<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
John Hancock Variable Series Trust I
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
John Hancock Variable Series Trust I
------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
________________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
________________________________________________________________________
(5) Total fee paid:
________________________________________________________________________
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
________________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
________________________________________________________________________
(3) Filing Party:
________________________________________________________________________
(4) Date Filed:
________________________________________________________________________
<PAGE>
JOHN HANCOCK VARIABLE SERIES TRUST I
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
A special Meeting of Shareholders of the John Hancock Variable Series Trust
I (the "Fund") will be held at the office of John Hancock Variable Life
Insurance Company, 197 Clarendon Street, Boston Massachusetts (telephone 1-
800-732-5443), at 2:00 P.M., on Monday April 14, 1997, for the following
purposes:
(1) To approve, as to the Equity Index, Large Cap Value, Mid Cap Growth,
Mid Cap Value, Small Cap Growth, Small Cap Value, Strategic Bond,
International Opportunities, and International Balanced Portfolios, the
currently effective Management Agreement between the Fund and John Hancock
Mutual Life Insurance Company ("John Hancock"), including a related Sub-
Investment Management Agreement that also is currently effective for each
Portfolio.
(2) To approve, as to all of the Fund's Portfolios, amended Management
Agreements that will reallocate to the Fund certain expenses relating to
the operations and administration of the Fund.
(3) To approve, as to the Equity Index Portfolio, an amended Management
Agreement that will reduce the investment advisory fee paid by this
Portfolio, including approval of a new Sub-Investment Management Agreement
among the Fund, John Hancock, and State Street Global Advisors as to this
Portfolio.
(4) To approve, as to the Short-Term U.S. Government Portfolio, an
amended Management Agreement that will reduce the investment advisory fee
paid by this Portfolio.
(5) To modify the investment restrictions of the Sovereign Bond Portfolio
to allow it to purchase "when issued" securities and to enter into forward
commitments.
(6) To change the status of the investment objective and policies of the
Money Market Portfolio to make them generally non-fundamental.
(7) To modify the investment restrictions of the Managed Portfolio to
allow it to purchase securities issued under Rule 144A of the Securities
Act of 1933.
In addition, any other matters incident to the conduct of the meeting or any
adjournment thereof, may be transacted at this Special Meeting.
<PAGE>
An owner of a variable life insurance policy or a variable annuity contract
("Owner") will be entitled to give voting instructions only if he/she was the
Owner of record as of the close of business on March 3, 1997. John Hancock is
soliciting votes from Owners invested in the following Portfolios with respect
to the indicated matters affecting those Portfolios:
<TABLE>
<CAPTION>
PROPOSALS
---------------------------
PORTFOLIO 1. 2. 3. 4. 5. 6. 7.
--------- --- --- --- --- --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C>
Growth & Income................................ X
Sovereign Bond................................. X X
Money Market................................... X X
Large Cap Growth............................... X
Managed........................................ X X
Real Estate Equity............................. X
International Equities......................... X
Short-Term U.S. Government..................... X X
Special Opportunities.......................... X
Equity Index................................... X X X
Large Cap Value................................ X X
Mid Cap Growth................................. X X
Mid Cap Value.................................. X X
Small Cap Growth............................... X X
Small Cap Value................................ X X
Strategic Bond................................. X X
International Opportunities.................... X X
International Balanced......................... X X
</TABLE>
Henry D. Shaw
Chairman, Board of Trustees
Boston, Massachusetts
March , 1997
- -------------------------------------------------------------------------------
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE COMPLETE
AND RETURN THE ENCLOSED FORMS OF VOTING INSTRUCTIONS. ENCLOSED IS A VOTING
INSTRUCTION FORM FOR EACH PORTFOLIO YOU ARE USING. PLEASE COMPLETE AND
RETURN ALL FORMS. YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE MEETING.
- -------------------------------------------------------------------------------
<PAGE>
PROXY STATEMENT
GENERAL
This statement is furnished in connection with the solicitation of voting
instructions by the management of John Hancock Variable Series Trust (the
"Fund") for use at the Special Meeting of its Shareholders (the "Meeting"), to
be held at the offices of John Hancock Variable Life Insurance Company
("JHVLICO"), 197 Clarendon Street, Boston, Massachusetts 02117, on Monday,
April 14, 1997 at 2:00 P.M. Boston time. This solicitation is being made of
all shares of each of the several series (the "Portfolios") of the Fund which
are attributable to the Owners' interests in John Hancock Variable Life
Accounts U, V, and S; John Hancock Variable Annuity Accounts U, V, and I; and
John Hancock Mutual Variable Life Insurance Account UV (the "Accounts").
The cost of printing and mailing this notice and statement and the
accompanying voting instructions form and the cost of tabulating the votes
will be borne by the Portfolios. All other expenses will be borne by John
Hancock. In addition to solicitations by mail, a number of regular employees
of JHVLICO and John Hancock Mutual Life Insurance Company ("John Hancock") may
solicit voting instructions in person or by telephone; such employees will not
be compensated for such services. Solicitation materials were first made
available to Owners on or about March , 1997.
Only the Portfolios indicated in the chart on page 2 of the attached notice
will vote on each proposal listed in that chart. Where the chart shows more
than one Portfolio as voting on a particular proposal, approval by any
Portfolio will be effective as to that Portfolio, even if one or more other
Portfolios fails to approve the proposal.
THE FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT FOR 1996
TO ANY SHAREHOLDER UPON REQUEST TO THE ADDRESS OR TOLL-FREE TELEPHONE NUMBER
SHOWN IN THE NOTICE ATTACHED AT THE FRONT OF THIS PROXY STATEMENT.
VOTING INSTRUCTIONS
Although JHVLICO and its parent, John Hancock, through the Accounts, legally
own all of the Fund's shares, they will vote all of such shares in accordance
with instructions given by Owners of variable life insurance policies and
variable annuity contracts, as discussed below. For this purpose the Owner of
a variable annuity contract during the period after annuity payments have
commenced is the annuitant.
Any authorized voting instructions will also be valid for any adjournment of
the Meeting and will be revocable only at the direction of the Owner executing
them. If an insufficient number of affirmative votes are obtained to approve
any item, the Meeting may be adjourned to permit the solicitation of
additional votes. Shares will be voted for any such adjournment in the
discretion of those persons named in the voting instructions. Whether a
proposal is approved depends upon whether a sufficient number of votes are
cast for the proposal. Accordingly, an instruction to abstain from voting on
any proposal has the same practical effect as an instruction to vote against
that proposal.
Any person giving voting instructions may revoke them at any time prior to
their exercise by submitting a superseding voting instruction form or a notice
of revocation to the Fund. In addition, although mere attendance at the
Meeting will not revoke voting instructions, an Owner present at the Meeting
may withdraw his/her voting instruction form and vote in person. JHVLICO and
John Hancock will vote Fund shares in accordance with all properly executed
and unrevoked voting instructions received in time for the Meeting.
1
<PAGE>
JHVLICO and John Hancock will vote the Fund shares of each Portfolio held in
their respective Accounts which are attributable to the policies and contracts
in accordance with the voting instructions received from the Owners
participating in that Portfolio. An Account's shares in any Portfolio which
are not attributable to policies or contracts or for which no timely voting
instructions are received will be represented and voted by JHVLICO or John
Hancock in the same proportion as the voting instructions which are received
from all Owners participating in the Portfolio through that Account. Fund
shares which are not attributable to policies and contracts include shares
purchased with contributions made as "seed money" to the Portfolios, by
JHVLICO or John Hancock.
Please refer to Appendix A to this statement if you wish additional
information about the number of shares of each Portfolio that are outstanding
or that are attributable to John Hancock or JHVLICO (rather than to Owners).
MAJORITY VOTING
In order for the shareholders of any Portfolio to approve any of the
proposals in this statement, the proposal must receive the favorable vote of a
majority of the outstanding shares of that Portfolio. When used in this
statement, a "majority of the outstanding voting shares" means the affirmative
vote of more than 50% of the outstanding shares or, if it is less, 67% or more
of the shares present or represented at the meeting.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE COMPLETE AND
RETURN THE ENCLOSED FORM(S) OF VOTING INSTRUCTIONS. ENCLOSED IS A VOTING
INSTRUCTION FORM FOR EACH PORTFOLIO YOU ARE USING. PLEASE COMPLETE AND RETURN
ALL FORMS. YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE MEETING.
2
<PAGE>
PROPOSAL 1
APPROVAL OF CURRENT MANAGEMENT AND
SUB-INVESTMENT MANAGEMENT AGREEMENTS FOR EQUITY INDEX,
LARGE CAP VALUE, MID CAP GROWTH, MID CAP VALUE, SMALL CAP
GROWTH, SMALL CAP VALUE, STRATEGIC BOND, INTERNATIONAL
OPPORTUNITIES, AND INTERNATIONAL BALANCED PORTFOLIOS
At a meeting of the Fund's Board of Trustees held on February 18, 1997, the
Trustees unanimously approved the continuance of, and voted to recommend that
the Owners approve, the current Management Agreement, including related Sub-
Investment Management Agreements, for the Equity Index, Large Cap Value, Mid
Cap Growth, Mid Cap Value, Small Cap Growth, Small Cap Value, Strategic Bond,
International Opportunities, and International Balanced Portfolios.
A copy of the current Management Agreement for these Portfolios is included
as Appendix B to this statement. The terms of the current Management Agreement
and the related Sub-Investment Management Agreements are summarized in
Proposal 2 under "The Current Management Agreements" and "The Sub-Investment
Management Agreements" and in Appendix C to this statement.
REASONS FOR THIS PROPOSAL
These agreements are being submitted for shareholder approval at the Meeting
because it will be the first shareholders meeting of the Fund since the nine
portfolios to which these agreements relate were created in 1996. Thus, these
agreements (unlike the similar agreements that relate to the nine older
Portfolios) have never been approved by Owners. There have been no changes in
any of the current agreements to which this Proposal relates since the
inception of the Portfolios that they cover.
RELATIONSHIP TO PROPOSALS 2, 3 AND 4
Proposals 2, 3 and 4 below also request approval of amended versions of the
Management Agreement. Nevertheless, the current Management Agreement will
continue as to any Portfolio whose Owners approve it under this Proposal 1,
unless and until any such amended version is approved by Owners and becomes
effective as to that Portfolio.
As a practical matter, the current Management and Sub-Investment Management
Agreements covered by this Proposal 1 will be substantially the same as are
contemplated by Proposal 2, but without certain increased expenses
contemplated by the latter. Accordingly, the information included (or referred
to) in Proposal 2 that supports approval of those increased expenses also
supports the current agreements for which this Proposal seeks approval.
TRUSTEES' RECOMMENDATION
The Board of Trustees believes that approval of this Proposal 1 is in the
best interests of the Fund and the Owners of each of the nine affected
Portfolios.
THE BOARD OF TRUSTEES RECOMMENDS THAT OWNERS OF THE NINE ABOVE-NAMED
PORTFOLIOS GIVE INSTRUCTIONS TO VOTE FOR THE APPROVAL OF THE CURRENT
---
MANAGEMENT AND SUB-INVESTMENT MANAGEMENT AGREEMENTS AS TO EACH OF THE NINE
ABOVE-NAMED PORTFOLIOS.
3
<PAGE>
PROPOSAL 2
APPROVAL OF AMENDED
MANAGEMENT AGREEMENTS
FOR ALL PORTFOLIOS
At its February 18, 1997 meeting, the Board of Trustees also unanimously
approved, and voted to recommend that Owners approve, an amendment to the four
current Management Agreements ("Management Agreements") between the Fund and
John Hancock. The amendment reallocates to the Fund certain expenses relating
to the administration and operation of the Fund.
The current Management Agreement, dated April 12, 1988, for the Real Estate
Equity and International Equities Portfolios was last approved on April 12,
1994. This approval was obtained because of a change in the sub-investment
manager of the Real Estate Equity Portfolio and a change in the investment
objective and policies of the International Equity Portfolio. The current
Management Agreement, dated April 15, 1994, for the Short-Term U.S. Government
and Special Opportunities Portfolios was approved by the Portfolios'
shareholders on April 26, 1995. These approvals were obtained because the
Portfolios were in each case newly created, and their Management Agreements,
therefore had not yet been approved by Owners. The current Management
Agreement, dated April 12, 1988, for the Growth and Income, Sovereign Bond,
Money Markets, Large Cap Growth, and Managed Portfolios was last approved by
Owners in April 1988. This was the initial approval of that Management
Agreement.
John Hancock, a registered investment adviser under the Investment Advisers
Act of 1940, began providing investment advice to investment companies in 1972
when it organized a management-type separate account, invested primarily in
common stocks. Total assets under management by John Hancock and its
subsidiaries as of December 31, 1996, amounted to over $106 billion, of which
over $59 billion was owned by John Hancock.
THE CURRENT MANAGEMENT AGREEMENTS
The current Management Agreements are substantially similar to one another,
except that they provide for different rates of investment advisory fees with
respect to the several Portfolios. The most recent of the four current
Management Agreements is set forth in Appendix B to this statement. Pursuant
to the Management Agreements, John Hancock advises the Fund in connection with
policy decisions; provides administration of day-to-day operations; provides
personnel, office space, equipment and supplies for the Fund; maintains
records required by the Investment Company Act of 1940; values assets and
liabilities of the Fund; computes income, net asset value, and yield of each
Portfolio; and supervises activities of the sub-investment managers referred
to below.
For its investment management and advisory services, John Hancock is paid a
fee each Portfolio at the following rates:
4
<PAGE>
<TABLE>
<CAPTION>
FEE ON AN ANNUAL BASIS AS A
NAME OF TOTAL AMOUNT PERCENTAGE OF THE PORTFOLIO'S
PORTFOLIO PAID FOR 1996* AVERAGE DAILY NET ASSETS*
- --------- -------------- --------------------------------
(IN THOUSANDS)
<S> <C> <C>
Small Cap Growth................ $ 69 0.75%
Mid Cap Growth.................. $ 43 0.85% of the first $100,000,000
0.80% of all additional amounts
Small Cap Value................. $ 44 0.80% of the first $100,000,000
0.75% of the next $100,000,000
0.65% of all additional amounts
Mid Cap Value................... $ 40 0.80% of the first $250,000,000
0.775% of the next $250,000,000
0.750% of the next $250,000,000
0.725% of all additional amounts
International Balanced.......... $124 0.85% of the first $100,000,000
0.70% of all additional amounts
International Opportunities..... $ 96 1.00% of the first $20,000,000
0.85% of the next $30,000,000
0.75% of all additional amounts
Large Cap Value................. $ 54 0.75%
Strategic Bond.................. $ 66 0.75% of the first $25,000,000
0.65% of the next $50,000,000
0.55% of the nest $75,000,000
0.50% of all additional amounts
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
FEE ON AN ANNUAL BASIS AS A
NAME OF TOTAL AMOUNT PERCENTAGE OF THE PORTFOLIO'S
PORTFOLIO PAID FOR 1996* AVERAGE DAILY NET ASSETS*
- --------- -------------- -------------------------------
(IN THOUSANDS)
<S> <C> <C>
Equity Index..................... $ 15 0.25%
Growth and Income................ $4,525 0.25%
Large Cap Growth................. $1,785 0.40% of the first $500,000,000
0.35% of the next $500,000,000
0.30% of all additional amounts
Managed.......................... $7,419 0.40% of the first $500,000,000
0.35% of the next $500,000,000
0.30% of all additional amounts
Short-Term U.S. Government....... $ 146 0.50% of first $250,000,000
0.45% of next $500,000,000
0.40% of all additional amounts
International Equities........... $ 861 0.60% of first $250,000,000
0.55% of next $250,000,000
0.50% of all additional amounts
Special Opportunities............ $ 901 0.75% of first $250,000,000
0.70% of next $250,000,000
0.65% of all additional amounts
Sovereign Bond................... $1,749 0.25%
Real Estate Equity............... $ 712 0.60% of first $300,000,000
0.50% of next $800,000,000
0.40% of all additional amounts
Money Market..................... $ 499 0.25%
</TABLE>
- --------
*These fees do not reflect Account fees, including sales loads.
Further, the Management Agreements also currently provide that for any
fiscal year in which the normal operating costs and expenses of any of the
Portfolios, exclusive of the investment advisory fees, interest, brokerage
commissions, taxes and extraordinary expenses outside the control of John
Hancock, exceed 0.25% of that Portfolio's average daily net assets, John
Hancock will reimburse that Portfolio promptly after the end of the fiscal
year in an amount equal to such excess. The reimbursement paid to each of the
Portfolios for the period ended December 31, 1996, is shown below, rounded to
the nearest thousand:
<TABLE>
<S> <C>
Equity Index Portfolio*............................................... $102,000
Large Cap Value Portfolio*............................................ $ 65,000
Mid Cap Growth Portfolio*............................................. $ 63,000
Mid Cap Value Portfolio*.............................................. $ 55,000
Small Cap Growth Portfolio*........................................... $ 56,000
Strategic Bond Portfolio*............................................. $ 50,000
International Opportunities Portfolio*................................ $145,000
International Balanced Portfolio*..................................... $ 50,000
Short-Term U.S. Government Portfolio.................................. $ 10,000
Small Cap Value Portfolio*............................................ $ 56,000
</TABLE>
- --------
*Commenced operations on May 1, 1996.
6
<PAGE>
Under the Management Agreements, John Hancock also pays the compensation of
Fund officers and employees and the expenses of clerical services relating to
the administration of the Fund. Expenses assumed by the Fund include, but are
not limited to, taxes, custodian and auditing fees, brokerage commissions,
advisory fees, the compensation of unaffiliated Trustees, the cost of the
Fund's fidelity bond, the cost of printing and distributing to Owners the
Fund's annual and semi-annual reports, and the cost of printing, distributing
to Owners, and tabulating proxy materials.
Under the Management Agreements, John Hancock also indemnifies each member
of the Board of Trustees against losses by reason of failure (other than
through willful misfeasance, bad faith, gross negligence or reckless disregard
of duties) to take any action relating to the investment or reinvestment of
assets in the Fund, including failure to seek or retain investment advice or
management in addition to or in place of that provided by John Hancock or the
sub-investment managers.
Unless modified or terminated, the Management Agreements will continue with
respect to each Portfolio from year to year but only so long as such
continuance is specifically approved at least annually by (a) a majority of
the Board of Trustees who are not interested persons of JHVLICO, John Hancock,
or the Fund, cast in person at a meeting called for the purpose of voting on
such approval, and (b) either a vote of the Board of Trustees or a majority of
the outstanding voting shares of such Portfolio. The Management Agreements
also provide that they may, on 60 days' notice, be terminated at any time
without penalty by the Board of Trustees, by majority vote of the outstanding
voting shares of such Portfolio, or by John Hancock. The Management Agreements
automatically terminate in the event of their assignment.
Additional information concerning John Hancock and the Management Agreements
is set forth in Appendix C to this statement.
THE CURRENT SUB-INVESTMENT MANAGEMENT AGREEMENTS
With respect to certain of the Portfolios, John Hancock and the Fund have
entered into Sub-Investment Management Agreements with other registered
investment advisers. Under these agreements, the sub-investment managers make
investment decisions, place investment orders and perform certain record
keeping functions for the affected Portfolios. This Proposal 2, however, will
not alter the terms of any of the Sub-Investment Management Agreements.
In the paragraphs that follow, each current sub-investment manager is
described after the names of the Portfolio(s) it serves.
International Equities, Special Opportunities, Sovereign Bond and Small Cap
Growth Portfolios--John Hancock Advisers, Inc. ("Advisers"), a Delaware
corporation organized in 1968, is wholly-owned by John Hancock Subsidiaries,
Inc., which is itself wholly owned by John Hancock. Advisers has approximately
$22 billion in assets under management in its capacity as investment adviser
to mutual funds and publicly traded investment companies in the John Hancock
fund complex.
Growth and Income, Large Cap Growth, Managed, Short-Term U.S. Government,
Real Estate Equity and Equity Index Portfolios--Independence Investment
Associates, Inc. ("IIA"), a Delaware corporation organized in 1982, is a
wholly-owned subsidiary of John Hancock Subsidiaries, Inc. IIA manages over
$25.9 billion worth of stocks and bonds for various clients.
Large Cap Value Portfolio--T. Rowe Price Associates, Inc. ("T. Rowe") is a
Maryland corporation. T. Rowe and its affiliates currently manage over $95
billion for over 4.5 million individual and institutional investor accounts.
7
<PAGE>
International Opportunities Portfolio--Rowe Price-Fleming International,
Inc. ("Rowe Price-Fleming") is a Maryland corporation incorporated in 1979 as
a corporate joint venture between T. Rowe Price and Robert Fleming Holdings
Limited. Rowe Price-Fleming, with offices in Baltimore, London, Tokyo, and
Hong Kong, currently manages over $25 billion worth of international stocks
and bonds.
Mid Cap Growth Portfolio--Janus Capital Corporation ("Janus") is a Colorado
corporation. A registered investment adviser since 1970, Janus manages over
$50 billion assets.
Mid Cap Value Portfolio--Neuberger & Berman L.P. ("Neuberger & Berman"), a
New York limited partnership, has been in the investment advisory business
since 1939. It manages over $44 billion of global stocks and bonds.
Small Cap Value--INVESCO Management & Research ("INVESCO"), a Massachusetts
corporation, is a part of INVESCO, PLC, a global firm that manages
approximately $91 billion as of September 30, 1996.
Strategic Bond Portfolio--J.P. Morgan Investment Management Inc. ("J.P.
Morgan"), a Delaware corporation, manages over $208 billion of global stocks
and bonds. Together with its predecessors, has been in the investment advisory
business for over 100 years.
International Balanced Portfolio--Brinson Partners, Inc., ("Brinson"), a
Delaware corporation, has been in the investment advisory business since 1974.
Brinson has over $71.6 billion of asset under management.
John Hancock pays all fees of sub-investment managers pursuant to the terms
of the Sub-Investment Management Agreement with each. Therefore, the sub-
investment management arrangements result in no additional charge to the Fund
or to Owners. The fees paid to the sub-investment managers are as follows:
<TABLE>
<CAPTION>
FEE ON AN ANNUAL BASIS AS A
PERCENTAGE OF THE PORTFOLIO'S AMOUNT PAID FOR
NAME OF PORTFOLIO AVERAGE DAILY NET ASSETS 1996
----------------- ----------------------------- ---------------
(IN THOUSANDS)
<S> <C> <C>
Equity Index............. 0.15% $
Small Cap Growth......... 0.50% $
Large Cap Value.......... 0.50% $
International 0.75% of the first $20,000,000
Opportunities........... 0.60% of the next $30,000,000
0.50% of the next $150,000,000
0.50% all assets over $200,000,000 $
Mid Cap Growth........... 0.60% of the first $100,000,000
0.55% on all additional amounts $
Mid Cap Value............ 0.55% of the first $250,000,000
0.525% of the next $250,000,000
0.50% of the next $250,000,000
0.475% on all additional amounts $
Small Cap Value.......... 0.55% of the first $100,000,000
0.50% of the next $100,000,000
0.40% of all additional amounts $
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
FEE ON AN ANNUAL BASIS AS A
PERCENTAGE OF THE PORTFOLIO'S AMOUNT PAID FOR
NAME OF PORTFOLIO AVERAGE DAILY NET ASSETS 1996
----------------- ----------------------------- ---------------
(IN THOUSANDS)
<S> <C> <C>
Strategic Bond.......... 0.50% of the first $25,000,000
0.40% of the next $50,000,000
0.30% of the next $75,000,000
0.25% of all additional amounts $
International Balanced.. 0.50% of the first $100,000,000
0.35% of all additional amounts $
Growth and Income....... 0.1875% $
Large Cap Growth........ 0.30% of the first $500,000,000
0.2625% of the next $500,000,000
0.225% of all additional amounts $
Managed................. 0.30% of the first $500,000,000
0.2625% of the next $500,000,000
0.225% of all additional amounts $
Short-Term U.S.
Government............. 0.19% of first $250,000,000
0.17% of next $500,000,000
0.15% of all additional amounts $
International Equities.. 0.40% of first $250,000,000
0.37% of next $250,000,000
0.33% of all additional amounts $
Special Opportunities... 0.50% of first $250,000,000
0.47% of next $250,000,000
0.44% of all additional amounts $
Sovereign Bond.......... 0.1875% $
Real Estate Equity...... 0.30% of first $300,000,000
0.25% of next $800,000,000
0.20% of all additional amounts $
</TABLE>
Additional information concerning the sub-investment managers and the terms
of the current Sub-Investment Management Agreements is provided in Appendix C.
9
<PAGE>
OTHER INVESTMENT COMPANY ADVISORY CLIENTS
Although John Hancock performs investment advisory services for other
separate accounts and advisory clients, none of these is a registered
investment company. John Hancock does provide investment advisory services to
other Portfolios of the Fund; however, none of these Portfolios has an
investment objective similar to any of the above-described Portfolios.
Advisers acts as an investment adviser to three registered investment
companies having a substantially similar investment objective to one of the
above described Portfolios. The following table sets forth the name of each
such investment company, its net assets as of December 31, 1996, the fee
charged by Advisers as a percentage of daily net assets, and the Portfolio
having the substantially similar investment objective.
<TABLE>
<CAPTION>
INVESTMENT COMPANY NAME FEE NET ASSETS PORTFOLIO
- ----------------------- --- ---------- ---------
<S> <C> <C> <C>
John Hancock 0.80% $1 million Small Cap Growth
Small Capitalization
Equity Fund
John Hancock 0.50% of first $1.5 billion $1.55 billion Sovereign Bond
Sovereign Bond Fund 0.45% of next $500 million
0.40% of next $500 million
0.35% of all amounts over $2.5 billion
John Hancock 0.80% of first $250 million $423.2 million Special Opportunities
Special Opportunities 0.75% of next $250 million
Fund 0.70% of all additional amounts
John Hancock 0.75% of first $750 million $73.5 million Growth and Income
Independence Equity Fund 0.70% of all additional amounts
John Hancock 0.70% of first $500 million $10.4 million Managed
Independence Balanced 0.65% of all additional amounts
Fund
John Hancock 0.80% of first $500 million $855,000 Large Cap Growth
Independence Growth Fund 0.75% of all additional amounts
John Hancock 0.50% of all amounts $290.5 million Growth and Income
Diversified Core
Equity Fund II
</TABLE>
- --------
Please refer to Appendix D to this statement if you wish information about
other investment companies for whom the sub-investment managers provide sub-
advisory services and the fees they charge those companies.
BACKGROUND TO PROPOSED EXPENSE REALLOCATION
At the time of the organization of the Fund in 1986, a business decision was
made to allocate to John Hancock a number of expense items which typically in
the mutual fund industry are borne directly by the mutual fund itself, e.g.,
the fees of independent auditors. This decision was supported by a survey in
1985 of a number of insurance companies in the business of issuing variable
life insurance which disclosed that a majority of those
10
<PAGE>
companies assumed such expenses themselves, rather than allowing the expenses
to be charged against their funds.
At the time of and prior to the 1985 survey, "management-type" separate
accounts that invested directly in the securities markets (rather than in an
underlying mutual fund) were quite prevalent. Indeed, prior to the Fund's
organization, all of John Hancock's separate accounts had been of the
management type. Under the management separate account structure, the
insurance company typically bore most of the separate account's expenses
(other than brokerage commissions and investment advisory fees), and instead
charged Owners or the separate account a separate administrative charge. When
John Hancock and other insurers converted their management separate accounts
to the current two-tier "unit investment trust" structure, it was generally
not intended that any increased expense burden for Owners would result.
Imposing additional costs on Owners might have put the two-tier structure at a
competitive disadvantage in relation to the management-type separate accounts
then still in use by other companies.
Accordingly, John Hancock originally bore substantially all of the Fund's
expenses (other than brokerage commissions and advisory fees), as it had
previously done for its management-type separate accounts. However, when the
Owners voted to approve the establishment of the Fund and the conversion from
management separate accounts to a two-tier structure, they were specifically
informed that, subject to Trustee and Owner approval, the investment
management agreements might subsequently be revised to expand the types of
expenses that the Fund would bear.
In 1987, an updated and broader survey of practices with respect to
insurance companies issuing variable life insurance and variable annuity
products revealed that industry practices had changed. Many of the insurance
companies which once followed the same approach as John Hancock had altered
their practices in favor of allocating to their new funds certain objective
expenses typically assumed by mutual funds generally. This resulted in part
from a growing number of underlying funds that marketed their shares to
unaffiliated insurance companies over whose contract charge structure the
fund's sponsor or adviser had no control.
In 1988, the Trustees considered and approved a proposal to allocate
prospectively to the Fund six categories of expenses: custodian and depository
fees; printing and distribution to Owners of the Fund annual and semi-annual
reports; printing and distribution to Owners of proxy ballots and statements
and tabulation thereof; compensation of unaffiliated trustees; cost of
fidelity bond; and independent auditors' fees. That proposal was then
submitted to, and approved by, the Fund shareholders (i.e., the Owners) in
April of 1988.
Now, a study based upon data from 1994 and early 1995 reveals that overall
industry practice has again significantly changed. Insurance product funds are
now being charged with more expenses. Once again, many insurance companies are
altering their practice in favor of allocating more expenses directly to their
funds.
PROPOSED EXPENSE RECOLLOCATION
Against this background, John Hancock proposed and, at their February 18,
1997 meeting, the Trustees considered and approved an amendment to the four
current Fund Management Agreements to allocate prospectively to the Fund five
new categories of expenses: costs of certain compliance, pricing, and
accounting services; legal expenses and independent agent fees; registration
fees and costs; association dues; and proxy preparation costs. The nature of
these costs is discussed further in Appendix E to this statement. That
appendix also sets forth the text of the proposed amendment.
11
<PAGE>
Reasons for Proposal
Among other things, the reallocation is intended to ensure that John Hancock
and JHVLICO will be able and motivated to continue to promote the Fund and its
Portfolios as a funding medium for variable insurance products that they may
market now or in the future. John Hancock believes its sponsorship of the Fund
in connection with John Hancock and JHVLICO insurance contracts has enhanced
the Fund's growth, which in turn has made possible economies of scale and
additional investment options for Owners.
It is customary (though not universal) practice today in the variable
insurance products industry to have an underlying investment company (such as
the Fund) assume directly a major portion of its own expenses. In theory, John
Hancock and JHVLICO could continue to attempt to defray their expenses through
additional charges deducted under contracts. However, the resulting higher
contract charges could be used against John Hancock and JHVLICO by their
competitors. Moreover, the proposed reallocation will cause these expenses to
be reflected in the Fund's financial statements and expense ratios in a way
more consistent with other funds that bear such expenses. This should make it
easier for an investor to evaluate how efficiently the Fund is managed,
relative to other such funds.
If the proposed reallocation of expenses is not approved, the offering of
additional Portfolios could be restricted (which would reduce the investment
alternatives and the fund transfer options for Owners) and John Hancock's
motivation to offer and distribute variable products funded by the Fund could
be diminished. As a result, the future growth in the size of the Portfolios of
the Fund could be less than otherwise would occur, and unit costs might not be
reduced as much as anticipated, to the detriment of current as well as future
Owners. In that case, effective investment management could be made more
difficult and certain economies of scale would not be achieved. With respect
to most of the Portfolios, Owners would be less likely to derive the benefits
from investment management fee rate reductions which become operative at
higher levels of assets under management.
Cost of Proposal to Fund*
During the calendar year 1996, the dollar amounts of expenses borne by the
Fund were as follows:
<TABLE>
<S> <C>
Brokerage commissions and related fees.......................... $ 7,441,000
Advisory fees................................................... $19,148,000
Taxes and reserves for taxes.................................... $ 0
Interest on borrowings.......................................... $ 0
Extraordinary non-recurring expenses............................ $ 0
Custodian and depository fees................................... $ 1,061,000
Printing and distribution of Fund annual and semi-annual re-
ports.......................................................... $ 1,129,000
Printing, distribution, and tabulation of proxy ballots and
statements..................................................... $ 0
Compensation of unaffiliated Trustees........................... $ 94,000
Cost of fidelity bond........................................... $ 13,000
Fee of independent auditors..................................... $ 338,000
-----------
Total......................................................... $29,224,000
</TABLE>
The total of such expenses charged to the Fund equaled 0.44% of the assets of
the Fund as of December 31, 1996.
12
<PAGE>
Had the proposed reallocation of expenses been in effect during calendar
year 1996, and had the cost of preparing this proxy statement been incurred in
1996, John Hancock estimates that the dollar amount of the additional expenses
borne by the Fund would have been as follows:
<TABLE>
<S> <C>
Cost of expanded custodian services............................ $ 930,000
Legal services and independent agent fees...................... $ 224,000**
Registration fees and costs.................................... $ 11,000**
Association fees............................................... $ 0
Cost of preparing proxies...................................... $ 51,000
----------
Total........................................................ $1,216,000
</TABLE>
- --------
* All of the amounts shown have been rounded to the nearest thousand.
** The organizational cost of adding the nine new Portfolios in 1996 is
reflected in these expense categories.
In summary, if the proposed reallocation of expenses had been in effect
during the calendar year 1996, it is estimated that the Fund would have
incurred additional expenses equal to an additional 0.02% of the assets of the
Fund as of December 31, 1996. However, the actual impact of the reallocation
on the Fund would have been significantly lessened by the imposition of the
0.25% expense limitation explained below.
If the current proposal is adopted, the Management Agreements' current 0.25%
expense limitation will continue to apply. That is to say, for any calendar
year in which the normal operating costs and expenses of any Portfolio
(exclusive of investment advisory fees, interest, brokerage commissions, taxes
and extraordinary expenses outside of the control of John Hancock) exceed
0.25% of that Portfolio's average daily net assets, John Hancock, pursuant to
the terms of the amended Management Agreements, will reimburse the Portfolio
promptly after the end of the year in an amount equal to such excess.
Therefore, although the Fund will assume additional expenses under the
proposal, the cost it will pay with respect to any Portfolio for these and all
other expenses subject to the limitation will not exceed 0.25% of the average
daily net assets for that Portfolio.
Pursuant to the foregoing commitments, John Hancock reimbursed expenses for
ten of the Portfolios for 1996. Had the reallocation of expenses been in
effect for 1996, it would have had no effect on these ten Portfolios, because
their normal operating costs and expenses subject to the limit already
exceeded the 0.25% cap.
Furthermore, for four of the remaining eight Portfolios, the additional
expense allocations will have little practical effect. That is to say, these
Portfolios have grown so large that the effect of the increase in expenses
would be minimal. For example, the Large Cap Growth Portfolio paid a total of
0.04% of its average daily net assets for non-advisory expenses. Had the
proposed changes been in effect, it is estimated that the Large Cap Growth
Portfolio would have paid only 0.05%.
13
<PAGE>
The following chart shows the effect that John Hancock estimates the
reallocation of expenses would have had on the percentage of average daily net
assets paid by each of the Portfolios in 1996. This chart does not reflect
separate account expenses, including sales loads.
NON-ADVISORY EXPENSES AS A PERCENTAGE
OF AVERAGE DAILY NET ASSETS
<TABLE>
<CAPTION>
1996 IF PROPOSED
1996 REALLOCATION
PORTFOLIO ACTUAL WERE IN EFFECT CHANGE
- --------- ------ ---------------- ------
<S> <C> <C> <C>
Growth & Income.................................. 02% .03% .01%
Managed.......................................... .02 .03 .01
Large Cap Growth................................. .04 .05 .01
Sovereign Bond................................... .04 .06 .02
Money Market..................................... .06 .07 .01
Real Estate Equities............................. .09 .11 .02
Special Opportunities............................ .09 .12 .03
International Equity............................. .16 .18 .02
Short-Term U.S. Government....................... .25* .25* 0
Small Cap Growth................................. .25* .25* 0
International Balanced........................... .25* .25* 0
Mid Cap Growth................................... .25* .25* 0
Large Cap Value.................................. .25* .25* 0
Mid Cap Value.................................... .25* .25* 0
Small Cap Value.................................. .25* .25* 0
International Opportunities...................... .25* .25* 0
Equity Index..................................... .25* .25* 0
Strategic Bond................................... .25* .25* 0
</TABLE>
- --------
*After expense reimbursement from John Hancock. Does not reflect John
Hancock's voluntary waiver of 1996 non-advisory fees for the Index Equity
Portfolio.
CURRENT INDUSTRY PRACTICE
As noted above, it has become the practice of many insurance companies
offering variable annuity and variable life insurance products to allocate to
the investment companies underlying these products a substantial portion of
the direct expenses of operating the investment company. Also the expenses
charged to the Portfolios of the Fund compare favorably to industry averages
shown in the 1994-95 survey mentioned above.
The proposed reallocation does not go as far as the practices followed by
some other companies with respect to the allocation of expenses to the Fund.
The expenses to be reallocated are those which can be determined quite
objectively, i.e., expenses paid to service providers or dues paid to certain
organizations or associations. In addition, some of the expenses to be
reallocated will have no immediate impact on the Fund because no charge for
the service or other fee is currently being collected (i.e., association dues,
organizational costs and the SEC registration fee).
14
<PAGE>
BASIS OF TRUSTEES' RECOMMENDATION
In connection with the Trustees' meeting on February 18, 1997, John Hancock
communicated to the Trustees the above-discussed reasons why it believes the
amended Management Agreements should be approved. Also, prior to the meeting,
the Trustees requested information from John Hancock that might bear on the
fairness or reasonableness of the terms of the amended Management Agreements.
John Hancock and/or the sub-investment managers provided a considerable amount
of such information to the Trustees in advance of the meeting; and additional
information was provided at the meeting.
In connection with their deliberations and gathering of information, the
Trustees were represented and advised by a law firm that the Fund has retained
as special counsel. Such counsel advised the Trustees that, in addition to the
information discussed above, the Trustees could take account of any other
information provided to the Trustees in the course of their services as such
(notwithstanding that such other information was not repeated at the February
18, 1997 meeting). This could include, for example, information bearing on the
reputation and capabilities of the sub-investment managers. Also, the Trustees
are routinely provided information concerning the investment performance and
strategies of each Portfolio.
Having been presented with all of the foregoing reasons and information, the
Trustees judged the amended Agreements to be in the best interest of the Fund
and the Owners of each Portfolio under all the circumstances.
THE BOARD OF TRUSTEES RECOMMENDS THAT THE OWNERS OF THE FUND GIVE
INSTRUCTIONS TO VOTE FOR APPROVAL OF AN AMENDMENT TO THE MANAGEMENT AGREEMENTS
TO REALLOCATE CERTAIN FUND EXPENSES.
If the amended Management Agreements are approved by a majority of the
outstanding shares of any Portfolio, this proposal would be effective with
respect to the expenses in question which accrue for that Portfolio after June
30, 1997.
15
<PAGE>
PROPOSAL 3
APPROVAL OF AMENDED MANAGEMENT AND RELATED SUB-INVESTMENT AGREEMENT
FOR THE EQUITY INDEX PORTFOLIO
At its February 18, 1997, meeting, the Board of Trustees also unanimously
approved, and voted to recommend that Owners approve, an amended Management
Agreement that reduces the investment advisory fee as to the Equity Index
Portfolio and a related new Sub-Investment Management Agreement among the
Fund, John Hancock, and State Street Bank & Trust Company, N.A. ("State
Street").
THE PROPOSED CHANGES
Currently, the Equity Index Portfolio is managed by John Hancock and IIA
pursuant to a Management Agreement between John Hancock and the Fund, and a
Sub-Investment Management Agreement among the Fund, John Hancock, and IIA.
In managing the Portfolio during the past year, IIA has used a "portfolio
optimizer" strategy to create a portfolio of stocks with a similar, but not
identical, risk and investment profile to that of the Standard and Poor's 500
Composite Price Index ("S&P 500")/1/. Because IIA is primarily focused on
running actively managed equity portfolios, as opposed to passively managed
portfolios, and because John Hancock concluded that the current size of the
Portfolio justified conversion to a "full replication" strategy, John Hancock
decided to seek out a new sub-investment manager that dedicates a substantial
organization solely to running passively managed equity portfolios.
Among the factors John Hancock considered in seeking a new manager were: (i)
past expertise in managing full replication equity portfolios based upon the
S&P 500; (ii) a strong and positive reputation in the investment community in
managing passive equity portfolios; (iii) a solid performance record over an
extended period of time in managing equity index portfolios that closely track
the S&P 500; (iv) a sub-investment advisory fee that is competitively priced
relative to other passively managed equity portfolios; and (v) a strong
organization with significant resources in terms of investment and operations
personnel dedicated and designed to managing passive portfolios. After
evaluating possible replacements based on these criteria, John Hancock
recommended to the Board of Trustees that the best candidate for the position
of sub-investment manager of the Portfolio would be State Street.
The sub-investment advisory fee to be charged by State Street is
substantially lower than the fee currently charged by IIA for managing the
Equity Index Portfolio. Whereas John Hancock pays IIA a sub-investment
advisory fee at an annual rate of 0.15% of the Portfolio's average daily net
assets, John Hancock will pay State Street a sub-investment advisory fee at a
annual rate of only 0.07% of the Portfolio's average daily net assets. As a
result, John Hancock will be able to reduce the investment advisory fee
charged to the Fund for this Portfolio from .25% to 0.20% of the Portfolio's
average daily net assets.
If the reduced fee had been in place during 1996, the Fund would have paid
John Hancock $ on behalf of the Portfolio, rather than the $ actually
paid.
- --------
/1/"Standard & Poor's(R)," "S&P(R)," "S&P 500(R)," "Standard & Poor's 500" and
"500" are trademarks of the McGraw-Hill Companies, Inc. and have been
licensed for use by John Hancock Variable Series Trust I. No investment or
insurance product is sponsored, endorsed, sold or promoted by S&P, and S&P
makes no representation regarding the advisability of investing in any
product.
16
<PAGE>
ADDITIONAL INFORMATION
State Street. As of December 31, 1996, State Street, through its division
called State Street Global Advisors, had $254.6 billion of assets under
management, $92.7 billion of which were in equities, fixed income, and real
estate, and $161.9 billion of which were in short-term assets. Information
concerning State Street Board of Directors set forth in Appendix C to this
statement.
State Street manages the State Street Global Advisors Fund's S&P 500 Index
Fund (the "500 Index Fund") which has a substantially similar investment
objective to that of the Equity Index Portfolio. The investment advisory fee
payable in connection with the 500 Index Fund, on an annual basis, is 0.10% of
the funds' average daily net assets. As of December 31, 1996, the 500 Index
Fund had $860,739,546 in net assets.
The new Sub-Investment Management Agreement. The terms of the new Sub-
Investment Management Agreement with State Street Global are substantially
similar to those of the current Sub-Investment Management Agreement for the
Equity Index Portfolio, except for the identity of the sub-investment manager
and the level of the sub-investment advisory fee. The other terms of the
proposed new Sub-Investment Management Agreement are as summarized in Appendix
C to this statement.
Relationship to Proposals 1 and 2. Under this Proposal 3, the amended
Management Agreement for the Equity Index Portfolio will be substantially the
same as the current Management Agreement, which is also a subject of Proposal
1 above, but with (i) a lower investment advisory fee and (ii) if also
approved, the expense reallocation presented in Proposal 2 above. As a
practical matter, therefore, the amended Management Agreement for which this
Proposal 3 seeks approval will in most respects be identical to the version of
the Management Agreement covered by Proposal 1 or the version covered by
Proposal 2. Accordingly, the information included (or referred to) in
Proposals 1 and 2 that supports approval of those versions also supports the
amended Management Agreement for which this Proposal 3 seeks approval.
TRUSTEES' RECOMMENDATION
At its February 18, 1997, meeting, the Board approved changes in the
investment policies of the Equity Index Portfolio that would allow it to fully
replicate the S&P 500. The Board of Trustees intends that, by employing this
full replication style of management, the Portfolio will be able to reduce
tracking error and achieve performance that more closely replicates that of
the S&P 500. Moreover, the Board of Trustees also determined that the amended
Management Agreement, with its reduced fees, is in the best interest of the
Fund and the Owners of the Portfolio.
THE BOARD OF TRUSTEES RECOMMENDS THAT THE OWNERS OF THE PORTFOLIO GIVE
INSTRUCTIONS TO VOTE FOR APPROVAL OF THE AMENDED MANAGEMENT AGREEMENT,
INCLUDING THE NEW SUB-INVESTMENT MANAGEMENT AGREEMENT, WITH RESPECT TO THE
EQUITY INDEX PORTFOLIO.
17
<PAGE>
PROPOSAL 4
APPROVAL OF AMENDED MANAGEMENT AGREEMENT
FOR SHORT-TERM U.S. GOVERNMENT PORTFOLIO
At its February 18, 1997, meeting, the Board of Trustees also unanimously
approved, and voted to recommend that the Owners approve, an amended
Management Agreement between the Fund and John Hancock that reduces the
investment advisory fee for the Short-Term U.S. Government Portfolio.
THE PROPOSED CHANGES
John Hancock is currently paid a fee at the annual rate of 0.50% of the
first $250,000,000 of the Portfolios' average daily net assets; 0.45% of the
next $250,000,000; and 0.40% of all additional amounts. For the year ended
December 31, 1996, the Fund paid John Hancock approximately $10,000 in
investment advisory fees for the Portfolio.
After evaluating the fees charged to the Portfolio in comparison to the cost
of the services being rendered, John Hancock recommended to the Board of
Trustees that the Portfolio's investment advisory fees be reduced to 0.30%,
effective May 1, 1997, which is reflected in the amended Management Agreement.
If this reduced fee had been in place in 1996, the Fund would have paid John
Hancock $ in investment advisory fees for the Portfolio rather than the
approximately $10,000 actually paid.
Under this Proposal 4, the amended Management Agreement for the Short-Term
U.S. Government Portfolio will be substantially the same as the current
Management Agreement, which is described in Proposal 2 above, but with (i) a
lower investment advisory fee and (ii) if also approved, the expense
reallocation presented in Proposal 2. As a practical matter, therefore, the
amended Management Agreement for which this Proposal 4 seeks approval will in
most respects be identical to the version of the Management Agreement covered
by Proposal 2. Accordingly, the information included (or referred to) in
Proposal 2 that supports approval of that version also supports the amended
Management Agreement for which this Proposal 4 seeks approval.
TRUSTEES' RECOMMENDATION
The Board of Trustees has determined that the amended Management Agreement,
with its reduced fees, is in the best interests of the Fund and the Owners of
the Portfolio.
THE BOARD OF TRUSTEES RECOMMENDS THAT THE OWNERS OF THE SHORT-TERM U.S.
GOVERNMENT PORTFOLIO GIVE INSTRUCTIONS TO VOTE FOR APPROVAL OF THE AMENDED
---
MANAGEMENT AGREEMENT.
18
<PAGE>
PROPOSAL 5
MODIFICATION TO THE INVESTMENT RESTRICTIONS OF
SOVEREIGN BOND PORTFOLIO
At its February 18, 1997, meeting, the Board of Trustees also unanimously
approved, and voted to recommend that the Owners approve, a change in the
investment restrictions applicable to the Sovereign Bond Portfolio to clearly
allow it to purchase "when-issued" securities and to enter into forward
commitments. The investment objective and other investment policies and
restrictions of the Portfolio would not be otherwise changed.
DISCUSSION
A current investment restriction of the Fund could be interpreted to
prohibit the Sovereign Bond Portfolio from purchasing "when-issued" securities
and entering into forward commitments. It is not entirely clear that this was
the intent of the restriction; and in any event, investment practices have
changed substantially in the 17 plus years that have elapsed since this
restriction was first put in place.
In the 1970's, securities were settled by physical delivery of the security.
Today, in most cases, securities are traded on a book-entry basis or are
immobilized in depositories and physical delivery is no longer required. These
types of changes in the investment industry brought about such investment
practices as "when-issued" securities and forward commitments. Today, certain
new issues of securities, such as U.S. Treasury securities, mortgage-backed
securities, and asset-backed securities are routinely traded on a "when-
issued" or forward commitment basis. To continue to restrict the Sovereign
Bond Portfolio from trading on these bases unnecessarily restricts the
Portfolio from taking advantage of new issues of these types of securities and
puts the Portfolio at a competitive disadvantage to funds that do employ these
investment practices. Furthermore, to restrict the Portfolio from trading on a
forward commitment basis will restrict the Portfolio from taking advantage of
situations when a dealer may be willing to pay an above-market price for
delivery in the current month to cover a short position.
A forward commitment is a contract to purchase securities for a fixed price
at a future date beyond the customary settlement time. "When-issued"
securities are securities issued on a delayed delivery basis. When such
transactions are negotiated, the price of such securities is fixed at the time
of commitment, but delivery and payment for the securities may take place a
month or more after the date of commitment to purchase.
On the date when a Portfolio enters into a forward commitment or when-issued
purchase transaction, it must segregate in a separate account cash or liquid
assets denominated in the currency of the security contracted to be purchased
having a value at least equal to the amount required to assure the
availability of funds for the purchase price. These assets are valued at
market daily and additional cash or liquid assets are added to the separate
account to the extent the total value of the assets in the account declines
below the amount of the commitment.
When securities are traded on a forward commitment basis, or purchased on a
when-issued basis, payment for the security is not tendered until the security
is delivered; therefore, there is no significant additional settlement risk to
trading on a forward commitment or when-issued basis than in trading on a
"regular settlement" basis. However, forward or when-issued commitments
involve a risk of loss if the value of the security to be purchased declines
prior to the settlement date. This risk is in addition to the risk of decline
in
19
<PAGE>
value of the Portfolio's other assets. Although a Portfolio may enter into
such contracts with the intention of acquiring securities, the Portfolio may
dispose of a commitment prior to settlement if the investment manager deems it
appropriate to do so. A Portfolio may realize short-term profits or losses
upon the sale of forward commitments.
TRUSTEES' RECOMMENDATION
The Board of Trustees believes that the proposed change to the Portfolio's
investment restrictions is in the best interests of the Fund and the Owners of
the Sovereign Bond Portfolio.
THE BOARD OF TRUSTEES RECOMMENDS THAT THE OWNERS OF THE SOVEREIGN BOND
PORTFOLIO GIVE INSTRUCTIONS TO VOTE FOR APPROVAL OF THE CHANGE IN THE
INVESTMENT RESTRICTIONS APPLICABLE TO THAT PORTFOLIO.
20
<PAGE>
PROPOSAL 6
CHANGING THE STATUS OF
MONEY MARKET PORTFOLIO INVESTMENT OBJECTIVE AND POLICIES
At its February 18, 1997, meeting, the Board of Trustees also unanimously
approved, and voted to recommend that Owners approve, changing the status of
the investment objective and policies of the Money Market Portfolio from
"fundamental" to "non-fundamental" to provide greater flexibility to the
Portfolio in selecting investments to achieve its investment objective.
However, the Portfolio's fundamental policy to operate as a "money market"
fund that seeks to maintain a constant net asset value per share would not be
affected by this change.
DISCUSSION
Briefly, the current fundamental investment polices of the Money Market
Portfolio specifically permit the Portfolio to invest in the following
instruments, if they mature in one year or less: (1) obligations issued or
guaranteed by the U.S. Government or its agencies; (2) obligations of U.S.
banks (and their foreign branches) and savings and loan associations with
capital, surplus and undivided profit in excess of $100,000,000; (3)
commercial paper rated in the highest rating category by Standard & Poor's
Corporation ("Standard & Poor's"), Moody's Investors Service, Inc.
("Moody's"), or Fitch Investors Service ("Fitch") or, if not rated, issued by
a company with outstanding debt rated in one of the two highest long-term
rating categories by Standard & Poor's or Moody's; (4) corporate obligations
rated in one of the three highest long-term rating categories by Standard &
Poor's or Moody's; and (5) repurchase agreements with respect to any of the
foregoing types of instruments. Because these policies are "fundamental," it
could be argued that the Money Market Portfolio may not invest in any other
types of instruments without approval of the Portfolio's shareholders.
These policies, however, were put into place approximately 17 years ago and
thus do not reflect various types of investments or investment practices
developed over the past 17 years that are currently permissible and being
utilized by other money market funds today. As a result, the current
investment policies of the Money Market Portfolio could limit the ability of
the Portfolio's manager to take advantage of investment opportunities or
strategies that may increase income or reduce risk for the Portfolio.
To avoid any such adverse consequences, the Board of Trustees is
recommending that the status of the investment policies summarized above be
changed to "non-fundamental." If this Proposal 5 is approved, such investment
policies could be changed without submitting the matter to a vote of the
Owners investing in the Portfolio.
The practical impact of this change is expected to be limited. The Portfolio
will continue to be operated and managed in accordance with the restrictions
set forth in Rule 2a-7 under the Investment Company Act of 1940, which (among
other things) limits the investments of the Portfolio to high-quality, short-
term U.S. dollar-denominated instruments that present minimal credits risks.
Rule 2a-7 is designed to limit the permissible investments of a money market
fund in order to ensure that any money market fund that seeks to maintain a
constant net asset value per share (such as the Portfolio) will be able to do
so.
Although the proposed changes will clarify that the Portfolio may purchase
instruments other than those described above, John Hancock does not currently
anticipate substantial deviations from current practice. The
21
<PAGE>
most likely changes would be (a) the purchase of some instruments with
maturities of more than one year (although Rule 2a-7 still would limit
individual maturities to 397 days or less and would limit the weighted average
maturity of the Portfolio as a whole to 90 days or less) and (b) the purchase
of securities based on ratings by a Nationally Recognized Statistical Rating
Organizations other than Standard & Poor's, Moody's or Fitch.
TRUSTEES RECOMMENDATION
The Board of Trustees believes that the proposed change to the status of the
Portfolio's investment objective and investment policies is in the best
interests of the Fund and the Owners investing in the Money Market Portfolio.
THE BOARD OF TRUSTEES RECOMMENDS THAT THE OWNERS OF THE MONEY MARKET
PORTFOLIO GIVE INSTRUCTIONS TO VOTE FOR APPROVAL OF CHANGE IN THE STATUS OF
THE INVESTMENT OBJECTIVE AND POLICIES OF THE PORTFOLIO.
22
<PAGE>
PROPOSAL 7
MODIFICATION TO THE INVESTMENT RESTRICTIONS
OF THE MANAGED PORTFOLIO
At its February 18, 1997, meeting, the Board of Trustees also unanimously
approved, and voted to recommend that the Owners approve, a change in the
investment restrictions of the Managed Portfolio to allow it to purchase
securities under Rule 144A of the Securities Act of 1933. The investment
objective, policies and restrictions of the Portfolio would not otherwise be
changed.
A current investment restriction of the Fund prohibits the Managed Portfolio
from purchasing securities of a type commonly referred to as "restricted."
This could be interpreted to include Rule 144A securities. For the reasons and
subject to the limitations set forth below, the Managed Portfolio now seeks
clear authority to invest in Rule 144A securities.
DISCUSSION
As an open-end investment company, the Fund is limited in the amount of
illiquid securities that it may own because such securities may present
problems of accurate valuation and it is possible that the Fund could have
difficulty satisfying redemptions within seven days as required under the
Investment Company Act of 1940. In general, an illiquid security is one which
cannot be sold in the ordinary course of business within seven days at
approximately the value at which the Fund has valued the security. Illiquid
securities generally include securities which are subject to legal or
contractual delays in or restrictions on resale (commonly referred to as
"restricted securities").
However, the securities markets are evolving. For example, the markets for
various types of securities, including some corporate bonds and notes, are
almost exclusively institutional. These instruments are often either exempt
from registration or sold in transactions not requiring registration. Although
these securities may be legally classified as "restricted," institutional
investors will often justifiably rely on an efficient institutional market in
which the unregistered security can be readily resold. The fact that the
securities may be restricted because of legal or contractual restrictions on
resale to the general public will, therefore, not be dispositive of the
liquidity of such investments.
In 1990, the SEC adopted Rule 144A to provide a safe harbor from
registration under the 1933 Act for the resale of privately placed securities
to qualified buyers. Rule 144A has increased the efficiency and liquidity of
the U.S. private placement market. Issuers that qualify for reliance on the
Rule now have access to a larger sophisticated investor base composed of both
traditional private and public institutional investors. Many Rule 144A
securities are rated by major rating agencies. The average size of Rule 144A
issues is larger than that of many traditional private placements.
Opportunities exist in this market to earn higher returns over comparable
public debt securities for two primary reasons. First, the base of buyers,
though expanding, is still smaller than the public market. Therefore,
underwriters typically offer a yield premium to investors. Similarly, the
secondary market in Rule 144A securities can at times provide buying
opportunities. Because the base of buyers is not as large as the pure public
market, a large block of securities would impact prices to a greater degree.
An astute investor could benefit from such a phenomenon.
23
<PAGE>
In general, the Rule 144A market expands the opportunities beyond what was
available to the Portfolio in 1986, when the Portfolio's investment
restrictions were first put in place. Given the growth in this market and its
improving liquidity, John Hancock believes that the Managed Portfolio should
be allowed to buy 144A securities. John Hancock or IIA will in each case
determine whether any Rule 144A securities should be deemed to be illiquid. If
so, those securities, plus any other illiquid securities owned by the Managed
Portfolio, may not, at the time of purchase, exceed 15% of the Portfolio's net
assets.
TRUSTEES' RECOMMENDATION
The Board of Trustees believes that the proposed changes to the Portfolio's
investment restrictions is in the best interests of the Fund and the Owners of
the Managed Portfolio.
THE BOARD OF TRUSTEES RECOMMENDS THAT THE OWNERS OF THE MANAGED PORTFOLIO
GIVE INSTRUCTIONS TO VOTE FOR THE APPROVAL OF CHANGES IN THE INVESTMENT
---
RESTRICTIONS APPLICABLE TO THE PORTFOLIO.
24
<PAGE>
APPENDIX A
RECORD DATE AND VOTING SHARES
As of the close of business on March 3, 1997 ("the record date"), there were
the following shares outstanding:
<TABLE>
<CAPTION>
NAME OF NUMBER OF
PORTFOLIO SHARES
- --------- ---------
<S> <C>
Growth & Income.......................................................
Sovereign Bond........................................................
Money Market..........................................................
Large Cap Growth......................................................
International Equities................................................
Real Estate Equity....................................................
Short-Term U.S. Government............................................
Special Opportunities.................................................
Equity Index..........................................................
Large Cap Value.......................................................
Mid Cap Growth........................................................
Mid Cap Value.........................................................
Small Cap Growth......................................................
Small Cap Value.......................................................
Strategic Bond........................................................
International Opportunities...........................................
International Balanced................................................
</TABLE>
Each Fund share is entitled to one vote, and fractional votes will be
counted.
The number of Fund Shares attributable to each Owner of a variable life
insurance policy ("policy") is determined by dividing, as of the record date
of the Meeting, a policy's cash (or account) value (less any outstanding
indebtedness) in the designated subaccount of the applicable Account by the
net asset value of one share in the corresponding Fund Portfolio in which the
assets of the subaccount are invested.
The number of Fund shares attributable to each Owner of a variable annuity
contract ("contract") is determined by dividing, as of the record date of the
Meeting, the value of the Accumulation Shares under a contract (or for each
contract under which annuity payments have commenced, the equivalent
determined by dividing the contract reserves by the value of one Accumulation
Share) in the designated subaccount of the applicable Account by the net asset
value of one share in the corresponding Fund Portfolio in which the assets of
the subaccount are invested.
A-1
<PAGE>
As of the close of business on March 3, 1997, JHVLICO and John Hancock had
in the aggregate the following numbers of shares representing their
contributions and other amounts in the Accounts that are in excess of the
amounts attributable to policies and contracts:
<TABLE>
<CAPTION>
NAME OF NUMBER OF PERCENTAGE OF TOTAL
PORTFOLIO SHARES SHARES OUTSTANDING
- --------- --------- -------------------
<S> <C> <C>
Growth & Income...................................
Sovereign Bond....................................
Money Market......................................
Large Cap Growth..................................
International Equities............................
Real Estate Equity................................
Short-Term U.S. Government........................
Special Opportunities.............................
Equity Index......................................
Large Cap Value...................................
Mid Cap Growth....................................
Mid Cap Value.....................................
Small Cap Growth..................................
Small Cap Value...................................
Strategic Bond....................................
International Opportunities.......................
International Balanced............................
</TABLE>
A-2
<PAGE>
APPENDIX B
MANAGEMENT AGREEMENT
AGREEMENT made as of the 14th day of March, 1996 by and between John Hancock
Variable Series Trust I, a Massachusetts business trust having a place of
business at John Hancock Place, Boston, Massachusetts 02117 (hereinafter
called the "Series") and John Hancock Mutual Life Insurance Company, a
Massachusetts corporation having its principal place of business at John
Hancock Place, Boston, Massachusetts 02117 (hereinafter called "JHMLICO").
WHEREAS, the Series is organized and engaged in business as an open-end
management investment company and is so registered under the Investment
Company Act of 1940 (the "1940 Act"); and
WHEREAS, JHMLICO is engaged in the business of rendering investment
management services and is registered as an investment adviser under the
Investment Advisers Act of 1940; and
WHEREAS, the Series is authorized to issue shares of beneficial interest in
separate classes with each such class representing interests in a separate
portfolio of securities and other assets; and
WHEREAS, the Series currently offers shares of beneficial interest in nine
classes designated as the Growth and Income Portfolio (formerly known as the
Stock Portfolio), Sovereign Bond Portfolio (formerly known as the Bond
Portfolio), Money Market Portfolio, Large Cap Growth Portfolio (formerly known
as the Select Stock Portfolio), Managed Portfolio (formerly known as Total
Return Portfolio), Real Estate Equity Portfolio, International Equities
Portfolio (formerly known as the International Portfolio), Short-Term U.S.
Government Portfolio, and Special Opportunities Portfolio, which are subject
to separate management agreements with JHMLICO that do not apply to the
Portfolios referred to below, and
WHEREAS, the Series intends to offer shares of beneficial interest in nine
additional classes (the "Initial Portfolios" under this Agreement) designated
as Small Cap Growth Portfolio, Mid Cap Growth Portfolio, Small Cap Value
Portfolio, Mid Cap Value Portfolio, International Balanced Portfolio,
International Opportunities Portfolio, Large Cap Value Portfolio, Strategic
Bond Portfolio and Equity Index Portfolio (together with other classes
subsequently established by the Series, the "Portfolios") and the Series
desires to retain JHMLICO to render investment advisory services under this
Agreement, and JHMLICO is willing to do so.
NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the parties
hereto as follows:
1. APPOINTMENT OF JHMLICO AS MANAGER.
(a) Initial Portfolios. The Series hereby appoints JHMLICO and JHMLICO
hereby accepts the appointment, to act as investment adviser and manager to
each of the Initial Portfolios for the period and on the terms herein set
forth, for the compensation herein provided.
(b) Additional Portfolios. In the event that the Series establishes one or
more classes of shares other than the Initial Portfolios with respect to which
it desires to retain JHMLICO to render investment advisory and management
services hereunder, it shall so notify JHMLICO in writing. If it is willing to
render such services JHMLICO shall notify the Series in writing, whereupon
such class of shares shall become a Portfolio hereunder.
(c) Independent Contractor. JHMLICO shall for all purposes herein be deemed
to be an independent contractor and shall, unless otherwise expressly provided
or authorized, have no authority to act for or be deemed an agent of the
Series.
B-1
<PAGE>
2. PROVISION OF INVESTMENT MANAGEMENT SERVICES.
JHMLICO will provide to the Portfolios a continuing and suitable investment
program consistent with the investment policies, objectives and restrictions
of the Series. JHMLICO will manage the investment and reinvestment of the
assets in the Portfolios, and perform the other functions set forth below,
subject to the overall supervision, direction, control and review of the Board
of Trustees of the Series and, as in effect from time to time, the provisions
of the Series' Declaration of Trust, Bylaws, prospectus, statement of
additional information, the 1940 Act and all other applicable laws and
regulations (including any applicable investment restrictions imposed by state
insurance laws and regulations) or any directions or instructions delivered to
JHMLICO in writing by the Series from time to time.
JHMLICO will, with respect to the Portfolios, and at its own expense:
(a) advise the Series in connection with policy decisions to be made by
its Board of Trustees or any committee thereof and, upon request, furnish
the Series with research, economic and statistical data in connection with
the Series' investments and investment policies;
(b) provide administration of the day to day operations of the Series;
(c) submit such reports relating to the valuation of the Series'
securities as its Board of Trustees may reasonably request;
(d) assist the Series in any negotiations relating to its investments
with issuers, investment banking firms, securities brokers or dealers and
other institutions or investors and place orders for purchases and sales of
portfolio investments;
(e) provide office space and office equipment and supplies (including
telephone and other utility services), accounting and data processing
equipment and necessary executive, legal, accounting, clerical and
secretarial personnel for the administration of the affairs of the Series;
(f) maintain and preserve the records required by the 1940 Act to be
maintained and preserved by the Series, to the extent not maintained by the
Series' custodian, transfer agent or any Sub-Investment Manager;
(g) oversee, and use its best efforts to assure the performance of all
the activities and services of any custodian, transfer agent other similar
agent retained by the Series;
(h) value the assets and liabilities of the Series, compute the daily
income, net asset value and yield of each Portfolio;
(i) pay the charges and expenses of independent counsel and any other
independent agents routinely retained by the Series; and
(j) supervise the activities of each Sub-Investment Manager.
The Series will provide timely information to JHMLICO regarding such matters
as purchases and redemptions of shares in each Portfolio and the cash
requirements of, and cash available for investment in, each Portfolio, and all
other information as may be reasonably necessary or appropriate in order for
JHMLICO to perform its responsibilities hereunder.
B-2
<PAGE>
3. ALLOCATION OF EXPENSES.
Except as set forth below, each party to this Agreement shall bear the costs
and expenses of performing its obligations hereunder.
(a) The Series agrees to assume the Portfolios' share of the expense of:
(i) brokerage commissions for transactions in the portfolio investments
of the Series and similar fees and charges for the acquisition,
disposition, lending or borrowing of such portfolio investments;
(ii) the advisory fees called for in this Agreement;
(iii) all taxes, including issuance and transfer taxes, and reserves for
taxes payable by the Series to federal, state or other governmental
agencies;
(iv) interest payable on the Series' borrowings; and
(v) extraordinary or non-recurring expenses, such as legal claims and
liabilities and litigation costs and indemnification payments by the Series
in connection therewith;
(vi) the charges and expenses of any custodian or depository appointed by
the Series for the safekeeping of its cash, portfolio securities and other
property;
(vii) the charges and expenses of its independent auditors;
(viii) the cost of the fidelity bond required by 1940 Act Rule 17g-l;
(ix) the compensation and travel expenses of trustees who are not
"interested persons" within the meaning of the 1940 Act; and
(x) the expenses in printing and distributing to persons entitled to give
voting instructions, but not of preparing, the forms of voting instruction
information statements and annual and semi-annual reports and the cost of
tabulating votes.
(b) To the extent not assumed by the Series pursuant to (a) above, JHMLICO
agrees to assume the Portfolios' share of the expense of:
(i) the charges and expenses of any registrar, stock transfer or dividend
disbursing agent;
(ii) the cost of any stock certificates representing shares of the
Series;
(iii) the fees and expenses involved in registering and maintaining
registrations of the Series and of its shares with the Securities and
Exchange Commission and various states and other jurisdictions;
(iv) all expenses of shareholders' and trustees' meetings, including
voting instructions solicitation fees and expenses, and of preparing,
printing and distributing communications (including Prospectuses,
statements of additional information, and any advertising or sales
literature) to prospective and existing policyowners and contractowners,
and costs of any other activity primarily intended to result in the sale of
the Series' shares;
(v) compensation and travel expense of directors, officers and employees
of the Series in their capacities as such, excluding trustees who are
"interested persons" within the meaning of the 1940 Act;
(vi) the expense of furnishing each shareholder statements of account;
(vii) membership or association dues for the Investment Company Institute
or similar organizations;
(viii) postage;
B-3
<PAGE>
(ix) the cost of and any errors and omissions insurance or other
liability insurance covering the Series and/or its officers, directors and
employees;
(x) organizational expenses of the Series; and
(xi) the expenses and costs associated with the preparation and filing of
all tax returns.
4. SUB-INVESTMENT MANAGERS.
Notwithstanding any other provision hereof, JHMLICO, with the approval of
the Series, may contract with one or more Sub-Investment Managers to perform
any of the investment management services required of JHMLICO under this
Agreement; provided, however, that the compensation of any such Sub-Investment
Manager will be the sole responsibility of JHMLICO and the duties and
responsibilities of any such Sub-Investment Manager shall be as set forth in
an agreement between the Series, JHMLICO and such Sub-Investment Manager. It
is anticipated that JHMLICO and the Series will agree to contract initially
with T. Rowe Price Associates, Inc. to be Sub-Investment Manager for the Large
Cap Growth Portfolio, with Rowe Price-Fleming International, Inc. to be Sub-
Investment Manager for the International Opportunities Portfolio, with Invesco
Management and Research, Inc. to be Sub-Investment Manager for the Small Cap
Value Portfolio, with Neuberger & Berman L.P. to be Sub-Investment Manager for
the Mid Cap Value Portfolio, with Janus Capital Corporation to be Sub-
Investment Manager for the Mid Cap Growth Portfolio, with J.P. Morgan
Investment Management Inc. to be Sub-Investment Manager for the Strategic Bond
Portfolio, with Brinson Partners, Inc. to be Sub-Investment Manager for the
International Balanced Portfolio, with John Hancock Advisers, Inc. to be Sub-
Investment Manager for the Small Cap Growth Portfolio, and with Independence
Investment Associates, Inc. to be Sub-Investment Manager for the Equity Index
Portfolio.
JHMLICO shall exercise reasonable care in selecting, for approval by the
Series, any Sub-Investment Manager and in monitoring and supervising the
performance of any Sub-Investment Manager but, except as provided in Section
14 hereof, shall not otherwise be legally responsible or liable for any action
of any Sub-Investment Manager. It shall be a particular responsibility of
JHMLICO to evaluate the investment performance of Sub-Investment Managers and
that of potential Sub-Investment Managers and to supervise and monitor the
practices of Sub-Investment Managers in selecting brokers and dealers to
effect portfolio transactions, including the negotiation of commissions and
the evaluation of services provided by such brokers and dealers.
5. INVESTMENT ADVISORY FEE AND EXPENSE LIMITATION.
For all of the services rendered, facilities furnished and expenses paid or
assumed as herein provided, the Series shall pay to JHMLICO a fee, which fee
shall, with respect to each Portfolio, be at an effective rate of:
(a) For the Small Cap Growth Portfolio:
(i) 0.75% of the Current Net Assets of such Portfolio on an annual
basis;
(b) For the Mid Cap Growth Portfolio:
(i) 0.85% on an annual basis of the first $100,000,000 of the Current
Net Assets of such Portfolio; and
(ii) 0.80% on an annual basis of that portion of the Current Net
Assets in excess of $100,000,000 of such Portfolio.
B-4
<PAGE>
(c) For the Small Cap Value Portfolio:
(i) 0.80% on an annual basis of the first $100,000,000 of the Current
Net Assets of such Portfolio; and
(ii) 0.75% on an annual basis of that portion of the Current Net
Assets in excess of $100,000,000 and not over $200,000,000 of such
Portfolio; and
(iii) 0.65% on an annual basis for that portion of the Current Net
Assets in excess of $200,000,000 of such Portfolio.
(d) For the Mid Cap Value Portfolio:
(i) 0.80% on an annual basis of the first $250,000,000 of the Current
Net Assets of such Portfolio; and
(ii) 0.775% on an annual basis of that portion of the Current Net
Assets in excess of $250,000,000 and not over $500,000,000 of such
Portfolio; and
(iii) 0.750% on an annual basis of that portion of the Current Net
Assets in excess of $500,000,000 and not over $750,000,000 of such
Portfolio; and
(iv) 0.725% on an annual basis for that portion of the Current Net
Assets in excess of $750,000,000 of such Portfolio.
(e) For the International Balanced Portfolio:
(i) 0.85% on an annual basis of the first $100,000,000 of the Current
Net Assets of such Portfolio; and
(ii) 0.70% on an annual basis of that portion of the Current Net
Assets in excess of $100,000,000 of such Portfolio.
(f) For the International Opportunities Portfolio:
(i) 1.00% on an annual basis of the first $20,000,000 of the Current
Net Assets of such Portfolio; and
(ii) 0.85% on an annual basis of that portion of the Current Net
Assets in excess of $20,000,000 and not over $50,000,000 of such
Portfolio; and
(iii) 0.75% on an annual basis for that portion of the Current Net
Assets in excess of $50,000,000 of such Portfolio.
(g) For the Large Cap Value Portfolio:
(i) 0.75% of the Current Net Assets of such Portfolio on an annual
basis.
(h) For the Strategic Bond Portfolio:
(i) 0.75% on an annual basis of the first $25,000,000 of the Current
Net Assets of such Portfolio; and
(ii) 0.65% on an annual basis of that portion of the Current Net
Assets in excess of $25,000,000 and not over $75,000,000 of such
Portfolio; and
(iii) 0.55% on an annual basis for that portion of the Current Net
Assets in excess of $75,000,000 and not over $150,000,000; and
(iv) 0.50% on an annual basis for that portion of the Current Net
Assets in excess of $150,000,000 of such Portfolio.
B-5
<PAGE>
(i) For the Equity Index Portfolio:
(i) 0.25% of the Current Net Assets of such Portfolio on an annual
basis.
The fee shall be accrued daily and payable monthly as soon as possible after
the last day of each calendar month.
In the case of termination of this Agreement with respect to any Portfolio
during any calendar month, the amount of the fee accrued to the date of
termination shall be paid.
"Current Net Assets" of any Portfolio for purposes of computing the amount
of advisory fee accrued for any day shall mean that Portfolio's net assets for
the most recent preceding day for which that Portfolio's net assets were
computed.
For any fiscal year in which the normal operating costs and expenses of any
Portfolio of the Series, exclusive of the investment advisory fee, interest,
brokerage commissions, taxes and extraordinary expenses outside the control of
JHMLICO exceed 0.25% of that Portfolio's average daily net assets, JHMLICO
will reimburse that Portfolio promptly after the end of the fiscal year in an
amount equal to such excess. In the event of termination of this Agreement as
of a date other than the last day of Series' fiscal year, JHMLICO shall pay
any Portfolio of Series the amount by which such expenses incurred by that
Portfolio prior to the date of termination exceeds a pro rata portion of the
expense limitation.
6. PORTFOLIO TRANSACTIONS.
In connection with the investment and reinvestment of the assets of the
Portfolios, JHMLICO is authorized to select the brokers or dealers that will
execute purchase and sale transactions for the Series and to use its best
efforts to obtain the best available price and most favorable execution with
respect to all such purchases and sales of portfolio securities for the
Series. JHMLICO shall maintain records adequate to demonstrate compliance with
this requirement. Subject to this primary requirement, and maintaining as its
first consideration the benefits to the Series and its shareholders, JHMLICO
shall have the right, subject to the control of the Board of Trustees, and to
the extent authorized by the Securities and Exchange Act of 1934, to follow a
policy of selecting brokers who furnish brokerage and research services to the
Series or to JHMLICO, who charge a higher commission rate to the Series than
may result when allocating brokerage solely on the basis of seeking the most
favorable price and execution. JHMLICO shall determine in good faith that such
higher cost was reasonable in relation to the value of the brokerage and
research services provided.
The fees payable to JHMLICO by the Series hereunder shall be reduced by any
tender solicitation fees or similar payments received by JHMLICO, or any
affiliated person of JHMLICO, in connection with the tender of investments of
any Portfolio (less any direct expenses incurred by JHMLICO, or any affiliated
person of JHMLICO, in connection with obtaining such fees or payments).
JHMLICO shall use its best efforts to recapture all available tender offer
solicitation fees and similar payments in connection with tenders of the
securities of any Portfolio, provided, however, that neither JHMLICO nor any
affiliated person shall be required to register as a broker-dealer for this
purpose. JHMLICO shall advise the Board of Trustees of any fees or payments of
whatever type which it may be possible for JHMLICO or an affiliate of JHMLICO
to receive in connection with the purchase or sale of investment securities
for any Portfolio.
B-6
<PAGE>
7. INFORMATION, RECORDS, AND CONFIDENTIALITY.
The Series shall own and control all records maintained hereunder by JHMLICO
on the Series' behalf and, in the event of termination of this Agreement with
respect to any Portfolio for any reason, all records relating to that
Portfolio shall promptly be returned to the Series, free from any claim or
retention of rights by JHMLICO. JHMLICO also agrees, upon request of the
Series, promptly to surrender such books and records or, at JHMLICO's expense,
copies thereof to the Series or make such books and records available for
inspection by representatives of regulatory authorities or other persons
reasonably designated by the Series. JHMLICO further agrees to maintain,
prepare and preserve such books and records in accordance with the 1940 Act
and rules thereunder, including but not limited to, Rules 31a-1 and 31a-2.
JHMLICO shall supply all information requested by any insurance regulatory
authorities to determine whether all insurance laws and regulations are being
complied with.
JHMLICO shall not disclose or use any records or information obtained
pursuant hereto in any manner whatsoever except as expressly authorized
herein, and will keep confidential any information obtained pursuant hereto,
and disclose such information only if the Series has authorized such
disclosure, or if such disclosure is expressly required by applicable Federal
or state regulatory authorities.
JHMLICO shall supply the Board of Trustees and officers of the Series with
all statistical information regarding investments of the Portfolios which is
reasonably required by them and reasonably available to JHMLICO.
8. LIABILITY.
No provision of this Agreement shall be deemed to protect JHMLICO against
any liability to the Series or its shareholders to which it might otherwise be
subject by reason of any willful misfeasance, bad faith or negligence in the
performance of its duties or the reckless disregard of its obligations and
duties under this Agreement. Nor shall any provision hereof be deemed to
protect any Trustee or officer of the Series against any such liability to
which he might otherwise be subject by reason of any willful misfeasance, bad
faith or negligence in the performance of his duties or the reckless disregard
of his obligations and duties.
9. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) Duration. This Agreement shall become effective with respect to each
Initial Portfolio on the date hereof and, with respect to any additional
Portfolio, on the date of receipt by the Series of notice from JHMLICO in
accordance with Paragraph 1(b) hereof that JHMLICO is willing to serve with
respect to such Portfolio. Unless terminated as herein provided, this
Agreement shall remain in full force and effect for two years from the date
hereof with respect to the Initial Portfolios and, with respect to each
additional Portfolio until two years following the date on which such
Portfolio becomes a Portfolio hereunder, and shall continue in full force and
effect thereafter with respect to each Portfolio so long as such continuance
with respect to any such Portfolio is approved at least annually (a) by either
the Board of Trustees of the Series or by vote of a majority of the
outstanding voting shares of such Portfolio, and (b) in either event by the
vote of a majority of the Board of Trustees of the Series who are not parties
to this Agreement or "interested persons" of any such party, cast in person at
a meeting called for the purpose of voting on such approval.
Any approval of this Agreement by the holders of a majority of the
outstanding shares of any Portfolio shall be effective to continue this
Agreement with respect to any such Portfolio notwithstanding (A) that this
B-7
<PAGE>
Agreement has not been approved by the holders of a majority of the
outstanding shares of any other Portfolio affected hereby, and (B) that this
Agreement has not been approved by the vote of a majority of the outstanding
shares of the Series, unless such approval shall be required by any other
applicable law or otherwise. The terms "assignment", "vote of a majority of
the outstanding shares" and "interested person", when used in this Agreement,
shall have the respective meanings specified in the 1940 Act and rules
thereunder.
(b) Termination. This Agreement may be terminated with respect to any
Portfolio at any time, without payment of any penalty, by vote of the Board of
Trustees of the Series, by vote of a majority of the outstanding shares of
such Portfolio, or by JHMLICO on at least sixty (60) days written notice to
the Series.
(c) Automatic Termination. This Agreement shall automatically and
immediately terminate in the event of its assignment.
10. NAME OF JOHN HANCOCK.
It is understood that the name "John Hancock", or any name derived from or
similar to that name, and any logo associated with that name, is the valuable
property of JHMLICO, and that the Series has the right to include "John
Hancock" as a part of its name only so long as this Agreement shall continue.
Upon termination of this Agreement the Series shall forthwith cease to use the
John Hancock name and logos and shall submit to its shareholders, if
necessary, an amendment to its Declaration of Trust to change the Series'
name.
11. SERVICES NOT EXCLUSIVE.
The services of JHMLICO to the Series with respect to the Portfolios are not
to be deemed exclusive and JHMLICO shall be free to render similar services to
others so long as its services hereunder are not impaired thereby. It is
specifically understood that directors, officers and employees of JHMLICO and
of its subsidiaries and affiliates may continue to engage in providing
portfolio management services and advice to other investment companies,
whether or not registered, and other investment advisory clients.
12. AVOIDANCE OF INCONSISTENT POSITION.
In connection with the purchase and sale of portfolio securities of the
Portfolios, JHMLICO and its directors, officers and employees will not act as
principal or agent or receive any commission. Nothing in this Agreement,
however, shall preclude the combination of orders for the sale or purchase of
portfolio securities of the Series with those for other registered investment
companies managed by JHMLICO or its affiliates, if orders are allocated in a
manner deemed equitable by JHMLICO among the accounts and at a price
approximately averaged.
13. AMENDMENT.
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing. No amendment of this
Agreement shall be effective with respect to any Portfolio until approved
specifically by (a) the Board of Trustees of the Series, or by vote of a
majority of the outstanding shares of that Portfolio, and (b) by vote of a
majority of those Trustees of the Series who are not interested persons of any
party to this Agreement cast in person at a meeting called for the purpose of
voting on such approval.
B-8
<PAGE>
14. INDEMNIFICATION.
Except to the extent that a member of the Board of Trustees would thereby be
protected against any liability to the Series or its shareholders to which he
or she would otherwise be subject by reason of willful misfeasance, bad faith,
or gross negligence in the performance of the member's duties, or by reason of
the member's reckless disregard either of the member's obligations and duties
under this Agreement or of the duties involved in the conduct of the member's
office, JHMLICO hereby indemnifies each person who is or has been a member of
the Board of Trustees and will hold each harmless against any and all losses,
claims, damages, liabilities or litigation (including legal and other
expenses) to which the member may become subject under the 1940 Act or any
other statute or at common law or otherwise, by reason of his or her failure
or alleged failure to take any action relating to the investment or
reinvestment of assets in the Portfolios, regardless of whether a Sub-
Investment Manager has been retained in connection with the Portfolio
concerned, including any failure or alleged failure to seek or retain
investment advice or management in addition to or in place of that provided by
JHMLICO and its Sub-Investment Managers, if any. With respect to any losses,
claims, damages, liabilities or litigation arising out of events occurring
prior to the termination of this Agreement, this indemnity shall survive said
termination.
15. LIMITATION OF LIABILITY.
It is expressly agreed that the obligations of the Series hereunder shall
not be binding upon any of the Trustees, shareholders, officers, agents or
employees of Series personally, but bind only the trust property of the
Series, as provided in the Series' Declaration of Trust.
16. GOVERNING LAW.
This Agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts and the applicable provisions of the 1940 Act
and rules thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first set forth above.
John Hancock Variable Series Trust I
Attest:
/s/ Sandra M. DaDalt By: /s/ Henry D. Shaw
- ------------------------------------- --------------------------------
Associate Counsel Title: Chairman
John Hancock Mutual Life Insurance
Company
Attest:
/s/ Francis C. Cleary, Jr. By: /s/ Robert R. Reitano
- ------------------------------------- ---------------------------------
Vice President Title: Vice President
B-9
<PAGE>
APPENDIX C
JHVLICO AND JOHN HANCOCK; THE SUB-INVESTMENT MANAGERS; A SUMMARY OF THE SUB-
INVESTMENT MANAGEMENT AGREEMENTS; BROKERAGE TRANSACTIONS
JHVLICO AND JOHN HANCOCK
JHVLICO, John Hancock Place, Boston, Massachusetts 02117, is a stock life
insurance company chartered in 1979 under Massachusetts law. It is a wholly-
owned subsidiary of John Hancock, authorized to transact a life insurance and
annuities business in 49 states. JHVLICO began selling variable life insurance
policies in 1980 and its Accounts owned Fund shares representing % of the
total net assets of the Fund on December 31, 1996.
John Hancock, John Hancock Place, Boston, Massachusetts 02117, is a mutual
life insurance company chartered in Massachusetts in 1862. It is authorized to
transact a life insurance and annuity business in all fifty states. John
Hancock began selling variable annuity contracts in 1971 and variable life
insurance policies in 1993. Its Accounts owned Fund shares representing % of
the net assets of the Fund on December 31, 1996. John Hancock acts as
"principal underwriter" of the Fund's shares pursuant to an Underwriting and
Administrative Services Agreement, dated January 17, 1986, to which John
Hancock and the Fund are parties. Under the Agreement, John Hancock collects
no additional charges or commissions in connection with its duties as
principal underwriter.
John Hancock is managed by its Board of Directors, the members of which are
elected by its policyholders. All of the Directors must be policyholders of
John Hancock. The business address of all Directors and Executive Officers of
John Hancock is John Hancock Place, Boston, Massachusetts 02117.
The following are the Directors and Chief Executive Officer of John Hancock:
Directors and Chief Executive Officer of John Hancock
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION
- ---- --------------------
<S> <C>
John F. Magee Chairman, Arthur D. Little, Inc. (industrial research and
consulting)
Nelson F. Gifford Director, Boston Edison Company (electric utility).
Stephen L. Brown Chairman of the Board, President and Chief Executive
Officer, John Hancock
William L. Boyan, Jr. President, John Hancock
E. James Morton Director, formerly Chairman, John Hancock
C. Vincent Vappi Former President and Chief Executive Officer, Vappi &
Company, Inc. (construction).
David F. D'Alessandro Senior Executive Vice President, Retail Sector, John Hancock
Foster L. Aborn Vice Chairman of the Board, John Hancock
Randolph W. Bromery President, Springfield College
Joan T. Bok Chairman, New England Electric System (electric utility)
Robert E. Fast Hale and Dorr (law firm)
John M. Conners, Jr. President and Chief Executive Officer, Hill, Holiday,
Connors and Cosmopulos (advertising agent)
</TABLE>
C-1
<PAGE>
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION
- ---- --------------------
<S> <C>
I. Macallister Booth Retired Chairman of the Board and Chief Executive Officer,
Polaroid Corporation (photographic products)
Samuel W. Bodman Chairman of the Board and Chief Executive Officer, Cabot
Corporation (chemicals)
Lawrence Fish Chairman and Chief Executive Officer, Citizens Financial
Group (banking)
Kathleen F. Feldstein President, Economic Studies, Inc. (economic consulting)
Richard F. Syron Chairman and Chief Executive Officer, American Stock
Exchange
Michael C. Hawley President & Chief Operating Officer, The Gillette Company
(razors, etc.)
Robert J. Tarr, Jr. Former President, Chief Executive Officer, Chief Operations
Officer; Harcourt, General, Inc. (publishers)
</TABLE>
INDEPENDENCE INVESTMENT ASSOCIATES, INC.
IIA's Board of Directors is as follows:
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION
- ---- --------------------
<S> <C>
William C. Fletcher President, Independence Investment Associates, Inc.
Joseph A. Tomlinson Vice President, Annuity and Special Products Profit Center,
John Hancock
Foster L. Aborn Vice Chairman of the Board, John Hancock
Henry D. Shaw Vice President, Retail Product Management, John Hancock
Lewis J. Kleinrock Former President, IIA
John T. Farady Senior Vice President and Treasurer, John Hancock
</TABLE>
C-2
<PAGE>
The business address for Messrs. Fletcher and Kleinrock is 53 State Street,
Boston, Massachusetts 02109. IIA's address and the business address of its
other directors is John Hancock Mutual Life Insurance Company, John Hancock
Place, Boston, Massachusetts 02117.
JOHN HANCOCK ADVISERS, INC.
Advisers' Board of Directors is as follows:
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION
- ---- --------------------
<S> <C>
Edward J. Boudreau, Jr. Chairman and Chief Executive Officer, John Hancock Funds,
Inc.
Richard S. Scipione General Counsel, John Hancock
Stephen L. Brown Chairman and Chief Executive Officer, John Hancock
Foster L. Aborn Vice Chairman of the Board, John Hancock
David F. D'Alessandro Senior Executive Vice President, John Hancock
Thomas E. Moloney Chief Financial Officer, John Hancock
John M. DeCiccio Senior Vice President, Investment, Technology & Financial
Management, John Hancock
Anne C. Hodsdon President and Chief Operations Officer, Advisers
Jeanne M. Livermore Senior Vice President, Investment and Pension Sector, John
Hancock
Richard O. Hansen Vice President, Managerial Department, John Hancock
Robert G. Freedman President and Chief Investment Officer, Advisers
Robert E. Watts Second Vice President, Office of Business Conduct, John
Hancock
William C. Fletcher President, IIA
David A. King President and Chief Executive Officer and Director, John
Hancock Signature Services, Inc.
</TABLE>
Advisers' address and the business address for all of its directors is 101
Huntington Avenue, Boston, Massachusetts 02199.
T. ROWE PRICE ASSOCIATES, INC.
T. Rowe's Board of Directors is as follows:
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION
- ---- --------------------
<S> <C>
George J. Collins Director of Rowe Price-Fleming International ("Rowe Price-
Fleming")
James E. Halbkat, Jr. President of U.S. Monitor Corporation
</TABLE>
C-3
<PAGE>
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION
- ---- --------------------
<S> <C>
Richard L. Menschel Limited Partner of Goldman Sachs Group L.P.
John W. Rosenblum Dean of the Jepson School of Leadership Studies at the
University of Richmond
Robert L. Stickland Chairman of Loew's Companies, Inc.
Phillip C. Walsh Consultant to Cyprus Annex Minerals Company
Anne Marie Whittemore Partner of the law firm of McQuire, Woods, Battle & Booth
George A. Roche Vice President and Director, Rowe Price-Fleming
M. David Testa Chairman of the Board, Rowe Price-Fleming
Henry H. Hopkins Vice President, Rowe Price-Fleming
Charles P. Smith Vice President, Rowe Price-Fleming
Peter Van Dyke Vice President, Rowe Price-Fleming
James S. Riepe Managing Director, Rowe Price-Fleming
</TABLE>
T. Rowe's address and the business address for its directors is 100 East
Pratt Street, Baltimore, Maryland 21202.
ROWE PRICE-FLEMING
The principal executive officers and directors of Rowe Price-Fleming
International, Inc., are as follows:
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION
- ---- --------------------
<S> <C>
M. David Testa Director and Managing Director of Price Associates
George J. Collins Chief Executive Officer, President, and Managing Director of
Price Associates
D. William J. Garrett Chairman of Robert Fleming Securities Limited, a Director of
Robert Fleming Holdings Limited ("Robert Fleming Holdings")
P. John Manser Chief Executive of Robert Fleming Holdings, Chairman of
Robert Fleming & Co., Limited
James S. Riepe Managing Director of Price Associates
George A. Roche Chief Financial Officer and Managing Director of Price
Associates
Henry C. T. Strutt Managing Director and General Manager of Jardine Fleming
Holdings Ltd.
Martin G. Wade Director of Robert Fleming Holdings
</TABLE>
Rowe Price-Fleming's address and the business address of its directors is 100
East Pratt Street, Baltimore, Maryland 21202.
C-4
<PAGE>
JANUS CAPITAL CORPORATION
The principal executive officers and directors of Janus Board of Directors
are as follows:
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION
- ---- --------------------
<S> <C>
Thomas H. Bailey President, Director, Chairman, Chief Executive Officer,
Janus
James P. Craig, III Director, Vice President, Chief Investment Officer, and
Portfolio Manager, Janus
Steven R. Goodbarn Vice President and Chief Investment Officer, Janus
Mark B. Whiston Vice President and Chief Marketing Officer, Janus
Marjorie G. Hurd Vice President and Chief Operations Officer, Janus
David C. Tucker Vice President, General Counsel, and Secretary, Janus
Michael E. Herman President, Kansas City Royals Baseball Team
Thomas A. McDonnell Director, President, and Treasurer, DST Systems
Landon H. Rowland President and Chief Executive Officer, Kansas City Southern
Industries, Inc.
Michael Stolper President, Stolper & Company
</TABLE>
Janus' address and the business address of its directors is 100 Fillmore
Street, Denver, Colorado 80206
NEUBERGER & BERMAN L.P.
Neuberger & Berman's Board of Directors is as follows:
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION
- ---- --------------------
<S> <C>
Howard R. Berlin Vice President & Director, Neuberger & Berman Partners Fund
Inc.
Richard A. Cantor Chairman and Director, Neuberger & Berman Management
Incorporated
Michael M. Kassen Managing Director, Vice President & Portfolio Manager,
Neuberger & Berman Management Incorporated
Irwin Lainoff Director & Vice President, Neuberger & Berman Management
Incorporated
Marvin C. Schwartz Director, Neuberger & Berman Management Incorporated
Lawrence Zicklin Director, Neuberger & Berman Trust Company
Howard L. Ganek Principal, Neuberger & Berman LLC
</TABLE>
Neuberger & Berman's address and the business address of its directors is 605
Third Avenue, New York, New York 10158.
C-5
<PAGE>
INVESCO MANAGEMENT AND RESEARCH
The principal executive officers and directors of INVESCO are as follows:
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION
- ---- --------------------
<S> <C>
Frank M. Bishop Vice President/Portfolio Manager, INVESCO Capital
Management, Inc.
Frank J. Keeler President & Chief Executive Officer, INVESCO
William M McCarthy Senior Vice President/Director of Fixed Income/Portfolio
Manager, INVESCO
Patricia M. McNulty Corporate Accounting Manager, INVESCO
Kathleen A. Greenberg Corporate Secretary/Clerk, Human Resources Manager, INVESCO
Robert C. Shanley Senior Vice President, Portfolio Manager, INVESCO
Robert Slotpole Senior Vice President, Director of Equities/Portfolio
Manager, INVESCO
Frank A. Bisognano Vice President, Director of MIS, INVESCO
Oliver Buckley Vice President, Portfolio Manager, INVESCO
Martha Childs Vice President, Trader/Portfolio Manager, INVESCO
Edmund F. Ingalls, Jr. Vice President, Portfolio Manager, INVESCO
Mary F. Kane Vice President, Portfolio Manager, INVESCO
Stephen J. Kaszynski Vice President, Portfolio Manager, INVESCO
Charles Koeniger Vice President, Director of Marketing, INVESCO
Sue-Ellen Whelan Vice President, Marketing Manager, INVESCO
</TABLE>
INVESCO's address and the business address for its directors is 101 Federal
Street, Boston, Massachusetts 02110.
J.P. MORGAN INVESTMENT MANAGEMENT, INC.
J.P. Morgan's Board of Directors is as follows:
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION
- ---- --------------------
<S> <C>
Cary N. Potter Chairman, J.P. Morgan
Keith M. Schappert President, Director & Managing Director, J.P. Morgan
William Lyman Cobb, Jr. Vice Chairman, Director & Managing Director, J.P. Morgan
Robert A. Anselmi General Counsel, Secretary, Director & Managing Director,
J.P. Morgan
Milan S. Soltis Director & Managing Director, J.P. Morgan
Thomas M. Luddy Director & Managing Director, J.P. Morgan
</TABLE>
C-6
<PAGE>
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION
- ---- --------------------
<S> <C>
Michael R. Granito Director & Managing Director, J.P. Morgan
Kenneth W. Anderson Director & Managing Director, J.P. Morgan
Louis G. Gardella Managing Director, J.P. Morgan
George E. Austin Managing Director, J.P. Morgan
John R. Thomas Director, J.P. Morgan
Michael E. Patterson Director, J.P. Morgan
Jean Louis P. Brunel Director, J.P. Morgan
</TABLE>
J.P. Morgan's address and the business address for its directors is 522
Fifth Avenue, New York, New York 10036.
BRINSON PARTNERS, INC.
Brinson's Board of Directors is as follows:
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION
- ---- --------------------
<S> <C>
Gary P. Brinson President, Director & Managing Partner, Brinson
Henry Doom, Jr. Chief Financial Officer, Managing Partner, and Treasurer,
Brinson
Michael J. Jacobs Assistant Secretary, Brinson
Richard C. Carr Director & Managing Partner, Brinson
Robert J. Bernstein Director of Emerging Markets, Brinson
Jeffery J. Diermeier Director & Managing Partner, Brinson
Samuel W. Anderson Director & Managing Partner, Brinson
Dennis L. Hesse Director & Managing Partner, Brinson
A. Bart Holaday Director & Managing Partner, Brinson
Denis S. Karnosky Director & Managing Partner, Brinson
E. Thomas McFarlan Director & Managing Partner, Brinson
Nicholas C. Rassas Director & Managing Partner, Brinson
Dirk A. Willms Partner/Account Manager, Brinson
Robert C. Moore Partner and Director of U. S. Equity Research, Brinson
M. Dale Fritz Managing Partner, Brinson
B. Craig Hutson Managing Partner, Brinson
Benjamin F. Lenhardt,
Jr. Managing Partner, Brinson
Alvin W. Marley Partner, Brinson
Peter J. Morant Partner, Brinson
Brian D. Singer Partner, Brinson
</TABLE>
Brinson's address and the business address for its directors is 209 South
LaSalle Street, Chicago, Illinois 60604.
STATE STREET
State Street's Board of Directors is a follows:
[to be added]
C-7
<PAGE>
SUMMARY OF THE SUB-INVESTMENT MANAGEMENT AGREEMENTS FOR WHICH PROPOSALS 1 AND
3 SEEK APPROVAL
Set forth below is a summary of certain provisions of the Sub-Investment
Management Agreements for which Proposals 1 and 3 seek approval.
The Sub-Investment Management Agreements require that the sub-investment
managers provide a suitable investment program consistent with the investment
objectives, policies and restrictions of the applicable Portfolio, subject to
the overall supervision and control of John Hancock and the Board of Trustees.
The sub-investment managers are required to place orders for purchases and
sales of Portfolio investments, maintain appropriate records relating to their
activities on behalf of the Portfolio and provide any research, reports or
additional information that John Hancock or the Board of Trustees may
reasonably request. The sub-manager bears the cost and expenses of performing
its obligations under the Sub-Investment Management Agreements, but is not
responsible for brokerage commissions, custodian fees and expenses, taxes or
interest payable on the Fund's borrowings.
Under the Sub-Investment Management Agreements, John Hancock agrees to hold
harmless the sub-investment manager, its directors and officers from and
against all liabilities and expenses (including reasonable attorney's fees)
arising out of any failure of any Fund document to comply with applicable
federal and state securities, insurance or other laws, unless the sub-manager
furnished, in writing, the information upon which the alleged compliance
failure is based. No protection against any liability is afforded to the sub-
investment manager for any willful malfeasance, bad faith, or gross negligence
in the performance of its duties, or the reckless disregard of such duties.
Unless modified or terminated, the Sub-Investment Management Agreements,
after an initial two-year period, continue with respect to a Portfolio from
year to year but only so long as such continuance is specifically approved at
least annually by (a) a majority of the Board of Trustees who are not
interested persons of JHVLICO, John Hancock, or the Fund, cast in person at a
meeting called for the purpose of voting such approval, and (b) either a vote
of the Board of Trustees or a majority of the outstanding voting shares of
such Portfolio. The Sub-Investment Management Agreements also provide that
they may, on 60 days' notice, be terminated at any time without penalty by the
Board of Trustees, by majority of the outstanding voting shares of such
Portfolio, by John Hancock, or by the sub-investment manager. The Sub-
Investment Management Agreements automatically terminate in the event of their
assignment.
BROKERAGE COMMISSIONS ON PORTFOLIO TRANSACTIONS
Orders for the purchase and sale of portfolio securities of the Equity
Index, Large Cap Value, Mid Cap Growth, Mid Cap Value, Small Cap Growth, Small
Cap Value, Strategic Bond, International Opportunities, and International
Balanced Portfolios are placed in such a manner as in the opinion of John
Hancock or the respective sub-investment manager will offer the best price and
market for the execution of each transaction. In seeking best price and
execution for securities traded in the over-the-counter market, John Hancock
and the respective sub-investment managers normally deal directly with the
principal market-makers. Evaluations of the overall reasonableness of any
brokers' commissions are made by the persons placing transactions for the
Portfolio on the basis of their experience and judgment. Such persons are
authorized to pay a brokerage commission on a particular transaction that is
in excess of what another broker might have charged in recognition of the
value of the brokerage and research services received from the broker,
although such authority is expected to be used very infrequently. The Mid Cap
Growth, Mid Cap Value and International Balanced Portfolios, however, may be
more likely to use such authority.
C-8
<PAGE>
Research and statistical services furnished by brokers handling transactions
for the Equity Index, Large Cap Value, Mid Cap Growth, Mid Cap Value, Small
Cap Growth, Small Cap Value, Strategic Bond, International Opportunities, and
International Balanced Portfolios may include analysts' reports on companies
and industries, market forecasts, economic analyses, and the like. Such
materials may be used by John Hancock and the respective sub-investment
manager for the benefit of all the portfolios managed by John Hancock and the
respective sub-investment manager and, accordingly, not all such research and
statistical services may be used in connection with these Portfolios.
While John Hancock and each sub-investment manager will be responsible for
the allocation of the corresponding Portfolio's brokerage, their policies and
practices in this regard must be consistent with the foregoing and will at all
times be subject to review by the Board of Trustees of the Fund.
C-9
<PAGE>
APPENDIX D
OTHER SUB-ADVISORY RELATIONSHIPS
Independence Investment Associates ("IIA") acts as a sub-investment manager
to four registered investment companies having a substantially similar
investment objective to one of the Portfolios. The following table sets forth
the name of each such investment company, its net assets as of December 31,
1996, the fee charged by IIA a percentage of daily net assets, and the
Portfolio having the substantially similar investment objective.
<TABLE>
<CAPTION>
INVESTMENT COMPANY NAME FEE NET ASSETS PORTFOLIO
- ----------------------- --- ---------- ---------
<S> <C> <C> <C>
John Hancock +55% of: $73.5 million Growth and Income
Independence Equity Fund 0.75% of first $750 million
0.70% of all additional amounts
John Hancock *69% of: $10.4 million Managed
Independence Balanced 0.70% of first $500 million
Fund 0.65% of all additional amounts
John Hancock *55% of: $855,000 Large Cap Growth
Independence Growth Fund 0.80% of first $500 million
0.75% of all additional amounts
John Hancock 80% of: $290.5 million Growth and Income
Diversified Core 0.50% of all amounts
Equity Fund II
</TABLE>
- --------
+ Since July 1, 1995, IIA has agreed to waive its fees. IIA can terminate this
waiver at any time.
* Since January 1, 1995, IIA has agreed to waive its fees. IIA can terminate
this waiver at any time.
Janus Capital Corporation [or an affiliate] ("Janus") acts as sub-investment
adviser to several registered investment companies having similar investment
objectives and policies to those of the Mid Cap Growth Portfolio. The table
below sets forth the name of each such investment company that is not
sponsored by Janus [or an affiliate], the net assets of each such investment
company as of January 31, 1997, and the advisory fee for each such investment
company expressed as a percentage of average daily net assets.
<TABLE>
<CAPTION>
INVESTMENT COMPANY NAME ADVISORY FEE NET ASSETS
- ----------------------- ------------ ----------
<S> <C> <C>
Allmerica Investment Trust 0.60% of the first $100,000,000 $146 million
Select Capital Appreciation Fund 0.55% of all additional amounts
Great West Maxim Series Trust,
Inc. 0.60% of the first $100,000,000 $210 million
Mid Cap Portfolio 0.55% of all additional amounts
IDEX Series Fund 0.50% $ 23 million
Capital Appreciation Portfolio
Jackson National Life Series
Trust 0.55% of the first $100,000,000 $ 40 million
Capital Growth Series 0.50% of the next $400,000,000
0.45% of all additional amounts
Sierra Trust Funds 0.55% of the first $10,000,000 $315 million
Emerging Growth Fund 0.55% of all additional amounts
The Sierra Variable Trust 0.55% of the first $10,000,000 $ 54 million
Variable Emerging Growth Fund 0.55% of all additional amounts
</TABLE>
D-1
<PAGE>
T. Rowe Price Associates, Inc. ("T. Rowe Price") acts as sub-investment
adviser to several registered investment companies having similar investment
objectives and policies to those of the Large Cap Value Portfolio. The
following table sets forth the name of each such investment company that is
not sponsored by T. Rowe, the fee charged by T. Rowe as a percentage of
average daily net assets, and the investment company's net assets as of
December 31, 1996.
<TABLE>
<CAPTION>
INVESTMENT COMPANY NAME ADVISORY FEE NET ASSETS
- ----------------------- ------------ ----------
<S> <C> <C>
Endeavor Series Trust $ 78 million
Equity Income Portfolio 0.40%
John Hancock Variable $ 19 million
Series Trust I:
Large Cap Value Portfolio 0.50%
Maxim Series Trust 0.50% of the first $20 $ 69 million
Maxim T. Rowe Price million
Equity/Income 0.40% of the next $30
million
0.40% of all additional
amounts
NASL Series Trust 0.40% of the first $50 $599 million
Equity-Income Trust million
0.30% of the next $150
million
0.20% of the next $300
million
North American Funds 0.40% of the first $50 $147 million
Equity-Income Fund million
0.30% of the next $150
million
0.20% of the next $300
million
0.20% of all additional
amounts
SBL Fund 0.50% of the first $20 $ 62 million
Series O million
(Equity Income Series) 0.40% of the next $30
million
0.40% of all additional
amounts
Security First Trust 0.35% $132 million
Growth and Income Series
Rowe Price-Fleming, International ("Rowe Price-Fleming") acts as sub-
investment adviser to several registered investment companies having similar
investment objectives and policies to those of the International Opportunities
Portfolio. The following table sets forth the name of each such investment
company that is not sponsored by Rowe Price-Fleming, the fee charged by Rowe
Price-Fleming as a percentage of average daily net assets, and the investment
company's net assets as of December 31, 1996.
<CAPTION>
INVESTMENT COMPANY NAME ADVISORY FEE NET ASSETS
- ----------------------- ------------ ----------
<S> <C> <C>
American Skandia Trust 0.75% of the first $20 $402 million
million
T. Rowe Price 0.60% of the next $30
million
International Equity Portfolio 0.50% of all additional
amounts (A)
Commerce Funds 0.75% of the first $20 $ 56 million
million
The International Equity Fund 0.60% of the next $30
million
0.50% of all additional
amounts
</TABLE>
D-2
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT COMPANY NAME ADVISORY FEE NET ASSETS
- ----------------------- ------------ ----------------
<S> <C> <C>
Endeavor Series Trust 0.75% of the first $20 $ 134 million
million
T. Rowe Price 0.60% of the next $30
million
International Stock Portfolio 0.50% of all additional
amounts
Frank Russell Investment 0.75% of the first $20 $ 172 million
million
Company 0.60% of the next $30
million
International Securities Fund 0.50% on all additional
amounts
[0.50% flat fee on all
assets excluding $200
million]
Frank Russell Investment 0.75% of the first $20 $ 139 million
million
Company 0.60% of the next $30
million
International Fund 0.50% of all additional
amounts
[0.50% flat fee on all
assets excluding $200
million]
JNL Series Trust 0.75% of the first $20 $ 48 million
T. Rowe Price/JNL million
International Equity 0.60% of the next $30
Investment Series million
0.50% of all additional
amounts
LB Series Fund, Inc. 0.75% of the first $20 $ 174 million
World Growth Portfolio million
0.60% of the next $30
million
0.50% of all additional
amounts (B)
Lutheran Brotherhood 0.75% of the first $20 $ 58 million
Family of Funds million
Lutheran Brotherhood 0.60% of the next $30
World Growth Fund million
0.50% of all additional
amounts (B)
NASL Series Trust 0.75% of the first $20 N/A
International Stock Trust million (Inception Date
0.60% of the next $30 January 1, 1997)
million
0.50% of the next $150
million
0.50% [retroactive of $1]
when assets equal or exceed
$200 million
0.45% of assets over $500
million
Style Select Series, Inc. 0.75% of the first $20 $ 6 million
International Equity Portfolio million
0.60% of the next $30
million
0.50% of the next $150
million
0.50% retroactive to $1 when
assets exceed $200 million
</TABLE>
- --------
(A) Commencing May 1, 1996, the sub-investment adviser has voluntarily agreed
to waive a portion of its fee equal to .25 of 1% of the portion of the
portfolio's average daily net assets not in excess of $20 million and .10
of 1% of the net assets over $20 million but not in excess of $50 million,
so long as the average daily net assets of the portfolio equal or exceed
$200 million. The sub-investment adviser may terminate this voluntary
agreement at any time.
(B) Sub-investment advisory fee is paid based on pro rata share of combined
assets of both portfolios.
D-3
<PAGE>
APPENDIX E
CHANGES TO THE MANAGEMENT AGREEMENTS UNDER PROPOSAL 2
The costs and expenses that would be reallocated to the Fund under Proposal
2's amendments to the Management Agreements are discussed in the paragraphs
that follow.
Costs of certain accounting, valuation, and compliance services. State
Street Bank and Trust Company ("State Street") serves as custodian to thirteen
of the eighteen Portfolios of the Fund. (It is expected that four of the other
Portfolios will be added to the State Street contract later in 1997.) Under
the terms of a revised Custodian Agreement between State Street and the Fund,
signed in 1995, State Street provides certain fund accounting and portfolio
valuation services previously provided by John Hancock. (Under the terms of a
1995 Custodian Agreement with the Fund, Investors Bank and Trust Company
("IBT") provides these services with respect to the Sovereign Bond Portfolio.)
In addition to the accounting and valuation services, State Street has
recently entered into a separate agreement with the John Hancock and the Fund
whereby State Street calculates the Fund's SEC total return and total return
exclusive of Fund expenses, provides quarterly testing for compliance with
agreed upon investment policies and restrictions and provides periodic testing
of the various Portfolios of the Fund for compliance with certain SEC and IRS
requirements. (It is expected that IBT will soon enter into a separate
agreement with John Hancock and the Fund to provide such services for the
Sovereign Bond Portfolio.) Because of economies of scale, the custodians can
provide these services more efficiently than John Hancock. Had the proposed
reallocation been in effect in 1996, the Fund would have had to pay an
estimated $930,000 for these services, which was borne by John Hancock. It is
proposed that the cost of these services be charged to the Fund under the
amended Management Agreements.
Legal expenses and independent agent fees. Currently, John Hancock pays all
ongoing legal expenses in connection with the Fund; including those associated
with such things as maintenance of the Fund, providing counsel to the
independent Trustees and initial review and on-going maintenance of the Fund's
SEC registration statement and all exhibits to the registration statement. It
is now proposed that the Fund (rather than John Hancock) bear the costs of all
such legal services rendered to or for the Fund, regardless of whether such
services are provided by independent counsel or by John Hancock's Law
Department.
Such services, however, will be charged to the Fund only where incurred in
the actual conduct of the Fund's business and affairs or in the performance of
those services the expense of which the Fund has agreed to assume (e.g., the
preparation of proxy statements and registration statements). They will not be
charged to the Fund where incurred to assist John Hancock in performing its
other responsibilities to the Fund. Where services are for both of such
purposes, the costs thereof will be fairly allocated between John Hancock and
the Fund. In 1996, legal costs of the type now to be allocated to the Fund
(both from independent counsel and from John Hancock's Law Department
personnel) are estimated to have been $179,000.
In addition, John Hancock has paid independent accountant fees associated
with the preparation and filing of the Fund's tax returns. In 1996, the
accounting fees for this service amounted to $45,000. It is also proposed that
the cost of independent agents, such as the independent accountants, retained
by the Fund be charged to the Fund under the amended Management Agreements.
Registration fees and costs. As a result of the 1996 National Securities
Markets Improvement Act, the Fund currently pays no SEC registration fees with
respect to the offer and sale of its shares. Although it appears
E-1
<PAGE>
unlikely, this exemption from fee assessment could be repealed at some time in
the future. In addition to paying any Fund registration fees, John Hancock, in
the past, has assumed the costs associated with preparing, typesetting, and
electronically submitting the Fund's registration statement to the SEC. In
1996, the costs assumed by John Hancock associated with the ongoing
registration of the Fund (exclusive of legal expenses) are estimated to have
been $11,000. It is proposed that these charges be assumed by the Fund under
the amended Management Agreements.
Association dues. Currently, the Fund is not charged for membership or
association dues by any organization or entity. However, there is the
possibility that the Fund will be charged membership dues if it becomes a
member of the Investment Company Institute, the National Association of
Variable Annuities, or some other similar trade association or a self-
regulatory organization. In that event, it is proposed that these dues be
assumed by the Fund under the amended Management Agreements.
Proxy costs; Organizational costs. It is proposed that the expenses of
preparing the voting instruction information statements (i.e., proxy
materials) be assumed by the Fund under the amended Management Agreements.
Currently, the Fund pays only the expenses of printing and distributing such
statements. There were no such statements prepared in 1996. The cost of
preparing these 1997 proxy materials is estimated to be $51,000. This estimate
includes legal expenses.
It is also proposed that John Hancock no longer bear the costs incurred in
connection with the addition of new Portfolios. On three prior occasions, the
Fund has incurred organizational, or start-up, costs (such as legal,
accounting, auditing, and typesetting fees and expenses) when it added new
Portfolios. In 1996, the organizational costs of adding the nine new
portfolios is estimated to have been $11,000 (including legal expenses).
Set forth below is the text of Sections 2 and 3 of the amended Management
Agreements that includes the changes that would be made by Proposal 2. (Note
that in the amended Management Agreement, John Hancock is referred to as
"JHMLICO.")
2. PROVISION OF INVESTMENT MANAGEMENT SERVICES.
JHMLICO will provide to the Portfolios a continuing and suitable
investment program consistent with the investment policies, objectives and
restrictions of the Series. JHMLICO will manage the investment and
reinvestment of the assets in the Portfolios, and perform the other
functions set forth below, subject to the overall supervision, direction,
control and review of the Board of Trustees of the Series and, as in effect
from time to time, the provisions of the Series' Declaration of Trust,
Bylaws, prospectus, statement of additional information, the 1940 Act and
all other applicable laws and regulations (including any applicable
investment restrictions imposed by state insurance laws and regulations) or
any directions or instructions delivered to JHMLICO in writing by the
Series from time to time.
Except to the extent that the Board of Trustees approves performance of
any of the following functions by any custodian, transfer agent,
independent counsel, or other independent agent, JHMLICO will, with respect
to the Portfolios:
(a) advise the Series in connection with policy decisions to be made
by its Board of Trustees or any committee thereof and, upon request,
furnish the Series with research, economic and statistical data in
connection with the Series' investments and investment policies;
E-2
<PAGE>
(b) provide administration of the day to day operations of the
Series;
(c) submit such reports relating to the valuation of the Series'
securities as its Board of Trustees may reasonably request;
(d) assist the Series in any negotiations relating to its investments
with issuers, investment banking firms, securities brokers or dealers
and other institutions or investors and place orders for purchases and
sales of portfolio investments;
(e) provide office space and office equipment and supplies (including
telephone and other utility services), accounting and data processing
equipment and necessary executive, legal, accounting, clerical and
secretarial personnel for the administration of the affairs of the
Series;
(f) maintain and preserve the records required by the 1940 Act to be
maintained and preserved by the Series, to the extent not maintained by
the Series' custodian, distributor, transfer agent or any Sub-
Investment Manager;
(g) oversee, and use its best efforts to assure the performance of
all the activities and services of any custodian, distributor, transfer
agent or other similar agent retained by the Series;
(h) value the assets and liabilities of the Series, compute the daily
income, net asset value and yield of each Portfolio; and
(i) supervise the activities of each Sub-Investment Manager.
The Series will provide timely information to JHMLICO regarding such
matters as purchases and redemptions of shares in each Portfolio and the
cash requirements of, and cash available for investment in, each Portfolio,
and all other information as may be reasonably necessary or appropriate in
order for JHMLICO to perform its responsibilities hereunder.
3. ALLOCATION OF EXPENSES.
Except as set forth below, each party to this Agreement shall bear the
costs and expenses of performing its obligations hereunder.
(a) The Series agrees to assume the Portfolios' share of the expense
of:
(i) brokerage commissions for transactions in the portfolio
investments of the Series and similar fees and charges for the
acquisition, disposition, lending or borrowing of such portfolio
investments;
(ii) the advisory fees called for in this Agreement;
(iii) all taxes, including issuance and transfer taxes, and
reserves for taxes payable by the Series to federal, state or other
governmental agencies, and the expenses and costs associated with
the preparation and filing of all tax returns;
(iv) interest payable on the Series' borrowings;
(v) extraordinary or non-recurring expenses, such as legal claims
and liabilities and litigation costs and indemnification payments by
the Series in connection therewith;
(vi) the charges and expenses of any custodian or depository
appointed by the Series for the safekeeping of its cash, portfolio
securities and other property, for providing accounting and
valuation services, and for monitoring compliance with federal laws
and regulations, subject to the Board of Trustees' approval as to
the scope of such accounting, valuation, and monitoring functions;
E-3
<PAGE>
(vii) the charges and expenses of its independent auditors;
(viii) the cost of the fidelity bond required by 1940 Act Rule
17g-l;
(ix) the compensation and travel expenses of trustees who are not
"interested persons" within the meaning of the 1940 Act;
(x) the expenses in preparing, printing and distributing voting
instruction information statements to persons entitled to give
voting instructions, in tabulating proxy votes and in printing and
distributing to policyowners and contractowners annual and semi-
annual reports;
(xi) fees and costs for legal services provided to or on behalf of
the Series (including fees and costs of independent counsel and an
allocable portion of the cost of JHMLICO's Law Department rendering
such services) (For this purpose, "legal services" includes (but is
not limited to) the services of such independent counsel or Law
Department employees in the course of administering the business and
affairs of the Series);
(xii) charges of any independent agents (other than independent
counsel) approved by the Board of Trustees;
(xiii) the fees and expenses involved in registering and
maintaining registrations of the Series and its shares with the
Securities and Exchange Commission and various states and other
jurisdictions; and
(xiv) membership or association dues for the Investment Company
Institute, the National Association of Variable Annuities, or
similar trade association or for any self-regularly organization.
(b) To the extent not assumed by the Series pursuant to (a) above,
JHMLICO agrees to assume the Portfolios' share of the expense of:
(i) the charges and expenses of any registrar, stock transfer or
dividend disbursing agent;
(ii) the cost of any stock certificates representing shares of the
Series;
(iii) the expenses of shareholders' meetings; trustees' meetings;
printing and distributing Prospectuses and statements of additional
information to prospective and existing policyowners and
contractowners; preparing, printing, and distributing any
advertising or sales literature to prospective and existing
policyowners and contractowners; and any other activity and related
legal services primarily intended to result in the sale of the
Series' shares;
(vi) the expense of furnishing each shareholder statements of
account; and
(v) the cost of and any errors and omissions insurance or other
liability insurance covering the Series and/or its officers,
directors and employees.
(vi) fees and costs of independent counsel to Series not incurred
in the actual conduct of the Series' affairs.
E-4
<PAGE>
BY SIGNING AND DATING THE LOWER PORTION OF THIS FORM, YOU INSTRUCT THE PERSONS
NAMED BELOW TO, AND THEY WILL, VOTE EACH PROPOSAL AS MARKED, OR IF NOT MARKED,
TO VOTE "FOR" EACH PROPOSAL, AND TO USE THEIR DISCRETION TO VOTE ANY OTHER
MATTER INCIDENT TO THE CONDUCT OF THE SPECIAL MEETING. IF YOU DO NOT INTEND
PERSONALLY TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DETACH AND MAIL THE
LOWER PORTION OF THIS FORM AT ONCE IN THE ENCLOSED ENVELOPE.
THESE VOTING INSTRUCTIONS ARE SOLICITED BY THE TRUSTEES OF
JOHN HANCOCK VARIABLE SERIES TRUST I
SOVEREIGN BOND PORTFOLIO
SPECIAL MEETING OF SHAREHOLDERS APRIL 14, 1997
THOMAS J. LEE AND HENRY D. SHAW, AND EACH OF THEM, WITH POWER OF SUBSTITUTION
IN EACH, ARE HEREBY INSTRUCTED TO VOTE THE SHARES HELD IN THE FUND PORTFOLIO
ATTRIBUTABLE TO THE UNDERSIGNED AT THE SPECIAL MEETING OF SHAREHOLDERS TO BE
HELD APRIL 14, 1997, AND AT ANY ADJOURNMENT THEREOF, AS SPECIFIED BELOW.
TO VOTE MARK AN [X] IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. KEEP THIS
PORTION FOR YOUR RECORDS.
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
(DETACH HERE AND RETURN THIS PORTION ONLY)
VOTE ON PROPOSALS
FOR AGAINST ABSTAIN
[_] [_] [_] 2. APPROVAL OF AMENDED MANAGEMENT
AGREEMENT TO REALLOCATE FUND
EXPENSES
[_] [_] [_] 5. APPROVAL OF MODIFICATION OF
INVESTMENT RESTRICTIONS TO ALLOW
THE PORTFOLIO TO PURCHASE "WHEN-
ISSUED" SECURITIES AND ENTER INTO
FORWARD COMMITMENTS
_____________________________________
Signature
_____________________________________
Signature (Joint Owners)
_____________________________________
Date
<PAGE>
BY SIGNING AND DATING THE LOWER PORTION OF THIS FORM, YOU INSTRUCT THE PERSONS
NAMED BELOW TO, AND THEY WILL, VOTE EACH PROPOSAL AS MARKED, OR IF NOT MARKED,
TO VOTE "FOR" EACH PROPOSAL, AND TO USE THEIR DISCRETION TO VOTE ANY OTHER
MATTER INCIDENT TO THE CONDUCT OF THE SPECIAL MEETING. IF YOU DO NOT INTEND
PERSONALLY TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DETACH AND MAIL THE
LOWER PORTION OF THIS FORM AT ONCE IN THE ENCLOSED ENVELOPE.
THESE VOTING INSTRUCTIONS ARE SOLICITED BY THE TRUSTEES OF
JOHN HANCOCK VARIABLE SERIES TRUST I
EQUITY INDEX PORTFOLIO
SPECIAL MEETING OF SHAREHOLDERS APRIL 14, 1997
THOMAS J. LEE AND HENRY D. SHAW, AND EACH OF THEM, WITH POWER OF SUBSTITUTION
IN EACH, ARE HEREBY INSTRUCTED TO VOTE THE SHARES HELD IN THE FUND PORTFOLIO
ATTRIBUTABLE TO THE UNDERSIGNED AT THE SPECIAL MEETING OF SHAREHOLDERS TO BE
HELD APRIL 14, 1997, AND AT ANY ADJOURNMENT THEREOF, AS SPECIFIED BELOW.
TO VOTE MARK AN [X] IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. KEEP THIS
PORTION FOR YOUR RECORDS.
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
(DETACH HERE AND RETURN THIS PORTION ONLY)
VOTE ON PROPOSALS
FOR AGAINST ABSTAIN
1. APPROVAL OF MANAGEMENT AGREEMENT
[_] [_] [_] AND RELATED SUB-INVESTMENT
MANAGEMENT AGREEMENT
[_] [_] [_] 2. APPROVAL OF AMENDED MANAGEMENT
AGREEMENT TO REALLOCATE FUND
EXPENSES
[_] [_] [_] 3. APPROVAL OF AMENDED MANAGEMENT
AGREEMENT REFLECTING REDUCTION IN
INVESTMENT ADVISORY FEE AND
RELATED SUB-INVESTMENT MANAGEMENT
AGREEMENT
_____________________________________
Signature
_____________________________________
Signature (Joint Owners)
_____________________________________
Date
<PAGE>
BY SIGNING AND DATING THE LOWER PORTION OF THIS FORM, YOU INSTRUCT THE PERSONS
NAMED BELOW TO, AND THEY WILL, VOTE EACH PROPOSAL AS MARKED, OR IF NOT MARKED,
TO VOTE "FOR" EACH PROPOSAL, AND TO USE THEIR DISCRETION TO VOTE ANY OTHER
MATTER INCIDENT TO THE CONDUCT OF THE SPECIAL MEETING. IF YOU DO NOT INTEND
PERSONALLY TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DETACH AND MAIL THE
LOWER PORTION OF THIS FORM AT ONCE IN THE ENCLOSED ENVELOPE.
THESE VOTING INSTRUCTIONS ARE SOLICITED BY THE TRUSTEES OF
JOHN HANCOCK VARIABLE SERIES TRUST I
MONEY MARKET PORTFOLIO
SPECIAL MEETING OF SHAREHOLDERS APRIL 14, 1997
THOMAS J. LEE AND HENRY D. SHAW, AND EACH OF THEM, WITH POWER OF SUBSTITUTION
IN EACH, ARE HEREBY INSTRUCTED TO VOTE THE SHARES HELD IN THE FUND PORTFOLIO
ATTRIBUTABLE TO THE UNDERSIGNED AT THE SPECIAL MEETING OF SHAREHOLDERS TO BE
HELD APRIL 14, 1997, AND AT ANY ADJOURNMENT THEREOF, AS SPECIFIED BELOW.
TO VOTE MARK AN [X] IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. KEEP THIS
PORTION FOR YOUR RECORDS.
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
(DETACH HERE AND RETURN THIS PORTION ONLY)
VOTE ON PROPOSALS
FOR AGAINST ABSTAIN
[_] [_] [_] 2. APPROVAL OF AMENDED MANAGEMENT
AGREEMENT TO REALLOCATE FUND
EXPENSES
[_] [_] [_] 6. APPROVAL OF CHANGE IN STATUS OF
INVESTMENT OBJECTIVE AND POLICIES
TO MAKE THEM GENERALLY NON-
FUNDAMENTAL
_____________________________________
Signature
_____________________________________
Signature (Joint Owners)
_____________________________________
Date
<PAGE>
BY SIGNING AND DATING THE LOWER PORTION OF THIS FORM, YOU INSTRUCT THE PERSONS
NAMED BELOW TO, AND THEY WILL, VOTE EACH PROPOSAL AS MARKED, OR IF NOT MARKED,
TO VOTE "FOR" EACH PROPOSAL, AND TO USE THEIR DISCRETION TO VOTE ANY OTHER
MATTER INCIDENT TO THE CONDUCT OF THE SPECIAL MEETING. IF YOU DO NOT INTEND
PERSONALLY TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DETACH AND MAIL THE
LOWER PORTION OF THIS FORM AT ONCE IN THE ENCLOSED ENVELOPE.
THESE VOTING INSTRUCTIONS ARE SOLICITED BY THE TRUSTEES OF
JOHN HANCOCK VARIABLE SERIES TRUST I
MANAGED PORTFOLIO
SPECIAL MEETING OF SHAREHOLDERS APRIL 14, 1997
THOMAS J. LEE AND HENRY D. SHAW, AND EACH OF THEM, WITH POWER OF SUBSTITUTION
IN EACH, ARE HEREBY INSTRUCTED TO VOTE THE SHARES HELD IN THE FUND PORTFOLIO
ATTRIBUTABLE TO THE UNDERSIGNED AT THE SPECIAL MEETING OF SHAREHOLDERS TO BE
HELD APRIL 14, 1997, AND AT ANY ADJOURNMENT THEREOF, AS SPECIFIED BELOW.
TO VOTE MARK AN [X] IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. KEEP THIS
PORTION FOR YOUR RECORDS.
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
(DETACH HERE AND RETURN THIS PORTION ONLY)
VOTE ON PROPOSALS
FOR AGAINST ABSTAIN
[_] [_] [_] 2. APPROVAL OF AMENDED MANAGEMENT
AGREEMENT TO REALLOCATE FUND
EXPENSES
[_] [_] [_] 7. APPROVAL OF MODIFICATION OF
INVESTMENT RESTRICTIONS TO ALLOW
THE PORTFOLIO TO PURCHASE RULE
144A SECURITIES
_____________________________________
Signature
_____________________________________
Signature (Joint Owners)
_____________________________________
Date
<PAGE>
BY SIGNING AND DATING THE LOWER PORTION OF THIS FORM, YOU INSTRUCT THE PERSONS
NAMED BELOW TO, AND THEY WILL, VOTE EACH PROPOSAL AS MARKED, OR IF NOT MARKED,
TO VOTE "FOR" EACH PROPOSAL, AND TO USE THEIR DISCRETION TO VOTE ANY OTHER
MATTER INCIDENT TO THE CONDUCT OF THE SPECIAL MEETING. IF YOU DO NOT INTEND
PERSONALLY TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DETACH AND MAIL THE
LOWER PORTION OF THIS FORM AT ONCE IN THE ENCLOSED ENVELOPE.
THESE VOTING INSTRUCTIONS ARE SOLICITED BY THE TRUSTEES OF
JOHN HANCOCK VARIABLE SERIES TRUST I
SHORT-TERM U.S. GOVERNMENT PORTFOLIO
SPECIAL MEETING OF SHAREHOLDERS APRIL 14, 1997
THOMAS J. LEE AND HENRY D. SHAW, AND EACH OF THEM, WITH POWER OF SUBSTITUTION
IN EACH, ARE HEREBY INSTRUCTED TO VOTE THE SHARES HELD IN THE FUND PORTFOLIO
ATTRIBUTABLE TO THE UNDERSIGNED AT THE SPECIAL MEETING OF SHAREHOLDERS TO BE
HELD APRIL 14, 1997, AND AT ANY ADJOURNMENT THEREOF, AS SPECIFIED BELOW.
TO VOTE MARK AN [X] IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. KEEP THIS
PORTION FOR YOUR RECORDS.
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
(DETACH HERE AND RETURN THIS PORTION ONLY)
VOTE ON PROPOSALS
FOR AGAINST ABSTAIN
[_] [_] [_] 2. APPROVAL OF AMENDED MANAGEMENT
AGREEMENT TO REALLOCATE FUND
EXPENSES
[_] [_] [_] 4. APPROVAL OF AMENDED MANAGEMENT
AGREEMENT REFLECTING REDUCTION IN
INVESTMENT ADVISORY FEE
_____________________________________
Signature
_____________________________________
Signature (Joint Owners)
_____________________________________
Date
<PAGE>
BY SIGNING AND DATING THE LOWER PORTION OF THIS FORM, YOU INSTRUCT THE PERSONS
NAMED BELOW TO, AND THEY WILL, VOTE EACH PROPOSAL AS MARKED, OR IF NOT MARKED,
TO VOTE "FOR" EACH PROPOSAL, AND TO USE THEIR DISCRETION TO VOTE ANY OTHER
MATTER INCIDENT TO THE CONDUCT OF THE SPECIAL MEETING. IF YOU DO NOT INTEND
PERSONALLY TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DETACH AND MAIL THE
LOWER PORTION OF THIS FORM AT ONCE IN THE ENCLOSED ENVELOPE.
THESE VOTING INSTRUCTIONS ARE SOLICITED BY THE TRUSTEES OF
JOHN HANCOCK VARIABLE SERIES TRUST I
SPECIAL OPPORTUNITIES PORTFOLIO
SPECIAL MEETING OF SHAREHOLDERS APRIL 14, 1997
THOMAS J. LEE AND HENRY D. SHAW, AND EACH OF THEM, WITH POWER OF SUBSTITUTION
IN EACH, ARE HEREBY INSTRUCTED TO VOTE THE SHARES HELD IN THE FUND PORTFOLIO
ATTRIBUTABLE TO THE UNDERSIGNED AT THE SPECIAL MEETING OF SHAREHOLDERS TO BE
HELD APRIL 14, 1997, AND AT ANY ADJOURNMENT THEREOF, AS SPECIFIED BELOW.
TO VOTE MARK AN [X] IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. KEEP THIS
PORTION FOR YOUR RECORDS.
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
(DETACH HERE AND RETURN THIS PORTION ONLY)
VOTE ON PROPOSALS
FOR AGAINST ABSTAIN
[_] [_] [_] 2. APPROVAL OF AMENDED MANAGEMENT
AGREEMENT TO REALLOCATE FUND
EXPENSES
_____________________________________
Signature
_____________________________________
Signature (Joint Owners)
_____________________________________
Date
<PAGE>
BY SIGNING AND DATING THE LOWER PORTION OF THIS FORM, YOU INSTRUCT THE PERSONS
NAMED BELOW TO, AND THEY WILL, VOTE EACH PROPOSAL AS MARKED, OR IF NOT MARKED,
TO VOTE "FOR" EACH PROPOSAL, AND TO USE THEIR DISCRETION TO VOTE ANY OTHER
MATTER INCIDENT TO THE CONDUCT OF THE SPECIAL MEETING. IF YOU DO NOT INTEND
PERSONALLY TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DETACH AND MAIL THE
LOWER PORTION OF THIS FORM AT ONCE IN THE ENCLOSED ENVELOPE.
THESE VOTING INSTRUCTIONS ARE SOLICITED BY THE TRUSTEES OF
JOHN HANCOCK VARIABLE SERIES TRUST I
INTERNATIONAL EQUITIES PORTFOLIO
SPECIAL MEETING OF SHAREHOLDERS APRIL 14, 1997
THOMAS J. LEE AND HENRY D. SHAW, AND EACH OF THEM, WITH POWER OF SUBSTITUTION
IN EACH, ARE HEREBY INSTRUCTED TO VOTE THE SHARES HELD IN THE FUND PORTFOLIO
ATTRIBUTABLE TO THE UNDERSIGNED AT THE SPECIAL MEETING OF SHAREHOLDERS TO BE
HELD APRIL 14, 1997, AND AT ANY ADJOURNMENT THEREOF, AS SPECIFIED BELOW.
TO VOTE MARK AN [X] IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. KEEP THIS
PORTION FOR YOUR RECORDS.
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
(DETACH HERE AND RETURN THIS PORTION ONLY)
VOTE ON PROPOSALS
FOR AGAINST ABSTAIN
[_] [_] [_] 2. APPROVAL OF AMENDED MANAGEMENT
AGREEMENT TO REALLOCATE FUND
EXPENSES
_____________________________________
Signature
_____________________________________
Signature (Joint Owners)
_____________________________________
Date
<PAGE>
BY SIGNING AND DATING THE LOWER PORTION OF THIS FORM, YOU INSTRUCT THE PERSONS
NAMED BELOW TO, AND THEY WILL, VOTE EACH PROPOSAL AS MARKED, OR IF NOT MARKED,
TO VOTE "FOR" EACH PROPOSAL, AND TO USE THEIR DISCRETION TO VOTE ANY OTHER
MATTER INCIDENT TO THE CONDUCT OF THE SPECIAL MEETING. IF YOU DO NOT INTEND
PERSONALLY TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DETACH AND MAIL THE
LOWER PORTION OF THIS FORM AT ONCE IN THE ENCLOSED ENVELOPE.
THESE VOTING INSTRUCTIONS ARE SOLICITED BY THE TRUSTEES OF
JOHN HANCOCK VARIABLE SERIES TRUST I
REAL ESTATE EQUITY PORTFOLIO
SPECIAL MEETING OF SHAREHOLDERS APRIL 14, 1997
THOMAS J. LEE AND HENRY D. SHAW, AND EACH OF THEM, WITH POWER OF SUBSTITUTION
IN EACH, ARE HEREBY INSTRUCTED TO VOTE THE SHARES HELD IN THE FUND PORTFOLIO
ATTRIBUTABLE TO THE UNDERSIGNED AT THE SPECIAL MEETING OF SHAREHOLDERS TO BE
HELD APRIL 14, 1997, AND AT ANY ADJOURNMENT THEREOF, AS SPECIFIED BELOW.
TO VOTE MARK AN [X] IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. KEEP THIS
PORTION FOR YOUR RECORDS.
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
(DETACH HERE AND RETURN THIS PORTION ONLY)
VOTE ON PROPOSALS
FOR AGAINST ABSTAIN
[_] [_] [_] 2. APPROVAL OF AMENDED MANAGEMENT
AGREEMENTS TO REALLOCATE FUND
EXPENSES
_____________________________________
Signature
_____________________________________
Signature (Joint Owners)
_____________________________________
Date
<PAGE>
BY SIGNING AND DATING THE LOWER PORTION OF THIS FORM, YOU INSTRUCT THE PERSONS
NAMED BELOW TO, AND THEY WILL, VOTE EACH PROPOSAL AS MARKED, OR IF NOT MARKED,
TO VOTE "FOR" EACH PROPOSAL, AND TO USE THEIR DISCRETION TO VOTE ANY OTHER
MATTER INCIDENT TO THE CONDUCT OF THE SPECIAL MEETING. IF YOU DO NOT INTEND
PERSONALLY TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DETACH AND MAIL THE
LOWER PORTION OF THIS FORM AT ONCE IN THE ENCLOSED ENVELOPE.
THESE VOTING INSTRUCTIONS ARE SOLICITED BY THE TRUSTEES OF
JOHN HANCOCK VARIABLE SERIES TRUST I
GROWTH & INCOME PORTFOLIO
SPECIAL MEETING OF SHAREHOLDERS APRIL 14, 1997
THOMAS J. LEE AND HENRY D. SHAW, AND EACH OF THEM, WITH POWER OF SUBSTITUTION
IN EACH, ARE HEREBY INSTRUCTED TO VOTE THE SHARES HELD IN THE FUND PORTFOLIO
ATTRIBUTABLE TO THE UNDERSIGNED AT THE SPECIAL MEETING OF SHAREHOLDERS TO BE
HELD APRIL 14, 1997, AND AT ANY ADJOURNMENT THEREOF, AS SPECIFIED BELOW.
TO VOTE MARK AN [X] IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. KEEP THIS
PORTION FOR YOUR RECORDS.
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
(DETACH HERE AND RETURN THIS PORTION ONLY)
VOTE ON PROPOSALS
FOR AGAINST ABSTAIN
[_] [_] [_] 2. APPROVAL OF AMENDED MANAGEMENT
AGREEMENT TO REALLOCATE FUND
EXPENSES
_____________________________________
Signature
_____________________________________
Signature (Joint Owners)
_____________________________________
Date
<PAGE>
BY SIGNING AND DATING THE LOWER PORTION OF THIS FORM, YOU INSTRUCT THE PERSONS
NAMED BELOW TO, AND THEY WILL, VOTE EACH PROPOSAL AS MARKED, OR IF NOT MARKED,
TO VOTE "FOR" EACH PROPOSAL, AND TO USE THEIR DISCRETION TO VOTE ANY OTHER
MATTER INCIDENT TO THE CONDUCT OF THE SPECIAL MEETING. IF YOU DO NOT INTEND
PERSONALLY TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DETACH AND MAIL THE
LOWER PORTION OF THIS FORM AT ONCE IN THE ENCLOSED ENVELOPE.
THESE VOTING INSTRUCTIONS ARE SOLICITED BY THE TRUSTEES OF
JOHN HANCOCK VARIABLE SERIES TRUST I
LARGE CAP VALUE PORTFOLIO
SPECIAL MEETING OF SHAREHOLDERS APRIL 14, 1997
THOMAS J. LEE AND HENRY D. SHAW, AND EACH OF THEM, WITH POWER OF SUBSTITUTION
IN EACH, ARE HEREBY INSTRUCTED TO VOTE THE SHARES HELD IN THE FUND PORTFOLIO
ATTRIBUTABLE TO THE UNDERSIGNED AT THE SPECIAL MEETING OF SHAREHOLDERS TO BE
HELD APRIL 14, 1997, AND AT ANY ADJOURNMENT THEREOF, AS SPECIFIED BELOW.
TO VOTE MARK AN [X] IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. KEEP THIS
PORTION FOR YOUR RECORDS.
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
(DETACH HERE AND RETURN THIS PORTION ONLY)
VOTE ON PROPOSALS
FOR AGAINST ABSTAIN
[_] [_] [_] 1. APPROVAL OF MANAGEMENT AGREEMENT
AND RELATED SUB-INVESTMENT
MANAGEMENT AGREEMENT
[_] [_] [_] 2. APPROVAL OF AMENDED MANAGEMENT
AGREEMENT TO REALLOCATE FUND
EXPENSES
_____________________________________
Signature
_____________________________________
Signature (Joint Owners)
_____________________________________
Date
<PAGE>
BY SIGNING AND DATING THE LOWER PORTION OF THIS FORM, YOU INSTRUCT THE PERSONS
NAMED BELOW TO, AND THEY WILL, VOTE EACH PROPOSAL AS MARKED, OR IF NOT MARKED,
TO VOTE "FOR" EACH PROPOSAL, AND TO USE THEIR DISCRETION TO VOTE ANY OTHER
MATTER INCIDENT TO THE CONDUCT OF THE SPECIAL MEETING. IF YOU DO NOT INTEND
PERSONALLY TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DETACH AND MAIL THE
LOWER PORTION OF THIS FORM AT ONCE IN THE ENCLOSED ENVELOPE.
THESE VOTING INSTRUCTIONS ARE SOLICITED BY THE TRUSTEES OF
JOHN HANCOCK VARIABLE SERIES TRUST I
MID CAP GROWTH PORTFOLIO
SPECIAL MEETING OF SHAREHOLDERS APRIL 14, 1997
THOMAS J. LEE AND HENRY D. SHAW, AND EACH OF THEM, WITH POWER OF SUBSTITUTION
IN EACH, ARE HEREBY INSTRUCTED TO VOTE THE SHARES HELD IN THE FUND PORTFOLIO
ATTRIBUTABLE TO THE UNDERSIGNED AT THE SPECIAL MEETING OF SHAREHOLDERS TO BE
HELD APRIL 14, 1997, AND AT ANY ADJOURNMENT THEREOF, AS SPECIFIED BELOW.
TO VOTE MARK AN [X] IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. KEEP THIS
PORTION FOR YOUR RECORDS.
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
(DETACH HERE AND RETURN THIS PORTION ONLY)
VOTE ON PROPOSALS
FOR AGAINST ABSTAIN
[_] [_] [_] 1. APPROVAL OF MANAGEMENT AGREEMENT
AND RELATED SUB-INVESTMENT
MANAGEMENT AGREEMENT
2. APPROVAL OF AMENDED MANAGEMENT
[_] [_] [_] AGREEMENT TO REALLOCATE FUND
EXPENSES
_____________________________________
Signature
_____________________________________
Signature (Joint Owners)
_____________________________________
Date
<PAGE>
BY SIGNING AND DATING THE LOWER PORTION OF THIS FORM, YOU INSTRUCT THE PERSONS
NAMED BELOW TO, AND THEY WILL, VOTE EACH PROPOSAL AS MARKED, OR IF NOT MARKED,
TO VOTE "FOR" EACH PROPOSAL, AND TO USE THEIR DISCRETION TO VOTE ANY OTHER
MATTER INCIDENT TO THE CONDUCT OF THE SPECIAL MEETING. IF YOU DO NOT INTEND
PERSONALLY TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DETACH AND MAIL THE
LOWER PORTION OF THIS FORM AT ONCE IN THE ENCLOSED ENVELOPE.
THESE VOTING INSTRUCTIONS ARE SOLICITED BY THE TRUSTEES OF
JOHN HANCOCK VARIABLE SERIES TRUST I
MID CAP VALUE PORTFOLIO
SPECIAL MEETING OF SHAREHOLDERS APRIL 14, 1997
THOMAS J. LEE AND HENRY D. SHAW, AND EACH OF THEM, WITH POWER OF SUBSTITUTION
IN EACH, ARE HEREBY INSTRUCTED TO VOTE THE SHARES HELD IN THE FUND PORTFOLIO
ATTRIBUTABLE TO THE UNDERSIGNED AT THE SPECIAL MEETING OF SHAREHOLDERS TO BE
HELD APRIL 14, 1997, AND AT ANY ADJOURNMENT THEREOF, AS SPECIFIED BELOW.
TO VOTE MARK AN [X] IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. KEEP THIS
PORTION FOR YOUR RECORDS.
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
(DETACH HERE AND RETURN THIS PORTION ONLY)
VOTE ON PROPOSALS
FOR AGAINST ABSTAIN
[_] [_] [_] 1. APPROVAL OF MANAGEMENT AGREEMENT
AND RELATED SUB-INVESTMENT
MANAGEMENT AGREEMENT
[_] [_] [_] 2. APPROVAL OF AMENDED MANAGEMENT
AGREEMENT TO REALLOCATE FUND
EXPENSES
_____________________________________
Signature
_____________________________________
Signature (Joint Owners)
_____________________________________
Date
<PAGE>
BY SIGNING AND DATING THE LOWER PORTION OF THIS FORM, YOU INSTRUCT THE PERSONS
NAMED BELOW TO, AND THEY WILL, VOTE EACH PROPOSAL AS MARKED, OR IF NOT MARKED,
TO VOTE "FOR" EACH PROPOSAL, AND TO USE THEIR DISCRETION TO VOTE ANY OTHER
MATTER INCIDENT TO THE CONDUCT OF THE SPECIAL MEETING. IF YOU DO NOT INTEND
PERSONALLY TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DETACH AND MAIL THE
LOWER PORTION OF THIS FORM AT ONCE IN THE ENCLOSED ENVELOPE.
THESE VOTING INSTRUCTIONS ARE SOLICITED BY THE TRUSTEES OF
JOHN HANCOCK VARIABLE SERIES TRUST I
SMALL CAP GROWTH PORTFOLIO
SPECIAL MEETING OF SHAREHOLDERS APRIL 14, 1997
THOMAS J. LEE AND HENRY D. SHAW, AND EACH OF THEM, WITH POWER OF SUBSTITUTION
IN EACH, ARE HEREBY INSTRUCTED TO VOTE THE SHARES HELD IN THE FUND PORTFOLIO
ATTRIBUTABLE TO THE UNDERSIGNED AT THE SPECIAL MEETING OF SHAREHOLDERS TO BE
HELD APRIL 14, 1997, AND AT ANY ADJOURNMENT THEREOF, AS SPECIFIED BELOW.
TO VOTE MARK AN [X] IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. KEEP THIS
PORTION FOR YOUR RECORDS.
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
(DETACH HERE AND RETURN THIS PORTION ONLY)
VOTE ON PROPOSALS
FOR AGAINST ABSTAIN
[_] [_] [_] 1. APPROVAL OF MANAGEMENT AGREEMENT
AND RELATED SUB-INVESTMENT
MANAGEMENT AGREEMENT
[_] [_] [_] 2. APPROVAL OF AMENDED MANAGEMENT
AGREEMENT TO REALLOCATE FUND
EXPENSES
_____________________________________
Signature
_____________________________________
Signature (Joint Owners)
_____________________________________
Date
<PAGE>
BY SIGNING AND DATING THE LOWER PORTION OF THIS FORM, YOU INSTRUCT THE PERSONS
NAMED BELOW TO, AND THEY WILL, VOTE EACH PROPOSAL AS MARKED, OR IF NOT MARKED,
TO VOTE "FOR" EACH PROPOSAL, AND TO USE THEIR DISCRETION TO VOTE ANY OTHER
MATTER INCIDENT TO THE CONDUCT OF THE SPECIAL MEETING. IF YOU DO NOT INTEND
PERSONALLY TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DETACH AND MAIL THE
LOWER PORTION OF THIS FORM AT ONCE IN THE ENCLOSED ENVELOPE.
THESE VOTING INSTRUCTIONS ARE SOLICITED BY THE TRUSTEES OF
JOHN HANCOCK VARIABLE SERIES TRUST I
SMALL CAP VALUE PORTFOLIO
SPECIAL MEETING OF SHAREHOLDERS APRIL 14, 1997
THOMAS J. LEE AND HENRY D. SHAW, AND EACH OF THEM, WITH POWER OF SUBSTITUTION
IN EACH, ARE HEREBY INSTRUCTED TO VOTE THE SHARES HELD IN THE FUND PORTFOLIO
ATTRIBUTABLE TO THE UNDERSIGNED AT THE SPECIAL MEETING OF SHAREHOLDERS TO BE
HELD APRIL 14, 1997, AND AT ANY ADJOURNMENT THEREOF, AS SPECIFIED BELOW.
TO VOTE MARK AN [X] IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. KEEP THIS
PORTION FOR YOUR RECORDS.
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
(DETACH HERE AND RETURN THIS PORTION ONLY)
VOTE ON PROPOSALS
FOR AGAINST ABSTAIN
[_] [_] [_] 1. APPROVAL OF MANAGEMENT AGREEMENT
AND RELATED SUB-INVESTMENT
MANAGEMENT AGREEMENT
[_] [_] [_] 2. APPROVAL OF AMENDED MANAGEMENT
AGREEMENT TO REALLOCATE FUND
EXPENSES
_____________________________________
Signature
_____________________________________
Signature (Joint Owners)
_____________________________________
Date
<PAGE>
BY SIGNING AND DATING THE LOWER PORTION OF THIS FORM, YOU INSTRUCT THE PERSONS
NAMED BELOW TO, AND THEY WILL, VOTE EACH PROPOSAL AS MARKED, OR IF NOT MARKED,
TO VOTE "FOR" EACH PROPOSAL, AND TO USE THEIR DISCRETION TO VOTE ANY OTHER
MATTER INCIDENT TO THE CONDUCT OF THE SPECIAL MEETING. IF YOU DO NOT INTEND
PERSONALLY TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DETACH AND MAIL THE
LOWER PORTION OF THIS FORM AT ONCE IN THE ENCLOSED ENVELOPE.
THESE VOTING INSTRUCTIONS ARE SOLICITED BY THE TRUSTEES OF
JOHN HANCOCK VARIABLE SERIES TRUST I
STRATEGIC BOND PORTFOLIO
SPECIAL MEETING OF SHAREHOLDERS APRIL 14, 1997
THOMAS J. LEE AND HENRY D. SHAW, AND EACH OF THEM, WITH POWER OF SUBSTITUTION
IN EACH, ARE HEREBY INSTRUCTED TO VOTE THE SHARES HELD IN THE FUND PORTFOLIO
ATTRIBUTABLE TO THE UNDERSIGNED AT THE SPECIAL MEETING OF SHAREHOLDERS TO BE
HELD APRIL 14, 1997, AND AT ANY ADJOURNMENT THEREOF, AS SPECIFIED BELOW.
TO VOTE MARK AN [X] IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. KEEP THIS
PORTION FOR YOUR RECORDS.
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
(DETACH HERE AND RETURN THIS PORTION ONLY)
VOTE ON PROPOSALS
FOR AGAINST ABSTAIN
[_] [_] [_] 1. APPROVAL OF MANAGEMENT AGREEMENT
AND RELATED SUB-INVESTMENT
MANAGEMENT AGREEMENT
[_] [_] [_] 2. APPROVAL OF AMENDED MANAGEMENT
AGREEMENT TO REALLOCATE FUND
EXPENSES
_____________________________________
Signature
_____________________________________
Signature (Joint Owners)
_____________________________________
Date
<PAGE>
BY SIGNING AND DATING THE LOWER PORTION OF THIS FORM, YOU INSTRUCT THE PERSONS
NAMED BELOW TO, AND THEY WILL, VOTE EACH PROPOSAL AS MARKED, OR IF NOT MARKED,
TO VOTE "FOR" EACH PROPOSAL, AND TO USE THEIR DISCRETION TO VOTE ANY OTHER
MATTER INCIDENT TO THE CONDUCT OF THE SPECIAL MEETING. IF YOU DO NOT INTEND
PERSONALLY TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DETACH AND MAIL THE
LOWER PORTION OF THIS FORM AT ONCE IN THE ENCLOSED ENVELOPE.
THESE VOTING INSTRUCTIONS ARE SOLICITED BY THE TRUSTEES OF
JOHN HANCOCK VARIABLE SERIES TRUST I
INTERNATIONAL OPPORTUNITIES PORTFOLIO
SPECIAL MEETING OF SHAREHOLDERS APRIL 14, 1997
THOMAS J. LEE AND HENRY D. SHAW, AND EACH OF THEM, WITH POWER OF SUBSTITUTION
IN EACH, ARE HEREBY INSTRUCTED TO VOTE THE SHARES HELD IN THE FUND PORTFOLIO
ATTRIBUTABLE TO THE UNDERSIGNED AT THE SPECIAL MEETING OF SHAREHOLDERS TO BE
HELD APRIL 14, 1997, AND AT ANY ADJOURNMENT THEREOF, AS SPECIFIED BELOW.
TO VOTE MARK AN [X] IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. KEEP THIS
PORTION FOR YOUR RECORDS.
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
(DETACH HERE AND RETURN THIS PORTION ONLY)
VOTE ON PROPOSALS
FOR AGAINST ABSTAIN
[_] [_] [_] 1. APPROVAL OF MANAGEMENT AGREEMENT
AND RELATED SUB-INVESTMENT
MANAGEMENT AGREEMENT
[_] [_] [_] 2. APPROVAL OF AMENDED MANAGEMENT
AGREEMENT TO REALLOCATE FUND
EXPENSES
_____________________________________
Signature
_____________________________________
Signature (Joint Owners)
_____________________________________
Date
<PAGE>
BY SIGNING AND DATING THE LOWER PORTION OF THIS FORM, YOU INSTRUCT THE PERSONS
NAMED BELOW TO, AND THEY WILL, VOTE EACH PROPOSAL AS MARKED, OR IF NOT MARKED,
TO VOTE "FOR" EACH PROPOSAL, AND TO USE THEIR DISCRETION TO VOTE ANY OTHER
MATTER INCIDENT TO THE CONDUCT OF THE SPECIAL MEETING. IF YOU DO NOT INTEND
PERSONALLY TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DETACH AND MAIL THE
LOWER PORTION OF THIS FORM AT ONCE IN THE ENCLOSED ENVELOPE.
THESE VOTING INSTRUCTIONS ARE SOLICITED BY THE TRUSTEES OF
JOHN HANCOCK VARIABLE SERIES TRUST I
INTERNATIONAL BALANCED PORTFOLIO
SPECIAL MEETING OF SHAREHOLDERS APRIL 14, 1997
THOMAS J. LEE AND HENRY D. SHAW, AND EACH OF THEM, WITH POWER OF SUBSTITUTION
IN EACH, ARE HEREBY INSTRUCTED TO VOTE THE SHARES HELD IN THE FUND PORTFOLIO
ATTRIBUTABLE TO THE UNDERSIGNED AT THE SPECIAL MEETING OF SHAREHOLDERS TO BE
HELD APRIL 14, 1997, AND AT ANY ADJOURNMENT THEREOF, AS SPECIFIED BELOW.
TO VOTE MARK AN [X] IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. KEEP THIS
PORTION FOR YOUR RECORDS.
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
(DETACH HERE AND RETURN THIS PORTION ONLY)
VOTE ON PROPOSALS
FOR AGAINST ABSTAIN
[_] [_] [_] 1. APPROVAL OF MANAGEMENT AGREEMENT
AND RELATED SUB-INVESTMENT
MANAGEMENT AGREEMENT
[_] [_] [_] 2. APPROVAL OF AMENDED MANAGEMENT
AGREEMENT TO REALLOCATE FUND
EXPENSES
_____________________________________
Signature
_____________________________________
Signature (Joint Owners)
_____________________________________
Date
<PAGE>
BY SIGNING AND DATING THE LOWER PORTION OF THIS FORM, YOU INSTRUCT THE PERSONS
NAMED BELOW TO, AND THEY WILL, VOTE EACH PROPOSAL AS MARKED, OR IF NOT MARKED,
TO VOTE "FOR" EACH PROPOSAL, AND TO USE THEIR DISCRETION TO VOTE ANY OTHER
MATTER INCIDENT TO THE CONDUCT OF THE SPECIAL MEETING. IF YOU DO NOT INTEND
PERSONALLY TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DETACH AND MAIL THE
LOWER PORTION OF THIS FORM AT ONCE IN THE ENCLOSED ENVELOPE.
THESE VOTING INSTRUCTIONS ARE SOLICITED BY THE TRUSTEES OF
JOHN HANCOCK VARIABLE SERIES TRUST I
LARGE CAP GROWTH PORTFOLIO
SPECIAL MEETING OF SHAREHOLDERS APRIL 14, 1997
THOMAS J. LEE AND HENRY D. SHAW, AND EACH OF THEM, WITH POWER OF SUBSTITUTION
IN EACH, ARE HEREBY INSTRUCTED TO VOTE THE SHARES HELD IN THE FUND PORTFOLIO
ATTRIBUTABLE TO THE UNDERSIGNED AT THE SPECIAL MEETING OF SHAREHOLDERS TO BE
HELD APRIL 14, 1997, AND AT ANY ADJOURNMENT THEREOF, AS SPECIFIED BELOW.
TO VOTE MARK AN [X] IN BLUE OR BLACK INK ON THE PROXY CARD BELOW. KEEP THIS
PORTION FOR YOUR RECORDS.
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
(DETACH HERE AND RETURN THIS PORTION ONLY)
VOTE ON PROPOSALS
FOR AGAINST ABSTAIN
[_] [_] [_] 1. APPROVAL OF MANAGEMENT AGREEMENT
AND RELATED SUB-INVESTMENT
MANAGEMENT AGREEMENT
[_] [_] [_] 2. APPROVAL OF AMENDED MANAGEMENT
AGREEMENT TO REALLOCATE FUND
EXPENSES
_____________________________________
Signature
_____________________________________
Signature (Joint Owners)
_____________________________________
Date
