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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
John Hancock Variable Series Trust I
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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John Hancock Variable Series Trust I
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
OF THE SMALL/MID CAP GROWTH FUND
(formerly, the "Diversified Mid Cap Growth Portfolio")
A Special Meeting of Shareholders of the Small/Mid Cap Growth Fund of John
Hancock Variable Series Trust I (the "Series Trust") will take place at 10:00
A.M. Eastern Time, on Friday, August 20, 1999. The meeting will be held at the
offices of John Hancock Variable Life Insurance Company ("JHVLICO"), 197
Clarendon Street, Boston, Massachusetts 02117 (telephone 1-800-732-5543). At
the meeting, the shareholders will consider:
1. A proposal to approve, as to the Small/Mid Cap Growth Fund, a new
sub-investment management agreement among the Series Trust, John Hancock
Mutual Life Insurance Company ("John Hancock"), and Wellington Management
Company, LLP ("Wellington").
2. Any other matters relating to the conduct of the meeting may also be
transacted at the meeting.
An owner of a variable life insurance policy or variable annuity contract
will be entitled to vote only if he/she had policy/contract assets invested in
the Small/Mid Cap Growth Fund at the close of business on June 30, 1999.
Thomas J. Lee
Vice Chairman
Board of Trustees
Boston, Massachusetts
July 16, 1999
PLEASE COMPLETE AND RETURN THE ENCLOSED VOTING INSTRUCTION FORM, EVEN IF
YOU EXPECT TO BE PRESENT AT THE MEETING. YOU MAY STILL VOTE IN PERSON IF
YOU ATTEND THE MEETING.
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PROXY STATEMENT
General
The management of the Series Trust is soliciting voting instructions from
the shareholders of the Small/Mid Cap Growth Fund ("Fund") of the Series Trust
for use at the Special Meeting of Fund shareholders on August 20, 1999. The
solicitation includes all shares of the Fund attributable to variable contract
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 "Account(s)"). This proxy statement is
being furnished in connection with the solicitation.
The Fund will bear the cost of (1) printing and mailing this notice, proxy
statement, and accompanying voting instructions form, and (2) tabulating the
votes. In addition to solicitations by mail, a number of regular employees of
John Hancock may solicit voting instructions in person or by telephone. Such
employees will receive no compensation for such services. The management of
the Series Trust first mailed solicitation materials to owners on July 16,
1999.
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You may obtain, free of charge, a copy of the Series Trust's 1998 annual
report and a copy of its current prospectus. Requests for the copies should
be made to Series Trust at the address or the toll-free telephone number
shown in the notice attached at the front of this proxy statement.
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Voting Instructions
Although JHVLICO and John Hancock, through the Accounts, legally own all of
the Fund's shares, JHVLICO and John Hancock will vote all such shares in
accordance with the voting instructions given by the owners ("owners") of
variable life insurance policies and variable annuity contracts (collectively
referred to as "contracts") with assets invested in the Fund.
Any authorized voting instructions will be valid for any adjournment of the
Special Meeting. Only the owner executing the voting instructions can revoke
them. If the management of the Series Trust receives an insufficient number of
votes to approve the proposal, the Special Meeting may be adjourned to permit
the solicitation of additional votes. Those persons named as proxies in the
voting instructions have the discretion to vote for any such adjournment. The
approval of the proposal 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.
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Any person giving voting instructions may revoke them at any time prior to
exercising them by submitting, to the Series Trust, a superseding voting
instruction form or written notice of revocation. In addition, an owner
present at the Special Meeting may withdraw his/her voting instruction form
and vote in person. (Mere attendance at the Special Meeting will not revoke
the voting instructions, however.) JHVLICO and John Hancock will vote the Fund
shares in accordance with all properly executed and unrevoked voting
instructions received in time for the Special Meeting.
In accordance with the voting instructions received from the owners whose
contracts are invested in the Fund, JHVLICO and John Hancock will vote the
Fund shares held in their respective Accounts. Fund shares which are not
attributable to contracts or for which no timely voting instructions are
received will be represented by JHVLICO or John Hancock at the meeting and
voted in the same proportion as the voting instructions which are received
from all owners invested in the Fund through those Accounts.
Fund shares which are not attributable to contracts include shares purchased
with contributions made as "seed money" to the Fund by JHVLICO or John
Hancock. Please refer to Appendix A to this proxy statement if you would like
additional information about the number of Fund shares attributable to JHVLICO
or John Hancock (rather than to contract owners).
Majority Voting
For the shareholders to approve the proposal described in this proxy
statement, the proposal must receive the favorable vote of a majority of the
outstanding shares of the Fund. When used in this proxy statement, "a majority
of the outstanding voting shares" means either:
(1) the affirmative vote of more than 50% of the outstanding shares; or
(2) if less than 50% of the outstanding shares is present or represented
at the Special Meeting, then 67% or more of those shares present or
represented.
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PROPOSAL 1: APPROVAL OF NEW SUB-INVESTMENT MANAGEMENT AGREEMENT
At a meeting of the Series Trust's Board of Trustees held on April 21, 1999,
the Trustees unanimously approved a proposal by John Hancock to:
(1) revise the investment strategy of the Diversified Mid Cap Growth
Portfolio of the Series Trust to reflect a focus on investments on
stocks having a small to mid-sized market capitalization rather than
solely on those having mid-sized market capitalization,
(2) rename the Portfolio the "Small/Mid Cap Growth Fund" to reflect that
revision in strategy, and
(3) approve, with respect to the Small/Mid Cap Growth Fund, a new sub-
investment management agreement appointing Wellington Management
Company, LLP as the Fund's sub-investment manager.
Background Information
Prior to May 1, 1999, John Hancock Advisers, Inc. ("Advisers"), an affiliate
of John Hancock, served as sub-investment manager to the Fund pursuant to a
sub-investment management agreement dated April 15, 1994. At the special
meeting of the Trustees held on April 21, 1999, the Trustees, upon John
Hancock's recommendation, decided that the Fund's sub-investment management
relationship with Advisers should be terminated, and that a successor sub-
investment manager should be appointed. For the reasons described in greater
detail below, the Trustees determined to appoint Wellington to succeed
Advisers as the sub-investment manager of the Fund. Accordingly, by agreement
(the "Agreement") dated April 30, 1999, Wellington accepted the appointment
and has served as sub-investment manager to the Fund since May 1, 1999.
Shareholders of the Fund are now being asked to approve the Agreement. A copy
of the Agreement appears as Appendix B hereto. Wellington, which also serves
as sub-investment manager for the Series Trust's High Yield Bond Fund, is not
affiliated with John Hancock.
Since the Fund's inception, its investment manager has been John Hancock,
serving pursuant to an investment management agreement dated April 15, 1994.
The terms of that agreement, the substance of which will not be affected by
the proposal to be voted on at the Special Meeting, provide that John Hancock
will pay sub-investment management fees to the sub-investment manager of the
Fund out of John Hancock's own assets. The Fund itself bears no responsibility
for payment of the sub-investment management fees and, therefore, approval of
the Agreement will not affect the overall investment management fees to be
paid by the Fund.
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Summary of the Agreement
Pursuant to the Agreement, Wellington agrees to provide a continuing and
suitable investment program for the Fund that is consistent with the Fund's
investment objectives, policies, guidelines and restrictions as established by
the Series Trust and John Hancock. Wellington performs its specific duties
under the Agreement subject to the overall supervision, direction, control,
and review of the Series Trust and John Hancock. As part of these specific
duties, Wellington advises and provides information to the Fund in connection
with policy decisions; places orders for purchases and sales of portfolio
investments; instructs and provides information to the Fund's custodian
regarding securities and cash transactions; provides information to John
Hancock regarding portfolio investments; and maintains records required by the
Investment Company Act of 1940. Wellington has also agreed to make its
personnel available to educate John Hancock sales personnel regarding its
management of the Fund.
For its investment management and advisory services, Wellington is paid a
fee by John Hancock at the following rates, on an annual basis as a percentage
of the Fund's average daily net assets: 0.55% of the first $100,000,000; 0.45%
of the next $100,000,000; and 0.40% of all additional amounts. However,
Wellington's compensation for the period prior to approval of the Agreement by
the Fund's shareholders will not exceed the compensation that would have been
paid for such period to Advisers under the former sub-investment management
agreement, had such agreement not been terminated.
By comparison, under the fee schedule payable under the terminated former
sub-investment management agreement with Advisers, Advisers was paid a fee by
John Hancock at the following rate, on an annual basis as a percentage of the
Fund's average daily net assets: 0.50% of the first $250,000,000; 0.47% of the
next $250,000,000; and 0.44% of any excess.
As previously noted, the sub-investment management fees with respect to the
Fund are paid by John Hancock rather than the Fund. The Fund pays John
Hancock, under its investment management agreement, a fee that will not be
changed as a result of the change in the Fund's sub-investment manager. This
fee to John Hancock is at the following rates, on an annual basis as a
percentage of the Fund's average daily net assets: 0.75% of the first
$250,000,000; 0.70% of the next $250,000,000; and 0.65% of any excess. For the
fiscal year ended December 31, 1998, the Fund paid John Hancock $1,490,558 for
its investment management services with respect to the Fund.
Each party agrees to bear the costs and expenses of performing its
obligations under the Agreement. The Series Trust assumes the expense of
taxes, custodian fees and expenses, brokerage commissions, and interest
payable on the Series Trust's borrowings.
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Unless modified or terminated, the Agreement will continue with respect to
the Fund for two years, and thereafter 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 John Hancock,
Wellington, or the Series Trust, 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 the Fund. The
Agreement also provides that it may be terminated at any time without penalty
by the Series Trust pursuant to a vote of the Trustees of the Series Trust or
a vote of a majority of the outstanding voting shares of the Fund. The
agreement also may be terminated by Wellington or by John Hancock on 90 days'
notice to the other parties. The Agreement automatically terminates in the
event of its assignment.
Evaluation by the Board of Trustees
The principal reason for the Trustees' decision to replace Advisers as sub-
investment manager for the Fund was to seek improved investment performance
for the Fund. John Hancock performed an initial screening of potential
successor sub-investment managers to identify those which, with respect to
their pursuit of an investment strategy emphasizing mid cap equity and growth,
produced above average investment performance versus the Fund's "benchmark"
(Russell Mid Cap Growth) and peer group (Russell Mid Cap Growth Universe) for
3- and 5-year periods. Wellington and one other candidate were chosen by John
Hancock, as a result of that screening process, for more detailed examination.
John Hancock then presented detailed performance, investment strategy, and
resource information about those candidates to the Board of Trustees for
consideration. In evaluating the candidates, the Trustees also considered each
candidate's length and depth of experience in managing portfolios having an
investment objective similar to that of the Fund, taking into account the
shift in investment strategy towards greater investment focus on stocks having
relatively small market capitalization ("small cap"), as described above.
The primary factors influencing the Trustees' decision were the
recommendation of John Hancock, the performance record and resources of
Wellington and the fact that there would be no increase in the fees or
expenses borne by the Fund.
Additional Information
John Hancock. John Hancock serves as the investment manager for the
Small/Mid Cap Growth Fund pursuant to an investment management agreement
between the Series Trust and John Hancock, dated April 15, 1994. That
agreement was last approved by the Fund's shareholders on April 14, 1997. The
substance of that agreement, as currently in effect, will not be changed by
approval of the Agreement.
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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 that invested primarily
in common stocks. Additional information about John Hancock is contained in
Appendix C.
Wellington. Wellington is a registered investment adviser and a limited
liability partnership with its principal place of business at 75 State Street,
Boston, Massachusetts 02109. Wellington was founded in 1928 and as of March
31, 1999, it had approximately $215.3 billion under management. Wellington
provides investment services to investment companies, employee benefit plans,
endowments, foundations, and other institutional and individual investors.
Wellington and its predecessor organizations have provided investment advisory
services for over 70 years.
Wellington is managed by its active partners. The managing partners of
Wellington as of July 1, 1999 were Laurie A. Gabriel, Duncan M. McFarland and
John R. Ryan. The names and titles of each of the general partners and Senior
Vice Presidents of Wellington are set forth in Appendix C. The principal
business address of each of Wellington's partners, as it relates to their
duties at Wellington, is 75 State Street, Boston, Massachusetts 02109.
Wellington manages two other mutual funds which have an investment objective
similar to that of the Small/Mid Cap Growth Fund. On an annual basis,
Wellington is paid the following investment management fees respect to those
funds:
<TABLE>
<CAPTION>
Fee Rate as a Percentage of
Name of Fund Net Assets Net Assets as of 6/30/99
- ------------ --------------------------- ------------------------
<S> <C> <C>
Style Select Mid-Cap 0.4% of first $200 million; $33.4 million
Growth(1) 0.35% of amount over $200
million.
0.45% of first $50 million; $63.6 million
Manulife Mid-Cap 0.425% of the next $150
Stock(2) million;
0.40% of the next $300
million;
0.375% of amounts over $500
million.
</TABLE>
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(1) As of June 30, 1999, Wellington managed approximately $3.2 billion in
mutual funds and variable annuities sponsored by Sun America, including
this fund.
(2) As of June 30, 1999, Wellington managed approximately $3.4 billion in
mutual funds and variable annuities sponsored by Manulife Financial,
including this fund.
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Brokerage Commissions on Portfolio Transactions
Wellington, like the Series Trust's other sub-investment managers, is
authorized when placing portfolio transactions for securities to pay a
brokerage commission (to the extent applicable) in excess of that which
another broker might charge for executing the same transaction, so long as the
amount paid is reasonable in relation to brokerage and research services
furnished by the broker to Wellington or the Fund.
Trustees' Recommendation
The Board Of Trustees Recommends That the Owners Give Voting Instructions To
Vote For Approval Of The Sub-investment Management Agreement Among The Series
---
Trust, John Hancock, and Wellington.
If the shareholders do not approve the Agreement, the Agreement will
terminate and the Board of Trustees will take such action as they deem to be
in the best interests of the Fund and its shareholders.
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Appendix A
RECORD DATE AND VOTING SHARES
As of the close of business on June 30, 1999 (the "record date"), there were
approximately 11,111,505 shares outstanding in the Small/Mid Cap Growth Fund.
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 is determined by dividing, as of the record date, the
policy's account value (less any outstanding indebtedness) in the
corresponding investment option by the net asset value of one share in the
Fund.
The number of Fund shares attributable to each owner of a variable annuity
contract is determined by dividing, as of the record date, the value of the
accumulation units under the contract (or, in the case of a contract under
which annuity payments have commenced, the contract reserves) in the
corresponding investment option by the net asset value of one share of the
Fund.
As of the close of business on June 30, 1999, JHVLICO and John Hancock owned
approximately the following numbers of Fund shares:
<TABLE>
<CAPTION>
Shares Not Attributable Shares Attributable
to Owners to Owners
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<S> <C> <C>
John Hancock (Including its
Accounts)........................ 0 7,189,538
JHVLICO (Including its Accounts)... 61,108 3,860,859
</TABLE>
To the knowledge of the Series Trust, no person beneficially owned, as of
June 30, 1999, more than 5% of the outstanding shares of the Fund.
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Appendix B
SUB-INVESTMENT MANAGEMENT AGREEMENT
AMONG
JOHN HANCOCK VARIABLE SERIES TRUST I
WELLINGTON MANAGEMENT COMPANY, LLP
AND
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
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SUB-INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made as of the 30th day of April, 1999 by and among John Hancock
Variable Series Trust I, a Massachusetts business trust (the "Series"),
Wellington Management Company, LLP, a Massachusetts limited liability
partnership ("Wellington Management"), and John Hancock Mutual Life Insurance
Company, a Massachusetts corporation ("JHMLICO").
WHEREAS, the Series is organized and is engaged in business as an open-end
management investment company and is so registered under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, JHMLICO and Wellington Management are each engaged in the business
of rendering investment advice under the Investment Advisers Act of 1940, as
amended; and
WHEREAS, the Series is authorized to issue its shares in separate classes,
with each such class representing interests in a separate portfolio of
securities and other assets; and
WHEREAS, the Series offers shares in several classes, one of which is
designated as the Small/Mid Cap Growth Portfolio (together with all other
classes established by the Series, collectively referred to as the
"Portfolios"), each of which pursues its investment objectives through
separate investment policies; and
WHEREAS, the Series has retained JHMLICO to render investment management
services to the Series pursuant to an Investment Management Agreement dated as
of April 15, 1994, as amended (the "Investment Management Agreement"),
pursuant to which it may contract with Wellington Management as a sub-
investment manager as provided for herein.
NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the parties
hereto as follows:
1. APPOINTMENT OF SUB-INVESTMENT MANAGER
(a) Subject Portfolio. Wellington Management is hereby appointed and
Wellington Management hereby accepts the appointment to act as investment
adviser and manager to the Small/Mid Cap Growth Portfolio (the "Subject
Portfolio") effective May 1, 1999 for the period and on the terms herein set
forth, and for the compensation herein provided.
(b) Additional Subject Portfolios. In the event that the Series and JHMLICO
desire to retain Wellington Management to render investment advisory services
hereunder for any other Portfolio, they shall so notify Wellington Management
in
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writing. If it is willing to render such services, Wellington Management shall
notify the Series in writing, whereupon such Portfolio shall become a Subject
Portfolio hereunder.
(c) Incumbency Certificates. Wellington Management shall furnish to JHMLICO,
immediately upon execution of this Agreement, a certificate of a senior
officer of Wellington Management setting forth (by name and title, and
including specimen signatures) those officers of Wellington Management who are
authorized to give instructions for the Subject Portfolio pursuant to the
provisions of this Agreement. Wellington Management shall promptly provide
supplemental certificates in connection with each additional Subject Portfolio
(if any) and further supplemental certificates, as needed, to reflect all
changes with respect to such authorized officers for any Subject Portfolio. On
behalf of the Series, JHMLICO shall instruct the custodian for the Subject
Portfolio to accept instructions with respect to the Subject Portfolio from
the officers of Wellington Management so named.
(d) Independent Contractor. Wellington Management 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.
(e) Wellington Management's Representations. Wellington Management
represents, warrants and agrees (i) that it is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended, and that it
will remain so registered and will comply with the requirements of said Act,
and the rules and regulations thereunder, at all times while this Agreement
remains in effect, (ii) that it will promptly notify JHMLICO if the foregoing
representation and agreement shall cease to be true in any material respect at
any time during the term of this Agreement, (iii) that it will promptly notify
JHMLICO of any material change in the ownership of Wellington Management, or
of any change in the identity of the personnel who manage the Subject
Portfolio, (iv) that it has adopted a code of ethics complying with the
requirements of Section 17(j) and Rule 17j-1 under the 1940 Act and has
provided true and complete copies of such code to the Series and to JHMLICO,
and has adopted procedures designed to prevent violations of such code, and
(v) that it has furnished the Series and JHMLICO each with a copy of
Wellington Management's Form ADV, as most recently filed with the Securities
and Exchange Commission ("SEC"), and will promptly furnish copies of each
future amendment thereto.
2. PROVISION OF INVESTMENT MANAGEMENT SERVICES.
Wellington Management will provide for the Subject Portfolio a continuing
and suitable investment program consistent with the investment objectives,
policies, guidelines and restrictions of said Portfolio, as established by the
Series
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and JHMLICO. From time to time, JHMLICO or the Series may provide Wellington
Management with additional or amended investment policies, guidelines and
restrictions. Wellington Management, as sub-investment manager, will manage
the investment and reinvestment of the assets in the Subject Portfolio, and
perform the functions set forth below, (i) subject to the overall supervision,
direction, control and review of JHMLICO and the Board of Trustees of the
Series, and (ii) consistent with the applicable investment objectives,
policies, guidelines and restrictions, the provisions of the Series'
Declaration of Trust, By-laws, prospectus, statement of additional information
(each as in effect from time to time), the 1940 Act and all other applicable
laws and regulations (including any applicable investment restrictions imposed
by state insurance laws and regulations or any other directions or
instructions delivered to Wellington Management in writing by JHMLICO or the
Series from time to time). By its signature below, Wellington Management
acknowledges receipt of a copy of the Series' Declaration of Trust, By-laws,
prospectus, and statement of additional information, each as in effect on the
date of this Agreement.
Wellington Management will, at its own expense:
(a) advise the Series in connection with investment policy decisions to
be made by its Board of Trustees or any committee thereof regarding the
Subject Portfolio and, upon request, furnish the Series with research,
economic and statistical data in connection with said Portfolio's
investments and investment policies;
(b) submit such reports and information as JHMLICO or the Series' Board
of Trustees may reasonably request, to assist the custodian in its
determination of the market value of securities held in the Subject
Portfolio;
(c) place orders for purchases and sales of portfolio investments for
the Subject Portfolio;
(d) give instructions to the Subject Portfolio's custodian concerning
the delivery of securities and transfer of cash for the Subject Portfolio;
(e) maintain and preserve the records relating to its activities
hereunder required by the 1940 Act to be maintained and preserved by the
Series, to the extent not maintained by the custodian, transfer agent or
JHMLICO;
(f) at or prior to the close of business each day, provide JHMLICO and
the custodian with trade information for each transaction effected for the
Subject Portfolio, and promptly provide to the custodian information on
all brokerage or dealer confirmations;
(g) as soon as practicable following the end of each calendar month,
provide JHMLICO with information on all transactions effected for the
Subject Portfolio during the month, a summary listing all investments held
in such Portfolio as of the last day of the month, and such other
information as JHMLICO may reasonably request in connection with the
accounting services that JHMLICO provides for the Subject Portfolio; and
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(h) absent specific instructions to the contrary provided to it by
JHMLICO and subject to its receipt of all necessary voting materials, vote
all proxies with respect to investments of the Subject Portfolio in
accordance with Wellington Management's proxy voting policy as most
recently provided to JHMLICO.
On its own initiative, Wellington Management will apprise JHMLICO and the
Series of important political and economic developments materially affecting
the marketplace or the Subject Portfolio, and will furnish JHMLICO and the
Series' Board of Trustees from time to time such information as is appropriate
for this purpose. Wellington Management will also make its personnel available
in Boston, Massachusetts or other reasonable locations as often as quarterly
to discuss the Subject Portfolio and Wellington Management's management
thereof, to educate JHMLICO sales personnel with respect thereto, and for such
other purposes as the Series or JHMLICO may reasonably request.
The Series and JHMLICO will provide timely information to Wellington
Management regarding such matters as purchases and redemptions of shares in
the Subject Portfolio and the cash requirements of, and cash available for
investment in, the Subject Portfolio. JHMLICO will timely provide Wellington
Management with monthly accounting statements for the Subject Portfolio, and
such other information (including, without limitation, reports concerning the
classification of Subject Portfolio securities for purposes of Subchapter M of
the Internal Revenue Code and Treasury Regulations Section 1.817) as may be
reasonably necessary or appropriate in order for Wellington Management to
perform its responsibilities hereunder.
3. ALLOCATION OF EXPENSES.
Each party to this Agreement shall bear the costs and expenses of performing
its obligations hereunder. In this regard, the Series specifically agrees to
assume the expense of:
(a) 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;
(b) custodian fees and expenses;
(c) all taxes, including issuance and transfer taxes, and reserves for
taxes payable by the Series to federal, state or other governmental
agencies; and
(d) interest payable on the Series' borrowings.
Nothing in this Agreement shall alter the allocation of expenses and costs
agreed upon between the Series and JHMLICO in the Investment Management
Agreement or any other agreement to which they are parties.
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4. SUB-ADVISORY FEES.
For all of the services rendered with respect to the Subject Portfolio as
herein provided, JHMLICO shall pay to Wellington Management a fee (for the
payment of which the Series shall have no obligation or liability), based on
the Current Net Assets of the Subject Portfolio, as set forth in Schedule I
attached hereto and made a part hereof. Such fee shall be accrued daily and
payable monthly, as soon as practicable after the last day of each calendar
month. In the case of termination of this Agreement with respect to the
Subject Portfolio during any calendar month, the fee with respect to such
Portfolio accrued to but excluding the date of termination shall be paid
promptly following such termination. For purposes of computing the amount of
advisory fee accrued for any day, "Current Net Assets" shall mean the Subject
Portfolio's net assets as of the most recent preceding day for which the
Subject Portfolio's net assets were computed.
Notwithstanding the foregoing provisions of this Paragraph 4 and of said
Schedule I, Wellington Management's compensation hereunder for the period
prior to approval of this Agreement by the appropriate shareholders of the
Series shall not exceed the compensation that would have been paid for such
period under the Sub-Investment Management Agreement dated April 15, 1994 by
and among the Series, JHMLICO and John Hancock Advisers Inc. had such Sub-
Investment Management Agreement not been terminated.
5. PORTFOLIO TRANSACTIONS.
In connection with the investment and reinvestment of the assets of the
Subject Portfolio, Wellington Management is authorized to select the brokers
or dealers that will execute purchase and sale transactions for the Portfolio
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 said Portfolio. Wellington Management 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 Subject Portfolio and its shareholders, Wellington Management shall
have the right subject to the control of the Board of Trustees, and to the
extent authorized by the Securities Exchange Act of 1934, to follow a policy
of selecting brokers who furnish brokerage and research services to the
Subject Portfolio or to Wellington Management, and who charge a higher
commission rate to the Subject Portfolio than may result when allocating
brokerage solely on the basis of seeking the most favorable price and
execution. Wellington Management shall determine in good faith that such
higher cost was reasonable in relation to the value of the brokerage and
research services provided.
Wellington Management will not receive any tender offer solicitation fees or
similar payments in connection with the tender of investments of any
Portfolio.
14
<PAGE>
6. OWNERSHIP OF INFORMATION, RECORDS, AND CONFIDENTIALITY.
The Series shall own and control all records maintained hereunder by
Wellington Management 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 be promptly returned to the Series, free from
any claim or retention of rights by Wellington Management, provided that
(subject to the last paragraph of this Section 6) Wellington Management may
retain copies of such records. Wellington Management also agrees, upon request
of the Series, promptly to surrender such books and records or, at its
expense, copies thereof, to the Series or to make such books and records
available for audit or inspection by representatives of regulatory
authorities, or other persons reasonably designated by the Series. Wellington
Management 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 Section 31 and Rules 31a-1 and 31a-2, to the extent such
records are not maintained by the custodian, transfer agent or JHMLICO, and to
supply all information requested by any securities and insurance regulatory
authorities to determine whether all securities and insurance laws and
regulations are being complied with. Wellington Management shall supply the
Board of Trustees and officers of the Series and JHMLICO with all statistical
information regarding investments which is reasonably required by them and
reasonably available to Wellington Management.
Wellington Management 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.
7. LIABILITY; STANDARD OF CARE.
No provision of this Agreement shall be deemed to protect Wellington
Management or 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 or the Investment
Management Agreement. Nor shall any provision hereof be deemed to protect any
trustee or officer of the Series against any such liability to which he or she
might otherwise be subject by reason of any willful misfeasance, bad faith or
negligence in the performance of his or her duties or the reckless disregard
of his or her obligations and duties. Adviser shall employ only qualified
personnel to manage the Subject Portfolio; shall comply with all applicable
laws and regulations in the discharge of its duties under this Agreement;
shall (as provided in Section 2 above) comply with
15
<PAGE>
the investment objectives, policies, guidelines and restrictions of the
Subject Portfolio and with the provisions of the Series' Declaration of Trust,
By-laws, prospectus and statement of additional information or any supplements
thereto; shall manage the Subject Portfolio (subject to the receipt of, and
based upon the information contained in, periodic reports from JHMLICO or the
custodian concerning the classification of Portfolio securities for such
purposes) as a regulated investment company in accordance with subchapter M of
the Internal Revenue Code of 1986, as amended (the "Code"), and Treasury
Regulations Section 1.817-5(b); shall act at all times in the best interests
of the Series; and shall discharge its duties with the care, skill, prudence
and diligence under the circumstances then prevailing that a prudent person
acting in a like capacity and familiar with such matters would use in the
conduct of a similar enterprise. However, Wellington Management shall not be
obligated to perform any service not described in this Agreement, and shall
not be deemed by virtue of this Agreement to have made any representation or
warranty that any level of investment performance or level of investment
results will be achieved.
8. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) Duration. This Agreement shall become effective with respect to the
Subject Portfolio on May 1, 1999 and, with respect to any additional Subject
Portfolio, on the date of receipt by the Series of notice from Wellington
Management in accordance with Paragraph 1(b) hereof that it 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 Subject Portfolio and, with respect to
each additional Subject Portfolio, until two years following the date on which
such Portfolio becomes a Subject Portfolio hereunder, and shall continue in
full force and effect thereafter with respect to each Subject Portfolio only
so long as such continuance with respect to any such Portfolio is specifically
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 Subject Portfolio shall be effective to continue
this Agreement with respect to any such Portfolio notwithstanding (A) that
this 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
16
<PAGE>
"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
Subject Portfolio at any time, without payment of any penalty, by the Series
pursuant to a vote of the Trustees of the Series or a vote of a majority of
the outstanding shares of such Portfolio, which termination shall be effective
immediately upon delivery of written notice thereof to Wellington Management
and JHMLICO. This Agreement may be terminated by Wellington Management on at
least ninety days' prior written notice to the Series and JHMLICO, and may be
terminated by JHMLICO on at least ninety days' prior written notice to the
Series and Wellington Management.
(c) Automatic Termination. This Agreement shall automatically and
immediately terminate in the event of its assignment or if the Investment
Management Agreement is terminated.
9. SERVICES NOT EXCLUSIVE; USE OF WELLINGTON MANAGEMENT'S NAME AND LOGO.
The services of Wellington Management to the Series are not to be deemed
exclusive and it shall be free to render similar services to others so long as
its services hereunder are not impaired thereby. It is specifically understood
that partners, officers and employees of Wellington Management 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.
During the term of this Agreement, subject to Wellington Management's
consent (which consent shall not be unreasonably withheld and which may be
presumed unless an objection is made to a proposed use as hereinafter
provided), JHMLICO and the Series shall have the non-exclusive and non-
transferrable right to use Wellington Management's name and logo in all
materials relating to the Subject Portfolio, including all prospectuses, proxy
statements, reports to shareholders, sales literature and other written
materials prepared for distribution to shareholders of the Series or the
public. However, prior to printing or distributing of any materials which
refer to Wellington Management, JHMLICO shall consult with Wellington
Management and shall furnish to Wellington Management a copy of such
materials. Wellington Management agrees to cooperate with JHMLICO and to
review such materials promptly. JHMLICO shall not print or distribute such
materials if Wellington Management reasonably objects in writing, within five
(5) business days of its receipt of such copy (or such other time as may be
mutually agreed), to the manner in which its name and logo are to be used.
17
<PAGE>
10. AVOIDANCE OF INCONSISTENT POSITION.
In connection with the purchase and sale of portfolio securities of the
Subject Portfolio, Wellington Management and its partners, 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 Subject Portfolio with
those for other accounts managed by Wellington Management or its affiliates,
if orders are allocated in a manner deemed equitable by Wellington Management
among the accounts and at a price approximately averaged.
11. 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.
12. 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 the Series personally, but only bind the trust property of the
Series, as provided in the Series' Declaration of Trust.
13. NOTICES
Notices and other communications required or permitted under this Agreement
shall be in writing, shall be deemed to be effectively delivered when actually
received, and may be delivered by US mail (first class, postage prepaid), by
facsimile transmission, by hand or by commercial overnight delivery service,
addressed as follows:
SUB-INVESTMENT MANAGER:
Wellington Management Company, LLP
75 State Street
Boston, MA 02109
Attention: Regulatory Affairs
Fax #: 617-790-7760
JHMLICO:
John Hancock Mutual Life Insurance Company
200 Clarendon Street
P.O. Box 111
Boston, MA 02117
Attention: Raymond F. Skiba
Fax #: 617-572-4953
18
<PAGE>
Series: John Hancock Variable Series Trust I
200 Clarendon Street
P.O. Box 111
Boston, MA 02117
Attention: Raymond F. Skiba
Fax #: 617-572-4953
14. 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.
15. ASSIGNMENT.
This Agreement may not be assigned by any party, either in whole or in part.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day first set forth above.
John Hancock Variable Series Trust I
Attest:
__________________________________ By: ___________________________________
Name: Michele G. Van Leer
Title: Chairman
John Hancock Mutual Life Insurance
Company
Attest:
__________________________________
By: ___________________________________
Name: Robert R. Reitano
Title: Vice President
Wellington Management Company, LLP
Attest:
__________________________________
By: ___________________________________
Name: Robert W. Doran
Title: Chairman
19
<PAGE>
SCHEDULE I
FEES
<TABLE>
<CAPTION>
Current Net Assets Under Management Sub-Advisory Fee
- ----------------------------------- ----------------
<S> <C>
On the first $100,000,000..................... 55 basis points (0.55%) per annum
On the next $100,000,000...................... 45 basis points (0.45%) per annum
On amounts over $200,000,000.................. 40 basis points (0.40%) per annum
</TABLE>
20
<PAGE>
Appendix C
JHVLICO, JOHN HANCOCK AND WELLINGTON
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.
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. 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 Series Trust
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. Two of the Trustees of the Fund, Michele G. Van Leer and Thomas
J. Lee, are Senior Vice President and Vice President, respectively, 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:
<TABLE>
<CAPTION>
Name Principal Occupation
- ---- --------------------
<S> <C>
Samuel W. Bodman................... Chairman of the Board and Chief Executive
Officer, Cabot Corporation (chemicals)
Nelson S. Gifford.................. Principal, Fleetwing Capital Management
(financial services)
E. James Morton.................... Director, formerly Chairman of the Board and
Chief Executive Officer, John Hancock
John M. Connors, Jr................ President and Chief Executive Officer and
Director, Hill, Holliday, Connors,
Cosmopoulos, Inc. (advertising)
Stephen L. Brown................... Chairman of the Board and Chief Executive
Officer, John Hancock
I. MacAllister Booth............... Retired Chairman of the Board and Chief
Executive Officer, Polaroid Corporation
(photographic products)
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
Name Principal Occupation
- ---- --------------------
<S> <C>
Robert J. Tarr, Jr.................. Former President, Chief Executive Officer
and Chief Operations Officer, Harcourt
General, Inc. (publishing)
David F. D'Alessandro............... President and Chief Operating Officer, John
Hancock
Joan T. Bok......................... Chairman of the Board, New England Electric
System (electric utility)
Robert E. Fast...................... Senior Partner, Hale and Dorr (law firm)
Foster L. Aborn..................... Vice Chairman of the Board, John Hancock
Richard F. Syron.................... Chairman of the Board and Chief Executive
Officer, American Stock Exchange
Kathleen F. Feldstein............... President, Economic Studies, Inc. (economic
consulting)
Michael C. Hawley................... President and Chief Operating Officer, The
Gillette Company (razors, etc.)
Edward H. Linde..................... President and Chief Executive Officer,
Boston Properties, Inc. (real estate)
Wayne A. Budd....................... Group President, Bell Atlantic--New England
(telecommunications)
</TABLE>
Wellington
The following are the general partners and executive officers of Wellington:
<TABLE>
<CAPTION>
Name Principal Occupation
- ---- --------------------
<S> <C>
Kenneth L. Abrams............... Senior Vice President
Nicholas C. Adams............... Senior Vice President
Rand L. Alexander............... Senior Vice President
Deborah L. Allinson............. Senior Vice President
James H. Averill................ Senior Vice President
Karl E. Bandtel................. Senior Vice President
Marie-Claude Bernal............. Senior Vice President
William N. Booth................ Senior Vice President
Paul Braverman.................. Senior Vice President & Chief Financial Officer
Robert A. Bruno................. Senior Vice President
Maryann E. Carroll.............. Senior Vice President
Pamela Dippel................... Senior Vice President
Charles T. Freeman.............. Senior Vice President
Laurie A. Gabriel............... Senior Vice President
Frank J. Gilday................. Senior Vice President
John H. Gooch................... Senior Vice President
Nicholas P. Greville............ Senior Vice President
Paul Hamel...................... Senior Vice President
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
Name Principal Occupation
- ---- --------------------
<S> <C>
Lucius T. Hill, III................... Senior Vice President
Paul D. Kaplan........................ Senior Vice President
John C. Keogh......................... Senior Vice President
George C. Lodge, Jr................... Senior Vice President
Nancy T. Lukitsh...................... Senior Vice President
Mark T. Lynch......................... Senior Vice President
Christine S. Manfredi................. Senior Vice President
Patrick J. McCloskey.................. Senior Vice President
Earl E. McEvoy........................ Senior Vice President
Duncan M. McFarland................... President and Chief Executive Officer
Paul M. Mecray III.................... Senior Vice President
Matthew E. Megargel................... Senior Vice President
James N. Mordy........................ Senior Vice President
Diane C. Nordin....................... Senior Vice President
Stephen T. O'Brien.................... Senior Vice President
Edward P. Owens....................... Senior Vice President
Saul J. Pannell....................... Senior Vice President
Thomas L. Pappas...................... Senior Vice President
Jonathan M. Payson.................... Senior Vice President
Stephen M. Pazuk...................... Senior Vice President/Finance & Treasurer
Robert D. Rands....................... Senior Vice President
Eugene E. Record, Jr.................. Senior Vice President
James A. Rullo........................ Senior Vice President
John R. Ryan.......................... Senior Vice President
Joseph H. Schwartz.................... Senior Vice President
Theodore Shasta....................... Senior Vice President
Binkley C. Shorts..................... Senior Vice President
Trond Skramstad....................... Senior Vice President
Catherine A. Smith.................... Senior Vice President
Stephen A. Soderberg.................. Senior Vice President
Brendan J. Swords..................... Senior Vice President
Harriett Tee Taggart.................. Senior Vice President
Perry M. Traquina..................... Senior Vice President
Gene R. Tremblay...................... Senior Vice President
Michael A. Tyler...................... Senior Vice President
Mary Ann Tynan........................ Senior Vice President/Secretary
Clare Villari......................... Senior Vice President
Ernst H. von Metzsch.................. Senior Vice President
James L. Walters...................... Senior Vice President/Special Counsel
Kim Williams.......................... Senior Vice President
Francis V. Wisneski, Jr............... Senior Vice President
</TABLE>
23
<PAGE>
Exhibit 1.
VOTING INSTRUCTIONS FORM
JOHN HANCOCK VARIABLE SERIES TRUST I
PLEASE SIGN, DATE AND RETURN ALL VOTING INSTRUCTION FORMS RECEIVED IN THE
ENCLOSED POSTAGE-PAID ENVELOPE
THESE VOTING INSTRUCTIONS ARE SOLICITED BY THE TRUSTEES FOR THE
SPECIAL MEETING OF SHAREHOLDERS OF THE SMALL/MID CAP GROWTH FUND -
AUGUST 20, 1999 - 10:00 A.M. EASTERN TIME, 197 CLARENDON STREET, BOSTON,
MASSACHUSETTS
A Special Meeting of Shareholders of the Small/Mid Cap Growth Fund of the
John Hancock Variable Series Trust I will be held at the office of John Hancock
Variable Life Insurance Company, 197 Clarendon Street, Boston, Massachusetts,
(telephone 1-800-732-5543) at 10:00 a.m. Eastern Time, on Friday, August 20,
1999. By signing and dating below, you instruct the persons named below to, and
they will, vote the proposal below as marked or, if not marked, to vote "FOR"
the proposal below, 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 this form in the
enclosed envelope at once.
Thomas J. Lee and Michele G. Van Leer, and each of them, with power of
substitution in each, are hereby instructed to vote the shares held in the Fund
attributable to the undersigned at the Special Meeting of Shareholders and at
any adjournment thereof.
Please vote by filling in the appropriate box below.
Proposal 1. Approval of a new sub-investment For Against Abstain
management agreement among the Series Trust,
John Hancock Mutual Life Insurance Company, [_] [_] [_]
and Wellington Management Company, LLP,
relating to the Small/Mid Cap Growth Fund.
Date:_____________________________________
Please be sure to sign and date this proxy.
__________________________________________
__________________________________________
Signature(s) of Shareholder(s)
