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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:
[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 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:
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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.
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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
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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 my 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.
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,
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(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.
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.
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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.
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
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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.
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 March 31, 1999 were Robert W. Doran, 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 the principal executive officer and each of Wellington's
partners and principals, as it relates to their duties at Wellington, is 75
State Street, Boston, Massachusetts 02109.
Wellington manages [ ] other mutual funds which have an investment
objective similar to that of the Small/Mid Cap Growth Fund. On an annual basis,
those funds pay the following investment management fees to Wellington:
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<TABLE>
<CAPTION>
Fee Rate as a Percentage of
Name of Fund Net Assets Net Assets as of [date]
- ------------------------------ ------------------------------- -------------------------------
<S> <C> <C>
[list and data to be provided]
</TABLE>
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 [ ] 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 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) [ ] [ ]
JHVLICO (Including its Accounts) [ ] [ ]
</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
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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
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desire to retain Wellington Management to render investment advisory services
hereunder for any other Portfolio, they shall so notify Wellington Management in
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.
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(c) Incumbency Certificates. Wellington Management shall furnish to
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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
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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
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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 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,
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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
(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.
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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.
6
<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 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
7
<PAGE>
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 "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.
8
<PAGE>
(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.
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,
9
<PAGE>
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
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.
10
<PAGE>
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.
ATTEST: JOHN HANCOCK VARIABLE SERIES TRUST I
By:_______________________________
Name: Michele G. Van Leer
Title: Chairman
ATTEST: JOHN HANCOCK MUTUAL LIFE INSURANCE
COMPANY
By:_______________________________
Name: Robert R. Reitano
Title: Vice President
ATTEST: WELLINGTON MANAGEMENT COMPANY, LLP
By:_______________________________
Name: Robert W. Doran
Title: Chairman
11
<PAGE>
SCHEDULE I
FEES
----
Current Net Assets Under Management Sub-Advisory Fee
----------------------------------- ----------------
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
<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:
NAME PRINCIPAL OCCUPATION
- ---- --------------------
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
<PAGE>
I. MacAllister Booth Retired Chairman of the Board and Chief Executive
Officer, Polaroid Corporation (photographic
products)
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)
WELLINGTON
The following are the general partners and executive officers of Wellington:
Name Principal Occupation
- ---- --------------------
Kenneth L. Abrams Senior Vice President
Nicholas C. Adams Senior Vice President
Rand L. Alexander Senior Vice President
Deborah L. Allinson Senior Vice President
<PAGE>
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
Robert W. Doran Chairman
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
William C.S. Hicks Senior Vice President
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
<PAGE>
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
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
<PAGE>
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 Senior Vice President
<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.
Date:_____________________________________
Please be sure to sign and date this proxy.
__________________________________________
__________________________________________
Signature(s) of Shareholder(s)
A Special Meeting of Shareholders of the Small/Mid Cap Growth Fund (the
"Fund") of the John Hancock Variable Series Trust I (the "Series Trust") 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.
on Friday, August 20, 1999 for the following purpose:
Proposal 1. Approval of a new sub-investment For Against Abstain
management agreement among the Series Trust,
John Hancock, and Wellington Management Company, [_] [_] [_]
LLP, relating to the Small/Mid Cap Growth Fund.
