REGISTRATION NO. 2-75807
REGISTRATION NO. 811-3392
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, C.C. 20549
FORM N-1A
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REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933 [X]
PRE-EFFECTIVE AMENDMENT NO. [ ]
POST-EFFECTIVE AMENDMENT NO. 25 [X]
AND/OR
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. 28
(Check appropriate box or boxes)
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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
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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)
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IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (Check appropriate box)
[ ] IMMEDIATELY UPON FILING PURSUANT TO PARAGRAPH (B)
[X] ON MAY 1, 1996 PURSUANT TO PARAGRAPH (B)
[ ] 60 DAYS AFTER FILING PURSUANT TO PARAGRAPH (A)
[ ] ON (DATE) PURSUANT TO PARAGRAPH (A) OF RULE (485 OR 486)
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 26, 1996.
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JOHN HANCOCK GLOBAL TECHNOLOGY FUND
CROSS REFERENCE SHEET
Cross Reference Sheet
Item Number Form N-1A, Statement of Additional
Part A Prospectus Caption Information Caption
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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; Share 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
<PAGE>
Item Number Form N-1A, Statement of Additional
Part A Prospectus Caption Information Caption
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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
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<PAGE>
JOHN HANCOCK
GLOBAL TECHNOLOGY
FUND
CLASS A AND CLASS B SHARES
PROSPECTUS
MAY 1, 1996
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TABLE OF CONTENTS
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Page
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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........................................................................... 13
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, 1996, 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>
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, 1995, adjusted to reflect current
fees and expenses. Actual fees and expenses may be greater or less than those
indicated.
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CLASS A CLASS B
SHARES SHARES
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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 reduction)++..................................................... 0.82% 0.82%
12b-1 fee***.............................................................................. 0.30% 1.00%
Other expenses............................................................................ 0.55% 0.55%
Total Fund operating expenses (net of reduction)**........................................ 1.67% 2.37%
</TABLE>
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* 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 the Adviser's reduction of the management fee, expenses
shown for Class A and Class B shares, respectively, would be: Management fee
0.93% and 0.93% and total expenses 1.78% and 2.48%.
*** 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. See "The Fund Expenses."
+ Redemption by wire fee (currently $4.00) not included.
++ The calculation of the management fee is based on average net assets for the
fiscal year ended December 31, 1995. See "The Fund's Expenses."
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EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
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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...................................................................... $ 66 $ 100 $ 136 $238
Class B Shares
--Assuming complete redemption at end of period................................... $ 74 $ 104 $ 147 $253
--Assuming no redemption.......................................................... $ 24 $ 74 $ 127 $253
(This example should not be considered a representation of past or future expenses. Actual expenses may be greater or less than
those shown.)
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The Fund's payment of a distribution fee may result in a long-term shareholder
indirectly paying more than the economic equivalent of the maximum front-end
sales charge permitted under the National Association of Securities Dealers
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
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THE FUND'S FINANCIAL HIGHLIGHTS
The following table of Financial Highlights has been audited by the Fund's
independent accountants. Price Waterhouse LLP has been the Fund's independent
accountants since January 1, 1992. Their unqualified report for the most recent
five years is included in the Fund's 1995 Annual Report and in the Statement of
Additional Information. The Financial Highlights prior to January 1, 1992 were
audited by other independent auditors. 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:
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<CAPTION>
YEAR ENDED DECEMBER 31,
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1995 1994 1993 1992 1991 1990 1989
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<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of
Period............................... $17.84 $17.45 $14.94 $15.60 $12.44 $16.93 $15.31
------------- ------ ------- ------- ------- ------- -------
Net Investment Income (Loss).......... (0.22)(a)(b) (0.22)(a) (0.21) (0.15)(b) 0.05 (0.04) 0.10
Net Realized and Unrealized Gain
(Loss) on Investments, Options and
Foreign Currency Transactions........ 8.53 1.87 4.92 1.00 4.11 (3.09) 2.43
------------- ------ ------- ------- ------- ------- -------
Total from Investment Operations... 8.31 1.65 4.71 0.85 4.16 (3.13) 2.53
------------- ------ ------- ------- ------- ------- -------
Less Distributions:
Dividends from Net Investment
Income............................... -- -- -- -- (0.04) -- (0.13)
Distributions from Net Realized Gain
on Investments Sold, Options and
Foreign Currency Transactions........ (1.64) (1.26) (2.20) (1.51) (0.96) (1.36) (0.78)
------------- ------ ------- ------- ------- ------- -------
Total Distributions................ (1.64) (1.26) (2.20) (1.51) (1.00) (1.36) (0.91)
------------- ------ ------- ------- ------- ------- -------
Net Asset Value, End of Period........ $24.51 $17.84 $17.45 $14.94 $15.60 $12.44 $16.93
============== ============== ======== ======== ======== ======== ========
Total Investment Return at Net Asset
Value(f)............................. 46.53% 9.62% 32.06% 5.70%(c) 33.05% (18.46)% 16.61%
------------- ------ ------- ------- ------- ------- -------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's
omitted)............................. $ 155,001 $52,193 $41,749 $32,094 $31,580 $28,864 $40,341
Ratio of Expenses to Average Net
Assets............................... 1.67% 2.16% 2.10% 2.05%(b) 2.32% 2.36% 1.90%
Ratio of Net Investment Income (Loss)
to Average Net Assets................ (0.89)% (1.25)% (1.49)% (0.88)%(b) 0.34% (0.28)% 0.60%
Portfolio Turnover Rate............... 70% 67% 86% 76% 67% 38% 30%
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1988 1987 1986
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CLASS A
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of
Period............................... $13.98 $13.80 $13.57
------- ------- -------
Net Investment Income (Loss).......... 0.15 0.15 0.14
Net Realized and Unrealized Gain
(Loss) on Investments, Options and
Foreign Currency Transactions........ 1.32 0.26 0.25
------- ------- -------
Total from Investment Operations... 1.47 0.41 0.39
------- ------- -------
Less Distributions:
Dividends from Net Investment
Income............................... (0.14) (0.23) (0.16)
Distributions from Net Realized Gain
on Investments Sold, Options and
Foreign Currency Transactions........ -- -- --
------- ------- -------
Total Distributions................ (0.14) (0.23) (0.16)
------- ------- -------
Net Asset Value, End of Period........ $15.31 $13.98 $13.80
======== ======== ========
Total Investment Return at Net Asset
Value(f)............................. 10.48% 2.84% 2.89%
------- ------- -------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's
omitted)............................. $38,594 $44,224 $56,927
Ratio of Expenses to Average Net
Assets............................... 1.75% 1.63% 1.75%
Ratio of Net Investment Income (Loss)
to Average Net Assets................ 0.89% 0.75% 0.77%
Portfolio Turnover Rate............... 12% 9% 6%
</TABLE>
<TABLE>
<CAPTION>
PERIOD ENDED
DECEMBER 31,
1995 1994
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CLASS B(d)
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of
Period............................... $ 17.68 $ 17.24(e)
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Net Investment Loss................... (0.39)(a)(b) (0.35)(a)
Net Realized and Unrealized Gain on
Investments and Options.............. 8.43 2.05
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Total from Investment Operations... 8.04 1.70
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Less Distributions:
Distributions from Net Realized Gain
on Investments Sold and Options...... (1.64) (1.26)
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Net Asset Value, End of Period........ $ 24.08 $ 17.68
============== ==============
Total Investment Return at Net Asset
Value(f)............................. 45.42% 10.02%
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's
omitted)............................. $ 35,754 $ 9,324
Ratio of Expenses to Average Net
Assets............................... 2.41% 2.90%*
Ratio of Net Investment Loss to
Average Net Assets................... (1.62)% (1.98)%*
Portfolio Turnover Rate............... 70% 67%
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* On an annualized basis.
(a) On average month end shares outstanding.
(b) Reflects voluntary fee reductions and expense limitations in effect during the years ended December 31, 1995 and 1992,
respectively. As a result of such fee reductions, expenses of Class A and Class B shares of the Fund reflect reductions of
$0.02 and $0.03 per share, respectively. Absent such reductions, for 1995, the ratio of expenses to average net assets would
have been 1.79% and 2.53% for Class A and Class B shares, respectively and the ratio of net investment income to average net
assets would have been (1.01%) and (1.74%) for Class A and Class B shares, respectively. 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) An estimated total return calculation which takes into consideration fees and expenses waived or borne by the Adviser during
the period shown.
(d) Class B shares commenced operations on January 3, 1994.
(e) Initial price to commence operations.
(f) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charge.
</TABLE>
3
<PAGE>
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.
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THE FUND'S INVESTMENT OBJECTIVE IS TO SEEK
LONG-TERM CAPITAL GROWTH THROUGH
INVESTMENTS PRINCIPALLY IN COMPANIES THAT
RELY EXTENSIVELY ON TECHNOLOGY.
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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.
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THE FUND MAY EMPLOY CERTAIN INVESTMENT
STRATEGIES TO HELP ACHIEVE ITS INVESTMENT
OBJECTIVE.
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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>
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") (see
Appendix) 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 eligible for resale to "qualified institutional buyers" pursuant to Rule
144A
5
<PAGE>
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 other 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 and interests in
money market funds. 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, 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 nonfundamental. The investment objective and
fundamental investment restrictions may not be changed without shareholder
approval. All other investment policies and restrictions are nonfundamental and
can be changed by a vote of the Board of Directors without shareholder approval.
Portfolio turnover rates of the Fund are shown in the section "The Fund's
Financial Highlights."
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THE FUND FOLLOWS CERTAIN POLICIES, WHICH
MAY HELP TO REDUCE INVESTMENT RISK.
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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.
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INVESTMENTS IN FOREIGN SECURITIES MAY
INVOLVE RISKS AND CONSIDERATIONS THAT ARE
NOT PRESENT IN DOMESTIC INVESTMENTS.
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GLOBAL RISKS. Investments in foreign securities may involve certain risks that
are not present in domestic securities due to exchange controls, less publicly
available information, more volatile or less liquid securities markets, and the
possibility of expropriation, confiscatory taxation or political, economic or
social instability. There may be difficulty in enforcing legal rights outside
the United States. Some foreign companies are not 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
6
<PAGE>
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 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.
When choosing brokerage firms to carry out the Fund's transactions the Adviser
gives primary consideration to execution at the most favorable prices, taking
into account the broker's professional ability and quality of service.
Consideration may also be given to the broker's sales of Fund shares. Pursuant
to procedures 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. They are indirectly owned by John Hancock Mutual Life Insurance
Company (the "Life Company"), which in turn indirectly owns the Adviser.
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BROKERS ARE CHOSEN BASED ON BEST PRICE AND
EXECUTION.
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7
<PAGE>
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 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 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.
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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.
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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 not required to
hold annual shareholder meetings, although special meetings may be held 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 Adviser was organized in 1968 and is a wholly-owned indirect subsidiary of
the Life Company, a financial services company. The Adviser provides the Fund,
and other investment companies in the John Hancock group of funds, with
investment research and portfolio management services. The Fund, under certain
circumstances, will assist in shareholder communications with other
shareholders.
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JOHN HANCOCK ADVISERS, INC. ADVISES
INVESTMENT COMPANIES HAVING A TOTAL ASSET
VALUE OF MORE THAN $16 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"), an indirect subsidiary of the
Life Company, 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 conflicts 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
8
<PAGE>
offerings, as well as contributions to specified charities of profits on
securities held for less than 91 days. A Sub-Adviser's restrictions may differ
where appropriate, as long as they maintain the same intent. 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 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 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
Class A shares. To the extent that any dividends are paid, 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 the Life Company that had more than 100
eligible employees at the inception of the Fund account.
- -------------------------------------------------------------------------------
YOU SHOULD CONSIDER WHICH CLASS OF SHARES
WILL BE MORE BENEFICIAL FOR YOU.
- -------------------------------------------------------------------------------
FACTORS TO CONSIDER IN CHOOSING AN ALTERNATIVE
The alternative purchase arrangement allows you to choose the most beneficial
way to buy shares given the amount of your purchase, the length of time you
expect to hold your shares and other circumstances. You should consider whether,
during the anticipated life of your Fund investment, the CDSC and accumulated
fees on Class B shares would be less than the initial sales charge and
accumulated fees on Class A shares purchased at the same time; and to what
extent this differential would be offset by the Class A shares' lower expenses.
To help you make this determination, the table under the caption "Expense
Information" on the
9
<PAGE>
inside cover of this Prospectus gives 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, the expenses will be paid from the proceeds of the
ongoing distribution and service fees, as well as from the CDSC incurred upon
redemption within six years of purchase. The purpose and function of Class B
shares' CDSC and ongoing distribution and service fees are the same as those of
the Class A shares' initial sales charge and ongoing distribution and service
fees.
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 and shareholder meeting expenses. 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 1995 fiscal year was 0.82% of the Fund's average daily
net asset value after the reduction by the Adviser. 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%.
10
<PAGE>
In addition, the Fund pays a monthly administration 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% on the first $100,000,000 of average daily net
assets.
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 (the
"1940 Act"). Under these Plans, the Fund will pay distribution and service fees
at an aggregate annual rate of up to 0.30% of the Class A shares' average daily
net assets and an aggregate annual rate of up to 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) 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 service fees are paid to compensate
Selling Brokers and others providing personal and account maintenance services
to shareholders.
- -------------------------------------------------------------------------------
THE FUND PAYS DISTRIBUTION AND SERVICE
FEES FOR MARKETING AND SALES-RELATED
SHAREHOLDER SERVICING.
- -------------------------------------------------------------------------------
In the event John Hancock Funds is not fully reimbursed for payments it makes or
expenses it incurs under the Class A Plan, these expenses will not be carried
beyond one year from the date they were incurred. These unreimbursed expenses
under the Class B Plan will be carried forward together with interest on the
balance of these unreimbursed expenses.
For the fiscal year ended December 31, 1995 an aggregate of $987,619 of
distribution expenses, or 4.34% 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.
Information on the Fund's total expenses is in the Financial Highlights section
of this Prospectus.
11
<PAGE>
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 cash. If
you elect the cash option and the U.S. Postal Service cannot deliver your
checks, your election will be converted to the reinvestment option. Because of
the higher expenses associated with Class B shares any dividends on these shares
will be lower than on the Class A shares. See "Share Price."
TAXATION. Dividends from the Fund's net investment income, certain net foreign
exchange gains, and net short-term capital gains are taxable to you as ordinary
income. Dividends from the Fund's net long-term capital gains are taxable as
long-term capital gains. These dividends are taxable whether received in cash or
reinvested in additional shares. Certain dividends may be paid in January of a
given year, but 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 Internal Revenue Code of 1986, as
amended (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 within the time period
prescribed by the Code. When you redeem (sell) or exchange shares, you may
realize a taxable gain or loss.
The Fund may be subject to foreign withholding taxes on certain of its foreign
investments, if any, which will reduce the yield on those investments.
On the account application, you must certify that your social security or other
taxpayer identification number you provide is correct and that you are not
subject to backup withholding of Federal income tax. If you do not provide this
information or are otherwise subject to this withholding, the Fund may be
required to withhold 31% of your dividends and the proceeds of redemptions and
exchanges.
In addition to Federal taxes, you may be subject to state, local or foreign
taxes with respect to your investments in and distributions from the Fund.
Non-U.S. shareholders and tax-exempt shareholders are subject to a different tax
treatment not described above. In many states, a portion of the Fund's dividends
that represent interest received by the Fund on direct U.S. Government
obligations may be exempt from tax. You should consult your tax adviser for
specific advice.
12
<PAGE>
PERFORMANCE
Total return shows the overall dollar or percentage change in value of a
hypothetical investment in the Fund, assuming the reinvestment of all dividends.
Cumulative total return shows the Fund's performance over a period of time.
Average annual total return shows the cumulative return divided by the number of
years included in the period. Because average annual total return tends to
smooth out variations in 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 a lower sales charges would result in higher
performance figures. Total return calculations for the Class B shares reflect
deduction of the applicable CDSC imposed on a redemption of shares held for the
applicable period (except as shown in "The Fund's Financial Highlights"). 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, total return may differ with respect to each
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 both classes in any advertisement or promotional
materials including Fund's performance data. The value of the Fund's 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>
HOW TO BUY SHARES
- --------------------------------------------------------------------------------
The minimum initial investment is $1,000 ($250 for group investments and
retirement plans). Complete the Account Application attached to this
Prospectus. Indicate whether you are purchasing Class A or Class B shares.
If you do not specify which class of shares you are purchasing Investor
Services will assume that you are investing in Class A shares.
- -------------------------------------------------------------------------------
OPENING AN ACCOUNT.
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
- ---------------------------------------------------------------------------------
BY CHECK 1. Make your check payable to John Hancock Investor Services
Corporation.
P.O. Box 9115
Boston, MA 02205-9115
2. Deliver the completed application and check to your registered
representative, or Selling Broker or mail it directly to
Investor Services.
- ---------------------------------------------------------------------------------
BY WIRE 1. Obtain an account number by contacting your registered
representative, or Selling Broker or by calling 1-800-225-5291.
2. Instruct your bank to wire funds to:
First Signature Bank & Trust
John Hancock Deposit Account No. 900000260
ABA Routing No. 211475000
For credit to: John Hancock 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 withdrawn automatically from
(MAAP) your
bank or credit union account.
</TABLE>
- -------------------------------------------------------------------------------
BUYING ADDITIONAL CLASS A
AND CLASS B SHARES.
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
- ---------------------------------------------------------------------------------
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(s) in which
your account is registered, the Fund name, the class of shares
you own, your account number and the amount you wish to invest.
4. Your investment normally will be credited to your account the
business day following your phone request.
- ---------------------------------------------------------------------------------
BY CHECK 1. Either complete 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>
- -------------------------------------------------------------------------------
BUYING ADDITIONAL CLASS A AND CLASS B
SHARES.
(CONTINUED)
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <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 THAT YOU SHOULD KEEP TO HELP
WITH YOUR PERSONAL RECORDKEEPING.
- -------------------------------------------------------------------------------
SHARE PRICE
The net asset value per share ("NAV") is the value of one share. The NAV is
calculated by dividing the net assets of each class by the number of outstanding
shares of that class. The NAV of each class can differ. Securities in the Fund's
portfolio are valued on the basis of market quotations, valuations provided by
independent pricing services or, 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 the Board of
Directors has determined to approximate 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>
INITIAL SALES CHARGE ALTERNATIVE -- CLASS A SHARES. The offering price you pay
for Class A shares of the Fund equals the NAV plus a sales charge as follows:
<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. A Selling Broker to whom substantially the entire sales charge is
reallowed 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 CDSC 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.
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>
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 CDSC period), a CDSC 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 the Life Company who were group annuity
contract holders as of September 1, 1994, and participant directed defined
contribution plans with at least 100 eligible employees at the inception of the
Fund account, may purchase Class A shares with no initial sales charge. However
if the shares are redeemed within 12 months after the end of the calendar year
in which the purchase was made, a CDSC will be imposed at the above rate.
The CDSC will be assessed on an amount equal to the lesser of the current market
value or the original purchase cost of the redeemed Class A shares. Accordingly,
no CDSC will be imposed on increases in account value above the initial purchase
price, including any 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
redemptions in certain circumstances. See "Waiver of Contingent Deferred Sales
Charges" below.
- -------------------------------------------------------------------------------
YOU MAY QUALIFY FOR A REDUCED SALES CHARGE
ON YOUR INVESTMENTS IN CLASS A SHARES.
- -------------------------------------------------------------------------------
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 shares of John Hancock
funds in 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:
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>
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 is
the rate that would otherwise be applicable to investments of less than $50,000.
See "Initial Sales Charge Alternative--Class A Shares."
- -------------------------------------------------------------------------------
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, financial planner, consultant 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 or
services 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 or she withdraws from his or her plan and transfers any or all of his or
her plan distributions directly to the Fund.
- - A member of an approved affinity group financial services plan.*
- ---------------
* 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.
- -------------------------------------------------------------------------------
SALES TO CERTAIN SHAREHOLDERS
- -------------------------------------------------------------------------------
Shareholders of the Fund who were shareholders of John Hancock National Aviation
& Technology Fund ("National Aviation") who held shares prior to May 1, 1984 are
permitted for an indefinite period to purchase additional shares of the Fund at
net asset value, without a sales charge, provided that the purchasing
shareholder held shares of National Aviation continuously from April 30, 1984 to
18
<PAGE>
July 28, 1995 (the date of the merger of National Aviation into the Fund) and
shares of the Fund from that date to the date of the purchase in question.
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.
- -------------------------------------------------------------------------------
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 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. The 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
dividend reinvestment 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
acquired through dividend reinvestment (10 X $12) -120
- - Minus appreciation on remaining shares, also not subject to CDSC
(40 X $2) -80
-----
- - Amount subject to CDSC $400
-----
</TABLE>
Proceeds from the CDSC are paid to John Hancock Funds. John Hancock Funds uses
them to defray its expenses related to providing the Fund with distribution
services in connection with the sale of the Class B shares, such as compensating
Selling Brokers for selling these shares. The combination of the CDSC and the
distribution and service fees makes it possible for the Fund to sell the Class B
shares without an initial sales charge.
19
<PAGE>
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 determining this holding period, any payment 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 to shareholders during the twelve months following
the sale, and thereafter the service fee is paid in arrears.
If you purchased Class B shares prior to January 1, 1994, the applicable CDSC as
a percentage of the amount redeemed will be: 3% for redemptions during the third
year after purchase, 2.5% for redemption during the fourth year, 2% for
redemptions during the fifth year, 1% for redemptions during the sixth year, and
no CDSC for the seventh year and thereafter.
- -------------------------------------------------------------------------------
UNDER CERTAIN CIRCUMSTANCES, THE CDSC ON
CLASS B AND CLASS 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
20
<PAGE>
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.
- - 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 no later than the month following eight years
after the shares were purchased, and will result in lower annual distribution
fees. If you exchanged Class B shares into 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 of the Fund should not be taxable for Federal income tax
purposes and should not change your tax basis or tax holding period for the
converted shares.
21
<PAGE>
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 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
three business 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 eligible automatically 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 according to the telephone
transaction procedures mentioned above.
Telephone redemption is not available for IRAs or other
tax-qualified retirement plans or shares of the Fund that
are in 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
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>
- --------------------------------------------------------------------------------
<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 additional purchases and dividend reinvestments 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 FOR
SHARES OF THE SAME CLASS OF ANOTHER JOHN
HANCOCK FUND.
- -------------------------------------------------------------------------------
23
<PAGE>
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 into
Class B shares of another John Hancock fund without incurring the CDSC; however,
these shares will be subject to the CDSC schedule of the shares acquired (except
that exchanges into John Hancock Short-Term Strategic Income Fund, John Hancock
Intermediate Maturity Government Fund 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 in effect on your initial purchase
date.
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 taxable gain or loss.
When you make an exchange, your account registration in both the existing and
new account must be identical. The exchange privilege is available only in
states where the exchange can be made legally.
Under exchange agreements with John Hancock Funds, certain dealers, brokers and
investment advisers may exchange their clients' Fund shares, subject to the
terms of those agreements and John Hancock Funds' right to reject or suspend
those exchanges at any time. Because of the restrictions and procedures under
those agreements, the exchanges may be subject to timing limitations and other
restrictions that do not apply to exchanges requested by shareholders directly,
as described above.
Because Fund performance and shareholders can be hurt by excessive trading, the
Fund reserves the right to terminate the exchange privilege for any person or
group that, in John Hancock Funds' judgment, is involved in a pattern of
exchanges that coincide with a "market timing" strategy that may disrupt the
Fund's ability to invest effectively according to its investment objective and
policies, or might otherwise affect the Fund and its shareholders adversely. The
Fund may also temporarily or permanently terminate the exchange privilege for
any person who makes seven or more exchanges out of the Fund per calendar year.
Accounts under common control or ownership will be aggregated for this purpose.
Although the Fund will attempt to give prior notice whenever it is reasonably
able to do so, it may impose these restrictions at any time.
24
<PAGE>
BY TELEPHONE
1. When you complete the application for your initial purchase of Fund shares,
you authorize exchanges automatically 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 a John Hancock fund that is otherwise subject to a sales charge, as long
as you reinvest within 120 days of 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. The holding period of the shares
acquired through reinvestment, for purposes of computing the CDSC payable
upon a subsequent redemption, will include the holding period of the redeemed
shares.
- -------------------------------------------------------------------------------
IF YOU REDEEM SHARES OF THE
FUND, YOU MAY BE ABLE TO
REINVEST ALL OR PART OF THE
PROCEEDS IN SHARES OF 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 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>
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 or to
a CDSC on your redemptions of Class B shares. In addition, your redemptions
are taxable events.
6. Redemptions will be discontinued if the U.S. Postal Service cannot deliver
your checks, or if deposits to a bank account are returned for any reason.
MONTHLY AUTOMATIC ACCUMULATION PROGRAM (MAAP)
1. You can authorize an investment to be withdrawn 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 withdrawn from a bank account and we are notified that
the account has been closed, your withdrawals will be discontinued.
GROUP INVESTMENT PROGRAM
1. An individual account will be established for each participant, but the
initial sales charge for Class A shares will be based on the aggregate dollar
amount of all participants' investments. To determine how to qualify for this
program, contact your registered representative or call 1-800-225-5291.
- -------------------------------------------------------------------------------
ORGANIZED GROUPS OF AT LEAST FOUR PERSONS
MAY
ESTABLISH ACCOUNTS.
- -------------------------------------------------------------------------------
2. The initial aggregate investment of all participants in the group must be at
least $250.
3. There is no additional charge for this program. There is no obligation to
make investments beyond the minimum, and you may terminate the program at any
time.
26
<PAGE>
RETIREMENT PLANS
1. You may use the Fund for various types of retirement plans, such as
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 Section 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 Section 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>
JOHN HANCOCK GLOBAL
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
PRINCIPAL DISTRIBUTOR
John Hancock Funds, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, Massachusetts 02110
TRANSFER AGENT
John Hancock Investor Services
Corporation
P.O. Box 9116
Boston, Massachusetts 02205-9116
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
160 Federal Street
Boston, Massachusetts 02110 JOHN HANCOCK
GLOBAL
TECHNOLOGY
FUND
CLASS A AND CLASS B SHARES
PROSPECTUS
MAY 1, 1996
A MUTUAL FUND SEEKING
LONG-TERM CAPITAL GROWTH
THROUGH INVESTMENT
PRINCIPALLY IN EQUITY
SECURITIES OF COMPANIES WHICH
RELY EXTENSIVELY ON
TECHNOLOGY IN THEIR PRODUCT
DEVELOPMENT OR OPERATIONS.
INCOME IS A SECONDARY
OBJECTIVE.
101 HUNTINGTON AVENUE
BOSTON, MASSACHUSETTS 02199-7603
TELEPHONE 1-800-225-5291
HOW TO OBTAIN INFORMATION
ABOUT THE FUND
For Service Information
For Telephone Exchange
For Investment-by-Phone
call 1-800-225-5291
For Telephone Redemption
For TDD call 1-800-554-6713
JHD-8300P 5/96 (LOGO)Printed on recycled paper
<PAGE>
JOHN HANCOCK
GLOBAL TECHNOLOGY FUND
Class A and Class B Shares
STATEMENT OF ADDITIONAL INFORMATION
May 1, 1996
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, 1996.
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 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
- --------------------------------------------------------------------------------
Statement of
Additional
Information
Page
ORGANIZATION OF THE FUND........................................... 2
INVESTMENT OBJECTIVES AND POLICIES................................. 2
INVESTMENT RESTRICTIONS............................................ 6
THOSE RESPONSIBLE FOR MANAGEMENT................................... 9
INVESTMENT ADVISORY AND OTHER SERVICES............................. 17
DISTRIBUTION CONTRACT.............................................. 19
NET ASSET VALUE.................................................... 21
INITIAL SALES CHARGE ON CLASS A SHARES............................. 22
DEFERRED SALES CHARGE ON CLASS B SHARES............................ 23
SPECIAL REDEMPTIONS................................................ 24
ADDITIONAL SERVICES AND PROGRAMS.................................. 24
TAX STATUS......................................................... 25
DESCRIPTION OF THE FUND'S SHARES................................... 30
CALCULATION OF PERFORMANCE......................................... 31
BROKERAGE ALLOCATION............................................... 32
TRANSFER AGENT SERVICES............................................ 34
CUSTODY OF PORTFOLIO............................................... 34
INDEPENDENT AUDITORS............................................... 34
APPENDIX........................................................... 35
FINANCIAL STATEMENTS............................................... --
<PAGE>
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") an indirect wholly-owned subsidiary of John Hancock Mutual
Life Insurance Company (the "Life Company"), a Massachusetts life insurance
company chartered in 1862, with national headquarters at John Hancock Place,
Boston, Massachusetts 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 purchases a forward contract, 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.
Hedging against a decline in the value of currency does not eliminate
fluctuations in the prices of portfolio securities or prevent losses if the
prices of such securities decline. Such transactions also preclude the
opportunity for gain if the value of the hedged currency rises.
2
<PAGE>
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 attributable to such investment as measured in U.S.
dollars may be affected favorably or unfavorably by changes in the relationship
of the U.S. dollar to 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 non-U.S. securities is 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.
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 of securities.
3
<PAGE>
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 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 of payment to all debt obligations and creditors of the issuer, and
convertible preferred stocks may
4
<PAGE>
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 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 may 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
5
<PAGE>
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 Fund's outstanding voting
securities which, as used in the Prospectus and this Statement of Additional
Information, means approval by the lesser of (1) 67% or more of the Fund's
shares represented at a meeting if at least 50% of the Fund's outstanding shares
are present in person or by proxy at the meeting or (2) 50% of the Fund's
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 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.
6
<PAGE>
(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.
(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
7
<PAGE>
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
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.
The Fund agrees that, in accordance with the Ohio Securities Division and
until such regulations are no longer required, it will comply with Rule
1301:6-3-09(E)(9) by not investing in
8
<PAGE>
the securities of other open-end and closed-end investment companies except by
purchase in the open market where no commission or profit to a sponsor or dealer
results from the purchase other than the customary broker's commission, or
except when the purchase is part of a plan of merger, consolidation,
reorganization or acquisition.
The Fund agrees that, in accordance with the Ohio Securities Division and
until such regulations are no longer required, it will comply with Rule
1301:6-3-09(E)(12) by not investing more than 15% of its total assets in the
aggregate in securities of issuers which, together with any predecessors, have a
record of less than three years continuous operation, and in securities of
issuers which are restricted as to disposition, including securities eligible
for resale pursuant to Rule 144A under the Securities Act of 1933.
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:
9
<PAGE>
<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 and Chief Chairman and Chief Executive
101 Huntington Avenue Executive Officer (1,2) Officer, the Adviser and The
Boston, MA 02199 Berkeley Financial Group ("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. (until
April 1994).
Thomas W.L. Cameron* Director Chairman and Director, Sovereign
Interstate/Johnson Lane Advisers, Inc.; Senior Vice
1892 Andell Bluff Blvd. President, Interstate/Johnson Lane
Johns Island, SC 29455 Corp. (securities dealer).
- -------------------
* 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 Administration Committee.
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Positions Held Principal Occupation(s)
Name and Address With the Company During the Past Five Years
- ---------------- ---------------- --------------------------
<S> <C> <C>
James F. Carlin Director(3) Chairman and CEO, Carlin
233 West Central Street Consolidated, Inc.
Natick, MA 01760 (management/investments); Director,
Arbella Mutual Insurance Company
(insurance), Consolidated Group
Trust (insurance administration),
Carlin Insurance Agency, Inc., West
Insurance Agency, Inc.(until May,
1995) and Uno Restaurant Corp.;
Chairman, Massachusetts Board of
Higher Education; Receiver, the
City of Chelsea (until August
1992).
William H. Cunningham Director(3) Chancellor, University of Texas
601 Colorado Street System and former President of the
O'Henry Hall University of Texas, Austin, Texas;
Austin, TX 78701 Regents Chair for Free Enterprise;
Director, LaQuinta Motor Inns, Inc.
(hotel management company);
Director, Jefferson-Pilot
Corporation (diversified life
insurance company); LBJ Foundation
Board (education foundation); and
Advisory Director, Texas Commerce
Bank - Austin.
Charles F. Fretz Director (3) Retired; Former Vice President and
RD #5, Box 300B Director, Towers, Perrin, Foster &
Clothier Springs Road Crosby, Inc. (international
Malvern, PA 19355 management consultants) (1952-1985).
- -------------------
* 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 Administration Committee.
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Positions Held Principal Occupation(s)
Name and Address With the Company During the Past Five Years
- ---------------- ---------------- --------------------------
<S> <C> <C>
Harold R. Hiser, Jr. Director(3) Executive Vice President,
123 Highland Avenue Schering-Plough Corporation
Short Hills, NJ 07078 (pharmaceuticals) (until 1996);
Director, ReCapital Corporation
(reinsurance)(until 1995).
Charles L. Ladner Director(3) Director, Energy North, Inc.
UGI Corporation (public utility holding company)
P.O. Box 858 (until 1992); Senior Vice President
Valley Forge, PA 19482 and Chief Financial Officer of UGI
Corp. (Holding Company: Public
Utilities, LPGAS).
Leo E. Linbeck, Jr. Director(3) Chairman, President, Chief
3810 W. Alabama Executive Officer and Director,
Houston, TX 77027 Linbeck Corporation (a holding
company engaged in various phases
of the construction industry and
warehousing interests); Director
and Chairman, Federal Reserve Bank
of Dallas; Chairman of the Board
and Chief Executive Officer,
Linbeck Construction Corporation;
Director, Panhandle Eastern
Corporation (a diversified energy
company); Daniel Industries, Inc.
(manufacturer of gas measuring
products and energy related
equipment); GeoQuest International,
Inc. (a geophysical consulting
firm); and Director, Greater
Houston Partnership.
- -------------------
* 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 Administration Committee.
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
Positions Held Principal Occupation(s)
Name and Address With the Company During the Past Five Years
- ---------------- ---------------- --------------------------
<S> <C> <C>
Patricia P. McCarter Director (3) Director and Secretary of The
1230 Brentford Road McCarter Corp. (manufacturing).
Malvern, PA 19355
Steven R. Pruchansky Director (1,3) Director and President, Mast
6920 Daniel Road Holdings, Inc. (since 1991);
Naples, FL 33942 Director, First Signature Bank &
Trust Company (until August 1991);
Director, Mast Realty Trust
(1982-1994); President, Maxwell
Building Corp. (until 1991).
Norman H. Smith Director (3) Retired. Lieutenant General, United
243 Mt. Oriole Lane States Marine Corps; Deputy Chief
Linden, VA 22642 of Staff for 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 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 Administration Committee.
13
<PAGE>
<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,
13 Chadwell Place National Liquid Reserves, Inc., The
Morristown, NJ 07960 Tax Free Money 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).
Robert G. Freedman* Vice Chairman and Chief Vice Chairman and Chief Investment
101 Huntington Avenue Investment Officer (1,2) Officer, the Adviser; President,
Boston, MA 02199 the Adviser (until December 1994).
Anne C. Hodsdon* Director and Executive President and Chief Operating
101 Huntington Avenue Vice President (1,2) Officer, the Adviser; Executive
Boston, MA 02199 Vice President, the Adviser (until
December 1994); Senior Vice
President; the Adviser (until
December 1993); Vice President, the
Adviser, 1991.
Thomas H. Drohan* Senior Vice President and Senior Vice President and Secretary
101 Huntington Avenue Secretary of the Adviser.
Boston, MA 02199
James B. Little* Senior Vice President and Senior Vice President, the Adviser.
101 Huntington Avenue Chief Financial Officer
Boston, MA 02199
Susan S. Newton* Vice President, Assistant Vice President and Assistant Secretary,
101 Huntington Avenue Secretary and Compliance the Adviser.
Boston, MA 02199 Officer
- -------------------
* 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 Administration Committee.
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
Positions Held Principal Occupation(s)
Name and Address With the Company During the Past Five Years
- ---------------- ---------------- --------------------------
<S> <C> <C>
John A. Morin* Vice President Vice President, the Adviser;
101 Huntington Avenue Counsel, the Life Company (until
Boston, MA 02199 1995).
James J. Stokowski* Vice President and Vice President, the Adviser.
101 Huntington Avenue Treasurer
Boston, MA 02199
Barry J. Gordon* President President and Chairman of the Board
1415 Kellum Place of AFA, Director and President of
Suite 205 the Company and its predecessors
Garden City, NY 11530 (until 1993); Chairman of the Board
and President of National Value
Fund, Inc. ("NVF") (until 1992);
Chairman of the Board and Chief
Executive Officer (since 1990) of
Baseball Entrepreneurs, Inc. and
(from 1991 until 1992) of Hamilton
Baseball Associates, Inc. (baseball
club ownership); Chairman of the
Board and Chief Executive Officer
of Minor League Sports Enterprises,
Inc. (baseball club ownership)
(since 1992); Director of Hain Food
Group (food products) (since 1993);
Director of Sports Heroes, Inc.
(sports memorabilia) since 1989;
Director of Winfield Capital Corp.
(SBIC) (since 1995); and Chairman
of the Board of ACOL Acquisition
Corp. (baseball club ownership)
(since 1994).
- -------------------
* 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 Administration Committee.
</TABLE>
15
<PAGE>
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. The three non-Independent
Directors, Messrs. Boudreau, Cameron, and Ms. Hodsdon, and each of the officers
of the Fund (except Mr. Gordon) are interested persons of the Adviser, are
compensated by the Adviser and/or its affiliates and receive no compensation
from the Fund for their services. Mr. Gordon is an interested person of the
Sub-Adviser, is compensated by the Sub-Adviser, and receives no compensation
from the Fund for his services.
<TABLE>
<CAPTION>
Pension or Total Compensation
Aggregate Retirement Benefits Estimated Annual From the Fund and
Compensation From Accrued as Part of Benefits Upon John Hancock Fund Complex
Independent Directors the Fund* the Fund's Expenses* Retirement to Directors(1)(2)
- --------------------- --------- -------------------- ---------- ------------------
<S> <C> <C> <C> <C>
Charles F. Fretz $ 1,306 $ - $ 56,200
Jack P. Gould** 5,300 9,800
Charles L. Ladner 834 60,700
Patricia P. McCarter 834 60.700
Steven R. Pruchansky 877 62,700
Norman H. Smith 856 62,700
John P. Toolan 0 855 60,700
James F. Carlin 1,029 60,700
Harold R. Hiser, Jr. 0 1,497 60,200
William H. Cunningham 340 69.700
Leo E. Linbeck, Jr. 334 73,200
------- ------ --------
$11,710 $2,352 $637,300
</TABLE>
* Compensation for the fiscal year ended December 31, 1995.
** As of March 26, 1996, Mr. Gould resigned as Director.
(1) The total compensation paid by the John Hancock Fund Complex to the
Independent Directors is as of the calendar year ended December 31, 1995.
(2) All Directors except Messrs. Cunningham and Linbeck are Directors of 33
funds in the John Hancock Complex. Messrs. Cunningham and Linbeck are
Directors of 31 funds.
As of March 13, 1996, 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.
16
<PAGE>
As of March 13, 1996, the following shareholders beneficially owned 5% of
or more of outstanding shares of the Fund listed below:
<TABLE>
<CAPTION>
Number of shares Percentage of total
Name and Address Fund and Class of beneficial outstanding shares of
of Shareholder of Shares interest owned the class of the Fund
- -------------- --------- -------------- ---------------------
<S> <C> <C> <C>
Merrill Lynch Pierce Fenner & Class B shares 111,570 6.69%
Smith, Inc.
Attn: Mutual Fund Operations
4800 Deer Lake Drive
Jacksonville FL 32246-6484
</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
and below 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 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.
17
<PAGE>
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 Life 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 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 reduced 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, 1995, 1994 and 1993, the Adviser received management fees of
$1,045,680, (net of fee reduction), $522,041 and $361,474, respectively and
administration fees of $100,000 from the Fund for each year.
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
18
<PAGE>
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 $16 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 1,080,000 shareholders. The
Adviser is an affiliate of the Life Company, one of the most recognized and
respected financial institutions in the nation. With total assets under
management of $80 billion, the Life Company is one of the ten largest life
insurance companies in the United States, and carries high ratings from Standard
& Poor's and A.M. Best. Founded in 1862, the Life Company 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 each class 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 the net
asset value next determined, plus the applicable sales charge. In connection
with the sale of Class A and Class B
19
<PAGE>
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 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 of 1940. Under the 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 net assets attributable to shares of that
class. 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. The 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, 1995, the Fund paid John Hancock
Funds the following amounts of expenses with respect to the Class A and Class B
shares of the Fund:
<TABLE>
<CAPTION>
Expense Items
Printing and
Mailing of Interest,
Prospectuses Expenses of Carrying or
to New Compensation to John Hancock Other Finance
Advertising Shareholders Selling Brokers Funds Charges
----------- ------------ --------------- ----- -------
Global Technology Fund
- ----------------------
<S> <C> <C> <C> <C> <C>
Class A Shares $56,438 $10,757 $89,300 $158,844 $ -
Class B Shares 31,799 5,883 44,891 85,964 58,569
</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
20
<PAGE>
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 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.
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 categories 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 Directors.
21
<PAGE>
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 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 Prospectus. Methods of obtaining a reduced sales charge
referred to generally in the Prospectus are described in detail below. In
calculating the sales charge applicable to current purchases of Class A shares
of the Fund, 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 owned by the investor, 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 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 current account 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.
22
<PAGE>
Letter of Intention. Reduced sales charges are also applicable to
investments in Class A shares made over a specified period pursuant to a Letter
of Intention ("LOI"), which should be read carefully prior to its execution by
an investor. The Fund offers two options regarding the specified period for
making investments under the LOI. All investors have the option of making their
investments over a period of thirteen months. Investors who are using the Fund
as a funding medium for a qualified retirement plan, however, may opt to make
the necessary investments called for by the LOI over a forty-eight month period.
These qualified retirement plans include group IRA's, SEP, SARSEP, TSA, 401(k),
403(b) and Section 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
actually invested, the difference in the sales charge actually paid and the
sales charge payable had the LOI not been in effect is due from the investor.
However, for the purchases actually made 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 Class A 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 or her
attorney-in-fact to redeem any escrowed Class A 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 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 increases in
account value 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 this number, all
payments during a month will be aggregated and deemed to have been made on the
last day of the month.
23
<PAGE>
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 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 sells portfolio
securities received in this fashion he would incur a brokerage charge. Any such
securities would be valued for the purposes of making such payment at the same
value as used in determining net asset value. The Fund has, 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 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 Prospectus, the
Fund permits the establishment of a Systematic Withdrawal Plan. Payments under
this plan represent proceeds arising from the redemption of the Fund's 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 or 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 Prospectus. The program, as it relates to automatic investing, is
subject to the following conditions:
24
<PAGE>
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 shareholder's bank. The bank shall be under no obligation to
notify the shareholder as to the non-payment of any checks.
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 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 other John Hancock 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. Such 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 tax purposes. The Fund has qualified and has 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 for each
taxable year. 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) which is
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.
25
<PAGE>
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 Prospectus, whether taken in shares or in cash. Distributions,
if any, in excess of E&P will constitute a return of capital, which will first
reduce an investor's tax basis in Fund shares and thereafter (after such basis
is reduced to zero) will generally give rise to capital gains. Shareholders
electing to receive distributions in the form of additional shares will have a
cost basis for Federal income tax purposes in each share so received equal to
the amount of cash 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 investment 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 three 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 invests in 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 these
passive foreign investment 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
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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. Accordingly, the Fund may limit
investments in passive foreign investment companies to minimize its tax
liability or maximize its return from these investments.
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 is often
attributable to realized or unrealized appreciation in the Fund's portfolio or
undistributed taxable income of the Fund. Consequently, subsequent distributions
on those shares 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. This 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 Automatic 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
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<PAGE>
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.
For Federal income tax purposes, the Fund is permitted to carryforward 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, from U.S. domestic corporations in respect of
any share of stock 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, if any. Additionally, any corporate
shareholder should consult its tax adviser regarding the possibility that its
tax 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.
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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 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 election is made, 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
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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.
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. 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 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 of the Fund represent an equal proportionate
interest in the aggregate net 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.
Dividends paid by the Fund, if any, with respect to each class of shares
will be calculated in the same manner, at the same time and on the same day and
will be in the same amount, except that (i) the distribution and service fees
relating to Class A and Class B shares will be borne exclusively by such class,
(ii) Class B shares will pay higher distribution and service fees than Class A
shares and (iii) each class of shares will bear any other class expenses
properly attributable to that class of shares, subject to certain conditions
imposed by the Internal Revenue Service in issuing rulings to funds with a
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
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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 of the Class A shares of the Fund for the 1
year, 5 year and 10 year periods ended December 31, 1995 was 39.20%, 23.25%, and
12.20%, respectively.
The average annual total return of the Class B shares of the Fund for the 1
year period ended December 31, 1995 and since inception on January 3, 1994 was
40.42% and 25.03%, 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 = \ / 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 simple 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
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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 compared to indices of mutual funds such as 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." Investments in debt securities are
generally traded on a net basis through dealers acting for their own account as
principals and not as brokers; no brokerage commissions are payable on such
transactions.
The Fund's primary policy is to execute all purchases and sales of
portfolio instruments at the most favorable prices consistent with best
execution, considering all of the costs of the transaction including brokerage
commissions. This policy governs the selection of brokers and dealers and the
market in which a transaction is executed. Consistent with the foregoing primary
policy, the Rules of Fair Practice of the 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.
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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
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 as the Board of
Directors may adopt from time to time. During the fiscal year ended December 31,
1995, the Fund directed commissions in the amount of $34,300 to compensate
brokers for research services such as industry, economic and company reviews and
evaluations of securities.
The Adviser's indirect parent, the Life Company, is the indirect sole
shareholder of John Hancock Freedom Securities Corporation and its subsidiaries,
three of which, Tucker Anthony Incorporated, 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 years ended December 31, 1995, 1994 and
1993, the Fund did not execute any portfolio transactions with Affiliated
Brokers.
During 1993, 1994 and 1995, the Fund paid total brokerage commissions,
excluding spreads or commissions on principal transactions, of $40,949, $81,677
and $102,799, respectively.
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TRANSFER AGENT SERVICES
John Hancock Investor Services Corporation, P.O. Box 9116, Boston, MA
02205-9116, a wholly-owned indirect subsidiary of the Life Company, is the
transfer and dividend paying agent for the Fund. The Fund pays an annual fee of
$16.00 for each Class A shareholder and $18.50 for each Class B shareholder,
plus certain out-of-pocket expenses. These expenses are aggregated and charged
to the Fund and allocated to each class on the basis of the relative net asset
values.
CUSTODY OF PORTFOLIO
Portfolio securities of the Fund are held by Investors Bank & Trust
Company, 24 Federal Street, Boston, Massachusetts 02110 as custodian.
INDEPENDENT AUDITORS
The independent auditors of the Fund are Price Waterhouse LLP, 160 Federal
Street, Boston, Massachusetts 02110. Price Waterhouse LLP audits and renders an
opinion on the Fund's annual financial statements and reviews the Fund's annual
Federal income tax return.
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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.
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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.
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C-7
PART C.
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) The financial statements listed below are included in and incorporated
by reference into Part B of the Registration Statement from the 1995 Annual
Report to Shareholders for the year ended December 31, 1995 (filed
electronically on February 26, 1996; file nos. 811-3392, and 2-75807; accession
number 0000950135-96-001155):
John Hancock Global Technology Fund
Statement of Assets and Liabilities as of December 31, 1995.
Statement of Operations for the period ended December 31, 1995.
Statement of Changes in Net Assets for the period ended December 31, 1995.
Notes to Financial Statements.
Financial Highlights for each of the 10 years ended December 31, 1995.
Schedule of Investments as of December 31, 1995.
(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
As of March 29, 1996, the number of record holders of shares of Registrant
was as follows:
Title of Class Number of Record Holders
GLOBAL TECHNOLOGY
FUND
Class A Shares 17,891
Class B Shares 5,759
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(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 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
C-2
<PAGE>
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 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.
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
C-3
<PAGE>
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 Current Interest, John
Hancock Series, Inc., John Hancock Tax-Free Bond Fund, John Hancock California
Tax-Free Income Fund, John Hancock Capital Series, John Hancock Limited-Term
Government Fund, John Hancock Tax-Exempt Income Fund, John Hancock Sovereign
Investors Fund, Inc., John Hancock Special Equities Fund, John Hancock Sovereign
Bond Fund, John Hancock Tax-Exempt Series, John Hancock Strategic Series, John
Hancock Technology Series, Inc. 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>
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------
<S> <C> <C>
Edward J. Boudreau, Jr. Director, Chairman, Director and Chairman
101 Huntington Avenue President and Chief
Boston, Massachusetts Executive Officer
Robert H. Watts Director, Executive None
John Hancock Place Vice President and
P.O. Box 111 Chief Compliance
Boston, Massachusetts Officer
Robert G. Freedman Director Vice Chairman, Chief Investment
101 Huntington Avenue Officer
Boston, Massachusetts
Stephen M. Blair Executive Vice None
101 Huntington Avenue President
Boston, Massachusetts
Thomas H. Drohan Senior Vice President Senior Vice President and Secretary
101 Huntington Avenue
Boston, Massachusetts
David A. King Director None
101 Huntington Avenue
Boston, Massachusetts
James W. McLaughlin Senior Vice None
101 Huntington Avenue President and Chief
Boston, Massachusetts Financial Officer
James B. Little Senior Vice President Senior Vice President and
101 Huntington Avenue Chief Financial Officer
Boston, Massachusetts
John A. Morin Vice President and Vice President
101 Huntington Avenue Secretary
Boston, Massachusetts
C-5
<PAGE>
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------
Susan S. Newton Vice President Vice President and Assistant
101 Huntington Avenue Secretary
Boston, Massachusetts
William S. Nichols Senior Vice President None
101 Huntington Avenue
Boston, Massachusetts
Christopher M. Meyer Second Vice None
101 Huntington Avenue President and
Boston, Massachusetts Treasurer
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 Director
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
C-6
<PAGE>
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------
John M. DeCiccio Director None
John Hancock Place
P.O. Box 111
Boston, Massachusetts
David F. D'Alessandro Director None
John Hancock Place
P.O. Box 111
Boston, Massachusetts
Foster Aborn Director None
John Hancock Place
P.O. Box 111
Boston, Massachusetts
William C. Fletcher Director None
53 State Street
Boston, Massachusetts
James V. Bowhers Executive Vice None
101 Huntington Avenue President
Boston, Massachusetts
Charles H. Womack Senior Vice President None
6501 Americas Parkway
Suite 950
Albuquerque, New Mexico
Michael T. Carpenter Senior Vice President None
101 Huntington Avenue
Boston, Massachusetts
Anthony P. Petrucci Senior Vice President None
101 Huntington Avenue
Boston, Massachusetts
Keith Harstein Vice President None
101 Huntington Avenue
Boston, Massachusetts
C-7
<PAGE>
Griselda Lyman Vice President None
101 Huntington Avenue
Boston, Massachusetts
</TABLE>
(c) None.
Item 30. Location of Accounts and Records
Registrant maintains the records required to be maintained by it under
Rules 31a-1 (a), 31a-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) 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>
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
26th day of April, 1996.
JOHN HANCOCK TECHNOLOGY SERIES, INC.
By: *
-------------------------------
Edward J. Boudreau, Jr.
Chairman
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.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* Chairman
______________________ (Principal Executive Officer)
Edward J. Boudreau, Jr.
Senior Vice President and Chief April 26, 1996
Financial Officer (Principal
/s/James B. Little Financial and Accounting Officer)
James B. Little
*
______________________ Director
Charles F. Fretz
*
______________________ Director
Thomas W. L. Cameron
*
______________________ Director
Charles L. Ladner
*
______________________ Director
Patricia P. McCarter
C-9
<PAGE>
*
______________________ Director
Norman H. Smith
*
______________________ Director
Steven R. Pruchansky
*
______________________ Director
James F. Carlin
*
______________________ Director
John P. Toolan
*
______________________ Director
Harold R. Hiser, Jr.
______________________ Director
Anne C. Hodsdon
*By: /s/ Thomas H. Drohan
---------------------
Thomas H. Drohan April 26, 1996
(Attorney-in-Fact)
</TABLE>
C-10
<PAGE>
John Hancock Technology Series, Inc.
Exhibit No. Exhibit Description
99.B1 Articles of Incorporation of Registrant dated December 8, 1993.*
99B.1.1 Articles Supplementary dated December 8, 1993.*
99B1.2 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 None
99.B11 Auditor's Consent.+
99.B12 Not Applicable
99.B13 None
99.B14 None
99.B15 Class A Distribution Plan between John Hancock Global Technology
Fund and John Hancock Brokers Services, Inc.*
<PAGE>
Exhibit No. Exhibit Description
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 Global Fund dated
July 28, 1995 and John Hancock Funds, Inc.+
99.B15.3 Class B Distribution Plan between John Hancock Global Fund dated
July 28, 1995 and John Hancock Funds, Inc.+
99.B16 Schedule of 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.A Global Technology
99.27.B Global Technology
* Previously filed electronically with Post-effective number 24 (file no.
8-113392 and 2-75807) on April 26, 1995, accession number
0000950135-95-00100.
+ Filed herewith.
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statement of Additional Information
constituting part of this Post Effective Amendment No. 25 to the Registration
Statement on Form N1-A (the "Registration Statement") of our report dated
February 7, 1996, relating to the financial statements and financial highlights
appearing in the December 31, 1995 Annual Report to Shareholders of John Hancock
Global Technology Fund which appears in such Statement of Additional Information
and to the incorporation by reference of our report into the Prospectus which
constitutes part of this Registration Statement. We also consent to the
reference to us under the heading "Independent Auditors" in such Statement of
Additional Information and to the references to us under the heading "The Fund's
Financial Highlights" in such Prospectus.
/s/PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Boston, Massachusetts
April 25, 1996
JOHN HANCOCK TECHNOLOGY SERIES, INC.
JOHN HANCOCK GLOBAL TECHNOLOGY FUND
Distribution Plan
Class A Shares
July 28, 1995
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 Global Technology Fund (the "Fund"), on
behalf of its Class A shares, will, after the effective date hereof, pay certain
amounts to John Hancock Funds, Inc. ("John Hancock Funds") in connection with
the provision by John Hancock Funds 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
John Hancock Funds 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 John Hancock Funds a fee in the amount specified in
Article III hereof. Such fee may be spent by John Hancock Funds 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 John Hancock Funds or
other broker-dealers ("Selling Brokers") that have entered into an agreement
with John Hancock Funds for the sale of Class A shares of the Fund, (b) direct
out-of-pocket expenses incurred in connection with the distribution of Class A
shares of the Fund, including expenses related to printing of prospectuses and
reports to other than existing Class A shareholders of the Fund, and
preparation, printing and distribution of sales literature and advertising
materials, (c) an allocation of overhead and other branch office expenses of
John Hancock Funds related to the distribution of Class A shares of the Fund;
and (d) expenses incurred in connection with the distribution of a corresponding
class of any open-end, registered investment company which sells all or
substantially all of its assets to the Fund.
<PAGE>
Service Expenses include payments made to, or on account of, account
executives of selected broker-dealers (including affiliates of John Hancock
Funds) and others who furnish personal and shareholder account maintenance
services to 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 John Hancock
Funds 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 John Hancock Funds under this Plan
during any fiscal year of the Fund and not expended or allocated by John Hancock
Funds 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>
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
John Hancock Funds 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 A shares, or (b) by John Hancock Funds 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 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 28th day of July, 1995 in Boston,
Massachusetts.
JOHN HANCOCK TECHNOLOGY SERIES, INC.
on behalf of
JOHN HANCOCK GLOBAL TECHNOLOGY FUND
<PAGE>
By /s/Thomas H. Connors
Second Vice President
JOHN HANCOCK FUNDS, INC.
By /s/C. Troy Shaver, Jr.
President
JOHN HANCOCK TECHNOLOGY SERIES, INC.
JOHN HANCOCK GLOBAL TECHNOLOGY FUND
Distribution Plan
Class B Shares
July 28, 1995
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 Global Technology Fund (the "Fund"), on behalf of its Class B shares,
will, after the effective date hereof, pay certain amounts to John Hancock
Funds, Inc. ("John Hancock Funds") in connection with the provision by John
Hancock Funds 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 John Hancock Funds
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 John Hancock Funds a fee in the amount specified in
Article III hereof. Such fee may be spent by John Hancock Funds 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 John Hancock Funds or
other broker-dealers ("Selling Brokers") that have entered into an agreement
with John Hancock Funds 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
John Hancock Funds related to the distribution of Class B shares of the Fund;
(d) expenses incurred in connection with the distribution of a corresponding
class of any open-end, registered investment company which sells all or
substantially all of its assets to the Fund; and (e) interest expenses on
unreimbursed distribution expenses related to Class B shares as described in
Article III hereof.
<PAGE>
Service Expenses include payments made to, or on account of, account
executives of selected broker-dealers (including affiliates of John Hancock
Funds) and others who furnish personal and shareholder account maintenance
services to 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 John Hancock
Funds is not fully reimbursed for payments made or other expenses incurred by it
under this Plan, John Hancock Funds 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>
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
John Hancock Funds 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 John Hancock Funds 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 28th day of July, 1995 in Boston,
Massachusetts.
JOHN HANCOCK TECHNOLOGY SERIES, INC.
on behalf of
JOHN HANCOCK GLOBAL TECHNOLOGY FUND
<PAGE>
By /s/Thomas H. Connors
Second Vice President
JOHN HANCOCK FUNDS, INC.
By /s/C. Troy Shaver, Jr.
President
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<NAME> JOHN HANCOCK GLOBAL TECHNOLOGY FUND - CLASS A
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<NAME> JOHN HANCOCK GLOBAL TECHNOLOGY FUND - CLASS B
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