding sentence shall be deemed to be an amendment
of this Agreement.
12. Certification as to Authorized Officers
---------------------------------------
The Secretary of the Fund shall at all times maintain on file with the Bank his
certification to the Bank, in such form as may be acceptable to the Bank, of
the names and signatures of the authorized officers of each fund, it being
understood that upon the occurence of any change in the information set forth
in the most recent certification on file (including without limitation any
person named in the most recent certification who has ceased to hold the office
designated therein), the Secretary of the Fund shall sign a new or amended
certification setting forth the change and the new, additional or ommitted
names or signatures. The Bank shall be entitled to rely and act upon any
officers named in the most recent certification.
13. Notices
-------
Notices and other writings delivered or mailed postage prepaid to the Fund
addressed to Thomas H. Drohan, John Hancock Advisers, Inc., 101 Huntington
Avenue, Boston, Massachusetts 02199, or to such other address as the Fund may
have designated to the Bank, in writing, or to Investors Bank & Trust Company,
24 Federal Street, Boston, Massachusetts 02110, shall be deemed to have been
properly delivered or given hereunder to the respective addressees.
<PAGE> 29
14. Massachusetts Law to Apply; Limitations on Liability
----------------------------------------------------
This Agreement shall be construed and the provisions thereof interpreted under
and in accordance with the laws of The Commonwealth of Massachusetts.
If the Fund is a Massachusetts business trust, the Custodian expressly
acknowledges the provision in the Fund's declaration of trust limiting the
personal liability of the trustees and shareholders of the Fund; and the
Custodian agrees that it shall have recourse only to the assets of the Fund for
the payment of claims or obligations as between the Custodian and the Fund
arising out of this Agreement, and the Custodian shall not seek satisfaction of
any such claim or obligation from the trustees or shareholders of the Fund.
Each Fund, and each series or portfolio of a Fund, shall be liable only for its
own obligations to the Custodian under this Agreement and shall not be jointly
or severally liable for the obligations of any other Fund, series or portfolio
hereunder.
<PAGE> 30
15. Adoption of the Agreement by the Fund
-------------------------------------
The Fund represents that its Board has approved this Agreement and has duly
authorized the Fund to adopt this Agreement. This Agreement shall be deemed to
supersede and terminate, as of the date first written above, all prior
agreements between the Fund and the Bank relating to the custody of the Fund's
assets.
* * * *
<PAGE> 31
In Witness Whereof, the parties hereto have caused this agreement to be
executed in duplicate as of the date first written above by their respective
officers thereunto duly authorized.
John Hancock Mutual Funds
by: /s/ Robert G. Freedman
----------------------
Attest:
/s/Avery P. Maher
- -----------------
Investors Bank & Trust Company
by: /s/ Henry M. Joyce
------------------
Attest:
/s/ JM Keenan
- -------------
<PAGE> 32
Page 1 of 2
INVESTORS BANK & TRUST COMPANY
APPENDIX A
[EFFECTIVE JANUARY 30, 1995]
John Hancock Limited Term Government Fund
John Hancock Capital Series
John Hancock Special Value Fund
John Hancock Growth Fund
John Hancock Income Securities Trust
John Hancock Investors Trust
John Hancock Sovereign Bond Fund
John Hancock Sovereign Investors Fund, Inc.
John Hancock Sovereign Investors Fund
John Hancock Sovereign Balanced Fund
John Hancock Special Equities Fund
John Hancock Strategic Series
John Hancock Independence Diversified Core Equity Fund
John Hancock Strategic Income Fund
John Hancock Utilities Fund
John Hancock Tax-Exempt Income Fund
John Hancock Tax-Exempt Series Fund
California Portfolio
Massachusetts Portfolio
New York Portfolio
John Hancock Technology Series, Inc.
John Hancock National Aviation & Technology Fund
John Hancock Global Technology Fund
Freedom Investment Trust
John Hancock Gold & Government Fund
John Hancock Regional Bank Fund
John Hancock Sovereign U.S. Government Income Fund
John Hancock Managed Tax-Exempt Fund
John Hancock Sovereign Achievers Fund
Freedom Investment Trust II
John Hancock Special Opportunities Fund
Freedom Investment Trust III
John Hancock Discovery Fund
<PAGE> 33
Page 2 of 2
INVESTORS BANK & TRUST COMPANY
APPENDIX A
[EFFECTIVE JANUARY 30, 1995]
John Hancock Series, Inc.
John Hancock Emerging Growth Fund
John Hancock Global Resources Fund
John Hancock Government Income Fund
John Hancock High Yield Bond Fund
John Hancock High Yield Tax-Free Fund
John Hancock Money Market Fund B
John Hancock Cash Reserve, Inc.
John Hancock Current Interest
John Hancock U.S. Government Cash Reserve
John Hancock Capital Growth Fund
John Hancock Investment Trust
John Hancock Growth and Income Fund
John Hancock California Tax-Free Income Fund
John Hancock Tax-Free Bond Fund
John Hancock Bond Fund
John Hancock Investment Quality Bond Fund
John Hancock Government Securities Trust
John Hancock U.S. Government Trust
John Hancock Adjustable U.S. Government Trust
John Hancock Adjustable U.S. Government Fund
John Hancock Intermediate Government Trust
John Hancock Institutional Series Trust
John Hancock Berkeley Dividend Performers Fund
John Hancock Berkeley Bond Fund
John Hancock Berkeley Fundamental Value Fund
John Hancock Berkeley Sector Opportunity Fund
John Hancock Independence Diversified Core Equity Fund II
John Hancock Independence Value Fund
John Hancock Independence Growth Fund
John Hancock Independence Medium Capitalization Fund
John Hancock Independence Balanced Fund
<PAGE> 1
EXHIBIT 99.B9
JOHN HANCOCK TECHNOLOGY SERIES, INC.
TRANSFER AGENCY AND SERVICE AGREEMENT
Dated: December 6, 1991
<PAGE> 2
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 6th day of December, 1991 by and between John
Hancock Technology Series, Inc., a Maryland corporation, having its principal
office and place of business at 101 Huntington Avenue, Boston, Massachusetts
(the "Fund"), and John Hancock Fund Services, Inc., a Delaware corporation
having its principal office and place of business at 101 Huntington Avenue,
Boston, Massachusetts 02117 ("JHFSI").
WITNESSETH:
WHEREAS, the Fund desires to appoint JHFSI as its transfer agent,
dividend disbursing agent and agent in connection with certain other
activities, and JHFSI desires to accept such appointment;
WHEREAS, the Fund is authorized to issue shares in separate series, with
each such series representing interests in a separate portfolio of securities
and other assets; and
WHEREAS, the Fund intends to initially offer Shares in two series, the
National Aviation & Technology Fund, and the John Hancock Global Technology
Fund; such series, together with all other series subsequently established by
the Fund and made subject to this Agreement in accordance with Article 8, being
herein referred to as the "Fund(s)");
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
-2-
<PAGE> 3
Article 1 Terms of Appointment: Duties of JHFSI
1.01 Subject to the terms and conditions set forth in this Agreement,
the Fund hereby, employs and appoints JHFSI to act as, and JHFSI agrees to act
as transfer agent for the Fund's authorized and issued shares of capital stock
("Shares"), with any accumulation, open-account or similar plans provided to
the shareholders of the Fund ("Shareholders") and set out in the currently
effective prospectus of the Fund, including without limitation any periodic
investment plan or periodic withdrawal program.
1.02 JHFSI agrees that it will perform the following services:
(a) In accordance with procedures established from time to time by
agreement between the Fund and JHFSI, JHFSI shall:
(i) Receive for acceptance, orders for the purchase of
Shares, and promptly deliver payment and appropriate
documentation therefor to the Custodian of the Fund
authorized pursuant to the By-Laws of the Corporation
as in effect on the date thereof (the "Custodian");
(ii) Pursuant to purchase orders, issue the appropriate
number of Shares and hold such Shares in the
appropriate Shareholder account;
(iii) Receive for acceptance, redemption requests and
redemption directions and deliver the appropriate
documentation therefor to the Custodian;
(iv) At the appropriate time as and when it receives monies
paid to it by the Custodian with respect to any
redemption, pay over or cause to be paid over in the
appropriate manner such monies as instructed by the
redeeming Shareholders;
(v) Effect transfers of Shares by the registered owners
thereof upon receipt of appropriate instructions;
(vi) Prepare and transmit payments for dividends and
distributions declared by the Fund; and
-3-
<PAGE> 4
(vii) Maintain records of account for and advise the Fund and
its Shareholders as to the foregoing; and
(viii) Record the issuance of Shares of the Fund and maintain
pursuant to SEC Rule 17Ad-10(e) a record of the total
number of Shares of the Fund which are authorized,
based upon data provided to it by the Fund, and issued
and outstanding. JHFSI shall also provide the Fund on
a regular basis with the total number of Shares which
are authorized and issued and outstanding and shall
have no obligation, when recording the issuance of
Shares, to monitor the issuance of such Shares or to
take cognizance of any laws relating to the issue or
sale of such Shares, which functions shall be the sole
responsibility of the Fund.
(b) In addition to and not in lieu of the services set forth in the
above paragraph (a), JHFSI shall: (i) perform all of the customary services of
a transfer agent, dividend disbursing agent and, as relevant, agent in
connection with accumulation, open- account or similar plans (including without
limitation any periodic investment plan or periodic withdrawal program);
including but not limited to: maintaining all Shareholder accounts, preparing
Shareholder meeting lists, mailing proxies, receiving and tabulating proxies,
mailing Shareholder reports and prospectuses to current Shareholders,
withholding taxes on U.S. resident and non-resident alien accounts, preparing
and filing U.S. Treasury Department Forms 1099 and other appropriate forms
required with respect to dividends and distributions by federal authorities for
all Shareholders, preparing and mailing confirmations forms and statements of
account to Shareholders for all purchases and redemptions of Shares and other
confirmable transactions in Shareholder accounts, preparing and mailing
activity statements for Shareholders, and providing Shareholder account
information and (ii) provide a system hich will enable the Fund to monitor the
total number of Shares sold in each State.
(c) In addition, the Fund shall (i) identify to JHFSI in writing
those transactions and assets to be treated as exempt from the blue sky
reporting for each State and (ii) verify the
-4-
<PAGE> 5
establishment of transactions for each State on the system prior to activation
and thereafter monitor the daily activity for each State. The responsibility
of JHFSI for the Fund's blue sky State registration status is solely limited to
the initial establishment of transactions subject to blue sky compliance by the
Fund and the reporting of such transactions to the Fund as provided above.
(d) Additionally, JHFSI shall:
(i) Utilize a system to identify all share transactions
which involve purchase and redemption orders that are processed
at a time other than the time of the computation of net asset
value per share next computed after receipt of such orders, and
shall compute the net effect upon the Fund of such transactions
so identified on a daily and cumulative basis.
(ii) If upon any day the cumulative net effect of such
transactions upon the Fund is negative and exceed a dollar amount
equivalent to 1/2 of 1 cent per share, JHFSI shall promptly make
a payment to the Fund in cash or through the use of a credit, in
the manner described in paragraph (iv) below, in such amount as
may be necessary to reduce the negative cumulative net effect to
less than 1/2 of 1 cent per share.
(iii) If on the last business day of any month the cumulative
net effect upon the Fund (adjusted by the amount of all prior
payments and credits by JHFSI and the Fund) is negative, the Fund
shall be entitled to a reduction in the fee next payable under
the Agreement by an equivalent amount, except as provided in
paragraph (iv) below. If on the last business day in any month
the cumulative net effect upon the Fund (adjusted by the amount
of all prior payments and credits by JHFSI and the Fund) is
positive, JHFSI shall be entitled to recover certain past
payments and reductions in fees, and to credit against all future
payments and fee reductions that may be required under the
Agreement as herein described in paragraph (iv) below.
(iv) At the end of each month, any positive cumulative net
effect upon the Fund shall be deemed to be a credit to JHFSI
which shall first be applied to permit
-5-
<PAGE> 6
JHFSI to recover any prior cash payments and fee reductions made by it
to the Fund under paragraphs (ii) and (iii) above during the calendar
year, by increasing the amount of the monthly fee under the Agreement
next payable in an amount equal to prior payments and fee reductions
made by JHFSI during such calendar year, but not exceeding the sum of
that month's credit and credits arising in prior months during such
calendar year to the extent such prior credits have not previously been
utilized as contemplated by this paragraph. Any portion of a credit to
JHFSI not so used by it shall remain as a credit to be used as payment
against the amount of any future negative cumulative net effects that
would otherwise require a cash payment or fee reduction to be made to
the Fund pursuant to paragraphs (ii) or (iii) above (regardless of
whether or not the credit or any portion thereof arose in the same
calendar year as that in which the negative cumulative net effects or
any portion thereof arose).
(v) JHFSI Shall supply to the Fund from time to time, as
mutually agreed upon, reports summarizing the transactions identified
pursuant to paragraph (i) above, and the daily and cumulative net
effects of such transactions, and shall advise the Fund at the end of
each month of the net cumulative effect at such time. JHFSI shall
promptly advise the Fund if at any time the cumulative net effect
exceeds a dollar amount equivalent to 1/2 of I cent per share.
(vi) In the event that this Agreement is terminated for
whatever cause, or this provision 1.02 (d) is terminated pursuant to
paragraph (vii) below, the Fund shall promptly pay to JHFSI an amount in
cash equal to the amount by which the cumulative net effect upon the
Fund is positive or, if the cumulative net effect upon the Fund is
negative, JHFSI shall promptly pay to the Fund an amount in cash equal
to the amount of such cumulative net effect.
(vii) This provision 1.02 (d) of the Agreement may be
terminated by JHFSI at any time without cause, effective as of the close
of business on the date written notice (which may be by telex) is
received by the Fund.
-6-
<PAGE> 7
Procedures applicable to certain of these services may be established
from time to time by agreement between the Fund and JHFSI.
Article 2 Fees and Expenses
2.01 For performance by JHFSI pursuant to this Agreement, the Fund
agrees to pay JHFSI an annual maintenance fee for each Shareholder account as
set out in the initial fee schedule attached hereto. Such fees and
out-of-pocket expenses and advances identified under Section 2.02 below may be
changed from time to time subject to mutual written agreement between the Fund
and JHFSI.
2.02 In addition to the fee paid under Section 2.01 above. the Fund
agrees to reimburse JHFSI for out-of-pocket expenses or advances incurred by
JHFSI for the items set out in the fee schedule attached hereto. In addition,
any other expenses incurred by JHFSI at the request or with the consent of the
Fund, will be reimbursed by the Fund.
2.03 The Fund agrees to pay all fees and reimbursable expenses
promptly following the mailing of the respective billing notice. Postage for
mailing of dividends, proxies, Fund reports and other mailings to all
shareholder accounts shall be advanced to JHFSI by the Fund at least seven (7)
days prior to the mailing date of such materials.
Article 3 Representations and Warranties of JHFSI
JHFSI represents and warrants to the Fund that:
3.01 It is a Delaware corporation duly organized and existing and in
good standing under the laws of the State of Delaware, and as a Foreign
Corporation under the Laws of the Commonwealth of Massachusetts.
3.02 It is duly qualified to carry on its business in the
Commonwealth of Massachusetts.
-7-
<PAGE> 8
3.03 It is empowered under applicable laws and by its charter and
By-Laws to enter into and perform this Agreement.
3.04 All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement.
3.05 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.
Article 4 Representations and Warranties of the Fund
The Fund represents and warrants to JHFSI that:
4.01 It is a corporation duly organized and existing and in good
standing under the laws of the state of Maryland.
4.02 It is empowered under applicable laws and by its charter and
By-Laws to enter into and perform this Agreement.
4.03 All corporate proceedings required by said charter and By-Laws
have been taken to authorize it to enter into and perform this Agreement.
4.04 It is an open-end and diversified investment company registered
under the Investment Company Act of 1940.
4.05 A registration statement under the Securities Act of 1933 is
currently effective and will remain effective, and appropriate state securities
law filings have been made and will continue to be made, with respect to all
Shares of the Fund being offered for sale.
Article 5 Indemnification
5.01 JHFSI shall not be responsible for, and the Fund shall indemnify
and hold JHFSI harmless from and against, any and all losses, damages, costs,
charges, counsel fees, payments, expenses and liabilities arising out of or
attributable to:
-8-
<PAGE> 9
(a) All actions of JHFSI or its agent or subcontractors required to
be taken pursuant to this Agreement, provided that such actions are taken in
good faith and without negligence or willful misconduct.
(b) The Fund's refusal or failure to comply with the terms of this
Agreement, or which arise out of the Fund's lack of good faith, negligence or
willful misconduct or which arise out of the breach of any representation or
warranty of the Fund hereunder.
(c) The reliance on or use by JHFSI or its agents or subcontractors
of information, records and documents which (i) are received by JHFSI or its
agents or subcontractors and furnished to it by or on behalf of the Fund, and
(ii) have been prepared and/or maintained by the Fund or any other person or
firm on behalf of the Fund.
(d) The reliance on, or the carrying out by JHFSI or its agents or
subcontractors of any instructions or requests of the Fund.
(e) The offer or sale of Shares in violation of any requirement
under the federal securities laws or regulations or the securities laws or
regulations of any state that such Shares be registered in such state or in
violation of any stop order or other determination or ruling by any federal
agency or any state with respect to the offer or sale of such Shares in such
state.
5.02 JHFSI shall indemnify and hold the Fund harmless from and
against any and all losses, damages, costs, charges, counsel fees, payments,
expenses and liabilities arising out of or attributed to any action or failure
or omission to act by JHFSI as a result of JHFSI's lack of good faith,
negligence or willful misconduct.
5.03 At any time JHFSI may apply to any officer of the Fund for
instructions, and may consult with legal counsel with respect to any matter
arising in connection with the services to be performed by JHFSI under this
Agreement, and JHFSI and its agents or subcontractors shall not be liable and
shall be lndemnified by the Fund for any action taken or omitted by it in
reliance upon such instructions or upon the opinion of such counsel. JHFSI, its
agents and subcontractors shall be protected and indemnified in acting upon any
paper or
-9-
<PAGE> 10
document furnished by or on behalf of the Fund, reasonably believed to be
genuine and to have been signed by the proper person or persons, or upon any
instruction, information, data, records or documents provided JHFSI or its
agents or subcontractors by machine readable input, telex, CRT data entry or
other similar means authorized by the Fund, and shall not be held to have
notice of any change of authority of any person, until receipt of written
notice thereof from the Fund. JHFSI, its agents and subcontractors shall also
be protected and indemnified in recognizing stock certificates which are
reasonably believed to bear the proper manual or facsimile signatures of the
officer of the Fund, and the proper countersignature of any former transfer
agent or registrar, or of a co-transfer agent or co-registrar.
5.04 In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable for damages to
the other for any damages resulting from such failure to perform or otherwise
from such causes.
5.05 Neither party to this Agreement shall be liable to the other
party for consequential damages under any provision of this Agreement or for
any act or failure to act hereunder.
5.06 In order that the indemnification provisions contained in this
Article 5 shall apply, upon the assertion of a claim for which either party may
be required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The
party who may be required to indemnify shall have the option to participate
with the party seeking indemnification in the defense of such claim. The party
seeking indemnification shall in no case confess any claim or make any
compromise in any case in which the other party may be required to indemnify it
except with the other party's prior written consent.
Article 6 Covenants of the Fund and JHFSI
6.01 The Fund shall promptly furnish to JHFSI the following:
-10-
<PAGE> 11
(a) A certified copy of the resolution of the Board of Directors
authorizing both the appointment of JHFSI and the execution and delivery of
this Agreement.
(b) A copy of the Articles of Incorporation and By-Laws of the Fund
and all amendments thereto.
6.02 JHFSI hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Fund for safekeeping of stock
certificates, check forms and facsimile signature imprinting devices, if any;
and for the preparation or use, and for keeping account of, such certificates,
forms and devices.
6.03 JHFSI shall keep records relating to the services to be
performed hereunder, in the form and manner as it may deem advisable. To the
extent required by Section 31 of the Investment Company Act of 1940, as
amended, and the Rules thereunder, JHFSI agrees that all such records prepared
or maintained by JHFSI relating to the services to be performed by JHFSI
hereunder are the property of the Fund and will be preserved, maintained and
made available in accordance with such Section and Rules, and will be
surrendered to the Fund on and in accordance with its request.
6.04 JHFSI and the Fund agree that all books, records, information
and data pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this Agreement
shall remain confidential, and shall not be voluntarily disclosed to any other
person, except as may be required by law.
6.05 In case of any requests or demands for the inspection of the
Shareholder records of the Fund, JHFSI will endeavor to notify the Fund and to
secure instructions from an authorized officer of the Fund as to such
instruction. JHFSI reserves the right, however, to exhibit the Shareholder
records to any person whenever it is advised by its counsel that it may be held
liable for the failure to exhibit the Shareholder records to such person.
Article 7 Termination of Agreement
-11-
<PAGE> 12
7.01 This Agreement may be terminated by either party upon one
hundred twenty (120) days written notice to the other.
7.02 Should the Fund exercise its right to terminate, all
out-of-pocket expenses associated with the movement of records and material
will be borne by the Fund. Additionally, JHFSI reserves the right to charge
for any other reasonable expenses associated with such termination.
Article 8 Additional Funds
8.01 In the event that the Fund establishes one or more of series of
Shares in addition to the National Aviation & Technology Fund and the John
Hancock Global Technology Fund with respect to which it desires to have JHFSI
render services as a transfer agent under the terms hereof, it shall so notify
JHFSI in writing, and if JHFSI agrees in writing to provide such services, such
series of Shares shall become a Fund hereunder.
Article 9 Assignment
9.01 Except as provided in Section 9.03 below, neither this Agreement
nor any rights or obligations hereunder may be assigned by either party without
the written consent of the other party.
9.02 This Agreement shall inure to the benefit of and be binding upon
the parties and their respective permitted successors and assigns.
9.03 JHFSI may, without further consent on the part of the Fund,
subcontract for the performance hereof with (i) Boston Financial Data Services,
Inc., a Massachusetts corporation ("BFDS") which is duly registered as a
transfer agent pursuant to Section 17A (c)(1) of the Securities Exchange Act of
1934 ("Section 17A (c)(1)"), (ii) 440 Financial Group, (iii) or any other
entity JHFSI deems appropriate in order to comply with the terms and conditions
of this Agreement, provided, however, that JHFSI shall be as fully responsible
to the Fund for the acts and omissions of any subcontractor as it is for its
own acts and omissions.
-12-
<PAGE> 13
Article 10 Amendment
10.01 This Agreement may be amended or modified by a written agreement
executed by both parties and authorized or approved by a resolution of the
Board of Directors of the Fund.
Article 11 Massachusetts Law to Apply
11.01 This Agreement shall be construed and the provisions thereof
interpreted under and In accordance with the laws of The Commonwealth of
Massachusetts.
Article 12 Merger of Agreement
12.01 This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
hereof whether oral or written.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf under their seals by and through
their duly authorized officers, as of the day and year first above written.
ATTEST: JOHN HANCOCK TECHNOLOGY SERIES, INC.
BY: /s/ Edward J. Boudreau, Jr.
---------------------------
ATTEST: JOHN HANCOCK FUND SERVICES, INC.
BY: /s/ David A. King
-----------------
-13-
<PAGE> 1
EXHIBIT 99.B10
[LETTERHEAD]
April 24, 1995
John Hancock Technology Series, Inc.
101 Huntington Avenue
Boston, MA 02199
RE: John Hancock Technology Series, Inc. (the "Fund")
(File Nos. 2-75807; 811-3392) (0000357238)
Ladies and Gentlemen:
In connection with the filing of Post-Effective Amendment No. 27 pursuant to
Rule 24e-2 under the Investment Company Act of 1940, as amended, registering by
Post-Effective Amendment No. 24 under the Securities Act of 1933, as amended,
13,809 shares of the Fund sold in reliance upon Rule 24e-2 during the fiscal
year ending December 31, 1994, it is the opinion of the undersigned that such
shares will be legally issued, fully paid and nonassessable.
Sincerely,
/s/ AVERY P. MAHER
Avery P. Maher
Assistant Secretary
Member of Massachusetts Bar
<PAGE> 1
EXHIBIT 99B.11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statements of Additional Information
constituting part of this Post Effective Amendment No. 24 to the registration
statement on Form N-1A (the "Registration Statement") of our reports dated
February 16, 1995, relating to the financial statement and financial highlights
appearing in the December 31, 1994 Annual Reports to Shareholders of John
Hancock Global Technology Fund and John Hancock National Aviation & Technology
Fund, which appear in such Statements of Additional Information and to the
incorporation by reference of our reports into the Prospectuses which
constitute part of this Registration Statement. We further consent to the
references to us under the headings "Independent Auditors" in the Statements of
Additional Information and "The Fund's Financial Highlights" in the
Prospectuses.
PRICE WATERHOUSE LLP
Boston, Massachusetts
April 21, 1995
<PAGE> 1
EXHIBIT 99B11.1
INDEPENDENT AUDITORS' CONSENT
-----------------------------
To the Shareholders and Board of Directors
John Hancock Technology Series, Inc.:
We consent to the references to our Firm under the headings "Financial
Highlights" in the Prospectuses with respect to the Funds listed below of John
Hancock Technology Series, Inc.
FUNDS
- -----
Global Technology Fund
National Aviation & Technology Fund
/s/ KPMG Peat Marwick LLP
-------------------------
KPMG Peat Marwick LLP
New York, New York
April 21,1995
<PAGE> 1
EXHIBIT 99.B15
JOHN HANCOCK TECHNOLOGY SERIES, INC.
JOHN HANCOCK FREEDOM GLOBAL TECHNOLOGY FUND
Distribution Plan
Class A Shares
January 1, 1994
Article I. This Plan
This amended and restated Distribution Plan (the "Plan") sets forth
the terms and conditions on which John Hancock Technology Series, Inc. (the
"Company"), on behalf of John Hancock Freedom Global Technology Fund (the
"Fund"), on behalf of its Class A shares, will, after the effective date
hereof, pay certain amounts to John Hancock Broker Distribution Services, Inc.
("Broker Services") in connection with the provision by Broker Services of
certain services to the Fund and its Class A shareholders, as set forth herein.
Certain of such payments by the Fund may, under Rule 12b-1 of the Securities
and Exchange Commission, as from time to time amended (the "Rule"), under the
Investment Company Act of 1940, as amended (the "Act"), be deemed to constitute
the financing of distribution by the Fund of its shares. This Plan describes
all material aspects of such financing as contemplated by the Rule and shall be
administered and interpreted, and implemented and continued, in a manner
consistent with the Rule. The Fund and Broker Services heretofore entered into
a Distribution Agreement, dated December 6, 1991, as amended, (the
"Agreement"), the terms of which, as heretofore and from time to time
continued, are incorporated herein by reference.
Article II. Distribution and Service Expenses
The Fund shall pay to Broker Services a fee in the amount specified in
Article III hereof. Such fee may be spent by Broker Services on any activities
or expenses primarily intended to result in the sale of Class A shares of the
Fund, including, but not limited to the payment of Distribution Expenses (as
defined below) and Service Expenses (as defined below). Distribution Expenses
include but are not limited to, (a) initial and ongoing sales compensation out
of such fee as it is received by Broker Services or other broker-dealers
("Selling Brokers") that have entered into an agreement with Broker Services
for the sale of Class A shares of the Fund, (b) direct out-of-pocket expenses
incurred in connection with the distribution of Class A shares of the Fund,
including expenses related to printing of prospectuses and reports to other
than existing Class A shareholders of the Fund, and preparation, printing and
distribution of sales literature and advertising materials, and (c) an
allocation of overhead and other branch office expenses of Broker Services
related to the distribution of Class A shares of the Fund.
Service Expenses include payments made to, or on account of, account
executives of selected broker-dealers (including affiliates of Broker Services)
and others who furnish
<PAGE> 2
personal and shareholder account maintenance services to Class A shareholders
of the Fund.
Article III. Maximum Expenditures
The expenditures to be made by the Fund pursuant to this Plan, and the
basis upon which such expenditures will be made, shall be determined by the
Fund, and in no event shall such expenditures exceed an annual rate of 0.30% of
the average daily net asset value of the Class A shares of the Fund (determined
in accordance with the Fund's prospectus as from time to time in effect) to
cover Distribution Expenses and Service Expenses, provided that the portion of
such fee used to cover service expenses shall not exceed an annual rate of up
to 0.25% of the average daily net asset value of the Class A shares of the
Fund. Such expenditures shall be calculated and accrued daily and paid monthly
or at such other intervals as the Directors shall determine. In the event
Broker Services is not fully reimbursed for payments made or other expenses
incurred by it under this Plan, such expenses will not be carried beyond one
year from the date such expenses were incurred. Any fees paid to Broker
Services under this Plan during any fiscal year of the Fund and not expended or
allocated by Broker Services for actual or budgeted Distribution Expenses and
Service Expenses during such fiscal year will be promptly returned to the Fund.
Article IV. Expenses Borne by the Fund
Notwithstanding any other provision of this Plan, the Company, the
Fund and its investment adviser, John Hancock Advisers, Inc. (the "Adviser"),
shall bear the respective expenses to be borne by them under the Investment
Management Contract dated December 6, 1991, as from time to time continued and
amended (the "Management Contract"), and under the Fund's current prospectus as
it is from time to time in effect. Except as otherwise contemplated by this
Plan, the Company and the Fund shall not, directly or indirectly, engage in
financing any activity which is primarily intended to or should reasonably
result in the sale of shares of the Fund.
Article V. Approval by Directors, etc.
This Plan shall not take effect until it has been approved, together
with any related agreements, by votes, cast in person at a meeting called for
the purpose of voting on this Plan or such agreements, of a majority (or
whatever greater percentage may, from time to time, be required by Section
12(b) of the Act or the rules and regulations thereunder) of (a) all of the
Directors of the Company and (b) those Directors of the company who are not
"interested persons" of the Fund, as such term may be from time to time defined
under the Act, and have no direct or indirect financial interest in the
operation of this Plan or any agreements related to it (the "Independent
Directors").
Article VI. Continuance
<PAGE> 3
This Plan and any related agreements shall continue in effect for so
long as such continuance is specifically approved at least annually in advance
in the manner provided for the approval of this Plan in Article V.
Article VII. Information
Broker Services shall furnish the Fund and its Directors quarterly, or
at such other intervals as the Fund shall specify, a written report of amounts
expended or incurred for Distribution Expenses and Service Expenses pursuant to
this Plan and the purposes for which such expenditures were made and such other
information as the Directors may request.
Articles VIII. Termination
This Plan may be terminated (a) at any time by vote of a majority of
the Directors, a majority of the Independent Directors, or a majority of the
Fund's outstanding voting Class A shares, or (b) by Broker Services on 60 days'
notice in writing to the Fund.
Articles IX. Agreements
Each agreement with any person relating to implementation of this Plan
shall be in writing, and each agreement related to this Plan shall provide:
(a) That, with respect to the Fund, such agreement may be terminated
at any time, without payment of any penalty, by vote of a majority of
the Independent Directors or by vote of a majority of the Fund's then
outstanding voting Class A shares.
(b) That such agreement shall terminate automatically in the event of
its assignment.
Article X. Amendments
This Plan may not be amended to increase the maximum amount of the
fees payable by the Fund hereunder without the approval of a majority of the
outstanding voting Class A shares of the Fund. No material amendment to the
Plan shall, in any event, be effective unless it is approved in the same manner
as is provided for approval of this Plan in Article V.
IN WITNESS WHEREOF, the Company, on behalf of the Fund, has executed
this Distribution Plan effective as of the 1st day of January ,1994 in Boston,
Massachusetts.
<PAGE> 4
JOHN HANCOCK TECHNOLOGY SERIES, INC.
on behalf of
JOHN HANCOCK FREEDOM GLOBAL TECHNOLOGY FUND
By /s/ Thomas H. Drohan
--------------------
JOHN HANCOCK BROKER DISTRIBUTION SERVICE, INC.
By /s/ John A. Morin
-----------------
Vice President
<PAGE> 1
EXHIBIT 99.B15.1
JOHN HANCOCK TECHNOLOGY SERIES, INC.
JOHN HANCOCK FREEDOM GLOBAL TECHNOLOGY FUND
Distribution Plan
Class B Shares
January 1, 1994
ARTICLE I. THIS PLAN
This Distribution Plan (the "Plan") sets forth the terms and
conditions on which John Hancock Technology Series, Inc. (the "Company"), on
behalf of John Hancock Freedom Global Technology Fund (the "Fund"), on behalf
of its Class B shares, will, after the effective date hereof, pay certain
amounts to John Hancock Broker Distribution Services, Inc. ("Broker Services")
in connection with the provision by Broker Services of certain services to the
Fund and its Class B shareholders, as set forth herein. Certain of such
payments by the Fund may, under Rule 12b-1 of the Securities and Exchange
Commission, as from time to time amended (the "Rule"), under the Investment
Company Act of 1940, as amended (the "Act"), be deemed to constitute the
financing of distribution by the Fund of its shares. This Plan describes all
material aspects of such financing as contemplated by the Rule and shall be
administered and interpreted, and implemented and continued, in a manner
consistent with the Rule. The Fund and Broker Services heretofore entered into
a Distribution Agreement, dated December 6, 1991, as amended, (the
"Agreement"), the terms of which, as heretofore and from time to time
continued, are incorporated herein by reference.
ARTICLE II. DISTRIBUTION AND SERVICE EXPENSES
The Fund shall pay to Broker Services a fee in the amount specified in
Article III hereof. Such fee may be spent by Broker Services on any activities
or expenses primarily intended to result in the sale of Class B shares of the
Fund, including, but not limited to the payment of Distribution Expenses (as
defined below) and Service Expenses (as defined below). Distribution Expenses
include but are not limited to, (a) initial and ongoing sales compensation out
of such fee as it is received by Broker Services or other broker-dealers
("Selling Brokers") that have entered into an agreement with Broker Services
for the sale of Class B shares of the Fund, (b) direct out-of-pocket expenses
incurred in connection with the distribution of Class B shares of the Fund,
including expenses related to printing of prospectuses and reports to other
than existing Class B shareholders of the Fund, and preparation, printing and
distribution of sales literature and advertising materials, (c) an allocation
of overhead and other branch office expenses of Broker Services related to the
distribution of Class B shares of the Fund and (d) interest expenses on
unreimbursed distribution expenses related to Class B shares as described in
Article III hereof.
<PAGE> 2
Service Expenses include payments made to, or on account of, account
executives of selected broker-dealers (including affiliates of Broker Services)
and others who furnish personal and shareholder account maintenance services to
Class B shareholders of the Fund.
ARTICLE III. MAXIMUM EXPENDITURES
The expenditures to be made by the Fund pursuant to this Plan, and the
basis upon which such expenditures will be made, shall be determined by the
Fund, and in no event shall such expenditures exceed an annual rate of 1.00% of
the average daily net asset value of the Class B shares of the Fund (determined
in accordance with the Fund's prospectus as from time to time in effect) to
cover Distribution Expenses and Service Expenses, provided that the portion of
such fee used to cover service expenses shall not exceed an annual rate of up
to 0.25% of the average daily net asset value of the Class B shares of the
Fund. Such expenditures shall be calculated and accrued daily and paid monthly
or at such other intervals as the Directors shall determine. In the event
Broker Services is not fully reimbursed for payments made or other expenses
incurred by it under this Plan, Broker Services shall be entitled to carry
forward such expenses to subsequent fiscal years for submission to the Class B
shares of the Fund for payment, subject always to the annual maximum
expenditures set forth in this Article III; provided, however, that nothing
herein shall prohibit or limit the Directors from terminating this Plan and all
payments hereunder at any time pursuant to Article VIII hereof.
ARTICLE IV. EXPENSES BORNE BY THE FUND
Notwithstanding any other provision of this Plan, the Company, the
Fund and its investment adviser, John Hancock Advisers, Inc. (the "Adviser"),
shall bear the respective expenses to be borne by them under the Investment
Management Contract dated December 6, 1991, as from time to time continued and
amended (the "Management Contract"), and under the Fund's current prospectus as
it is from time to time in effect. Except as otherwise contemplated by this
Plan, the Company and the Fund shall not, directly or indirectly, engage in
financing any activity which is primarily intended to or should reasonably
result in the sale of shares of the Fund.
ARTICLE V. APPROVAL BY DIRECTORS, ETC.
This Plan shall not take effect until it has been approved, together
with any related agreements, by votes, cast in person at a meeting called for
the purpose of voting on this Plan or such agreements, of a majority (or
whatever greater percentage may, from time to time, be required by Section
12(b) of the Act or the rules and regulations thereunder) of (a) all of the
Directors of the Company and (b) those Directors of the Company who are not
"interested persons" of the Fund, as such term may be from time to time defined
under the Act, and have no direct or indirect financial interest in the
operation of this Plan or any agreements related to it (the "Independent
Directors").
ARTICLE VI. CONTINUANCE
<PAGE> 3
This Plan and any related agreements shall continue in effect for so
long as such continuance is specifically approved at least annually in advance
in the manner provided for the approval of this Plan in Article V.
ARTICLE VII. INFORMATION
Broker Services shall furnish the Fund and its Directors quarterly, or
at such other intervals as the Fund shall specify, a written report of amounts
expended or incurred for Distribution Expenses and Service Expenses pursuant to
this Plan and the purposes for which such expenditures were made and such other
information as the Directors may request.
ARTICLE VIII. TERMINATION
This Plan may be terminated (a) at any time by vote of a majority of
the Directors, a majority of the Independent Directors, or a majority of the
Fund's outstanding voting Class B shares, or (b) by Broker Services on 60 days'
notice in writing to the Fund.
ARTICLE IX. AGREEMENTS
Each agreement with any person relating to implementation of this Plan
shall be in writing, and each agreement related to this Plan shall provide:
(a) That, with respect to the Fund, such agreement may be
terminated at any time, without payment of any penalty, by
vote of a majority of the Independent Directors or by vote of
a majority of the Fund's then outstanding voting Class B
shares.
(b) That such agreement shall terminate automatically in the event
of its assignment.
ARTICLE X. AMENDMENTS
This Plan may not be amended to increase the maximum amount of the
fees payable by the Fund hereunder without the approval of a majority of the
outstanding voting Class B shares of the Fund. No material amendment to the
Plan shall, in any event, be effective unless it is approved in the same manner
as is provided for approval of this Plan in Article V.
IN WITNESS WHEREOF, the Company, on behalf of the Fund, has executed
this Distribution Plan effective as of the 1st day of January, 1994 in Boston,
Massachusetts.
JOHN HANCOCK TECHNOLOGY SERIES, INC.
on behalf of
JOHN HANCOCK FREEDOM GLOBAL TECHNOLOGY FUND
<PAGE> 4
By /s/ Thomas H. Drohan
--------------------
JOHN HANCOCK BROKER DISTRIBUTION SERVICES, INC.
By /s/ John A. Morin
-----------------
Vice President
<PAGE> 1
EXHIBIT 99.B15.2
JOHN HANCOCK TECHNOLOGY SERIES, INC.
JOHN HANCOCK FREEDOM NATIONAL AVIATION & TECHNOLOGY FUND
Distribution Plan
Class A Shares
January 1, 1994
Article I. This Plan
This amended and restated Distribution Plan (the "Plan") sets forth
the terms and conditions on which John Hancock Technology Series, Inc. (the
"Company"), on behalf of John Hancock Freedom National Aviation & Technology
Fund (the "Fund"), on behalf of its Class A shares, will, after the effective
date hereof, pay certain amounts to John Hancock Broker Distribution Services,
Inc. ("Broker Services") in connection with the provision by Broker Services of
certain services to the Fund and its Class A shareholders, as set forth herein.
Certain of such payments by the Fund may, under Rule 12b-1 of the Securities and
Exchange Commission, as from time to time amended (the "Rule"), under the
Investment Company Act of 1940, as amended (the "Act"), be deemed to constitute
the financing of distribution by the Fund of its shares. This Plan describes
all material aspects of such financing as contemplated by the Rule and shall be
administered and interpreted, and implemented and continued, in a manner
consistent with the Rule. The Fund and Broker Services heretofore entered into
a Distribution Agreement, dated December 6, 1991, as amended, (the "Agreement"),
the terms of which, as heretofore and from time to time continued, are
incorporated herein by reference.
Article II. Distribution and Service Expenses
The Fund shall pay to Broker Services a fee in the amount specified in
Article III hereof. Such fee may be spent by Broker Services on any activities
or expenses primarily intended to result in the sale of Class A shares of the
Fund, including, but not limited to the payment of Distribution Expenses (as
defined below) and Service Expenses (as defined below). Distribution Expenses
include but are not limited to, (a) initial and ongoing sales compensation out
of such fee as it is received by Broker Services or other broker-dealers
("Selling Brokers") that have entered into an agreement with Broker Services
for the sale of Class A shares of the Fund, (b) direct out-of-pocket expenses
incurred in connection with the distribution of Class A shares of the Fund,
including expenses related to printing of prospectuses and reports to other
than existing Class A shareholders of the Fund, and preparation, printing and
distribution of sales literature and advertising materials, and (c) an
allocation of overhead and other branch office expenses of Broker Services
related to the distribution of Class A shares of the Fund.
Service Expenses include payments made to, or on account of, account
executives of selected broker-dealers (including affiliates of Broker Services)
and others who furnish
<PAGE> 2
personal and shareholder account maintenance services to Class A shareholders
of the Fund.
Article III. Maximum Expenditures
The expenditures to be made by the Fund pursuant to this Plan, and the
basis upon which such expenditures will be made, shall be determined by the
Fund, and in no event shall such expenditures exceed an annual rate of 0.30% of
the average daily net asset value of the Class A shares of the Fund (determined
in accordance with the Fund's prospectus as from time to time in effect) to
cover Distribution Expenses and Service Expenses, provided that the portion of
such fee used to cover service expenses shall not exceed an annual rate of up
to 0.25% of the average daily net asset value of the Class A shares of the
Fund. Such expenditures shall be calculated and accrued daily and paid monthly
or at such other intervals as the Directors shall determine. In the event
Broker Services is not fully reimbursed for payments made or other expenses
incurred by it under this Plan, such expenses will not be carried beyond one
year from the date such expenses were incurred. Any fees paid to Broker
Services under this Plan during any fiscal year of the Fund and not expended or
allocated by Broker Services for actual or budgeted Distribution Expenses and
Service Expenses during such fiscal year will be promptly returned to the Fund.
Article IV. Expenses Borne by the Fund
Notwithstanding any other provision of this Plan, the Company, the
Fund and its investment adviser, John Hancock Advisers, Inc. (the "Adviser"),
shall bear the respective expenses to be borne by them under the Investment
Management Contract dated December 6, 1991, as from time to time continued and
amended (the "Management Contract"), and under the Fund's current prospectus as
it is from time to time in effect. Except as otherwise contemplated by this
Plan, the Company and the Fund shall not, directly or indirectly, engage in
financing any activity which is primarily intended to or should reasonably
result in the sale of shares of the Fund.
Article V. Approval by Directors, etc.
This Plan shall not take effect until it has been approved, together
with any related agreements, by votes, cast in person at a meeting called for
the purpose of voting on this Plan or such agreements, of a majority (or
whatever greater percentage may, from time to time, be required by Section
12(b) of the Act or the rules and regulations thereunder) of (a) all of the
Directors of the Company and (b) those Directors of the company who are not
"interested persons" of the Fund, as such term may be from time to time defined
under the Act, and have no direct or indirect financial interest in the
operation of this Plan or any agreements related to it (the "Independent
Directors").
Article VI. Continuance
<PAGE> 3
This Plan and any related agreements shall continue in effect for so
long as such continuance is specifically approved at least annually in advance
in the manner provided for the approval of this Plan in Article V.
Article VII. Information
Broker Services shall furnish the Fund and its Directors quarterly, or
at such other intervals as the Fund shall specify, a written report of amounts
expended or incurred for Distribution Expenses and Service Expenses pursuant to
this Plan and the purposes for which such expenditures were made and such other
information as the Directors may request.
Articles VIII. Termination
This Plan may be terminated (a) at any time by vote of a majority of
the Directors, a majority of the Independent Directors, or a majority of the
Fund's outstanding voting Class A shares, or (b) by Broker Services on 60 days'
notice in writing to the Fund.
Articles IX. Agreements
Each agreement with any person relating to implementation of this Plan
shall be in writing, and each agreement related to this Plan shall provide:
(a) That, with respect to the Fund, such agreement may be terminated at
any time, without payment of any penalty, by vote of a majority of the
Independent Directors or by vote of a majority of the Fund's then
outstanding voting Class A shares.
(b) That such agreement shall terminate automatically in the event of
its assignment.
Article X. Amendments
This Plan may not be amended to increase the maximum amount of the
fees payable by the Fund hereunder without the approval of a majority of the
outstanding voting Class A shares of the Fund. No material amendment to the
Plan shall, in any event, be effective unless it is approved in the same manner
as is provided for approval of this Plan in Article V.
IN WITNESS WHEREOF, the Company, on behalf of the Fund, has executed
this Distribution Plan effective as of the 1st day of January ,1994 in Boston,
Massachusetts.
<PAGE> 4
JOHN HANCOCK TECHNOLOGY SERIES, INC.
on behalf of
JOHN HANCOCK FREEDOM NATIONAL AVIATION &
TECHNOLOGY FUND
By /s/ Thomas H. Drohan
--------------------
JOHN HANCOCK BROKER DISTRIBUTION SERVICE, INC.
By /s/ John A. Morin
-----------------
Vice President
<PAGE> 1
EXHIBIT 99.B15.3
JOHN HANCOCK TECHNOLOGY SERIES, INC.
JOHN HANCOCK FREEDOM NATIONAL AVIATION & TECHNOLOGY FUND
Distribution Plan
Class B Shares
January 1, 1994
ARTICLE I. THIS PLAN
This Distribution Plan (the "Plan") sets forth the terms and
conditions on which John Hancock Technology Series, Inc. (the "Company"), on
behalf of John Hancock Freedom National Aviation & Technology Fund (the
"Fund"), on behalf of its Class B shares, will, after the effective date
hereof, pay certain amounts to John Hancock Broker Distribution Services, Inc.
("Broker Services") in connection with the provision by Broker Services of
certain services to the Fund and its Class B shareholders, as set forth herein.
Certain of such payments by the Fund may, under Rule 12b-1 of the Securities
and Exchange Commission, as from time to time amended (the "Rule"), under the
Investment Company Act of 1940, as amended (the "Act"), be deemed to constitute
the financing of distribution by the Fund of its shares. This Plan describes
all material aspects of such financing as contemplated by the Rule and shall be
administered and interpreted, and implemented and continued, in a manner
consistent with the Rule. The Fund and Broker Services heretofore entered into
a Distribution Agreement, dated December 6, 1991, as amended, (the
"Agreement"), the terms of which, as heretofore and from time to time
continued, are incorporated herein by reference.
ARTICLE II. DISTRIBUTION AND SERVICE EXPENSES
The Fund shall pay to Broker Services a fee in the amount specified in
Article III hereof. Such fee may be spent by Broker Services on any activities
or expenses primarily intended to result in the sale of Class B shares of the
Fund, including, but not limited to the payment of Distribution Expenses (as
defined below) and Service Expenses (as defined below). Distribution Expenses
include but are not limited to, (a) initial and ongoing sales compensation out
of such fee as it is received by Broker Services or other broker-dealers
("Selling Brokers") that have entered into an agreement with Broker Services
for the sale of Class B shares of the Fund, (b) direct out-of-pocket expenses
incurred in connection with the distribution of Class B shares of the Fund,
including expenses related to printing of prospectuses and reports to other
than existing Class B shareholders of the Fund, and preparation, printing and
distribution of sales literature and advertising materials, (c) an allocation
of overhead and other branch office expenses of Broker Services related to the
distribution of Class B shares of the Fund and (d) interest expenses on
unreimbursed distribution expenses related to Class B shares as described in
Article III hereof.
<PAGE> 2
Service Expenses include payments made to, or on account of, account
executives of selected broker-dealers (including affiliates of Broker Services)
and others who furnish personal and shareholder account maintenance services to
Class B shareholders of the Fund.
ARTICLE III. MAXIMUM EXPENDITURES
The expenditures to be made by the Fund pursuant to this Plan, and the
basis upon which such expenditures will be made, shall be determined by the
Fund, and in no event shall such expenditures exceed an annual rate of 1.00% of
the average daily net asset value of the Class B shares of the Fund (determined
in accordance with the Fund's prospectus as from time to time in effect) to
cover Distribution Expenses and Service Expenses, provided that the portion of
such fee used to cover service expenses shall not exceed an annual rate of up
to 0.25% of the average daily net asset value of the Class B shares of the
Fund. Such expenditures shall be calculated and accrued daily and paid monthly
or at such other intervals as the Directors shall determine. In the event
Broker Services is not fully reimbursed for payments made or other expenses
incurred by it under this Plan, Broker Services shall be entitled to carry
forward such expenses to subsequent fiscal years for submission to the Class B
shares of the Fund for payment, subject always to the annual maximum
expenditures set forth in this Article III; provided, however, that nothing
herein shall prohibit or limit the Directors from terminating this Plan and all
payments hereunder at any time pursuant to Article VIII hereof.
ARTICLE IV. EXPENSES BORNE BY THE FUND
Notwithstanding any other provision of this Plan, the Trust, the Fund
and its investment adviser, John Hancock Advisers, Inc. (the "Adviser"), shall
bear the respective expenses to be borne by them under the Investment
Management Contract dated December 6, 1991, as from time to time continued and
amended (the "Management Contract"), and under the Fund's current prospectus as
it is from time to time in effect. Except as otherwise contemplated by this
Plan, the Company and the Fund shall not, directly or indirectly, engage in
financing any activity which is primarily intended to or should reasonably
result in the sale of Class B shares of the Fund.
ARTICLE V. APPROVAL BY DIRECTORS, ETC.
This Plan shall not take effect until it has been approved, together
with any related agreements, by votes, cast in person at a meeting called for
the purpose of voting on this Plan or such agreements, of a majority (or
whatever greater percentage may, from time to time, be required by Section
12(b) of the Act or the rules and regulations thereunder) of (a) all of the
Directors of the Company and (b) those Directors of the Company who are not
"interested persons" of the Fund, as such term may be from time to time defined
under the Act, and have no direct or indirect financial interest in the
operation of this Plan or any agreements related to it (the "Independent
Directors").
ARTICLE VI. CONTINUANCE
This Plan and any related agreements shall continue in effect for so
long as such
<PAGE> 3
continuance is specifically approved at least annually in advance in the manner
provided for the approval of this Plan in Article V.
ARTICLE VII. INFORMATION
Broker Services shall furnish the Fund and its Directors quarterly, or
at such other intervals as the Fund shall specify, a written report of amounts
expended or incurred for Distribution Expenses and Service Expenses pursuant to
this Plan and the purposes for which such expenditures were made and such other
information as the Directors may request.
ARTICLE VIII. TERMINATION
This Plan may be terminated (a) at any time by vote of a majority of
the Directors, a majority of the Independent Directors, or a majority of the
Fund's outstanding voting Class B shares, or (b) by Broker Services on 60 days'
notice in writing to the Fund.
ARTICLE IX. AGREEMENTS
Each agreement with any person relating to implementation of this Plan
shall be in writing, and each agreement related to this Plan shall provide:
(a) That, with respect to the Fund, such agreement may be
terminated at any time, without payment of any penalty, by
vote of a majority of the Independent Directors or by vote of
a majority of the Fund's then outstanding voting Class B
shares.
(b) That such agreement shall terminate automatically in the event
of its assignment.
ARTICLE X. AMENDMENTS
This Plan may not be amended to increase the maximum amount of the
fees payable by the Fund hereunder without the approval of a majority of the
outstanding voting Class B shares of the Fund. No material amendment to the
Plan shall, in any event, be effective unless it is approved in the same manner
as is provided for approval of this Plan in Article V.
IN WITNESS WHEREOF, the Company, on behalf of the Fund, has executed
this Distribution Plan effective as of the 1st day of January, 1994 in Boston,
Massachusetts.
JOHN HANCOCK TECHNOLOGY SERIES, INC.
on behalf of
JOHN HANCOCK FREEDOM NATIONAL AVIATION &
TECHNOLOGY FUND
<PAGE> 4
By /s/ Thomas H. Drohan
--------------------
JOHN HANCOCK BROKER DISTRIBUTION SERVICES, INC.
By /s/ John A. Morin
-----------------
Vice President
<PAGE> 1
EX-99.B16
JOHN HANCOCK FREEDOM NATIONAL AVIATION TECHNOLOGY FUND -
CLASS A SEC TOTAL RETURN FORMULA
Initial Investment: $1,000.00 CLASS A
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Average Annual Total Return Rate Inv Value at End of Period
<S> <C> <C> <C>
10 Year Return: 8.68% 10 Year Value: $2,298.90
5 Year Return: 1.46% 5 Year Value: $1,075.27
3 Year Return: 0.53% 3 Year Value: $1,015.92
1 Year Return: -18.48% 1 Year Value: $815.20
YTD Return: -18.48% YTD Value: $815.20
- -------------------------------------------------------------------------------
</TABLE>
Constant Sales Charge: 5.00%
<TABLE>
<CAPTION>
10-Year
--------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shs Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. O/S
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Aug/84 $9.00 $9.47 5.00%
Sep/84 $8.97 $9.44 5.00%
Oct/84 $9.08 $9.56 5.00%
Nov/84 $8.76 $9.22 5.00%
Dec/84 $9.21 $9.69 5.00% 103.199
Jan/85 $9.61 $10.12 5.00% 01/17/85 $0.3700 $9.17 $0.2400 Cap Gain $38.1836 4.164 107.363
Feb/85 $9.82 $10.34 5.00% $0.0000 0.000 107.363
Mar/85 $9.53 $10.03 5.00% $0.0000 0.000 107.363
Apr/85 $9.20 $9.68 5.00% $0.0000 0.000 107.833
May/85 $10.31 $10.85 5.00% $0.0000 0.000 107.363
Jun/85 $10.63 $11.19 5.00% $0.0000 0.000 107.363
Jul/85 $10.67 $11.23 5.00% 07/11/85 $0.1200 $10.77 $12.8836 1.196 108.559
Aug/85 $10.72 $11.28 5.00% $0.0000 0.000 108.559
Sep/85 $9.95 $10.47 5.00% $0.0000 0.000 108.559
Oct/85 $10.39 $10.94 5.00% $0.0000 0.000 108.559
Nov/85 $10.57 $11.13 5.00% $0.0000 0.000 108.559
Dec/85 $10.63 $11.19 5.00% $0.0000 0.000 108.559
Jan/86 $10.37 $10.92 5.00% 01/16/86 $0.5400 $10.17 $0.4100 Cap Gain $58.6219 5.764 114.323
Feb/86 $11.32 $11.92 5.00% $0.0000 0.000 114.323
Mar/86 $11.65 $12.26 5.00% $0.0000 0.000 114.323
Apr/86 $11.69 $12.31 5.00% $0.0000 0.000 114.323
May/86 $11.92 $12.55 5.00% $0.0000 0.000 114.323
Jun/86 $11.76 $12.38 5.00% $0.0000 0.000 114.323
Jul/86 $11.15 $11.74 5.00% 07/11/86 $0.1100 $11.23 $12.5755 1.120 115.443
Aug/86 $11.64 $12.25 5.00% $0.0000 0.000 115.443
Sep/86 $11.31 $11.91 5.00% $0.0000 0.000 115.443
Oct/86 $11.90 $12.53 5.00% $0.0000 0.000 115.443
Nov/86 $11.86 $12.48 5.00% $0.0000 0.000 115.443
Dec/86 $11.02 $11.60 5.00% 12/11/86 $0.5200 $11.50 $0.5200 Cap Gain $60.0304 5.220 120.663
Jan/87 $12.18 $12.82 5.00% $0.0000 0.000 120.663
Feb/87 $12.95 $13.63 5.00% 02/12/87 $0.1400 $12.45 $16.8928 1.357 122.020
Mar/87 $12.63 $13.29 5.00% $0.0000 0.000 122.020
Apr/87 $12.44 $13.09 5.00% $0.0000 0.000 122.020
May/87 $12.97 $13.65 5.00% $0.0000 0.000 122.020
Jun/87 $13.05 $13.74 5.00% 06/25/87 $0.2200 $13.21 $0.1500 Cap Gain $26.8444 2.032 124.052
Jul/87 $13.50 $14.21 5.00% $0.0000 0.000 124.052
Aug/87 $13.73 $14.45 5.00% $0.0000 0.000 124.052
Sep/87 $13.03 $13.72 5.00% $0.0000 0.000 124.052
Oct/87 $9.57 $10.07 5.00% $0.0000 0.000 124.052
Nov/87 $8.75 $9.21 5.00% $0.0000 0.000 124.052
Dec/87 $9.40 $9.89 5.00% $0.0000 0.000 124.052
Jan/88 $9.25 $9.74 5.00% 01/04/88 $0.5500 $9.04 $0.5000 Cap Gain $68.2286 7.547 131.599
</TABLE>
<TABLE>
<CAPTION>
5-Year
---------------------------------
Month Dividend # of Shs Shares Plot Points
Ended Received Reinv. O/S for Graph
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
Aug/84 $0.00
Sep/84 $0.00
Oct/84 $0.00
Nov/84 $0.00
Dec/84 $9,504.63
Jan/85 $10,317.58
Feb/85 $10,543.05
Mar/85 $10,231.69
Apr/85 $9,877.40
May/85 $11,069.13
Jun/85 $11,412.69
Jul/85 $11,583.25
Aug/85 $11,637.52
Sep/85 $10,801.62
Oct/85 $11,279.28
Nov/85 $11,474.69
Dec/85 $11,539.82
Jan/86 $11,855.30
Feb/86 $12,941.36
Mar/86 $13,318.63
Apr/86 $13,364.36
May/86 $13,627.30
Jun/86 $13,444.38
Jul/86 $12,871.89
Aug/86 $13,437.57
Sep/86 $13,056.60
Oct/86 $13,737.72
Nov/86 $13,691.54
Dec/86 $13,297.06
Jan/87 $14,696.75
Feb/87 $15,801.59
Mar/87 $15,411.13
Apr/87 $15,179.29
May/87 $15,825.99
Jun/87 $16,188.79
Jul/87 $16,747.02
Aug/87 $17,032.34
Sep/87 $16,163.98
Oct/87 $11,871.78
Nov/87 $10,854.55
Dec/87 $11,660.89
Jan/88 $12,172.91
</TABLE>
<PAGE> 2
JOHN HANCOCK FREEDOM NATIONAL AVIATION TECHNOLOGY FUND -
CLASS A SEC TOTAL RETURN FORMULA
Initial Investment: $1,000.00 CLASS A
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Average Annual Total Return Rate Inv Value at End of Period
<S> <C> <C> <C>
10 Year Return: 8.68% 10 Year Value: $2,298.90
5 Year Return: 1.46% 5 Year Value: $1,075.27
3 Year Return: 0.53% 3 Year Value: $1,015.92
1 Year Return: -18.48% 1 Year Value: $815.20
YTD Return: -18.48% YTD Value: $815.20
- -------------------------------------------------------------------------------
</TABLE>
Constant Sales Charge: 5.00%
<TABLE>
<CAPTION>
10-Year
--------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shs Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. O/S
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Feb/88 $9.70 $10.21 5.00% $0.0000 0.000 131.599
Mar/88 $9.80 $10.32 5.00% $0.0000 0.000 131.599
Apr/88 $9.67 $10.18 5.00% $0.0000 0.000 131.599
May/88 $9.61 $10.12 5.00% $0.0000 0.000 131.599
Jun/88 $10.38 $10.93 5.00% 06/30/88 $0.0700 $10.38 $9.2119 0.887 132.486
Jul/88 $10.25 $10.79 5.00% $0.0000 0.000 132.486
Aug/88 $9.97 $10.49 5.00% $0.0000 0.000 132.486
Sep/88 $10.65 $11.21 5.00% $0.0000 0.000 132.486
Oct/88 $10.78 $11.35 5.00% $0.0000 0.000 132.486
Nov/88 $10.89 $11.46 5.00% $0.0000 0.000 132.486
Dec/88 $10.31 $10.85 5.00% 12/30/88 $0.6800 $10.31 $0.6100 Cap Gain $90.0905 8.738 141.224
Jan/89 $11.09 $11.67 5.00% $0.0000 0.000 141.224
Feb/89 $11.11 $11.69 5.00% $0.0000 0.000 141.224
Mar/89 $11.64 $12.25 5.00% $0.0000 0.000 141.224
Apr/89 $12.81 $13.48 5.00% $0.0000 0.000 141.224
May/89 $13.18 $13.87 5.00% $0.0000 0.000 141.224
Jun/89 $13.11 $13.80 5.00% 06/30/89 $0.0700 $13.11 $9.8857 0.754 141.978
Jul/89 $14.54 $15.31 5.00% $0.0000 0.000 141.978
Aug/89 $16.52 $17.39 5.00% $0.0000 0.000 141.978
Sep/89 $16.76 $17.64 5.00% $0.0000 0.000 141.978
Oct/89 $14.38 $15.14 5.00% $0.0000 0.000 141.978
Nov/89 $14.08 $14.82 5.00% $0.0000 0.000 141.978
Dec/89 $11.67 $12.28 5.00% 12.28/89 $2.6200 $11.58 $2.5200 Cap Gain $371.9824 32.123 174.101
Jan/90 $10.30 $10.84 5.00% $0.0000 0.000 174.101
Feb/90 $10.65 $11.21 5.00% $0.0000 0.000 174.101
Mar/90 $11.53 $12.14 5.00% $0.0000 0.000 174.101
Apr/90 $11.27 $11.86 5.00% $0.0000 0.000 174.101
May/90 $12.11 $12.75 5.00% $0.0000 0.000 174.101
Jun/90 $11.97 $12.60 5.00% 06/28/90 $0.0700 $11.99 $12.1871 1.016 175.117
Jul/90 $11.96 $12.59 5.00% $0.0000 0.000 175.117
Aug/90 $9.67 $10.18 5.00% $0.0000 0.000 175.117
Sep/90 $9.01 $9.48 5.00% $0.0000 0.000 175.117
Oct/90 $8.94 $9.41 5.00% $0.0000 0.000 175.117
Nov/90 $9.01 $9.48 5.00% $0.0000 0.000 175.117
Dec/90 $8.84 $9.31 5.00% 12/28/90 $0.5300 $8.87 $0.5000 Cap Gain $92.8120 10.464 185.581
Jan/91 $9.67 $10.18 5.00% $0.0000 0.000 185.581
Feb/91 $10.27 $10.81 5.00% $0.0000 0.000 185.581
Mar/91 $10.45 $11.00 5.00% $0.0000 0.000 185.581
Apr/91 $10.46 $11.01 5.00% $0.0000 0.000 185.581
May/91 $10.82 $11.39 5.00% $0.0000 0.000 185.581
Jun/91 $10.08 $10.61 5.00% 06/27/91 $0.0300 $10.07 $5.5674 0.553 186.134
Jul/91 $10.45 $11.00 5.00% $0.0000 0.000 186.134
Aug/91 $10.47 $11.02 5.00% $0.0000 0.000 186.134
</TABLE>
<TABLE>
<CAPTION>
5-Year
---------------------------------
Month Dividend # of Shs Shares Plot Points
Ended Received Reinv. O/S for Graph
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
Feb/88 $12,765.10
Mar/88 $12,896.70
Apr/88 $12,725.62
May/88 $12,646.66
Jun/88 $13,752.05
Jul/88 $13,579.82
Aug/88 $13,208.85
Sep/88 $14,109.76
Oct/88 $14,281.99
Nov/88 $14,427.73
Dec/88 $14,560.19
Jan/89 $15,661.74
Feb/89 $15,689.99
Mar/89 $16,438.47
Apr/89 $18,090.79
May/89 $18,613.32
Jun/89 $18,613.32
Jul/89 $20,643.60
Aug/89 $23,454.77
Sep/89 $23,795.51
Oct/89 $20,416.44
Nov/89 $19,990.50
Dec/89 81.433 $20,317.59
Jan/90 $0.0000 0.000 81.433 $17,932.40
Feb/90 $0.0000 0.000 81.433 $18,541.76
Mar/90 $0.0000 0.000 81.433 $20,073.85
Apr/90 $0.0000 0.000 81.433 $19,621.18
May/90 $0.0000 0.000 81.433 $21,083.63
Jun/90 $5.7003 0.475 81.908 $20,961.50
Jul/90 $0.0000 0.000 81.908 $20,943.99
Aug/90 $0.0000 0.000 81.908 $16,933.81
Sep/90 $0.0000 0.000 81.908 $15,778.04
Oct/90 $0.0000 0.000 81.908 $15,655.46
Nov/90 $0.0000 0.000 81.908 $15,778.04
Dec/90 $43.4112 4.894 86.802 $16,405.36
Jan/91 $0.0000 0.000 86.802 $17,945.68
Feb/91 $0.0000 0.000 86.802 $19,059.17
Mar/91 $0.0000 0.000 86.802 $19,393.21
Apr/91 $0.0000 0.000 86.802 $19,411.77
May/91 $0.0000 0.000 86.802 $20,079.86
Jun/91 $2.6041 0.259 87.061 $18,762.31
Jul/91 $0.0000 0.000 87.061 $19,451.00
Aug/91 $0.0000 0.000 87.061 $19,488.23
</TABLE>
<PAGE> 3
JOHN HANCOCK FREEDOM NATIONAL AVIATION TECHNOLOGY FUND -
CLASS A SEC TOTAL RETURN FORMULA
Initial Investment: $1,000.00 CLASS A
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Average Annual Total Return Rate Inv Value at End of Period
<S> <C> <C> <C>
10 Year Return: 8.68% 10 Year Value: $2,298.90
5 Year Return: 1.46% 5 Year Value: $1,075.27
3 Year Return: 0.53% 3 Year Value: $1,015.92
1 Year Return: -18.48% 1 Year Value: $815.20
YTD Return: -18.48% YTD Value: $815.20
- -------------------------------------------------------------------------------
</TABLE>
Constant Sales Charge: 5.00%
<TABLE>
<CAPTION>
10-Year
--------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shs Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. O/S
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Sep/91 $10.19 $10.73 5.00% $0.0000 0.000 186.134
Oct/91 $10.79 $11.36 5.00% $0.0000 0.000 186.134
Nov/91 $10.22 $10.76 5.00% $0.0000 0.000 186.134
Dec/91 $10.91 $11.48 5.00% 12/31/91 $0.6531 $11.07 $0.6462 Cap Gain $121.5641 10.981 197.115
Jan/92 $10.99 $11.57 5.00% $0.0000 0.000 197.115
Feb/92 $11.11 $11.69 5.00% $0.0000 0.000 197.115
Mar/92 $10.48 $11.03 5.00% $0.0000 0.000 197.115
Apr/92 $10.19 $10.73 5.00% $0.0000 0.000 197.115
May/92 $10.04 $10.57 5.00% $0.0000 0.000 197.115
Jun/92 $9.80 $10.32 5.00% $0.0000 0.000 197.115
Jul/92 $9.89 $10.41 5.00% $0.0000 0.000 197.115
Aug/92 $9.48 $9.98 5.00% $0.0000 0.000 197.115
Sep/92 $9.73 $10.24 5.00% $0.0000 0.000 197.115
Oct/92 $10.23 $10.77 5.00% $0.0000 0.000 197.115
Nov/92 $10.49 $11.04 5.00% $0.0000 0.000 197.115
Dec/92 $10.34 $10.88 5.00% 12/23/92 $0.87293 $10.03 $0.87293 Cap Gain $172.0676 17.155 214.270
Jan/93 $10.37 $10.92 5.00% $0.0000 0.000 214.270
Feb/93 $10.36 $10.91 5.00% $0.0000 0.000 214.270
Mar/93 $11.21 $11.80 5.00% $0.0000 0.000 214.270
Apr/93 $11.40 $12.00 5.00% $0.0000 0.000 214.270
May/93 $12.04 $12.67 5.00% $0.0000 0.000 214.270
Jun/93 $11.78 $12.40 5.00% $0.0000 0.000 214.270
Jul/93 $12.08 $12.72 5.00% $0.0000 0.000 214.270
Aug/93 $12.65 $13.32 5.00% $0.0000 0.000 214.270
Sep/93 $12.54 $13.20 5.00% $0.0000 0.000 214.270
Oct/93 $12.53 $13.19 5.00% $0.0000 0.000 214.270
Nov/93 $12.45 $13.11 5.00% $0.0000 0.000 214.270
Dec/93 $11.32 $11.92 5.00% 12/23/93 $1.17139 $11.25 $1.17139 Cap Gain $250.9937 22.311 236.581
Jan/94 $11.71 $12.33 5.00% $0.0000 0.000 236.581
Feb/94 $11.28 $11.87 5.00% $0.0000 0.000 236.581
Mar/94 $10.76 $11.33 5.00% $0.0000 0.000 236.581
Apr/94 $10.61 $11.17 5.00% $0.0000 0.000 236.581
May/94 $10.13 $10.66 5.00% $0.0000 0.000 236.581
Jun/94 $10.01 $10.54 5.00% $0.0000 0.000 236.581
Jul/94 $10.33 $10.87 5.00% $0.0000 0.000 236.581
Aug/94 $10.51 $11.06 5.00% $0.0000 0.000 236.581
Sep/94 $9.88 $10.40 5.00% $0.0000 0.000 236.581
Oct/94 $10.18 $10.72 5.00% $0.0000 0.000 236.581
Nov/94 $9.76 $10.27 5.00% $0.0000 0.000 236.581
Dec/94 $7.24 $7.62 5.00% 12/23/94 $2.47036 $7.22 $2.47036 Cap Gain $584.4402 80.947 317.528
</TABLE>
<TABLE>
<CAPTION>
5-Year
---------------------------------
Month Dividend # of Shs Shares Plot Points
Ended Received Reinv. O/S for Graph
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
Sep/91 $0.0000 0.000 87.061 $18,967.05
Oct/91 $0.0000 0.000 87.061 $20,083.86
Nov/91 $0.0000 0.000 87.061 $19,022.89
Dec/91 $56.8595 5.136 92.197 $21,505.25
Jan/92 $0.0000 0.000 92.197 $21,662.94
Feb/92 $0.0000 0.000 92.197 $21,899.48
Mar/92 $0.0000 0.000 92.197 $20,657.65
Apr/92 $0.0000 0.000 92.197 $20,086.02
May/92 $0.0000 0.000 92.197 $19,790.35
Jun/92 $0.0000 0.000 92.197 $19,317.27
Jul/92 $0.0000 0.000 92.197 $19,494.67
Aug/92 $0.0000 0.000 92.197 $18,686.50
Sep/92 $0.0000 0.000 92.197 $19,179.29
Oct/92 $0.0000 0.000 92.197 $20,164.86
Nov/92 $0.0000 0.000 92.197 $20,677.36
Dec/92 $80.4815 8.024 100.221 $22,155.52
Jan/93 $0.0000 0.000 100.221 $22,219.80
Feb/93 $0.0000 0.000 100.221 $22,198.37
Mar/93 $0.0000 0.000 100.221 $24,019.67
Apr/93 $0.0000 0.000 100.221 $24,426.78
May/93 $0.0000 0.000 100.221 $25,798.11
Jun/93 $0.0000 0.000 100.221 $25,241.01
Jul/93 $0.0000 0.000 100.221 $25,883.82
Aug/93 $0.0000 0.000 100.221 $27,105.16
Sep/93 $0.0000 0.000 100.221 $26,869.46
Oct/93 $0.0000 0.000 100.221 $26,848.03
Nov/93 $0.0000 0.000 100.221 $26,676.61
Dec/93 $117.3979 10.435 110.656 $26,780.97
Jan/94 $0.0000 0.000 110.656 $27,703.64
Feb/94 $0.0000 0.000 110.656 $26,686.34
Mar/94 $0.0000 0.000 110.656 $25,456.12
Apr/94 $0.0000 0.000 110.656 $25,101.24
May/94 $0.0000 0.000 110.656 $23,965.66
Jun/94 $0.0000 0.000 110.656 $23,681.76
Jul/94 $0.0000 0.000 110.656 $24,438.82
Aug/94 $0.0000 0.000 110.656 $24,864.66
Sep/94 $0.0000 0.000 110.656 $23,374.20
Oct/94 $0.0000 0.000 110.656 $24,083.95
Nov/94 $0.0000 0.000 110.656 $23,090.31
Dec/94 $273.3602 37.862 148.518 $22,989.03
</TABLE>
<PAGE> 4
JOHN HANCOCK FREEDOM NATIONAL AVIATION TECHNOLOGY FUND -
CLASS A SEC TOTAL RETURN FORMULA
Initial Investment: $1,000.00 CLASS A
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
Average Annual Total Return Rate Inv Value at End of Period
<S> <C> <C> <C>
10 Year Return: 8.68% 10 Year Value: $2,298.90
5 Year Return: 1.46% 5 Year Value: $1,075.27
3 Year Return: 0.53% 3 Year Value: $1,015.92
1 Year Return: -18.48% 1 Year Value: $815.20
YTD Return: -18.48% YTD Value: $815.20
- ----------------------------------------------------------------------
</TABLE>
Constant Sales Charge: 5.00%
<TABLE>
<CAPTION>
3-Year
--------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shs Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. O/S
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Dec/91 $10.91 $11.48 5.00% 12/31/91 $0.6531 $11.07 $0.6462 Cap Gain 87.108
Jan/92 $10.99 $11.57 5.00% $0.0000 0.000 87.108
Feb/92 $11.11 $11.69 5.00% $0.0000 0.000 87.108
Mar/92 $10.48 $11.03 5.00% $0.0000 0.000 87.108
Apr/92 $10.19 $10.73 5.00% $0.0000 0.000 87.108
May/92 $10.04 $10.57 5.00% $0.0000 0.000 87.108
Jun/92 $9.80 $10.32 5.00% $0.0000 0.000 87.108
Jul/92 $9.89 $10.41 5.00% $0.0000 0.000 87.108
Aug/92 $9.48 $9.98 5.00% $0.0000 0.000 87.108
Sep/92 $9.73 $10.24 5.00% $0.0000 0.000 87.108
Oct/92 $10.23 $10.77 5.00% $0.0000 0.000 87.108
Nov/92 $10.49 $11.04 5.00% $0.0000 0.000 87.108
Dec/92 $10.34 $10.88 5.00% 12/23/92 $0.87293 $10.03 $0.87293 Cap Gain $76.0392 7.581 94.689
Jan/93 $10.37 $10.92 5.00% $0.0000 0.000 94.689
Feb/93 $10.36 $10.91 5.00% $0.0000 0.000 94.689
Mar/93 $11.21 $11.80 5.00% $0.0000 0.000 94.689
Apr/93 $11.40 $12.00 5.00% $0.0000 0.000 94.689
May/93 $12.04 $12.67 5.00% $0.0000 0.000 94.689
Jun/93 $11.78 $12.40 5.00% $0.0000 0.000 94.689
Jul/93 $12.08 $12.72 5.00% $0.0000 0.000 94.689
Aug/93 $12.65 $13.32 5.00% $0.0000 0.000 94.689
Sep/93 $12.54 $13.20 5.00% $0.0000 0.000 94.689
Oct/93 $12.53 $13.19 5.00% $0.0000 0.000 94.689
Nov/93 $12.45 $13.11 5.00% $0.0000 0.000 94.689
Dec/93 $11.32 $11.92 5.00% 12/23/93 $1.17139 $11.25 $1.17139 Cap Gain $110.9177 9.859 104.548
Jan/94 $11.71 $12.33 5.00% $0.0000 0.000 104.548
Feb/94 $11.28 $11.87 5.00% $0.0000 0.000 104.548
Mar/94 $10.76 $11.33 5.00% $0.0000 0.000 104.548
Apr/94 $10.61 $11.17 5.00% $0.0000 0.000 104.548
May/94 $10.13 $10.66 5.00% $0.0000 0.000 104.548
Jun/94 $10.01 $10.54 5.00% $0.0000 0.000 104.548
Jul/94 $10.33 $10.87 5.00% $0.0000 0.000 104.548
Aug/94 $10.51 $11.06 5.00% $0.0000 0.000 104.548
Sep/94 $9.88 $10.40 5.00% $0.0000 0.000 104.548
Oct/94 $10.18 $10.72 5.00% $0.0000 0.000 104.548
Nov/94 $9.76 $10.27 5.00% $0.0000 0.000 104.548
Dec/94 $7.24 $7.62 5.00% 12/23/94 $2.47036 $7.22 $2.47036 Cap Gain $258.2712 35.772 140.320
</TABLE>
<TABLE>
<CAPTION>
1-Year
------------------------------
Month Dividend # of Shs Shares
Ended Received Reinv. O/S
- ---------------------------------------
<S> <C> <C> <C>
Dec/91
Jan/92
Feb/92
Mar/92
Apr/92
May/92
Jun/92
Jul/92
Aug/92
Sep/92
Oct/92
Nov/92
Dec/92
Jan/93
Feb/93
Mar/93
Apr/93
May/93
Jun/93
Jul/93
Aug/93
Sep/93
Oct/93
Nov/93
Dec/93 83.893
Jan/94 $0.0000 0.000 83.893
Feb/94 $0.0000 0.000 83.893
Mar/94 $0.0000 0.000 83.893
Apr/94 $0.0000 0.000 83.893
May/94 $0.0000 0.000 83.893
Jun/94 $0.0000 0.000 83.893
Jul/94 $0.0000 0.000 83.893
Aug/94 $0.0000 0.000 83.893
Sep/94 $0.0000 0.000 83.893
Oct/94 $0.0000 0.000 83.893
Nov/94 $0.0000 0.000 83.893
Dec/94 $207.2459 28.704 112.597
</TABLE>
<PAGE> 5
JOHN HANCOCK FREEDOM NATIONAL AVIATION TECHNOLOGY FUND -
CLASS A SEC TOTAL RETURN FORMULA
Initial Investment: $1,000.00 CLASS A
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Average Annual Total Return Rate Inv Value at End of Period
<S> <C> <S> <C>
10 Year Return: 8.68% 10 Year Value: $2,298.90
5 Year Return: 1.46% 5 Year Value: $1,577.06
3 Year Return: 0.53% 3 Year Value: $1,015.92
1 Year Return: -18.48% 1 Year Value: $ 815.20
YTD Return: -18.48% YTD Value: $ 815.20
- -------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
YTD
---------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shs Shares Plot Points
Ended NAV Price Charge Date Amount Price Information Received Reinv. O/S for Graph
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Dec/91 $10.91 $11.48 5.00% 12/31/91 $0.6531 $11.07 $0.6462 Cap Gain $21,505.25
Jan/92 $10.99 $11.57 5.00% $21,662.94
Feb/92 $11.11 $11.69 5.00% $21,899.48
Mar/92 $10.48 $11.03 5.00% $20,657.65
Apr/92 $10.19 $10.73 5.00% $20,086.02
May/92 $10.04 $10.57 5.00% $19,790.35
Jun/92 $9.80 $10.32 5.00% $19,317.27
Jul/92 $9.89 $10.41 5.00% $19,494.67
Aug/92 $9.48 $9.98 5.00% $18,686.50
Sep/92 $9.73 $10.24 5.00% $19,179.29
Oct/92 $10.23 $10.77 5.00% $20,164.86
Nov/92 $10.49 $11.04 5.00% $20,677.36
Dec/92 $10.34 $10.88 5.00% 12/23/92 $0.87293 $10.03 $0.87293 Cap Gain $22,155.52
Jan/93 $10.37 $10.92 5.00% $22,219.80
Feb/93 $10.36 $10.91 5.00% $22,198.37
Mar/93 $11.21 $11.80 5.00% $24,019.67
Apr/93 $11.40 $12.00 5.00% $24,426.78
May/93 $12.04 $12.67 5.00% $25,798.11
Jun/93 $11.78 $12.40 5.00% $25,241.01
Jul/93 $12.08 $12.72 5.00% $25,883.82
Aug/93 $12.65 $13.32 5.00% $27,105.16
Sep/93 $12.54 $13.20 5.00% $26,869.46
Oct/93 $12.53 $13.19 5.00% $26,848.03
Nov/93 $12.45 $13.11 5.00% $26,676.61
Dec/93 $11.32 $11.92 5.00% 12/23/93 $1.17139 $11.25 $1.17139 Cap Gain $0.0000 0.000 83.893 $26,780.97
Jan/94 $11.71 $12.33 5.00% $0.0000 0.000 83.893 $27,703.64
Feb/94 $11.28 $11.87 5.00% $0.0000 0.000 83.893 $26,686.34
Mar/94 $10.76 $11.33 5.00% $0.0000 0.000 83.893 $25,456.12
Apr/94 $10.61 $11.17 5.00% $0.0000 0.000 83.893 $25,101.24
May/94 $10.13 $10.66 5.00% $0.0000 0.000 83.893 $23,965.66
Jun/94 $10.01 $10.54 5.00% $0.0000 0.000 83.893 $23,681.76
Jul/94 $10.33 $10.87 5.00% $0.0000 0.000 83.893 $24,438.82
Aug/94 $10.51 $11.06 5.00% $0.0000 0.000 83.893 $24,864.66
Sep/94 $9.88 $10.40 5.00% $0.0000 0.000 83.893 $23,374.20
Oct/94 $10.18 $10.72 5.00% $0.0000 0.000 83.893 $24,083.95
Nov/94 $9.76 $10.27 5.00% $0.0000 0.000 83.893 $23,090.31
Dec/94 $7.24 $7.62 5.00% 12/23/94 $2.47036 $7.22 $2.47036 Cap Gain $207.2459 28.704 112.597 $22,989.03
</TABLE>
<PAGE> 6
JOHN HANCOCK FREEDOM NATIONAL AVIATION TECH FUND (CLASS B) - SEC TOTAL RETURN
Initial Investment: $1,000.00
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Average Annual Total Return Investment Value at End of Period
Excluding With Excluding % CDSC Ending
CDSC CDSC CDSC CDSC Amount Value
<S> <C> <C> <C> <C> <C> <C>
10 Year Return: N/A N/A N/A 0.00% N/A
5 Year Return: N/A N/A N/A 2.00% N/A
3 Year Return: N/A N/A N/A 3.00% $0.00 $0.00
0.99 Year Return: -14.53% -18.84% $856.08 5.00% $42.80 $813.28
YTD Return: -14.39% -18.67% $856.08 5.00% $42.80 $813.28
- -----------------------------------------------------------------------------------------------------
</TABLE>
Constant Sales Charge: N/A
<TABLE>
<CAPTION>
Capital
Month Offering Sales Ex-Div Dividend Reinv. Gains
Ended NAV Price Charge Date Amount Price Information
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Jan/94 $11.23 $11.23 N/A
Jan/94 $11.71 $11.71 N/A
Feb/94 $11.27 $11.27 N/A
Mar/94 $10.75 $10.75 N/A
Apr/94 $10.59 $10.59 N/A
May/94 $10.10 $10.10 N/A
Jun/94 $9.98 $9.98 N/A
Jul/94 $10.29 $10.29 N/A
Aug/94 $10.46 $10.46 N/A
Sep/94 $9.82 $9.82 N/A
Oct/94 $10.09 $10.09 N/A
Nov/94 $9.66 $9.66 N/A
Dec/94 $7.14 $7.14 N/A 12/29/94 $2.47036 $7.13 $2.47036
- -------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
$10,000.00 $10,000.00
1-Year YTD INVESTMENT INVESTMENT
- -----------------------------------------------------------------------------------------------------------------------
Month Dividend # of Shs Shares Dividend # of Shs Shares With CSCD
Ended Received Reinv. O/S Received Reinv. O/S 5%
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Jan/94 89.047 89.047 $9,999.98 $500.00 $9,499.98
Jan/94 $0.0000 0.000 89.047 $0.0000 0.000 89.047 $10,427.40 $500.00 $9,927.40
Feb/94 $0.0000 0.000 89.047 $0.0000 0.000 89.047 $10,035.60 $500.00 $9,535.60
Mar/94 $0.0000 0.000 89.047 $0.0000 0.000 89.047 $9,572.55 $478.63 $9,093.92
Apr/94 $0.0000 0.000 89.047 $0.0000 0.000 89.047 $9,430.08 $471.50 $8,958.57
May/94 $0.0000 0.000 89.047 $0.0000 0.000 89.047 $8,993.75 $449.69 $8,544.06
Jun/94 $0.0000 0.000 89.047 $0.0000 0.000 89.047 $8,886.89 $444.34 $8,442.55
Jul/94 $0.0000 0.000 89.047 $0.0000 0.000 89.047 $9,162.94 $458.15 $8,704.79
Aug/94 $0.0000 0.000 89.047 $0.0000 0.000 89.047 $9,314.32 $465.72 $8,848.60
Sep/94 $0.0000 0.000 89.047 $0.0000 0.000 89.047 $8,744.42 $437.22 $8,307.19
Oct/94 $0.0000 0.000 89.047 $0.0000 0.000 89.047 $8,984.84 $449.24 $8,535.60
Nov/94 $0.0000 0.000 89.047 $0.0000 0.000 89.047 $8,601.94 $430.10 $8,171.84
Dec/94 $219.9781 30.852 119.899 $219.9781 30.582 119.899 $8,560.79 $428.04 $8,132.75
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 7
JOHN HANCOCK FREEDOM NATIONAL AVIATION TECHNOLOGY FUND -
CLASS A SEC TOTAL RETURN FORMULA
Initial Investment: $1,000.00 CLASS A
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Average Annual Total Return Rate Inv Value at End of Period
<S> <C> <C> <C>
10 Year Return: 9.23% 10 Year Value: $2,418.78
5 Year Return: 2.50% 5 Year Value: $1,131.49
3 Year Return: 2.25% 3 Year Value: $1,068.99
1 Year Return: -14.16% 1 Year Value: $858.41
YTD Return: -14.16% YTD Value: $858.41
- -------------------------------------------------------------------------------
</TABLE>
Constant Sales Charge: 0.00%
<TABLE>
<CAPTION>
10-Year
-------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shs Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. O/S
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Aug/84 $9.00 $9.00 0.00%
Sep/84 $8.97 $8.97 0.00%
Oct/84 $9.08 $9.08 0.00%
Nov/84 $8.76 $8.76 0.00%
Dec/84 $9.21 $9.21 0.00% 108.578
Jan/85 $9.61 $9.61 0.00% 01/17/85 $0.3700 $9.17 $0.2400 Cap Gain $40.1739 4.381 112.959
Feb/85 $9.82 $9.82 0.00% $0.0000 0.000 112.959
Mar/85 $9.53 $9.53 0.00% $0.0000 0.000 112.959
Apr/85 $9.20 $9.20 0.00% $0.0000 0.000 112.959
May/85 $10.31 $10.31 0.00% $0.0000 0.000 112.959
Jun/85 $10.63 $10.63 0.00% $0.0000 0.000 112.959
Jul/85 $10.67 $10.67 0.00% 07/11/85 $0.1200 $10.77 $13.5551 1.259 114.218
Aug/85 $10.72 $10.72 0.00% $0.0000 0.000 114.218
Sep/85 $9.95 $9.95 0.00% $0.0000 0.000 114.218
Oct/85 $10.39 $10.39 0.00% $0.0000 0.000 114.218
Nov/85 $10.57 $10.57 0.00% $0.0000 0.000 114.218
Dec/85 $10.63 $10.63 0.00% $0.0000 0.000 114.218
Jan/86 $10.37 $10.37 0.00% 01/16/86 $0.5400 $10.17 $0.4100 Cap Gain $61.6777 6.065 120.283
Feb/86 $11.32 $11.32 0.00% $0.0000 0.000 120.283
Mar/86 $11.65 $11.65 0.00% $0.0000 0.000 120.283
Apr/86 $11.69 $11.69 0.00% $0.0000 0.000 120.283
May/86 $11.92 $11.92 0.00% $0.0000 0.000 120.283
Jun/86 $11.76 $11.76 0.00% $0.0000 0.000 120.283
Jul/86 $11.15 $11.15 0.00% 07/11/86 $0.1100 $11.23 $13.2311 1.178 121.461
Aug/86 $11.64 $11.64 0.00% $0.0000 0.000 121.461
Sep/86 $11.31 $11.31 0.00% $0.0000 0.000 121.461
Oct/86 $11.90 $11.90 0.00% $0.0000 0.000 121.461
Nov/86 $11.86 $11.86 0.00% $0.0000 0.000 121.461
Dec/86 $11.02 $11.02 0.00% 12/11/86 $0.5200 $11.50 $0.5200 Cap Gain $63.1597 5.492 126.953
Jan/87 $12.18 $12.18 0.00% $0.0000 0.000 126.953
Feb/87 $12.95 $12.95 0.00% 02/12/87 $0.1400 $12.45 $17.7734 1.428 128.381
Mar/87 $12.63 $12.63 0.00% $0.0000 0.000 128.381
Apr/87 $12.44 $12.44 0.00% $0.0000 0.000 128.381
May/87 $12.97 $12.97 0.00% $0.0000 0.000 128.381
Jun/87 $13.05 $13.05 0.00% 06/25/87 $0.2200 $13.21 $0.1500 Cap Gain $28.2438 2.138 130.519
Jul/87 $13.50 $13.50 0.00% $0.0000 0.000 130.519
Aug/87 $13.73 $13.73 0.00% $0.0000 0.000 130.519
Sep/87 $13.03 $13.03 0.00% $0.0000 0.000 130.519
Oct/87 $9.57 $9.57 0.00% $0.0000 0.000 130.519
Nov/87 $8.75 $8.75 0.00% $0.0000 0.000 130.519
Dec/87 $9.40 $9.40 0.00% $0.0000 0.000 130.519
Jan/88 $9.25 $9.25 0.00% 01/04/88 $0.5500 $9.04 $0.5000 Cap Gain $64.7141 7.159 124.821
</TABLE>
<TABLE>
<CAPTION>
5-Year
-------------------------------
Month Dividend # of Shs Shares Plot Points
Ended Received Reinv. O/S for Graph
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
Aug/84 $0.00
Sep/84 $0.00
Oct/84 $0.00
Nov/84 $0.00
Dec/84 $10,000.03
Jan/85 $10,855.36
Feb/85 $11,092.57
Mar/85 $10,764.99
Apr/85 $10,392.23
May/85 $11,646.07
Jun/85 $12,007.54
Jul/85 $12,187.06
Aug/85 $12,244.17
Sep/85 $11,364.69
Oct/85 $11,867.25
Nov/85 $12,072.84
Dec/85 $12,141.37
Jan/86 $12,473.35
Feb/86 $13,616.04
Mar/86 $14,012.97
Apr/86 $14,061.08
May/86 $14,337.73
Jun/86 $14,145.28
Jul/86 $13,542.90
Aug/86 $14,138.06
Sep/86 $13,737.24
Oct/86 $14,453.86
Nov/86 $14,405.27
Dec/86 $13,990.22
Jan/87 $15,462.88
Feb/87 $16,625.34
Mar/87 $16,214.52
Apr/87 $15,970.60
May/87 $16,651.02
Jun/87 $17,032.73
Jul/87 $17,620.07
Aug/87 $17,920.26
Sep/87 $17,006.63
Oct/87 $12,490.67
Nov/87 $11,420.41
Dec/87 $12,268.79
Jan/88 $16,154.99
</TABLE>
<PAGE> 8
JOHN HANCOCK FREEDOM NATIONAL AVIATION TECHNOLOGY FUND -
CLASS A SEC TOTAL RETURN FORMULA
Initial Investment: $1,000.00 CLASS A
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Average Annual Total Return Rate Inv Value at End of Period
<S> <C> <C> <C>
10 Year Return: 9.23% 10 Year Value: $2,418.78
5 Year Return: 2.50% 5 Year Value: $1,131.49
3 Year Return: 2.25% 3 Year Value: $1,068.99
1 Year Return: -14.16% 1 Year Value: $858.41
YTD Return: -14.16% YTD Value: $858.41
- -------------------------------------------------------------------------------
</TABLE>
Constant Sales Charge: 0.00%
<TABLE>
<CAPTION>
10-Year
-------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shs Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. O/S
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Feb/88 $9.70 $9.70 0.00% $0.0000 0.000 138.460
Mar/88 $9.80 $9.80 0.00% $0.0000 0.000 138.460
Apr/88 $9.67 $9.67 0.00% $0.0000 0.000 138.460
May/88 $9.61 $9.61 0.00% $0.0000 0.000 138.460
Jun/88 $10.38 $10.38 0.00% 06/30/88 $0.0700 $10.38 $9.6922 0.934 139.394
Jul/88 $10.25 $10.25 0.00% $0.0000 0.000 139.394
Aug/88 $9.97 $9.97 0.00% $0.0000 0.000 139.394
Sep/88 $10.65 $10.65 0.00% $0.0000 0.000 139.394
Oct/88 $10.78 $10.78 0.00% $0.0000 0.000 139.394
Nov/88 $10.89 $10.89 0.00% $0.0000 0.000 139.394
Dec/88 $10.31 $10.31 0.00% 12/30/88 $0.6800 $10.31 $0.6100 Cap Gain $94.7879 9.194 148.588
Jan/89 $11.09 $11.09 0.00% $0.0000 0.000 148.588
Feb/89 $11.11 $11.11 0.00% $0.0000 0.000 148.588
Mar/89 $11.64 $11.64 0.00% $0.0000 0.000 148.588
Apr/89 $12.81 $12.81 0.00% $0.0000 0.000 148.588
May/89 $13.18 $13.18 0.00% $0.0000 0.000 148.588
Jun/89 $13.11 $13.11 0.00% 06/30/89 $0.0700 $13.11 $10.4012 0.793 149.381
Jul/89 $14.54 $14.54 0.00% $0.0000 0.000 149.381
Aug/89 $16.52 $16.52 0.00% $0.0000 0.000 149.381
Sep/89 $16.76 $16.76 0.00% $0.0000 0.000 149.381
Oct/89 $14.38 $14.38 0.00% $0.0000 0.000 149.381
Nov/89 $14.08 $14.08 0.00% $0.0000 0.000 149.381
Dec/89 $11.67 $11.67 0.00% 12.28/89 $2.6200 $11.58 $2.5200 Cap Gain $391.3782 33.798 183.179
Jan/90 $10.30 $10.30 0.00% $0.0000 0.000 183.179
Feb/90 $10.65 $10.65 0.00% $0.0000 0.000 183.179
Mar/90 $11.53 $11.53 0.00% $0.0000 0.000 183.179
Apr/90 $11.27 $11.27 0.00% $0.0000 0.000 183.179
May/90 $12.11 $12.11 0.00% $0.0000 0.000 183.179
Jun/90 $11.97 $11.97 0.00% 06/28/90 $0.0700 $11.99 $12.8225 1.069 184.248
Jul/90 $11.96 $11.96 0.00% $0.0000 0.000 184.248
Aug/90 $9.67 $9.67 0.00% $0.0000 0.000 184.248
Sep/90 $9.01 $9.01 0.00% $0.0000 0.000 184.248
Oct/90 $8.94 $8.94 0.00% $0.0000 0.000 184.248
Nov/90 $9.01 $9.01 0.00% $0.0000 0.000 184.248
Dec/90 $8.84 $8.84 0.00% 12/28/90 $0.5300 $8.87 $0.5000 Cap Gain $97.6514 11.009 195.257
Jan/91 $9.67 $9.67 0.00% $0.0000 0.000 195.257
Feb/91 $10.27 $10.27 0.00% $0.0000 0.000 195.257
Mar/91 $10.45 $10.45 0.00% $0.0000 0.000 195.257
Apr/91 $10.46 $10.46 0.00% $0.0000 0.000 195.257
May/91 $10.82 $10.82 0.00% $0.0000 0.000 195.257
Jun/91 $10.08 $10.08 0.00% 06/27/91 $0.0300 $10.07 $5.8577 0.582 195.839
Jul/91 $10.45 $10.45 0.00% $0.0000 0.000 195.839
Aug/91 $10.47 $10.47 0.00% $0.0000 0.000 195.839
</TABLE>
<TABLE>
<CAPTION>
5-Year
-------------------------------
Month Dividend # of Shs Shares Plot Points
Ended Received Reinv. O/S for Graph
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
Feb/88 $13,430.62
Mar/88 $13,569.08
Apr/88 $13,389.08
May/88 $13,306.01
Jun/88 $14,469.10
Jul/88 $14,287.89
Aug/88 $13,897.58
Sep/88 $14,845.46
Oct/88 $15,026.67
Nov/88 $15,180.01
Dec/88 $15,319.42
Jan/89 $16,478.41
Feb/89 $16,508.13
Mar/89 $17,295.64
Apr/89 $19,034.12
May/89 $19,583.90
Jun/89 $19.583.85
Jul/89 $21,720.00
Aug/89 $24,677.74
Sep/89 $25,036.26
Oct/89 $21,480.99
Nov/89 $21,032.84
Dec/89 85.690 $21,376.99
Jan/90 $0.0000 0.000 85.690 $18,867.44
Feb/90 $0.0000 0.000 85.690 $19,508.56
Mar/90 $0.0000 0.000 85.690 $21,120.54
Apr/90 $0.0000 0.000 85.690 $20,644.27
May/90 $0.0000 0.000 85.690 $22,182.98
Jun/90 $5.9983 0.500 86.190 $22,054.49
Jul/90 $0.0000 0.000 86.190 $22,036.06
Aug/90 $0.0000 0.000 86.190 $17,816.78
Sep/90 $0.0000 0.000 86.190 $16,600.74
Oct/90 $0.0000 0.000 86.190 $16,471.77
Nov/90 $0.0000 0.000 86.190 $16,600.74
Dec/90 $45.6807 5.150 91.340 $17,260.72
Jan/91 $0.0000 0.000 91.340 $18,881.35
Feb/91 $0.0000 0.000 91.340 $20,052.89
Mar/91 $0.0000 0.000 91.340 $20,404.36
Apr/91 $0.0000 0.000 91.340 $20,423.88
May/91 $0.0000 0.000 91.340 $21,126.81
Jun/91 $2.7402 0.272 91.612 $19,740.57
Jul/91 $0.0000 0.000 91.612 $20,465.18
Aug/91 $0.0000 0.000 91.612 $
</TABLE>
<PAGE> 9
JOHN HANCOCK FREEDOM NATIONAL AVIATION TECHNOLOGY FUND -
CLASS A SEC TOTAL RETURN FORMULA
Initial Investment: $1,000.00 CLASS A
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Average Annual Total Return Rate Inv Value at End of Period
<S> <C> <C> <C>
10 Year Return: 9.23% 10 Year Value: $2,418.78
5 Year Return: 2.50% 5 Year Value: $1,131.49
3 Year Return: 2.25% 3 Year Value: $1,068.99
1 Year Return: -14.16% 1 Year Value: $858.41
YTD Return: -14.16% YTD Value: $858.41
- -------------------------------------------------------------------------------
</TABLE>
Constant Sales Charge: 0.00%
<TABLE>
<CAPTION>
10-Year
-------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shs Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. O/S
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Sep/91 $10.19 $10.19 0.00% $0.0000 0.000 195.839
Oct/91 $10.79 $10.79 0.00% $0.0000 0.000 195.839
Nov/91 $10.22 $10.22 0.00% $0.0000 0.000 195.839
Dec/91 $10.91 $10.91 0.00% 12/31/91 $0.6531 $11.07 $0.6462 Cap Gain $127.9025 11.554 207.393
Jan/92 $10.99 $10.99 0.00% $0.0000 0.000 207.393
Feb/92 $11.11 $11.11 0.00% $0.0000 0.000 207.393
Mar/92 $10.48 $10.48 0.00% $0.0000 0.000 207.393
Apr/92 $10.19 $10.19 0.00% $0.0000 0.000 207.393
May/92 $10.04 $10.04 0.00% $0.0000 0.000 207.393
Jun/92 $9.80 $9.80 0.00% $0.0000 0.000 207.393
Jul/92 $9.89 $9.89 0.00% $0.0000 0.000 207.393
Aug/92 $9.48 $9.48 0.00% $0.0000 0.000 207.393
Sep/92 $9.73 $9.73 0.00% $0.0000 0.000 207.393
Oct/92 $10.23 $10.23 0.00% $0.0000 0.000 207.393
Nov/92 $10.49 $10.49 0.00% $0.0000 0.000 207.393
Dec/92 $10.34 $10.34 0.00% 12/23/92 $0.87293 $10.03 $0.87293 Cap Gain $181.0396 18.050 225.443
Jan/93 $10.37 $10.37 0.00% $0.0000 0.000 225.443
Feb/93 $10.36 $10.36 0.00% $0.0000 0.000 225.443
Mar/93 $11.21 $11.21 0.00% $0.0000 0.000 225.443
Apr/93 $11.40 $11.40 0.00% $0.0000 0.000 225.443
May/93 $12.04 $12.04 0.00% $0.0000 0.000 225.443
Jun/93 $11.78 $11.78 0.00% $0.0000 0.000 225.443
Jul/93 $12.08 $12.08 0.00% $0.0000 0.000 225.443
Aug/93 $12.65 $12.65 0.00% $0.0000 0.000 225.443
Sep/93 $12.54 $12.54 0.00% $0.0000 0.000 225.443
Oct/93 $12.53 $12.53 0.00% $0.0000 0.000 225.443
Nov/93 $12.45 $12.45 0.00% $0.0000 0.000 225.443
Dec/93 $11.32 $11.32 0.00% 12/23/93 $1.17139 $11.25 $1.17139 Cap Gain $264.0817 23.474 248.917
Jan/94 $11.71 $11.71 0.00% $0.0000 0.000 248.917
Feb/94 $11.28 $11.28 0.00% $0.0000 0.000 248.917
Mar/94 $10.76 $10.76 0.00% $0.0000 0.000 248.917
Apr/94 $10.61 $10.61 0.00% $0.0000 0.000 248.917
May/94 $10.13 $10.13 0.00% $0.0000 0.000 248.917
Jun/94 $10.01 $10.01 0.00% $0.0000 0.000 248.917
Jul/94 $10.33 $10.33 0.00% $0.0000 0.000 248.917
Aug/94 $10.51 $10.51 0.00% $0.0000 0.000 248.917
Sep/94 $9.88 $9.88 0.00% $0.0000 0.000 248.917
Oct/94 $10.18 $10.18 0.00% $0.0000 0.000 248.917
Nov/94 $9.76 $9.76 0.00% $0.0000 0.000 248.917
Dec/94 $7.24 $7.24 0.00% 12/23/94 $2.47036 $7.22 $2.47036 Cap Gain $614.9146 85.168 334.085
</TABLE>
<TABLE>
<CAPTION>
5-Year
-------------------------------
Month Dividend # of Shs Shares Plot Points
Ended Received Reinv. O/S for Graph
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
Sep/91 $0.0000 0.000 91.612 $19,955.99
Oct/91 $0.0000 0.000 91.612 $21,131.03
Nov/91 $0.0000 0.000 91.612 $20,014.75
Dec/91 $59.8318 5.405 97.017 $22,626.58
Jan/92 $0.0000 0.000 97.017 $22,792.49
Feb/92 $0.0000 0.000 97.017 $23,041.36
Mar/92 $0.0000 0.000 97.017 $21,734.79
Apr/92 $0.0000 0.000 97.017 $21,133.35
May/92 $0.0000 0.000 97.017 $20,822.26
Jun/92 $0.0000 0.000 97.017 $20,324.51
Jul/92 $0.0000 0.000 97.017 $20,511.17
Aug/92 $0.0000 0.000 97.017 $19,660.86
Sep/92 $0.0000 0.000 97.017 $20,179.34
Oct/92 $0.0000 0.000 97.017 $21,216.30
Nov/92 $0.0000 0.000 97.017 $21,755.53
Dec/92 $84.6890 8.444 105.461 $23,310.81
Jan/93 $0.0000 0.000 105.461 $23,378.44
Feb/93 $0.0000 0.000 105.461 $23,355.89
Mar/93 $0.0000 0.000 105.461 $25,272.16
Apr/93 $0.0000 0.000 105.461 $25,700.50
May/93 $0.0000 0.000 105.461 $27,143.34
Jun/93 $0.0000 0.000 105.461 $26,557.19
Jul/93 $0.0000 0.000 105.461 $27,233.51
Aug/93 $0.0000 0.000 105.461 $28,518.54
Sep/93 $0.0000 0.000 105.461 $28,270.55
Oct/93 $0.0000 0.000 105.461 $28,248.01
Nov/93 $0.0000 0.000 105.461 $28,067.65
Dec/93 $123.5360 10.981 116.442 $28,177.40
Jan/94 $0.0000 0.000 116.442 $29,148.18
Feb/94 $0.0000 0.000 116.442 $28,077.84
Mar/94 $0.0000 0.000 116.442 $26,783.47
Apr/94 $0.0000 0.000 116.442 $26,410.09
May/94 $0.0000 0.000 116.442 $25,215.29
Jun/94 $0.0000 0.000 116.442 $24,916.59
Jul/94 $0.0000 0.000 116.442 $25,713.13
Aug/94 $0.0000 0.000 116.442 $26,161.18
Sep/94 $0.0000 0.000 116.442 $24,593.00
Oct/94 $0.0000 0.000 116.442 $25,339.75
Nov/94 $0.0000 0.000 116.442 $24,294.30
Dec/94 $287.6537 39.841 156.283 $24,187.75
</TABLE>
<PAGE> 10
JOHN HANCOCK FREEDOM NATIONAL AVIATION TECHNOLOGY FUND -
CLASS A SEC TOTAL RETURN FORMULA
Initial Investment: $1,000.00 CLASS A
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Average Annual Total Return Rate Inv Value at End of Period
<S> <C> <C> <C>
10 Year Return: 9.23% 10 Year Value: $2,418.78
5 Year Return: 2.50% 5 Year Value: $1,131.49
3 Year Return: 2.25% 3 Year Value: $1,068.99
1 Year Return: -14.16% 1 Year Value: $858.41
YTD Return: -14.16% YTD Value: $858.41
- -------------------------------------------------------------------------------
</TABLE>
Constant Sales Charge: 0.00%
<TABLE>
<CAPTION>
3-Year
----------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shs Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. O/S
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Dec/91 $10.91 $10.91 0.00% 12/31/91 $0.6531 $11.07 $0.6462 Cap Gain 91.659
Jan/92 $10.99 $10.99 0.00% $0.0000 0.000 91.659
Feb/92 $11.11 $11.11 0.00% $0.0000 0.000 91.659
Mar/92 $10.48 $10.48 0.00% $0.0000 0.000 91.659
Apr/92 $10.19 $10.19 0.00% $0.0000 0.000 91.659
May/92 $10.04 $10.04 0.00% $0.0000 0.000 91.659
Jun/92 $9.80 $9.80 0.00% $0.0000 0.000 91.659
Jul/92 $9.89 $9.89 0.00% $0.0000 0.000 91.659
Aug/92 $9.48 $9.48 0.00% $0.0000 0.000 91.659
Sep/92 $9.73 $9.73 0.00% $0.0000 0.000 91.659
Oct/92 $10.23 $10.23 0.00% $0.0000 0.000 91.659
Nov/92 $10.49 $10.49 0.00% $0.0000 0.000 91.659
Dec/92 $10.34 $10.34 0.00% 12/23/92 $0.87293 $10.03 $0.87293 Cap Gain $80.0119 7.977 99.636
Jan/93 $10.37 $10.37 0.00% $0.0000 0.000 99.636
Feb/93 $10.36 $10.36 0.00% $0.0000 0.000 99.636
Mar/93 $11.21 $11.21 0.00% $0.0000 0.000 99.636
Apr/93 $11.40 $11.40 0.00% $0.0000 0.000 99.636
May/93 $12.04 $12.04 0.00% $0.0000 0.000 99.636
Jun/93 $11.78 $11.78 0.00% $0.0000 0.000 99.636
Jul/93 $12.08 $12.08 0.00% $0.0000 0.000 99.636
Aug/93 $12.65 $12.65 0.00% $0.0000 0.000 99.636
Sep/93 $12.54 $12.54 0.00% $0.0000 0.000 99.636
Oct/93 $12.53 $12.53 0.00% $0.0000 0.000 99.636
Nov/93 $12.45 $12.45 0.00% $0.0000 0.000 99.636
Dec/93 $11.32 $11.32 0.00% 12/23/93 $1.17139 $11.25 $1.17139 Cap Gain $116.7126 10.374 110.010
Jan/94 $11.71 $11.71 0.00% $0.0000 0.000 110.010
Feb/94 $11.28 $11.28 0.00% $0.0000 0.000 110.010
Mar/94 $10.76 $10.76 0.00% $0.0000 0.000 110.010
Apr/94 $10.61 $10.61 0.00% $0.0000 0.000 110.010
May/94 $10.13 $10.13 0.00% $0.0000 0.000 110.010
Jun/94 $10.01 $10.01 0.00% $0.0000 0.000 110.010
Jul/94 $10.33 $10.33 0.00% $0.0000 0.000 110.010
Aug/94 $10.51 $10.51 0.00% $0.0000 0.000 110.010
Sep/94 $9.88 $9.88 0.00% $0.0000 0.000 110.010
Oct/94 $10.18 $10.18 0.00% $0.0000 0.000 110.010
Nov/94 $9.76 $9.76 0.00% $0.0000 0.000 110.010
Dec/94 $7.24 $7.24 0.00% 12/23/94 $2.47036 $7.22 $2.47036 Cap Gain $271.7643 37.640 147.650
</TABLE>
<TABLE>
<CAPTION>
1-Year
---------------------------------
Month Dividend # of Shs Shares
Ended Received Reinv. O/S
- --------------------------------------------
<S> <C> <C> <C>
Dec/91
Jan/92
Feb/92
Mar/92
Apr/92
May/92
Jun/92
Jul/92
Aug/92
Sep/92
Oct/92
Nov/92
Dec/92
Jan/93
Feb/93
Mar/93
Apr/93
May/93
Jun/93
Jul/93
Aug/93
Sep/93
Oct/93
Nov/93
Dec/93 88.339
Jan/94 $0.0000 0.000 88.339
Feb/94 $0.0000 0.000 88.339
Mar/94 $0.0000 0.000 88.339
Apr/94 $0.0000 0.000 88.339
May/94 $0.0000 0.000 88.339
Jun/94 $0.0000 0.000 88.339
Jul/94 $0.0000 0.000 88.339
Aug/94 $0.0000 0.000 88.339
Sep/94 $0.0000 0.000 88.339
Oct/94 $0.0000 0.000 88.339
Nov/94 $0.0000 0.000 88.339
Dec/94 $218.2291 30.226 118.565
</TABLE>
<PAGE> 11
JOHN HANCOCK FREEDOM NATIONAL AVIATION TECHNOLOGY FUND -
CLASS A SEC TOTAL RETURN FORMULA
Initial Investment: $1,000.00 CLASS A
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Average Annual Total Return Rate Inv Value at End of Period
<S> <C> <C> <C>
10 Year Return: 9.23% 10 Year Value: $2,418.78
5 Year Return: 2.50% 5 Year Value: $1,131.49
3 Year Return: 2.25% 3 Year Value: $1,068.99
1 Year Return: -14.16% 1 Year Value: $858.41
YTD Return: -14.16% YTD Value: $858.41
- -------------------------------------------------------------------------------
</TABLE>
Constant Sales Charge: 0.00%
<TABLE>
<CAPTION>
YTD
---------------------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shs Shares Plot Points
Ended NAV Price Charge Date Amount Price Information Received Reinv. O/S for Graph
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Dec/91 $10.91 $10.91 0.00% 12/31/91 $0.6531 $11.07 $0.6462 Cap Gain $22,626.58
Jan/92 $10.99 $10.99 0.00% $22,792.49
Feb/92 $11.11 $11.11 0.00% $23,041.36
Mar/92 $10.48 $10.48 0.00% $21,734.79
Apr/92 $10.19 $10.19 0.00% $21,133.35
May/92 $10.04 $10.04 0.00% $20,822.26
Jun/92 $9.80 $9.80 0.00% $20,324.51
Jul/92 $9.89 $9.89 0.00% $20,511.17
Aug/92 $9.48 $9.48 0.00% $19,660.86
Sep/92 $9.73 $9.73 0.00% $20,179.34
Oct/92 $10.23 $10.23 0.00% $21,216.30
Nov/92 $10.49 $10.49 0.00% $21,755.53
Dec/92 $10.34 $10.34 0.00% 12/23/92 $0.87293 $10.03 $0.87293 Cap Gain $23,310.81
Jan/93 $10.37 $10.37 0.00% $23,378.44
Feb/93 $10.36 $10.36 0.00% $23,355.89
Mar/93 $11.21 $11.21 0.00% $25,272.16
Apr/93 $11.40 $11.40 0.00% $25,700.50
May/93 $12.04 $12.04 0.00% $27,143.34
Jun/93 $11.78 $11.78 0.00% $26,557.19
Jul/93 $12.08 $12.08 0.00% $27,233.51
Aug/93 $12.65 $12.65 0.00% $28,518.54
Sep/93 $12.54 $12.54 0.00% $28,270.55
Oct/93 $12.53 $12.53 0.00% $28,248.01
Nov/93 $12.45 $12.45 0.00% $28,067.65
Dec/93 $11.32 $11.32 0.00% 12/23/93 $1.17139 $11.25 $1.17139 Cap Gain $28,177.40
Jan/94 $11.71 $11.71 0.00% $0.0000 0.000 88.339 $29,148.18
Feb/94 $11.28 $11.28 0.00% $0.0000 0.000 88.339 $28,077.84
Mar/94 $10.76 $10.76 0.00% $0.0000 0.000 88.339 $26,783.47
Apr/94 $10.61 $10.61 0.00% $0.0000 0.000 88.339 $26,410.09
May/94 $10.13 $10.13 0.00% $0.0000 0.000 88.339 $25,215.29
Jun/94 $10.01 $10.01 0.00% $0.0000 0.000 88.339 $24,916.59
Jul/94 $10.33 $10.33 0.00% $0.0000 0.000 88.339 $25,713.13
Aug/94 $10.51 $10.51 0.00% $0.0000 0.000 88.339 $26,161.18
Sep/94 $9.88 $9.88 0.00% $0.0000 0.000 88.339 $24,593.00
Oct/94 $10.18 $10.18 0.00% $0.0000 0.000 88.339 $25,339.75
Nov/94 $9.76 $9.76 0.00% $0.0000 0.000 88.339 $24,294.30
Dec/94 $7.24 $7.24 0.00% 12/23/94 $2.47036 $7.22 $2.47036 Cap Gain $218.2291 30.226 118.565 $24,187.75
</TABLE>
<PAGE> 12
Initial Investment: $1,000.00
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
Average Annual Total Return Rate Investment Value at End of Period
<S> <C> <C> <C>
10 Year Return: 0.1026 10 Year Value: 2655.11
5 Year Return: 0.1067 5 Year Value: 1659.94
3 Year Return: 0.1523 3 Year Value: 1530.08
1 Year Return: 0.0962 1 Year Value: 1096.16
YTD Return: 0.0962 YTD Value: 1096.16
- ---------------------------------------------------------------------------
</TABLE>
Constant Sales Charge: 0.00%
<TABLE>
<CAPTION>
Payment/
Month Offering Sales Ex-Div Dividend Reinv. Capital Gain
Ended NAV Price Charge Date Amount Price Information
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
12 / 84 11.89 11.89 0.00%
1 / 85 12.77 12.77 0.00% 01/17/85 $0.2300 $12.11
2 / 85 12.55 12.55 0.00%
3 / 85 12.20 12.20 0.00%
4 / 85 11.84 11.84 0.00%
5 / 85 12.33 12.33 0.00%
6 / 85 12.32 12.32 0.00%
7 / 85 12.48 12.48 0.00% 07/11/85 $0.1100 $12.29
8 / 85 12.23 12.23 0.00%
9 / 85 11.58 11.58 0.00%
10 / 85 11.84 11.84 0.00%
11 / 85 12.81 12.81 0.00%
12 / 85 13.57 13.57 0.00%
1 / 86 13.46 13.46 0.00% 01/16/86 $0.1100 $13.51
2 / 86 14.36 14.36 0.00%
3 / 86 14.69 14.69 0.00%
4 / 86 14.90 14.90 0.00%
5 / 86 15.28 15.28 0.00%
6 / 86 14.85 14.85 0.00%
7 / 86 13.41 13.41 0.00% 07/11/86 $0.0500 $14.08
8 / 86 14.28 14.28 0.00%
9 / 86 13.11 13.11 0.00%
10 / 86 13.74 13.74 0.00%
11 / 86 14.12 14.12 0.00%
12 / 86 13.80 13.80 0.00%
1 / 87 15.46 15.46 0.00%
2 / 87 16.61 16.61 0.00% 02/12/87 $0.0800 $15.93
3 / 87 17.06 17.06 0.00%
4 / 87 17.08 17.08 0.00%
5 / 87 16.93 16.93 0.00%
6 / 87 16.87 16.87 0.00% 06/25/87 $0.0500 $17.16
7 / 87 17.71 17.71 0.00%
8 / 87 18.74 18.74 0.00%
9 / 87 18.74 18.74 0.00%
10 / 87 14.04 14.04 0.00%
11 / 87 12.57 12.57 0.00%
12 / 87 14.08 14.08 0.00%
1 / 88 13.81 13.81 0.00% 01/04/88 $0.1000 $14.40
2 / 88 14.72 14.72 0.00%
3 / 88 14.37 14.37 0.00%
4 / 88 14.70 14.70 0.00%
5 / 88 14.68 14.68 0.00%
6 / 88 15.63 15.63 0.00% 06/30/88 $0.0700 $15.63
</TABLE>
<TABLE>
<CAPTION>
10-Year 5-Year 3-Year
- -------- ----------- ----------- -------- ----------- ----------- -------- ----------- -----------
Dividend # of Shares Shares Dividend # of Shares Shares Dividend # of Shares Shares
Received Reinv. Outstanding Received Reinv. Outstanding Received Reinv. Outstanding
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
84.104
$19.3439 1.597 85.701
$0.0000 0.000 85.701
$0.0000 0.000 85.701
$0.0000 0.000 85.701
$0.0000 0.000 85.701
$0.0000 0.000 85.701
$9.4271 0.767 86.468
$0.0000 0.000 86.468
$0.0000 0.000 86.468
$0.0000 0.000 86.468
$0.0000 0.000 86.468
$0.0000 0.000 86.468
$9.5115 0.704 87.172
$0.0000 0.000 87.172
$0.0000 0.000 87.172
$0.0000 0.000 87.172
$0.0000 0.000 87.172
$0.0000 0.000 87.172
$4.3586 0.310 87.482
$0.0000 0.000 87.482
$0.0000 0.000 87.482
$0.0000 0.000 87.482
$0.0000 0.000 87.482
$0.0000 0.000 87.482
$0.0000 0.000 87.482
$6.9986 0.439 87.921
$0.0000 0.000 87.921
$0.0000 0.000 87.921
$0.0000 0.000 87.921
$4.3961 0.256 88.177
$0.0000 0.000 88.177
$0.0000 0.000 88.177
$0.0000 0.000 88.177
$0.0000 0.000 88.177
$0.0000 0.000 88.177
$0.0000 0.000 88.177
$8.8177 0.612 88.789
$0.0000 0.000 88.789
$0.0000 0.000 88.789
$0.0000 0.000 88.789
$0.0000 0.000 88.789
$6.2152 0.398 89.187
</TABLE>
<PAGE> 13
Initial Investment: $1,000,000
<TABLE>
<CAPTION>
Average Annual Total Return Rate Investment Value at End of Period
<S> <C> <C> <C>
10 Year Return: 10.26% 10 Year Value: $2,655.11
5 Year Return: 10.67% 5 Year Value: $1,659.94
3 Year Return: 15.23% 3 Year Value: $1,530.08
1 Year Return: 9.62% 1 Year Value: $1,096.16
YTD Return: 9.62% YTD Value: $1,096.16
</TABLE>
Constant Sales Charge: 0.00%
<TABLE>
<CAPTION>
Payment/
Month Offering Sales Ex-Div Dividend Reinv. Capital Gain
Ended NAV Price Charge Date Amount Price Information
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
7 / 88 15.16 15.16 0.00%
8 / 88 14.34 14.34 0.00%
9 / 88 14.94 14.94 0.00%
10 / 88 14.98 14.98 0.00%
11 / 88 14.77 14.77 0.00%
12 / 88 15.31 15.31 0.00% 12/30/88 $0.0700 $15.31
1 / 89 16.12 16.12 0.00%
2 / 89 15.41 15.41 0.00%
3 / 89 15.55 15.55 0.00%
4 / 89 16.82 16.82 0.00%
5 / 89 17.97 17.97 0.00%
6 / 89 16.74 16.74 0.00% 08/30/89 $0.0700 $16.74
7 / 89 17.32 17.32 0.00%
8 / 89 18.00 18.00 0.00%
9 / 89 18.03 18.03 0.00%
10 / 89 17.42 17.42 0.00%
11 / 89 17.67 17.67 0.00%
12 / 89 16.93 16.93 0.00% 12/28/89 $0.8400 $16.77 $0.7800 Cap Gain
1 / 90 15.52 15.52 0.00%
2 / 90 15.95 15.95 0.00%
3 / 90 16.50 16.50 0.00%
4 / 90 15.86 15.86 0.00%
5 / 90 18.01 18.01 0.00%
6 / 90 17.73 17.73 0.00%
7 / 90 16.59 16.59 0.00%
8 / 90 14.30 14.30 0.00%
9 / 90 12.92 12.92 0.00%
10 / 90 12.53 12.53 0.00%
11 / 90 13.38 13.38 0.00%
12 / 90 12.44 12.44 0.00% 12/28/90 $1.3600 $12.40 $1.1000 Cap Gain
1 / 91 13.79 13.79 0.00%
2 / 91 14.79 14.79 0.00%
3 / 91 15.31 15.31 0.00%
4 / 91 15.20 15.20 0.00%
5 / 91 15.48 15.48 0.00%
6 / 91 13.91 13.91 0.00%
7 / 91 15.04 15.04 0.00%
8 / 91 15.70 15.70 0.00%
9 / 91 15.37 15.37 0.00%
10 / 91 15.97 15.97 0.00%
11 / 91 15.12 15.12 0.00%
12 / 91 15.60 15.60 0.00% 12/31/91 $1.00424 $16.46 $0.96658 Cap Gain
1 / 92 16.47 16.47 0.00%
</TABLE>
<TABLE>
<CAPTION>
10-Year 5-Year 3-Year
----------- ----------- -------- ----------- ----------- -------- ----------- -----------
Month # of Shares Shares Dividend # of Shares Shares Dividend # of Shares Shares
Ended Reinv. Outstanding Received Reinv. Outstanding Received Reinv. Outstanding
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
7 / 88 0.000 89.187
8 / 88 0.000 89.187
9 / 88 0.000 89.187
10 / 88 0.000 89.187
11 / 88 0.000 89.187
12 / 88 0.408 89.595
1 / 89 0.000 89.595
2 / 89 0.000 89.595
3 / 89 0.000 89.595
4 / 89 0.000 89.595
5 / 89 0.000 89.595
6 / 89 0.375 89.970
7 / 89 0.000 89.970
8 / 89 0.000 89.970
9 / 89 0.000 89.970
10 / 89 0.000 89.970
11 / 89 0.000 89.970
12 / 89 4.507 94.477 59.067
1 / 90 0.000 94.477 $0.0000 0.000 59.067
2 / 90 0.000 94.477 $0.0000 0.000 59.067
3 / 90 0.000 94.477 $0.0000 0.000 59.067
4 / 90 0.000 94.477 $0.0000 0.000 59.067
5 / 90 0.000 94.477 $0.0000 0.000 59.067
6 / 90 0.000 94.477 $0.0000 0.000 59.067
7 / 90 0.000 94.477 $0.0000 0.000 59.067
8 / 90 0.000 94.477 $0.0000 0.000 59.067
9 / 90 0.000 94.477 $0.0000 0.000 59.067
10 / 90 0.000 94.477 $0.0000 0.000 59.067
11 / 90 0.000 94.477 $0.0000 0.000 59.067
12 / 90 10.362 104.839 $80.3311 6.478 65.545
1 / 91 0.000 104.839 $0.0000 0.000 65.545
2 / 91 0.000 104.839 $0.0000 0.000 65.545
3 / 91 0.000 104.839 $0.0000 0.000 65.545
4 / 91 0.000 104.839 $0.0000 0.000 65.545
5 / 91 0.000 104.839 $0.0000 0.000 65.545
6 / 91 0.000 104.839 $0.0000 0.000 65.545
7 / 91 0.000 104.839 $0.0000 0.000 65.545
8 / 91 0.000 104.839 $0.0000 0.000 65.545
9 / 91 0.000 104.839 $0.0000 0.000 65.545
10 / 91 0.000 104.839 $0.0000 0.000 65.545
11 / 91 0.000 104.839 $0.0000 0.000 65.545
12 / 91 6.396 111.235 $65.8229 3.999 69.544 64.103
1 / 92 0.000 111.235 $0.0000 0.000 69.544 $0.0000 0.000 64.103
</TABLE>
<PAGE> 14
JOHN HANCOCK FREEDOM GLOBAL TECHNOLOGY FUND (CLASS A) -
SEC TOTAL RETURN FORMULA
Initial Investment: $1,000,000
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Average Annual Total Return Rate Investment Value at End of Period
<S> <C> <C> <C>
10 Year Return: 10.26% 10 Year Value: $2,655.11
5 Year Return: 10.67% 5 Year Value: $1,659.94
3 Year Return: 15.23% 3 Year Value: $1,530.08
1 Year Return: 9.62% 1 Year Value: $1,096.16
YTD Return: 9.62% YTD Value: $1,096.16
- --------------------------------------------------------------------------------
Constant Sales Charge: 0.00%
</TABLE>
<TABLE>
<CAPTION>
Payment/
Month Offering Sales Ex-Div Dividend Reinv. Capital Gain
Ended NAV Price Charge Date Amount Price Information
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
2 / 92 17.04 17.04 0.00%
3 / 92 15.55 15.55 0.00%
4 / 92 15.04 15.04 0.00%
5 / 92 15.10 15.10 0.00%
6 / 92 14.11 14.11 0.00%
7 / 92 14.04 14.04 0.00%
8 / 92 13.80 13.80 0.00%
9 / 92 14.09 14.09 0.00%
10 / 92 14.77 14.77 0.00%
11 / 92 15.74 15.74 0.00%
12 / 92 14.94 14.94 0.00% 12/23/92 $1.50644 $14.53 $1.50644 Cap Gain
1 / 93 15.55 15.55 0.00%
2 / 93 15.49 15.49 0.00%
3 / 93 15.84 15.84 0.00%
4 / 93 14.91 14.91 0.00%
5 / 93 16.67 16.67 0.00%
6 / 93 17.37 17.37 0.00%
7 / 93 17.66 17.66 0.00%
8 / 93 18.72 18.72 0.00%
9 / 93 19.30 19.30 0.00%
10 / 93 19.25 19.25 0.00%
11 / 93 18.94 18.94 0.00%
12 / 93 17.45 17.45 0.00% 12/23/93 $2.20288 $16.86 $2.20288 Cap Gain
1 / 94 18.98 18.98 0.00%
2 / 94 19.09 19.09 0.00%
3 / 94 17.80 17.80 0.00%
4 / 94 17.62 17.62 0.00%
5 / 94 17.08 17.08 0.00%
6 / 94 16.17 16.17 0.00%
7 / 94 16.50 16.50 0.00%
8 / 94 17.99 17.99 0.00%
9 / 94 18.53 18.53 0.00%
10 / 94 19.55 19.55 0.00%
11 / 94 18.63 18.63 0.00%
12 / 94 17.84 17.84 0.00% 12/23/94 $1.26248 $17.49 $1.26248 Cap Gain
</TABLE>
<TABLE>
<CAPTION>
10-Year 5-Year 3-Year
--------- ----------- ----------- -------- ----------- ----------- -------- ----------- -----------
Month Dividend # of Shares Shares Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding Received Reinv. Outstanding
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2 / 92 $0.0000 0.000 111.235 $0.0000 0.000 69.544 $0.0000 0.000 64.103
3 / 92 $0.0000 0.000 111.235 $0.0000 0.000 69.544 $0.0000 0.000 64.103
4 / 92 $0.0000 0.000 111.235 $0.0000 0.000 69.544 $0.0000 0.000 64.103
5 / 92 $0.0000 0.000 111.235 $0.0000 0.000 69.544 $0.0000 0.000 64.103
6 / 92 $0.0000 0.000 111.235 $0.0000 0.000 69.544 $0.0000 0.000 64.103
7 / 92 $0.0000 0.000 111.235 $0.0000 0.000 69.544 $0.0000 0.000 64.103
8 / 92 $0.0000 0.000 111.235 $0.0000 0.000 69.544 $0.0000 0.000 64.103
9 / 92 $0.0000 0.000 111.235 $0.0000 0.000 69.544 $0.0000 0.000 64.103
10 / 92 $0.0000 0.000 111.235 $0.0000 0.000 69.544 $0.0000 0.000 64.103
11 / 92 $0.0000 0.000 111.235 $0.0000 0.000 69.544 $0.0000 0.000 64.103
12 / 92 $167.5689 11.533 122.768 $104.7639 7.210 76.754 $96.5673 6.646 70.749
1 / 93 $0.0000 0.000 122.768 $0.0000 0.000 76.754 $0.0000 0.000 70.749
2 / 93 $0.0000 0.000 122.768 $0.0000 0.000 76.754 $0.0000 0.000 70.749
3 / 93 $0.0000 0.000 122.768 $0.0000 0.000 76.754 $0.0000 0.000 70.749
4 / 93 $0.0000 0.000 122.768 $0.0000 0.000 76.754 $0.0000 0.000 70.749
5 / 93 $0.0000 0.000 122.768 $0.0000 0.000 76.754 $0.0000 0.000 70.749
6 / 93 $0.0000 0.000 122.768 $0.0000 0.000 76.754 $0.0000 0.000 70.749
7 / 93 $0.0000 0.000 122.768 $0.0000 0.000 76.754 $0.0000 0.000 70.749
8 / 93 $0.0000 0.000 122.768 $0.0000 0.000 76.754 $0.0000 0.000 70.749
9 / 93 $0.0000 0.000 122.768 $0.0000 0.000 76.754 $0.0000 0.000 70.749
10 / 93 $0.0000 0.000 122.768 $0.0000 0.000 76.754 $0.0000 0.000 70.749
11 / 93 $0.0000 0.000 122.768 $0.0000 0.000 76.754 $0.0000 0.000 70.749
12 / 93 $270.4432 16.041 138.809 $169.0799 10.028 86.782 $155.8516 9.244 79.993
1 / 94 $0.0000 0.000 138.809 $0.0000 0.000 86.782 $0.0000 0.000 79.993
2 / 94 $0.0000 0.000 138.809 $0.0000 0.000 86.782 $0.0000 0.000 79.993
3 / 94 $0.0000 0.000 138.809 $0.0000 0.000 86.782 $0.0000 0.000 79.993
4 / 94 $0.0000 0.000 138.809 $0.0000 0.000 86.782 $0.0000 0.000 79.993
5 / 94 $0.0000 0.000 138.809 $0.0000 0.000 86.782 $0.0000 0.000 79.993
6 / 94 $0.0000 0.000 138.809 $0.0000 0.000 86.782 $0.0000 0.000 79.993
7 / 94 $0.0000 0.000 138.809 $0.0000 0.000 86.782 $0.0000 0.000 79.993
8 / 94 $0.0000 0.000 138.809 $0.0000 0.000 86.782 $0.0000 0.000 79.993
9 / 94 $0.0000 0.000 138.809 $0.0000 0.000 86.782 $0.0000 0.000 79.993
10 / 94 $0.0000 0.000 138.809 $0.0000 0.000 86.782 $0.0000 0.000 79.993
11 / 94 $0.0000 0.000 138.809 $0.0000 0.000 86.782 $0.0000 0.000 79.993
12 / 94 $175.2436 10.020 148.829 $109.5605 6.264 93.046 $100.9896 5.774 85.767
</TABLE>
<PAGE> 15
Initial Investment: $1,000.00
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Average Annual Total Return Rate Investment Value at End of Period
<S> <C> <C> <C>
10 Year Return: 10.26% 10 Year Value: $2,655.11
5 Year Return: 10.67% 5 Year Value: $1,659.94
3 Year Return: 15.23% 3 Year Value: $1,530.08
1 Year Return: 9.62% 1 Year Value: $1,096.16
YTD Return: 9.62% YTD Value: $1,096.16
- -------------------------------------------------------------------------------
Constant Sales Charge: 0.00%
</TABLE>
<TABLE>
<CAPTION>
Payment/
Month Offering Sales Ex-Div Dividend Reinv. Capital Gain
Ended NAV Price Charge Date Amount Price Information
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
12 / 93 17.45 17.45 0.00% 12/23/93 $2.20288 $16.86 $2.20288 Cap Gain
1 / 94 18.98 18.98 0.00%
2 / 94 19.09 19.09 0.00%
3 / 94 17.80 17.80 0.00%
4 / 94 17.62 17.62 0.00%
5 / 94 17.08 17.08 0.00%
6 / 94 16.17 16.17 0.00%
7 / 94 16.50 16.50 0.00%
8 / 94 17.99 17.99 0.00%
9 / 94 18.53 18.53 0.00%
10 / 94 19.55 19.55 0.00%
11 / 94 18.63 18.63 0.00%
12 / 94 17.84 17.84 0.00% 12/23/94 $1.26248 $17.49 $1.26248 Cap Gain
</TABLE>
<TABLE>
<CAPTION>
1-Year YTD
--------- ----------- ----------- -------- ----------- -----------
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
12 / 93 57.307 57.307
1 / 94 $0.0000 0.000 57.307 $0.0000 0.000 57.307
2 / 94 $0.0000 0.000 57.307 $0.0000 0.000 57.307
3 / 94 $0.0000 0.000 57.307 $0.0000 0.000 57.307
4 / 94 $0.0000 0.000 57.307 $0.0000 0.000 57.307
5 / 94 $0.0000 0.000 57.307 $0.0000 0.000 57.307
6 / 94 $0.0000 0.000 57.307 $0.0000 0.000 57.307
7 / 94 $0.0000 0.000 57.307 $0.0000 0.000 57.307
8 / 94 $0.0000 0.000 57.307 $0.0000 0.000 57.307
9 / 94 $0.0000 0.000 57.307 $0.0000 0.000 57.307
10 / 94 $0.0000 0.000 57.307 $0.0000 0.000 57.307
11 / 94 $0.0000 0.000 57.307 $0.0000 0.000 57.307
12 / 94 $0.0000 0.000 57.307 $0.0000 0.000 57.307
$72.3489 4.137 61.444 $72.3489 4.137 61.444
</TABLE>
<PAGE> 16
<TABLE>
<CAPTION>
DIVIDEND PAYMENTS
-----------------
1994
-------------------------------------------------------------------------------
Cap Gain Income Payment Per Share Reinvest
Fund Ex-Date Ex-Div Date Date Inc Div Cap Gain Price
- ---- -------- ----------- ------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
FREEDOM GLOBAL RX- CLASS B..................... Dec. 23 Dec. 29 $0.00000
Ticker Symbol - N/A
Cusip # - 410233-704
TOTAL: $0.00000 $0.00000
FR GLOBAL TECH - CLASS A....................... Dec. 23 Dec. 23 Dec. 29 $0.00000 $0.40822 ST $17.49
Ticker Symbol - NTTFX $0.85426 LT
Cusip # - 41023E-205
TOTAL: $0.00000 $1.26248
FR GLOBAL TECH - CLASS B....................... Dec. 23 Dec. 23 Dec. 29 $0.00000 $0.40822 ST $17.34
Ticker Symbol - FGTBX $0.85426 LT
Cusip # - 41023E-304
TOTAL: $0.00000 $1.26248
FR NAT'L AVIATION - CLASS A.................... Dec. 23 Dec. 23 Dec. 29 $0.00000 $2.47036 LT $7.22
Ticker Symbol - NAVTX
Cusip # - 41023E-106
TOTAL: $0.00000 $2.47036
FR NAT'L AVIATION - CLASS B.................... Dec. 23 Dec. 23 Dec. 29 $0.00000 $2.47036 LT $7.13
Ticker Symbol - N/A
Cusip # - 41023E-403
TOTAL: $0.00000 $2.47036
FR PAC BASIN EQUITIES - CLASS A................ Dec. 23 Dec. 23 Dec. 29 $0.00000 $0.37859 ST $13.92
Ticker Symbol - JHWPX $0.16959 LT
Cusip # - 410233-209
TOTAL: $0.00000 $0.54818
FR PAC BASIN EQUITIES - CLASS B................ DEC. 23 DEC. 23 DEC. 29 $0.00000 $0.37859 ST $13.85
Ticker Symbol - FPBBX $0.16959 LT
Cusip # - 410233-506
TOTAL: $0.00000 $0.54818
</TABLE>
<TABLE>
<CAPTION>
PREPARED BY FFM
---------------
1993
---------------------------------------------------------------
Per Share
----------------------------------
Ex. Div. Payment
Fund Date Date Inc Div Extra Div Cap Gain
- ---- -------- ------- ------- --------- --------
<S> <C> <C> <C> <C> <C>
FREEDOM GLOBAL RX- CLASS B..................... Dec. 23 Dec. 29 NONE
Ticker Symbol - N/A
Cusip # - 410233-704
TOTAL: $0.00000 $0.00000
FR GLOBAL TECH - CLASS A....................... Dec. 23 Dec. 30 $1.66810 LT
Ticker Symbol - NTTFX $0.53478 ST
Cusip # - 41023E-205
TOTAL: $0.00000 $2.20288
FR GLOBAL TECH - CLASS B....................... NONE
Ticker Symbol - FGTBX
Cusip # - 41023E-304
FR NAT'L AVIATION - CLASS A.................... Dec. 23 Dec. 30 NONE $1.08577 LT
Ticker Symbol - NAVTX
Cusip # - 41023E-106 $0.08562 ST
TOTAL: $0.00000 $0.00000 $1.17139
FR NAT'L AVIATION - CLASS B.................... NONE
Ticker Symbol - N/A
Cusip # - 41023E-403
FR PAC BASIN EQUITIES - CLASS A................ Dec. 23 Dec. 30 NONE $0.10431 LT
Ticker Symbol - JHWPX $0.30065 ST
Cusip # - 410233-209
TOTAL: $0.00000 $0.00000 $0.40496
FR PAC BASIN EQUITIES - CLASS B................ Dec. 23 Dec. 29 NONE
Ticker Symbol - FPBBX
Cusip # - 410233-506
TOTAL: $0.00000 $0.00000
</TABLE>
<PAGE> 17
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
------------------------
GROSS INCOME 437,540.62 0.15
SHORT TERM INVESTMENTS 0.00 LESS: FEES AND EXPENSES 1,033,241.74 0.35
------------------------
CORPORATE SAVINGS ACCOUNT 0.00 NET INCOME 595,701.12- 0.20-
CASH 0.00 INCOME EQUALIZATION 0.00 0.00
ACCTS RECVBLE-SECURITIES SOLD 1,249.68 UNDISTRIBUTED INCOME-PRIOR PERIOD 0.00 0.00
------------------------
ACCTS RECVBLE-CAP STOCK 4,749.08 TOTAL INCOME 595,701.12- 0.20-
DIVIDENDS RECVBLE 0.00 LESS: DISTRIBUTIONS YEAR TO DATE 0.00 0.00
------------------------
INTEREST RECVBLE 0.00 UNDISTRIBUTED NET INCOME 595,701.12- 0.20-
MISCELLANEOUS RECVBLE 0.00
MISCELLANEOUS ASSETS 52,276,738.93 UNREALIZED GAIN/LOSS 11,562,138.59 3.95
-------------
TOTAL 52,282,737.69
ACCUMULATED GAIN/LOSS 4,386.24 0.00
LIABILITIES
ACCTS PAYABLE-SECURITIES PURCHASED 0.00 REALIZED GAIN/LOSS YEAR TO DATE 929,952.12 0.32
ACCTS PAYABLE-CAPITAL STOCK 48,915.28
DIVIDEND PAYABLE 0.00 CAPITAL STOCK 1,038.95 0.00
MISCELLANEOUS PAYABLE 0.00
ACCRUED FEES AND EXPENSES 39,056.23 PAID IN SURPLUS 40,292,951.40 13.77
MISCELLANEOUS LIABILITIES 0.00
------------- ------------------------
TOTAL 87,971.51
NET ASSETS 52,194,766.18 TOTAL 52,194,766.18 17.84
NET SHARES OUTSTANDING 2,925,484.617 COST OF SECURITIES 0.00
NET ASSET VALUE PER SHARE 17.84 REALIZED GAIN/LOSS YTD.
LONG TERM 3,399,933.20-
OFFERING PRICE PER SHARE 18.78 SHORT TERM 4,329,885.32
WEIGHTED AVERAGE 0.000
</TABLE>
<PAGE> 18
JOHN HANCOCK FREEDOM GLOBAL TECHNOLOGY FUND (CLASS A) - SEC TOTAL RETURN FORMULA
Initial Investment: $1,000.00
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Average Annual Total Return Rate Investment Value at End of Period
<S> <C> <C> <C>
10 Year Return: 9.69% 10 Year Value: $2,521.47
5 Year Return: 9.54% 5 Year Value: $1,577.06
3 Year Return: 13.28% 3 Year Value: $1,453.66
1 Year Return: 4.13% 1 Year Value: $1,041.25
YTD Return: 4.13% YTD Value: $1,041.25
- -------------------------------------------------------------------------------
</TABLE>
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>
12 / 84 $11.89 $12.52 5.00% 79.872
1 / 85 $12.77 $13.44 5.00% 01/17/85 $0.2300 $12.11 $18.3706 1.517 81.389
2 / 85 $12.55 $13.21 5.00% $0.0000 0.000 81.389
3 / 85 $12.20 $12.84 5.00% $0.0000 0.000 81.389
4 / 85 $11.84 $12.46 5.00% $0.0000 0.000 81.389
5 / 85 $12.33 $12.98 5.00% $0.0000 0.000 81.389
6 / 85 $12.32 $12.97 5.00% $0.0000 0.000 81.389
7 / 85 $12.48 $13.14 5.00% 07/11/85 $0.1100 $12.29 $8.9528 0.728 82.117
8 / 85 $12.23 $12.87 5.00% $0.0000 0.000 82.117
9 / 85 $11.58 $12.19 5.00% $0.0000 0.000 82.117
10 / 85 $11.84 $12.46 5.00% $0.0000 0.000 82.117
11 / 85 $12.81 $13.48 5.00% $0.0000 0.000 82.117
12 / 85 $13.57 $14.28 5.00% $0.0000 0.000 82.117
1 / 86 $13.46 $14.17 5.00% 01/16/86 $0.1100 $13.51 $9.0329 0.669 82.786
2 / 86 $14.36 $15.12 5.00% $0.0000 0.000 82.786
3 / 86 $14.69 $15.46 5.00% $0.0000 0.000 82.786
4 / 86 $14.90 $15.68 5.00% $0.0000 0.000 82.786
5 / 86 $15.28 $16.08 5.00% $0.0000 0.000 82.786
6 / 86 $14.85 $15.63 5.00% $0.0000 0.000 82.786
7 / 86 $13.41 $14.12 5.00% 07/11/86 $0.0500 $14.08 $4.1393 0.294 83.080
8 / 86 $14.28 $15.03 5.00% $0.0000 0.000 83.080
9 / 86 $13.11 $13.80 5.00% $0.0000 0.000 83.080
10 / 86 $13.74 $14.46 5.00% $0.0000 0.000 83.080
11 / 86 $14.12 $14.86 5.00% $0.0000 0.000 83.080
12 / 86 $13.80 $14.53 5.00% $0.0000 0.000 83.080
1 / 87 $15.46 $16.27 5.00% $0.0000 0.000 83.080
2 / 87 $16.61 $17.48 5.00% 02/12/87 $0.0800 $15.93 $6.6464 0.417 83.497
3 / 87 $17.06 $17.96 5.00% $0.0000 0.000 83.497
4 / 87 $17.08 $17.98 5.00% $0.0000 0.000 83.497
5 / 87 $16.93 $17.82 5.00% $0.0000 0.000 83.497
6 / 87 $16.87 $17.76 5.00% 06/25/87 $0.0500 $17.16 $4.1749 0.243 83.740
7 / 87 $17.71 $18.64 5.00% $0.0000 0.000 83.740
8 / 87 $18.74 $19.73 5.00% $0.0000 0.000 83.740
9 / 87 $18.74 $19.73 5.00% $0.0000 0.000 83.740
10 / 87 $14.04 $14.78 5.00% $0.0000 0.000 83.740
11 / 87 $12.57 $13.23 5.00% $0.0000 0.000 83.740
12 / 87 $14.08 $14.82 5.00% $0.0000 0.000 83.740
1 / 88 $13.81 $14.54 5.00% 01/04/88 $0.1000 $14.40 $8.3740 0.582 84.322
2 / 88 $14.72 $15.49 5.00% $0.0000 0.000 84.322
3 / 88 $14.37 $15.13 5.00% $0.0000 0.000 84.322
4 / 88 $14.70 $15.47 5.00% $0.0000 0.000 84.322
5 / 88 $14.68 $15.45 5.00% $0.0000 0.000 84.322
6 / 88 $15.63 $16.45 5.00% 06/30/88 $0.0700 $15.63 $5.9025 0.378 84.700
</TABLE>
<TABLE>
<CAPTION>
5-Year 3-Year
---------------------------------------------------------------------------
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
12 / 84
1 / 85
2 / 85
3 / 85
4 / 85
5 / 85
6 / 85
7 / 85
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
</TABLE>
<PAGE> 19
JOHN HANCOCK FREEDOM GLOBAL TECHNOLOGY FUND (CLASS A) - SEC TOTAL RETURN FORMULA
Initial Investment: $1,000.00
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Average Annual Total Return Rate Investment Value at End of Period
<S> <C> <C> <C>
10 Year Return: 9.69% 10 Year Value: $2,521.47
5 Year Return: 9.54% 5 Year Value: $1,577.06
3 Year Return: 13.28% 3 Year Value: $1,453.66
1 Year Return: 4.13% 1 Year Value: $1,041.25
YTD Return: 4.13% YTD Value: $1,041.25
- -------------------------------------------------------------------------------
</TABLE>
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>
7 / 88 $15.16 $15.96 5.00% $0.0000 0.000 84.700
8 / 88 $14.34 $15.09 5.00% $0.0000 0.000 84.700
9 / 88 $14.94 $15.73 5.00% $0.0000 0.000 84.700
10 / 88 $14.98 $15.77 5.00% $0.0000 0.000 84.700
11 / 88 $14.77 $15.55 5.00% $0.0000 0.000 84.700
12 / 88 $15.31 $16.12 5.00% 12/30/88 $0.0700 $15.31 $5.9290 0.387 85.087
1 / 89 $16.12 $16.97 5.00% $0.0000 0.000 85.087
2 / 89 $15.41 $16.22 5.00% $0.0000 0.000 85.087
3 / 89 $15.55 $16.37 5.00% $0.0000 0.000 85.087
4 / 89 $16.82 $17.71 5.00% $0.0000 0.000 85.087
5 / 89 $17.97 $18.92 5.00% $0.0000 0.000 85.087
6 / 89 $16.74 $17.62 5.00% 06/30/89 $0.0700 $16.74 $5.9561 0.356 85.443
7 / 89 $17.32 $18.23 5.00% $0.0000 0.000 85.443
8 / 89 $18.00 $18.95 5.00% $0.0000 0.000 85.443
9 / 89 $18.03 $18.98 5.00% $0.0000 0.000 85.443
10 / 89 $17.42 $18.34 5.00% $0.0000 0.000 85.443
11 / 89 $17.67 $18.60 5.00% $0.0000 0.000 85.443
12 / 89 $16.93 $17.82 5.00% 12/28/89 $0.8400 $16.77 $0.7800 Cap Gain $71.7721 4.280 89.723
1 / 90 $15.52 $16.34 5.00% $0.0000 0.000 89.723
2 / 90 $15.95 $16.79 5.00% $0.0000 0.000 89.723
3 / 90 $16.50 $17.37 5.00% $0.0000 0.000 89.723
4 / 90 $15.86 $16.69 5.00% $0.0000 0.000 89.723
5 / 90 $18.01 $18.96 5.00% $0.0000 0.000 89.723
6 / 90 $17.73 $18.66 5.00% $0.0000 0.000 89.723
7 / 90 $16.59 $17.46 5.00% $0.0000 0.000 89.723
8 / 90 $14.30 $15.05 5.00% $0.0000 0.000 89.723
9 / 90 $12.92 $13.60 5.00% $0.0000 0.000 89.723
10 / 90 $12.53 $13.19 5.00% $0.0000 0.000 89.723
11 / 90 $13.38 $14.08 5.00% $0.0000 0.000 89.723
12 / 90 $12.44 $13.09 5.00% 12/28/90 $1.3600 $12.40 $1.1000 Cap Gain $122.0233 9.841 99.564
1 / 91 $13.79 $14.52 5.00% $0.0000 0.000 99.564
2 / 91 $14.79 $15.57 5.00% $0.0000 0.000 99.564
3 / 91 $15.31 $16.12 5.00% $0.0000 0.000 99.564
4 / 91 $15.20 $16.00 5.00% $0.0000 0.000 99.564
5 / 91 $15.48 $16.29 5.00% $0.0000 0.000 99.564
6 / 91 $13.91 $14.64 5.00% $0.0000 0.000 99.564
7 / 91 $15.04 $15.83 5.00% $0.0000 0.000 99.564
8 / 91 $15.70 $16.53 5.00% $0.0000 0.000 99.564
9 / 91 $15.37 $16.18 5.00% $0.0000 0.000 99.564
10 / 91 $15.97 $16.81 5.00% $0.0000 0.000 99.564
11 / 91 $15.12 $15.92 5.00% $0.0000 0.000 99.564
12 / 91 $15.60 $16.42 5.00% 12/31/91 $1.00424 $16.46 $0.96658 Cap Gain $99.9862 6.074 105.638
1 / 92 $16.47 $17.34 5.00% $0.0000 0.000 105.638
</TABLE>
<TABLE>
<CAPTION>
5-Year 3-Year
---------------------------------------------------------------------------
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
7 / 88
8 / 88
9 / 88
10 / 88
11 / 88
12 / 88
1 / 89
2 / 89
3 / 89
4 / 89
5 / 89
6 / 89
7 / 89
8 / 89
9 / 89
10 / 89
11 / 89
12 / 89
1 / 90
2 / 90 56.117
3 / 90 $0.0000 0.000 56.117
4 / 90 $0.0000 0.000 56.117
5 / 90 $0.0000 0.000 56.117
6 / 90 $0.0000 0.000 56.117
7 / 90 $0.0000 0.000 56.117
8 / 90 $0.0000 0.000 56.117
9 / 90 $0.0000 0.000 56.117
10 / 90 $0.0000 0.000 56.117
11 / 90 $0.0000 0.000 56.117
12 / 90 $76.3191 6.155 62.272
1 / 91 $0.0000 0.000 62.272
2 / 91 $0.0000 0.000 62.272
3 / 91 $0.0000 0.000 62.272
4 / 91 $0.0000 0.000 62.272
5 / 91 $0.0000 0.000 62.272
6 / 91 $0.0000 0.000 62.272
7 / 91 $0.0000 0.000 62.272
8 / 91 $0.0000 0.000 62.272
9 / 91 $0.0000 0.000 62.272
10 / 91 $0.0000 0.000 62.272
11 / 91 $0.0000 0.000 62.272
12 / 91 $62.5360 3.799 66.071 60.901
1 / 92 $0.0000 0.000 66.071 $0.0000 0.000 60.901
</TABLE>
<PAGE> 20
JOHN HANCOCK FREEDOM GLOBAL TECHNOLOGY FUND (CLASS A) - SEC TOTAL RETURN FORMULA
Initial Investment: $1,000.00
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Average Annual Total Return Rate Investment Value at End of Period
<S> <C> <C> <C>
10 Year Return: 9.69% 10 Year Value: $2,521.47
5 Year Return: 9.54% 5 Year Value: $1,577.06
3 Year Return: 13.28% 3 Year Value: $1,453.66
1 Year Return: 4.13% 1 Year Value: $1,041.25
YTD Return: 4.13% YTD Value: $1,041.25
- -------------------------------------------------------------------------------
</TABLE>
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>
2 / 92 $17.04 $17.94 5.00% $0.0000 0.000 105.638
3 / 92 $15.55 $16.37 5.00% $0.0000 0.000 105.638
4 / 92 $15.04 $15.83 5.00% $0.0000 0.000 105.638
5 / 92 $15.10 $15.89 5.00% $0.0000 0.000 105.638
6 / 92 $14.11 $14.85 5.00% $0.0000 0.000 105.638
7 / 92 $14.04 $14.78 5.00% $0.0000 0.000 105.638
8 / 92 $13.80 $14.53 5.00% $0.0000 0.000 105.638
9 / 92 $14.09 $14.83 5.00% $0.0000 0.000 105.638
10 / 92 $14.77 $15.55 5.00% $0.0000 0.000 105.638
11 / 92 $15.74 $16.57 5.00% $0.0000 0.000 105.638
12 / 92 $14.94 $15.73 5.00% 12/23/92 $1.50644 $14.53 $1.50644 Cap Gain $159.1373 10.952 116.590
1 / 93 $15.55 $16.37 5.00% $0.0000 0.000 116.590
2 / 93 $15.49 $16.31 5.00% $0.0000 0.000 116.590
3 / 93 $15.84 $16.67 5.00% $0.0000 0.000 116.590
4 / 93 $14.91 $15.69 5.00% $0.0000 0.000 116.590
5 / 93 $16.67 $17.55 5.00% $0.0000 0.000 116.590
6 / 93 $17.37 $18.28 5.00% $0.0000 0.000 116.590
7 / 93 $17.66 $18.59 5.00% $0.0000 0.000 116.590
8 / 93 $18.72 $19.71 5.00% $0.0000 0.000 116.590
9 / 93 $19.30 $20.32 5.00% $0.0000 0.000 116.590
10 / 93 $19.25 $20.26 5.00% $0.0000 0.000 116.560
11 / 93 $18.94 $19.94 5.00% $0.0000 0.000 116.560
12 / 93 $17.45 $18.37 5.00% 12/23/93 $2.20288 $16.86 $2.20288 Cap Gain $256.8338 15.233 131.823
1 / 94 $18.98 $19.98 5.00% $0.0000 0.000 131.823
2 / 94 $19.09 $20.09 5.00% $0.0000 0.000 131.823
3 / 94 $17.80 $18.74 5.00% $0.0000 0.000 131.823
4 / 94 $17.62 $18.55 5.00% $0.0000 0.000 131.823
5 / 94 $17.08 $17.98 5.00% $0.0000 0.000 131.823
6 / 94 $16.17 $17.02 5.00% $0.0000 0.000 131.823
7 / 94 $16.50 $17.37 5.00% $0.0000 0.000 131.823
8 / 94 $17.99 $18.94 5.00% $0.0000 0.000 131.823
9 / 94 $18.53 $19.51 5.00% $0.0000 0.000 131.823
10 / 94 $19.55 $20.58 5.00% $0.0000 0.000 131.823
11 / 94 $18.63 $19.61 5.00% $0.0000 0.000 131.823
12 / 94 $17.84 $18.78 5.00% 12/23/94 $1.26248 $17.49 $1.26248 Cap Gain $166.4239 9.515 141.338
</TABLE>
<TABLE>
<CAPTION>
5-Year 3-Year
---------------------------------------------------------------------------
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
2 / 92 $0.0000 0.000 66.071 $0.0000 0.000 60.901
3 / 92 $0.0000 0.000 66.071 $0.0000 0.000 60.901
4 / 92 $0.0000 0.000 66.071 $0.0000 0.000 60.901
5 / 92 $0.0000 0.000 66.071 $0.0000 0.000 60.901
6 / 92 $0.0000 0.000 66.071 $0.0000 0.000 60.901
7 / 92 $0.0000 0.000 66.071 $0.0000 0.000 60.901
8 / 92 $0.0000 0.000 66.071 $0.0000 0.000 60.901
9 / 92 $0.0000 0.000 66.071 $0.0000 0.000 60.901
10 / 92 $0.0000 0.000 66.071 $0.0000 0.000 60.901
11 / 92 $0.0000 0.000 66.071 $0.0000 0.000 60.901
12 / 92 $99.5320 6.850 72.921 $91.7437 6.314 67.215
1 / 93 $0.0000 0.000 72.921 $0.0000 0.000 67.215
2 / 93 $0.0000 0.000 72.921 $0.0000 0.000 67.215
3 / 93 $0.0000 0.000 72.921 $0.0000 0.000 67.215
4 / 93 $0.0000 0.000 72.921 $0.0000 0.000 67.215
5 / 93 $0.0000 0.000 72.921 $0.0000 0.000 67.215
6 / 93 $0.0000 0.000 72.921 $0.0000 0.000 67.215
7 / 93 $0.0000 0.000 72.921 $0.0000 0.000 67.215
8 / 93 $0.0000 0.000 72.921 $0.0000 0.000 67.215
9 / 93 $0.0000 0.000 72.921 $0.0000 0.000 67.215
10 / 93 $0.0000 0.000 72.921 $0.0000 0.000 67.215
11 / 93 $0.0000 0.000 72.921 $0.0000 0.000 67.215
12 / 93 $160.6362 9.528 82.449 $148.0666 8.782 75.997
1 / 94 $0.0000 0.000 82.449 $0.0000 0.000 75.997
2 / 94 $0.0000 0.000 82.449 $0.0000 0.000 75.997
3 / 94 $0.0000 0.000 82.449 $0.0000 0.000 75.997
4 / 94 $0.0000 0.000 82.449 $0.0000 0.000 75.997
5 / 94 $0.0000 0.000 82.449 $0.0000 0.000 75.997
6 / 94 $0.0000 0.000 82.449 $0.0000 0.000 75.997
7 / 94 $0.0000 0.000 82.449 $0.0000 0.000 75.997
8 / 94 $0.0000 0.000 82.449 $0.0000 0.000 75.997
9 / 94 $0.0000 0.000 82.449 $0.0000 0.000 75.997
10 / 94 $0.0000 0.000 82.449 $0.0000 0.000 75.997
11 / 94 $0.0000 0.000 82.449 $0.0000 0.000 75.997
12 / 94 $104.0902 5.951 88.440 $95.9447 5.486 81.483
</TABLE>
<PAGE> 21
JOHN HANCOCK FREEDOM GLOBAL TECHNOLOGY FUND (CLASS A) - SEC TOTAL RETURN FORMULA
Initial Investment: $1,000.00
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
Average Annual Total Return Rate Investment Value at End of Period
<S> <C> <C> <C>
10 Year Return: 9.69% 10 Year Value: $2,521.47
5 Year Return: 9.54% 5 Year Value: $1,577.06
3 Year Return: 13.28% 3 Year Value: $1,453.66
1 Year Return: 4.13% 1 Year Value: $1,041.25
YTD Return: 4.13% YTD Value: $1,041.25
- -----------------------------------------------------------------------------
</TABLE>
Constant Sales Charge: 5.00%
<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>
12 / 93 $17.45 $18.37 5.00% 12/23/93 $2.20288 $16.86 $2.20288 Cap Gain
1 / 94 $18.98 $19.98 5.00%
2 / 94 $19.09 $20.09 5.00% 54.437
3 / 94 $17.80 $18.74 5.00% $0.0000 0.000 54.437
4 / 94 $17.62 $18.55 5.00% $0.0000 0.000 54.437
5 / 94 $17.08 $17.98 5.00% $0.0000 0.000 54.437
6 / 94 $16.17 $17.02 5.00% $0.0000 0.000 54.437
7 / 94 $16.50 $17.37 5.00% $0.0000 0.000 54.437
8 / 94 $17.99 $18.94 5.00% $0.0000 0.000 54.437
9 / 94 $18.53 $19.51 5.00% $0.0000 0.000 54.437
10 / 94 $19.55 $20.58 5.00% $0.0000 0.000 54.437
11 / 94 $18.63 $19.61 5.00% $0.0000 0.000 54.437
12 / 94 $17.84 $18.78 5.00% 12/23/94 $1.26248 $17.49 $1.26248 Cap Gain $68.7256 3.929 58.366
</TABLE>
<TABLE>
<CAPTION>
YTD
---------------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- --------------------------------------------------
<S> <C> <C> <C>
12 / 93 54.437
1 / 94 $0.0000 0.000 54.437
2 / 94 $0.0000 0.000 54.437
3 / 94 $0.0000 0.000 54.437
4 / 94 $0.0000 0.000 54.437
5 / 94 $0.0000 0.000 54.437
6 / 94 $0.0000 0.000 54.437
7 / 94 $0.0000 0.000 54.437
8 / 94 $0.0000 0.000 54.437
9 / 94 $0.0000 0.000 54.437
10 / 94 $0.0000 0.000 54.437
11 / 94 $0.0000 0.000 54.437
12 / 94 $68.7256 3.929 58.366
</TABLE>
<PAGE> 22
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: N/A N/A N/A 0.00% N/A N/A
5 Year Return: N/A N/A N/A 2.00% N/A N/A
3 Year Return: N/A N/A N/A 4.00% $0.00
0.99 Year Return: 10.02% 5.02% $1,100.19 5.00% $50.00 $1,050.19
YTD Return: 10.02% 5.02% $1,100.19 5.00% $50.00 $1,050.19
</TABLE>
<TABLE>
<CAPTION>
Constant Sales Charge: N/A Accrued Dividend $0.0000
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains
Ended NAV Price Charge Date Amount Price Information
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 / 04 /94 $17.24 $17.24 N/A
1 / 94 $18.96 $18.96 N/A
2 / 94 $19.05 $19.05 N/A
3 / 94 $17.76 $17.76 N/A
4 / 94 $17.56 $17.56 N/A
5 / 94 $17.01 $17.01 N/A
6 / 94 $16.09 $16.09 N/A
7 / 94 $16.42 $16.42 N/A
8 / 94 $17.89 $17.89 N/A
9 / 94 $18.41 $18.41 N/A
10 / 94 $19.41 $19.41 N/A
11 / 94 $18.49 $18.49 N/A
12 / 94 $17.68 $17.68 N/A Dec 29 1994 $1.2625 $17.34 $1.2625 Cap Gains
</TABLE>
<TABLE>
<CAPTION>
1-Year YTD
- - - - - - -
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
<S> <C> <C> <C> <C> <C> <C>
1 / 04 / 94 58.005 58.005
1 / 94 $0.0000 0.000 58.005 $0.0000 0.000 58.005
2 / 94 $0.0000 0.000 58.005 $0.0000 0.000 58.005
3 / 94 $0.0000 0.000 58.005 $0.0000 0.000 58.005
4 / 94 $0.0000 0.000 58.005 $0.0000 0.000 58.005
5 / 94 $0.0000 0.000 58.005 $0.0000 0.000 58.005
6 / 94 $0.0000 0.000 58.005 $0.0000 0.000 58.005
7 / 94 $0.0000 0.000 58.005 $0.0000 0.000 58.005
8 / 94 $0.0000 0.000 58.005 $0.0000 0.000 58.005
9 / 94 $0.0000 0.000 58.005 $0.0000 0.000 58.005
10 / 94 $0.0000 0.000 58.005 $0.0000 0.000 58.005
11 / 94 $0.0000 0.000 58.005 $0.0000 0.000 58.005
12 / 94 73.2302 4.223 62.228 $73.2302 4.223 62.228
</TABLE>
<PAGE> 23
<TABLE>
MCPB4195
INVESTORS BANK & TRUST FUND ACCOUNTING AND CUSTODY TRACKING SYSTEM 12/30/94
FUND STATEMENT
JOHN HANCOCK GLOBAL TECH CLASS B FUND
B FUND
COMPUTATION OF NET ASSET VALUE AND
OFFERING PRICE B FUND DETAIL OF NET ASSETS AMOUNTS PER SHARE
- ---------------------------------- ------ -------------------- ------- ---------
<S> <C> <C> <C> <C>
ASSETS DIVIDEND INCOME 14,833.74 0.03
MARKET VALUE OF SECURITIES 0.00 INTEREST INCOME 24,655.72 0.05
(COST) MISCELLANEOUS INCOME 0.00 0.00
------------ -----
GROSS INCOME 39,489.46 0.07
SHORT TERM INVESTMENTS 0.00 LESS: FEES AND EXPENSES 0.24
------------ -----
CORPORATE SAVINGS ACCOUNT 0.00 NET INCOME 0.16-
CASH 0.00 INCOME EQUALIZATION 0.00
ACCTS RECVBLS-SECURITIES SOLD 204.58- UNDISTRIBUTED INCOME-PRIOR PERIOD 0.00
------------ -----
ACCTS RECVBLE-CAP STOCK 36,167.86 TOTAL INCOME 0.16-
DIVIDENDS RECVBLE 0.00 LESS: DISTRIBUTIONS YEAR TO DATE 0.00 0.00
------------ -----
INTEREST RECVBLE 0.00 UNDISTRIBUTED NET INCOME 85,592.06- 0.16-
MISCELLANEOUS RECVBLE 0.00
MISCELLANEOUS ASSETS 9,302,433.69 UNREALIZED GAIN/LOSS 48,467.58 0.09
------------
TOTAL 9,338,396.97
ACCUMULATED GAIN/LOSS 0.00 0.00
LIABILITIES
ACCTS PAYABLE-SECURITIES PURCHASED 0.00 REALIZED GAIN/LOSS YEAR TO DATE 251,544.49- 0.48-
ACCTS PAYABLE-CAPITAL STOCK 0.00
DIVIDENDS PAYABLE 0.00 CAPITAL STOCK 431.50- 0.00
MISCELLANEOUS PAYABLE 0.00
ACCRUED FEES AND EXPENSES 14,300.85 PAID IN SURPLUS 9,613,196.59 18.23
MISCELLANEOUS LIABILITIES 0.00
------------ ------------ -----
TOTAL 14,300.85
NET ASSETS 9,324,096.12 TOTAL 9,324,096.12 17.68
NET SHARES OUTSTANDING 527,263.115 COST OF SECURITIES 0.00
NET ASSET VALUE PER SHARE 17.68 REALIZED GAIN/LOSS YTD.
LONG TERM 606,494.43-
OFFERING PRICE PER SHARE 17.68 SHORT TERM 354,949.94
WEIGHTED AVERAGE 0.000
</TABLE>
<PAGE> 1
EXHIBIT 99.B17
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS, that the undersigned Trustee of John Hancock
Technology Series, Inc. does hereby constitute and appoint EDWARD J. BOUDREAU,
JR., THOMAS H. DROHAN, AND JAMES B. LITTLE and each of them individually his
true and lawful attorneys and agents to take any and all action and execute any
and all instruments which said attorneys and agents may deem necessary or
advisable
(i) to enable the Trust to comply with the Securities Act of 1933, as
amended, and any rules regulations, orders or other requirements of the
Securities and Exchange Commission thereunder, in connection with the
registration under such Securities Act of 1933 of shares of beneficial
interest of the Trust to be offered by the Trust, and
(ii) in connection with the registration of the Trust under the
Investment Company Act of 1940, as amended,
including specifically, but without limitation of the foregoing, power and
authority to sign his name in his behalf as Director as indicated below,
opposite his signature hereto, to any amendment or supplement (including
post-effective amendments) to the registration statement or statements filed
with the Securities and Exchange Commission under such Securities Act of 1933
and such Investment Company Act of 1940, and to execute any instruments or
documents filed or to be filed as a part of or in connection with such
registration statement or statements; and does hereby ratify and confirm all
that said attorneys and agents shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, we have hereunto set our hands on the date
indicated below.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE AS OF:
- --------- ----- -----------
<S> <C> <C>
/s/Edward J. Boudreau, Jr. Chairman, Director March 31, 1992
- --------------------------
Edward J. Boudreau, Jr. and Principal
Executive Officer
/s/Thomas W. L. Cameron Director August 31, 1993
- --------------------------
Thomas W. L. Cameron
/s/James F. Carlin Director December 8, 1992
- --------------------------
James F. Carlin
/s/Charles F. Fretz Director April 30, 1992
- --------------------------
Charles F. Fretz
</TABLE>
<PAGE> 2
<TABLE>
<S> <C> <C>
/s/Jack P. Gould Director April 3, 1992
- --------------------------
Jack P. Gould
/s/Harold R. Hiser, Jr. Director March 2, 1993
- --------------------------
Harold R. Hiser, Jr.
/s/Charles L. Ladner Director April 2, 1992
- --------------------------
Charles L. Ladner
/s/Patricia P. McCarter Director April 3, 1992
- --------------------------
Patricia P. McCarter
/s/Steven R. Pruchansky Director April 28, 1992
- --------------------------
Stevem R/ Pruchansky
/s/Norman H. Smith Director April 4, 1992
- --------------------------
Norman H. Smith
/s/John P. Toolan Director April 14, 1992
- --------------------------
John P. Toolan
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000357238
<NAME> JOHN HANCOCK TECHNOLOGY SERIES, INC.
<SERIES>
<NUMBER> 2
<NAME> JOHN HANCOCK FREEDOM GLOBAL TECHNOLOGY FUND - CLASS A
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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