<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14A-
6(E)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to 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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<PAGE>
John Hancock Variable Series Trust I
Notice of Special Meeting of Shareholders
A special meeting of shareholders of the John Hancock Variable Series Trust
I (the "Fund") will take place at 11:00 A.M., on Friday, April 23, 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 elect six Trustees to the Board of
Trustees.
2. A proposal to change the status of the
investment objectives and policies of the
Growth & Income, Large Cap Growth, Real
Estate Equity, and Sovereign Bond Portfolios
so that a shareholder vote will generally not be
required to make future changes in such
investment objectives and policies.
3. A proposal to permit the Managed, Growth & Income, Large Cap
Growth, Real Estate Equity, Sovereign Bond, and Money Market
Portfolios to engage in securities lending.
4. A proposal to change the investment restrictions of the
Diversified Mid Cap Growth and Short-Term Bond Portfolios with
respect to illiquid securities.
5. A proposal to (i) change the methodology for allocating certain
of the non-advisory expenses of the Trust among the Trust
portfolios and (ii) reduce the "expense cap" in each of the
Investment Management Agreements between John Hancook and the
Trust.
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In addition, any other matters relating the conduct of the meeting may also
be transacted at the meeting.
An owner of a variable life insurance policy or a variable annuity contract will
be entitled to vote only if he/she had policy assets invested in the Fund at the
close of business on February 26, 1999. John Hancock is soliciting votes from
owners invested in the following Portfolios with respect to matters affecting
those Portfolios:
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<TABLE>
<CAPTION>
Proposals
---------------------------
<S> <C> <C> <C> <C> <C>
Portfolio 1. 2. 3. 4. 5.
- ------------------------------------------------- ------------- ------------- ------------- ------------- -------------
Managed X X X
- ------------------------------------------------- ------------- ------------- ------------- ------------- -------------
Growth & Income X X X X
- ------------------------------------------------- ------------- ------------- ------------- ------------- -------------
Equity Index X X
- ------------------------------------------------- ------------- ------------- ------------- ------------- -------------
Large Cap Value X X
- ------------------------------------------------- ------------- ------------- ------------- ------------- -------------
Large Cap Growth X X X X
- ------------------------------------------------- ------------- ------------- ------------- ------------- -------------
Mid Cap Value X X
- ------------------------------------------------- ------------- ------------- ------------- ------------- -------------
Mid Cap Growth X X
- ------------------------------------------------- ------------- ------------- ------------- ------------- -------------
Diversified Mid Cap Growth X X X
- ------------------------------------------------- ------------- ------------- ------------- ------------- -------------
Real Estate Equity X X X X
- ------------------------------------------------- ------------- ------------- ------------- ------------- -------------
Small/Mid Cap CORE X X
- ------------------------------------------------- ------------- ------------- ------------- ------------- -------------
Small Cap Value X X
- ------------------------------------------------- ------------- ------------- ------------- ------------- -------------
Small Cap Growth X X
- ------------------------------------------------- ------------- ------------- ------------- ------------- -------------
Global Equity X X
- ------------------------------------------------- ------------- ------------- ------------- ------------- -------------
International Balanced X X
- ------------------------------------------------- ------------- ------------- ------------- ------------- -------------
International Equity Index X X
- ------------------------------------------------- ------------- ------------- ------------- ------------- -------------
International Opportunities X X
- ------------------------------------------------- ------------- ------------- ------------- ------------- -------------
Emerging Market Equities X X
- ------------------------------------------------- ------------- ------------- ------------- ------------- -------------
Short-Term Bond X X X
- ------------------------------------------------- ------------- ------------- ------------- ------------- -------------
Bond Index X X
- ------------------------------------------------- ------------- ------------- ------------- ------------- -------------
Sovereign Bond X X X X
- ------------------------------------------------- ------------- ------------- ------------- ------------- -------------
Strategic Bond X X
- ------------------------------------------------- ------------- ------------- ------------- ------------- -------------
High Yield Bond X X
- ------------------------------------------------- ------------- ------------- ------------- ------------- -------------
Money Market X X X
- ------------------------------------------------- ------------- ------------- ------------- ------------- -------------
</TABLE>
Thomas J. Lee
Vice Chairman
Board of Trustees
Boston, Massachusetts
March 19, 1999
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We have enclosed a voting instruction form for each Portfolio you are using.
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Please complete and return all enclosed voting instruction form(s), even if you
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expect to be present at the meeting. You may still vote in person if you attend
the meeting.
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<PAGE>
PROXY STATEMENT
General
The management of the Fund is soliciting voting instructions from the
shareholders of all of its Portfolios for use at the special meeting on April
23, 1999. The solicitation includes all shares of the Fund attributable to
owners' assets in John Hancock Variable Life Accounts U, V, and S; John Hancock
Variable Annuity Accounts U, V, and I; and John Hancock Mutual Variable Life
Insurance Account UV (the "Accounts"). 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
Fund first mailed solicitation materials to owners on March 19, 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
Fund at the address or 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 Series Trust's shares, JHVLICO and John Hancock will vote all such shares in
accordance with the voting instructions given by the owners of variable life
insurance policies and variable annuity contracts (collectively referred to as
"contracts").
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 Fund 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
3
<PAGE>
the proposal. Accordingly, an instruction to abstain from voting on any proposal
has the same practical effect as an instruction to vote against that proposal.
Any person giving voting instructions may revoke them at any time prior to
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. JHVLICO and John Hancock will vote the Portfolio shares in
accordance with all properly executed and unrevoked voting instructions received
in time for the special meeting.
JHVLICO and John Hancock will vote the portfolio shares held in their
respective Accounts on a Portfolio-by-Portfolio basis. Portfolio shares that are
attributable to contracts will be voted by JHVLICO and John Hancock in
accordance with the voting instructions received from the owners participating
in that Portfolio. Portfolio shares which are not attributable to contracts or
for which no timely voting instructions are received will be voted by JHVLICO or
John Hancock in the same proportion as the voting instructions which are
received from all owners invested in the Portfolio through that Account.
Portfolio shares which are not attributable to contracts include shares
purchased with contributions made as "seed money" to the Portfolio by JHVLICO or
John Hancock.
Please refer to Appendix A to this proxy statement if you would like
additional information about the number of Portfolio shares attributable to
JHVLICO or John Hancock (rather than to owners).
Majority Voting
For the shareholders to approve any of the proposal in this proxy
statement, the proposal must receive the favorable vote of a majority of the
outstanding shares of that Portfolio. 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 actually present or
represented.
4
<PAGE>
PROPOSAL 1
ELECTION OF BOARD OF TRUSTEES
The persons named in the accompanying voting instruction form intend to
vote, at the special meeting, to elect the persons named below as members of the
Board of Trustees. If elected, these persons will serve until their successors
are elected and qualified. The Trustees have served as such since the dates
indicated below. Three of the six Trustees - William H. Dykstra, Elizabeth G.
Cook, and Thomas J. Lee - were last elected by a majority of the owners of all
then-current Fund portfolios in April of 1995. Since that date, the Board of
Trustees has recommended three new Trustees -- Michele G. Van Leer, Diane C.
Kessler, and Robert Verdonck -- to fill vacancies on the Board of Trustees
occasioned by the resignations of three Trustees. With a proper instruction to
the persons named on the voting instructions form, an owner may withhold his/her
vote for one or more of the Trustees running for election.
Election of each Trustee to the Board of Trustees will require the vote of
more than 50% of the outstanding shares of all the Portfolios represented at
this special meeting.
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The Board of Trustees of the Fund recommends that owners give
instructions to vote FOR the election of the below-named
---
Trustees.
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Information About the Trustees
The following table sets forth the position of each Trustee and his or her
principal occupation or employment during the last five years.
Name and Position First Became
With the Board Principal Occupation a Member
-------------- -------------------- --------
MICHELE G. VAN LEER Senior Vice President, Product September 16, 1998
Chairman and and Market Management, John
Member Hancock Mutual Life Insurance
Company. Director, John Hancock
Variable Life Insurance Company.
Age 40.
THOMAS J. LEE Vice President, Life and Annuity February 8, 1994
Vice Chairman Services, John Hancock Mutual Life
and Member Insurance Company. Director, John
Hancock Variable Life Insurance
Company. Age 45.
5
<PAGE>
WILLIAM H. DYKSTRA Certified Public Accountant. May 17, 1979
Member Director and Member of the Executive
Committee, East Boston Savings Bank.
Director, Arrow Mutual Liability Company.
Director, Chase Corporation. Age 70.
ELIZABETH G. COOK Former Executive Director, The April 13, 1993
Member Advertising Club of Greater Boston.
Age 62
DIANE C. KESSLER Executive Director, Massachusetts April 9, 1999
Member Council of Churches. Age 50.
ROBERT VERDONCK President and CEO, East Boston April 9, 1999
Member Savings Bank. Age 53.
Portfolio shares attributable to Trustees owning variable life insurance
policies and variable annuity contracts did not, in the aggregate, constitute
more than 1% of the outstanding shares of any Portfolio as of February 26, 1999.
Four meetings of the Board of Trustees were held during the last fiscal
year. Mr. Dykstra, Mr. Lee, and Ms. Cook attend all four meetings. Two audit
committee meeting and two nominating committee meetings were held during the
last fiscal year. All members of those committees attended those meetings.
Ms. Van Leer and Mr. Lee are "interested persons" as defined in the
Investment Company Act of 1940 by reason of their relationship with John
Hancock.
John Hancock and JHVLICO compensate the officers of the Series Trust.
Trustees affiliated with John Hancock (Ms. Van Leer and Mr. Lee) serve without
compensation. All other Trustees are compensated by the Series Trust. For the
last fiscal year, the unaffiliated Trustees receive the following compensation:
<TABLE>
<CAPTION>
- -------------------------------- ------------------ --------------- --------------- -----------------
Pension or Total
Retirement Compensation
Benefits Estimated from Registrant
Aggregate Accrued as Annual and Fund
Compensation Part of Fund Benefits Upon Complex Paid to
Name of Trustee from Registrant Expenses Retirement Directors
- -------------------------------- ------------------ --------------- --------------- -----------------
<S> <C> <C> <C> <C>
WILLIAM DYKSTRA, Trustee $ N/A N/A $
- -------------------------------- ------------------ --------------- --------------- -----------------
ELIZABETH G. COOK, Trustee $ N/A N/A $
- -------------------------------- ------------------ --------------- --------------- -----------------
</TABLE>
6
<PAGE>
PROPOSAL 2
APPROVAL TO MAKE NON-FUNDAMENTAL THE
INVESTMENT OBJECTIVES AND POLICIES OF
THE GROWTH & INCOME, LARGE CAP GROWTH,
REAL ESTATE EQUITY, AND SOVEREIGN BOND PORTFOLIOS
The Trustees have unanimously approved a proposal to make "non-fundamental"
the investment objectives and certain investment policies of the Growth &
Income, Large Cap Growth, Real Estate Equity, and Sovereign Bond Portfolios.
This means that future changes in these objectives and policies could be made
without the approval of owners who participate in these four Portfolios.
For a complete description of the current investment objective and policies
of each of these Portfolios, please consult the Fund's prospectus under the
caption "Investment Objectives and Policies." (If you wish to obtain a copy of
the Fund's current prospectus, free of charge, please direct your request to the
Fund at the address or telephone number given in the Notice of Special Meeting
at the beginning of this proxy statement.)
Neither John Hancock or the sub-investment managers of any of these
portfolios is currently planning any such change. However, if such a change were
made, shareholders would not have a legal right to approve or disapprove of it.
Reasons for Proposed Change
The investment objectives and policies for these Portfolios are currently
classified as "fundamental." A fundamental investment objective or policy may be
changed only by a vote of the Portfolio's owners. Under the Investment Company
Act of 1940, however, a Portfolio's investment objective and policies are not
required to be classified as fundamental.
The Trustees have approved the reclassification from fundamental to
non-fundamental of the investment objectives and policies of these Portfolios to
provide the Portfolios' sub-investment managers with enhanced investment
flexibility to respond to market, industry, or regulatory changes. A portfolio's
non-fundamental investment objective or policy may be changed at any time
without the approval of the Portfolio's owners.
In former years, it was common practice for a mutual fund's investment
objectives and policies to be made "fundamental" even though they were not
required to be. This practice has grown increasingly inconvenient, however, as
the pace of innovation in the investment markets has accelerated. Accordingly,
the trend in the mutual fund industry has increasingly been to keep to a minimum
7
<PAGE>
the number of investment objectives and policies that are designed as
fundamental. Indeed, that is the approach that has been followed with the Series
Trust's own more recently-created Portfolios.
Furthermore, as new Portfolios have been added to the Fund in recent years
it has been desirable to adjust the investment objectives and policies of some
of the older Portfolios in an effort to preserve the best overall "mix" of
investment options. Moreover, when a change is made that requires owner
approval, the Fund normally pays the cost of seeking such approval. Therefore,
to the extent that this Proposal 2 obviates the need for some such future
approvals, owners will reap the benefit of the cost savings.
Last year, a proposal identical to this Proposal 2 was approved by owners
participating in the Series Trust's Managed, Diversified Mid Cap Growth
(formerly, Special Opportunities), Short-Term Bond (formerly, Short-Term U.S.
Government), and International Equity Index (formerly, International Equities)
Portfolios.
Trustees' Recommendation
The Board of Trustees has determined that the proposal to make
non-fundamental the investment objectives and policies of the Growth & Income,
Large Cap Growth, Real Estate Equity, and Sovereign Bond Portfolios is in the
best interests of the Fund and the owners of those Portfolios.
--------------------------------------------------------------
The Board of Trustees of the Fund recommends that owners of
the Growth & Income, Large Cap Growth, Real Estate Equity, and
Sovereign Bond Portfolios give instructions to vote FOR the
---
approval of this Proposal 2.
--------------------------------------------------------------
8
<PAGE>
PROPOSAL 3
APPROVAL TO PERMIT THE MANAGED, GROWTH & INCOME,
LARGE CAP GROWTH, REAL ESTATE EQUITY,
SOVEREIGN BOND, AND MONEY MARKET PORTFOLIOS
TO ENGAGE IN SECURITIES LENDING.
The current fundamental investment restrictions of the Fund contain a
general prohibition against the making of loans by any Portfolio. All of the
Portfolios other than the six listed above, however, are subject to an exception
from that prohibition that permits them to lend their portfolio securities, in
an amount not to exceed 33 1/3% of the respective Portfolio's total assets. The
purpose of this Proposal 3 is to extend that exception to these six Portfolios
as well.
Reasons for Proposed Change
Lending securities is a common portfolio management practice whose purpose
is to earn additional income from the ownership of the securities, by lending
them for temporary purposes to others. Such loans are used, for example, by
brokers in order to cover settlement failures in securities truncations. Any
such loans will be collateralized in a way that satisfies the relevant sub-
investment manager that the risk to the Portfolio is minimal. This change is
reflected in revised fundamental investment restriction (2), as follows (deleted
language in brackets; added language underscored):
"No Portfolio will:
***
(2) Make loans, other than through the acquisition of obligations in which
the Portfolio may invest consistent with its objective and investment
policies, except that [the Equity Index, Large Cap Value, Mid Cap Value,
Mid Cap Growth, Diversified Mid Cap Growth, Small/Mid Cap CORE, Small Cap
Value, Small Cap Growth, Global Equity, International Balanced,
International Equity Index, International Opportunities, Emerging Markets
Equity, Short-Term Bond, Bond Index, Strategic Bond, and High Yield Bond
Portfolios] each Portfolio may lend portfolio securities not having a value
---- ---------
in excess of 33 1/3% of the Portfolio's total assets."
A complete list of the Fund's investment restrictions is contained in the
Fund's current Statement of Additional Information ("SAI"). (If you wish to
obtain a copy of the Fund's current SAI, free of charge, please direct your
request to the Fund at the address or telephone number given in the Notice of
Special Meeting at the beginning of this proxy statement.)
Trustees' Recommendation
The Board of Trustees has determined that the proposal to extend the ability of
the Managed, Growth and Income, Large Cap Growth, Real Estate, Sovereign Bond,
and Money Market Portfolios to make loans of their portfolio securities on the
same basis as the other Portfolios is in the best interests of the Fund and the
owners of those named Portfolios.
The Board of Trustees recommends that the owners of the Managed, Growth &
Income, Large Cap Growth, Real Estate Equity, Sovereign Bond, and Money
Market Portfolios give instructions to vote FOR approval of this Proposal
---
3.
<PAGE>
PROPOSAL 4
APPROVAL OF CHANGES IN THE INVESTMENT RESTRICTIONS
OF THE DIVERSIFIED MID CAP GROWTH
AND SHORT-TERM BOND PORTFOLIOS
At a meeting of the Fund's Board of Trustees held on March 2, 1999, the
Trustees unanimously approved a proposal to eliminate a current restriction that
prohibits the Diversified Mid Cap Growth and Short-Term Bond Portfolios, absent
shareholders approval, from investing in repurchase agreements maturing in more
than seven days, other restricted securities, or other securities that are not
directly marketable if the total of all such securities owned by the Portfolio
in question would exceed 10% of its assets.
The restriction, however, is a "fundamental" investment restriction. Its
elimination, therefore, requires the approval of the Portfolios' shareholders.
This Proposal 4 seeks that approval.
Reasons for the Proposal
This Proposal 4 would eliminate a current restriction that prohibits the
Diversified Mid Cap Growth and Short-Term Bond Portfolios, absent owner
approval, from investing in repurchase agreements maturing in more than seven
days, other restricted securities, or other securities that are not directly
marketable if the total of all such securities owned by the Portfolio in
question would exceed 10% of its assets. This restriction was put in place at a
time when the SEC imposed a maximum of 10% on fund ownership of illiquid
securities. Now the SEC-imposed limit is 15%. In order to be able to adjust
more easily to such administrative changes, and to provide enhanced flexibility,
relatively few mutual funds now make their policy on illiquid securities
"fundamental." If this Proposal 4 is approved, these Portfolios, similarly,
would have no "fundamental" policy about illiquid investments and therefore
could change their practices in this regard from time to time without a vote of
owners (or any expense or delay that such a vote might involve).
Nevertheless, in conformity with the current SEC position mentioned above,
each Portfolio intends for the foreseeable future to observe a 15% limit on its
illiquid securities, as a non-fundamental policy. Given the relative stability
of owners' allocations to the Fund's Portfolios, John Hancock does not believe
that increasing the maximum amount of illiquid securities from 10% to 15% is
likely to have any adverse impact on either Portfolio's ability to meet
redemption request on a timely basis. Moreover, increasing the limit could in
at least some, perhaps unlikely, circumstances reduce transaction costs that
otherwise might arise from the need to dispose of illiquid securities.
Trustees' Recommendation
The Board of Trustees has determined that the proposed changes to the
investment restrictions are in the best interests of the Fund and the owners of
Portfolios of the Diversified Mid Cap Growth and Short-Term Bond.
The Board of Trustees recommends that the owners of the Diversified Mid Cap
Growth and Short-Term Bond Portfolios give instructions to vote FOR
---
approval of this Proposal 4.
<PAGE>
PROPOSAL 5
APPROVAL OF CHANGES IN METHODOLOGY FOR ALLOCATING
EXPENSES AND REDUCTION OF EXPENSE CAP
At a meeting of the Fund's Board of Trustees held on March 8, 1999, the
Trustees unanimously approved, and voted to recommend that the owners approve, a
proposal to
(i) change the methodology for allocating certain of the non-advisory
expenses of the Fund among the Fund Portfolios as set forth below
and
(ii) reduce the level above which John Hancock will reimburse the
portfolios for annual non-advisory expenses (the "expense cap")
in each of the five current investment management agreements
("Management Agreements") between John Hancock and the Fund.
The following Management Agreements were last approved by the owners on
April 14, 1997:
(1) the Management Agreement, dated April 12, 1988, relating to the Growth
& Income, Sovereign Bond, Money Market, Large Cap Growth, and Managed
Portfolios;
(2) the Management Agreement, dated April 12, 1988, relating to the Real
Estate Equity Portfolios;
(3) the Management Agreement, dated April 15, 1994, relating to the Short-
Term Bond and Diversified Mid Cap Growth Portfolios; and
(4) the Management Agreement, dated April 15, 1996, relating to the Equity
Index, Large Cap Value, Mid Cap Growth, Mid Cap Value, Small Cap
Growth, Small Cap Value, Strategic Bond, International Opportunities,
and International Balanced Portfolios.
This approval was obtained because of a reallocation to the Fund of certain
expenses relating to the administration and operation of the Fund.
The Management Agreement, dated April 12, 1988, relating to the
International Equity Index Portfolio was last approved by owners on April 27,
1998. This approval was obtained to change the Portfolio's investment program.
The Management Agreement, dated April 14, 1998, relating to the Small/Mid
Cap CORE, High Yield Bond, Bond Index, Global Equity, and
<PAGE>
Emerging Markets Equity Portfolios was last approved by owners in May,1998. This
was the initial approval of that Management Agreement.
A copy of the form of Management Agreement is included as Appendix B to
this proxy statement. A table of fees paid to John Hancock under the current
Management Agreement is included as Appendix C to this statement. Additional
information concerning John Hancock and the Management Agreements is set forth
in Appendix D to this proxy statement.
REALLOCATION OF NON-ADVISORY FUND EXPENSES
Section 3 of all of the above-cited Management Agreements pertains
specifically to the allocation of expenses incurred in connection with those
Management Agreements. The expenses allocated to the Fund include, among other
things, the following:
(1) the charges and expenses of any custodian or depository appointed by
the Fund (i) for the safekeeping of its cash, portfolio securities and
other property, (ii) for providing accounting and valuation services,
and (iii) for monitoring compliance with federal laws and regulations;
(2) the charges and expenses of the Fund's independent auditors;
(3) the cost of the Fund's fidelity bond;
(4) the expenses in preparing, printing and distributing voting instruction
information statements (commonly referred to as "proxy statements") and
in tabulating proxy votes;
(5) the expenses in printing and distributing annual and semi-annual
reports of the Fund to owners;
(6) the fees and expenses involved in registering and maintaining
registrations of the Fund and its shares with the SEC (i.e., the
printing and filing, but not printing in bulk, of the Fund
prospectuses); and
(7) the fees and costs for legal services provided to or on behalf of the
Fund by John Hancock lawyers and outside counsel incurred in the
conduct of the business and affairs of the Fund (including the
development of such things as prospectuses, proxy statements, Fund
resolutions and Fund procedures).
The above items constitute the bulk of non-advisory expenses allocable to the
Fund. This Proposal 5 relates to how these non-advisory Fund expenses are
allocated by the Fund among the various Fund Portfolios.
---------------------------------------------
<PAGE>
The allocation of Fund expenses must be made in accordance with the terms
of the Fund's Declaration of Trust. Subsection 3.3(a)(2) of the Declaration of
Trust contains the following relevant statements: "The assets belonging to each
particular Portfolio shall be charged with the liabilities of the [Fund] with
respect to that Portfolio and all expenses, costs, charges, and reserves
attributable to that Portfolio. Any general liabilities, expenses, costs,
charges, or reserves of the [Fund] which are not readily identifiable as
-------------------------------------
belonging to any particular Portfolio shall be allocated by the Trustees to any
- -------------------------------------
one or more of the Portfolios established by the Trustees." In short, if an
expense is not "readily identifiable" to a particular Portfolio, the Trustees
are free to allocate that expense among the Portfolios on any basis that, in
their reasonable judgement, appears fair and equitable.
Appendix E to this proxy statement is a listing of the various non-advisory
Fund expenses identified above, in some cases further subdivided into
constituent parts. Appendix E shows how each of these expense items (or sub-
items) is currently allocated to the Portfolios and how those expenses would be
allocated in the future, if this proposal is approved. In most cases, as shown
in Appendix E, the allocation among the Portfolios would be made on an asset-
weighted basis rather than on the current basis (which is generally an equal
-----
allocation across all affected Portfolios). John Hancock acknowledges that, in
order to fully implement this proposal, it will be necessary to renegotiate the
compensation arrangements with State Street Bank and Trust Company under the
Custodian Agreement and the Sub-Administration Agreement to reflect the proposed
expense allocation methodology.
REDUCTION IN EXPENSE CAP
Under the Management Agreements, John Hancock currently reimburses each
Portfolio for annual non-advisory expenses (excluding certain expenses such as
brokerage and taxes) that exceed 0.25% of the Portfolio's average daily net
assets. John Hancock has proposed that the Fund amend the Management Agreements
to reduce this "expense cap" to 0.10% of a Portfolio's average daily net assets.
Ordinarily, a reduction in the "expense cap" would be expected to result in an
increase in the amount of John Hancock's reimbursement to the Fund. However,
because of the proposed reallocation of Trust expenses, the amount of
John Hancock's reimbursement to the Fund would actually be expected to decrease
if this proposal is adopted. In 1998, John Hancock's expense reimbursement to
the Fund totaled about $1.3 million for all Portfolios. Appendix F to this proxy
statement shows the expense reimbursement for each Portfolio in 1998 and an
estimate of what that expense reimbursement would have been had this proposal
for reallocation of Fund expenses and reduction in the expense cap been in
effect in 1998.
<PAGE>
REASONS FOR THIS PROPOSAL
Fairness of Allocation Methodology
----------------------------------
The rationale for the expense reallocation depends upon the type of expense
involved. For those expenses (such as printing and distribution of annual
reports and proxy statements for multiple Portfolios) that are driven by the
number of owners receiving the document in question, the Trustees have
determined that it is reasonable to allocate more of the expense to the larger
Portfolios that have more owners. Although asset size is not an exact proxy for
the number of owners, there is clearly a rough correlation. For those expenses
(such as domestic custodianship fees and general legal costs) that are of
general utility to the Fund as a whole, the Trustees have determined that it is
reasonable to expect each owner, regardless of Portfolio, to bear a roughly
equal share of the expense burden. This is accomplished more nearly by an asset-
weighted allocation than by the current methodology.
For those expenses that are clearly identifiable to a specific Portfolio
(i.e., transaction charges and proxy statements for a single Portfolio), the
only change in allocation methodology is with respect to legal costs for proxy
statements. Also, no change is recommended for foreign custodianship fees
because such fees are considerably higher than domestic custodianship fees and
vary widely from country to country. The Trustees have determined that it would
be inappropriate to allocate such fees to any Portfolio that did not invest in
foreign securities or to allocate such fees equally across global and
international Portfolios that differ widely in their country selections.
Benefits to Owners
------------------
Although the five largest Portfolios would incur relatively modest
increases in expenses under Proposal 5 (in each case less than 0.03%), there
would be significant decreases in the expense ratio for each of the remaining 18
Portfolios (as shown in Appendix G to this proxy statement). Such expense
reductions would allow producers and agents who sell Fund-supported variable
life insurance and variable annuity products to use higher net investment return
assumptions in product illustrations. John Hancock is convinced that the
enhanced product performance shown in those illustrations will significantly
improve the competitive position of the Fund-supported products, thereby
increasing sales of the products and generating more rapid growth in Fund
assets. More rapid growth in Fund assets will benefit the various Portfolios
because breakpoints at which management fees decrease will be reached more
rapidly. Moreover, Proposal 5 would result in less variance among the
Portfolios' expense ratios. This would benefit all owners in that it would
significantly reduce the expense cost barriers to reallocation of funds to most
of the Portfolios (while increasing that barrier only very modestly with respect
to only five Portfolios).
<PAGE>
TRUSTEES' RECOMMENDATION
The Board of Trustees has determined that the proposal to change the
methodology for allocating expenses and reduce the expense cap is in the best
interests of the Fund and its owners.
--------------------------------------------------------------------
THE BOARD OF TRUSTEES OF THE FUND RECOMMENDS THAT OWNERS OF GIVE
INSTRUCTIONS TO VOTE FOR THE APPROVAL OF THIS PROPOSAL 5.
---
--------------------------------------------------------------------
<PAGE>
APPENDIX A
RECORD DATE AND VOTING SHARES
As of the close of business on February 26, 1999 ("the record date"), the
following shares were outstanding:
Name of Number
Portfolio of shares
--------- ---------
- ---------------------------------------------------- ------------------------
Managed
- ---------------------------------------------------- ------------------------
Growth & Income
- ---------------------------------------------------- ------------------------
Equity Index
- ---------------------------------------------------- ------------------------
Large Cap Value
- ---------------------------------------------------- ------------------------
Large Cap Growth
- ---------------------------------------------------- ------------------------
Mid Cap Value
- ---------------------------------------------------- ------------------------
Mid Cap Growth
- ---------------------------------------------------- ------------------------
Diversified Mid Cap Growth
- ---------------------------------------------------- ------------------------
Real Estate Equity
- ---------------------------------------------------- ------------------------
Small/Mid Cap CORE
- ---------------------------------------------------- ------------------------
Small Cap Value
- ---------------------------------------------------- ------------------------
Small Cap Growth
- ---------------------------------------------------- ------------------------
Global Equity
- ---------------------------------------------------- ------------------------
International Equity Index
- ---------------------------------------------------- ------------------------
International Balanced
- ---------------------------------------------------- ------------------------
International Opportunities
- ---------------------------------------------------- ------------------------
Emerging Market Equities
- ---------------------------------------------------- ------------------------
Short-Term Bond
- ---------------------------------------------------- ------------------------
Bond Index
- ---------------------------------------------------- ------------------------
Sovereign Bond
- ---------------------------------------------------- ------------------------
Strategic Bond
- ---------------------------------------------------- ------------------------
High Yield Bond
- ---------------------------------------------------- ------------------------
Money Market
- ---------------------------------------------------- ------------------------
Each Fund share is entitled to one vote, and fractional votes will be
counted.
The number of Fund shares attributable to each owner of a variable life
insurance policy ("policy") is determined by dividing, as of the record date of
the special meeting, the policy's cash (or account) value (less any outstanding
indebtedness) in the corresponding subaccount of the applicable Account by the
net asset value of one share in the corresponding Fund Portfolio in which the
assets of the subaccount are invested.
The number of Fund shares attributable to each owner of a variable annuity
contract ("contract") is determined by dividing, as of the record date of
<PAGE>
the special meeting, the value of the accumulation shares under a contract (or
for each contract under which annuity payments have commenced, the contract
reserves) in the corresponding subaccount of the applicable Account by the net
asset value of one share in the corresponding Fund portfolio in which the assets
of he subaccount are invested.
As of the close of business on February 26, 1999, JHVLICO and John Hancock
had in the aggregate the following numbers of shares representing their
contributions and other amounts in the Accounts that are in excess of the
amounts attributable to policies and contracts:
Percentage of
Name of Number Total Shares
Portfolio of Shares Outstanding
--------- --------- -----------
- ---------------------------------------------- ----------------- -------------
Managed
- ---------------------------------------------- ----------------- -------------
Growth & Income
- ---------------------------------------------- ----------------- -------------
Equity Index
- ---------------------------------------------- ----------------- -------------
Large Cap Value
- ---------------------------------------------- ----------------- -------------
Large Cap Growth
- ---------------------------------------------- ----------------- -------------
Mid Cap Value
- ---------------------------------------------- ----------------- -------------
Mid Cap Growth
- ---------------------------------------------- ----------------- -------------
Diversified Mid Cap Growth
- ---------------------------------------------- ----------------- -------------
Real Estate Equity
- ---------------------------------------------- ----------------- -------------
Small/Mid Cap CORE
- ---------------------------------------------- ----------------- -------------
Small Cap Value
- ---------------------------------------------- ----------------- -------------
Small Cap Growth
- ---------------------------------------------- ----------------- -------------
Global Equity
- ---------------------------------------------- ----------------- -------------
International Balanced
- ---------------------------------------------- ----------------- -------------
International Equity Index
- ---------------------------------------------- ----------------- -------------
International Opportunities
- ---------------------------------------------- ----------------- -------------
Emerging Market Equities
- ---------------------------------------------- ----------------- -------------
Short-Term Bond
- ---------------------------------------------- ----------------- -------------
Bond Index
- ---------------------------------------------- ----------------- -------------
Sovereign Bond
- ---------------------------------------------- ----------------- -------------
Strategic Bond
- ---------------------------------------------- ----------------- -------------
High Yield Bond
- ---------------------------------------------- ----------------- -------------
Money Market
- ---------------------------------------------- ----------------- -------------
<PAGE>
APPENDIX B
FORM OF MANAGEMENT AGREEMENT
AGREEMENT made as of the ___ day of ____, 19__ by and between John Hancock
Variable Series Trust I, a Massachusetts business trust having a place of
business at John Hancock Place, Boston, Massachusetts 02117 (hereinafter called
the "Series") and John Hancock Mutual Life Insurance Company, a Massachusetts
corporation having its principal place of business at John Hancock Place,
Boston, Massachusetts 02117 (hereinafter called "JHMLICO").
WHEREAS, the Series is organized and engaged in business as an open-end
management investment company and is so registered under the Investment Company
Act of 1940 (the "1940 Act"); and
WHEREAS, JHMLICO is engaged in the business of rendering investment
management services and is registered as an investment adviser under the
Investment Advisers Act of 1940; and
WHEREAS, the Series is authorized to issue shares of beneficial interest in
separate classes with each such class representing interests in a separate
portfolio of securities and other assets; and
WHEREAS, the Series currently offers shares of beneficial interest in
eighteen classes which are subject to separate management agreements with
JHMLICO that do not apply to the Portfolios referred to below, and
WHEREAS, the Series intends to offer shares of beneficial interest in five
additional classes (the "Initial Portfolios" under this Agreement) designated
[name of individual Portfolios], (together with other classes subsequently
established by the Series, the "Portfolios) and the Series desires to retain
JHMLICO to render investment advisory services under this Agreement, and JHMLICO
is willing to do so.
<PAGE>
2
NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the parties
hereto as follows:
1. APPOINTMENT OF JHMLICO AS MANAGER.
(a) Initial Portfolios. The Series hereby appoints JHMLICO and JHMLICO
------------------
hereby accepts the appointment, to act as investment adviser and manager to each
of the Initial Portfolios for the period and on the terms herein set forth, for
the compensation herein provided.
(b) Additional Portfolios. In the event that the Series establishes one or
---------------------
more classes of shares other than the Initial Portfolios with respect to which
it desires to retain JHMLICO to render investment advisory and management
services hereunder, it shall so notify JHMLICO in writing. If it is willing to
render such services JHMLICO shall notify the Series in writing, whereupon such
class of shares shall become a Portfolio hereunder.
(c) Independent Contractor. JHMLICO shall for all purposes herein be
----------------------
deemed to be an independent contractor and shall, unless otherwise expressly
provided or authorized, have no authority to act for or be deemed an agent of
the Series.
2. PROVISION OF INVESTMENT MANAGEMENT SERVICES.
JHMLICO will provide to the Portfolios a continuing and suitable investment
program consistent with the investment policies, objectives and restrictions of
the Series. JHMLICO will manage the investment and reinvestment of the assets in
the Portfolios, and perform the other functions set forth below, subject to the
overall supervision, direction, control and review of the Board of Trustees of
the Series and, as in effect from time to time, the provisions of the Series'
Declaration of Trust, Bylaws, prospectus, statement of additional information,
the 1940 Act and all other applicable laws and regulations (including any
applicable investment restrictions imposed by state insurance laws and
regulations) or any directions or instructions delivered to JHMLICO in writing
by the Series from time to time.
<PAGE>
3
Except to the extent that the Board of Trustees approves performance of any
of the following functions by any custodian, transfer agent, independent
counsel, or other independent agent, JHMLICO will, with respect to the
Portfolios:
(a) advise the Series in connection with policy decisions to be made by
its Board of Trustees or any committee thereof and, upon request, furnish the
Series with research, economic and statistical data in connection with the
Series' investments and investment policies;
(b) provide administration of the day to day operations of the Series;
(c) submit such reports relating to the valuation of the Series'
securities as its Board of Trustees may reasonably request;
(d) assist the Series in any negotiations relating to its investments with
issuers, investment banking firms, securities brokers or dealers and other
institutions or investors and place orders for purchases and sales of portfolio
investments;
(e) provide office space and office equipment and supplies (including
telephone and other utility services), accounting and data processing equipment
and necessary executive, legal, accounting, clerical and secretarial personnel
for the administration of the affairs of the Series;
(f) maintain and preserve the records required by the 1940 Act to be
maintained and preserved by the Series, to the extent not maintained by the
Series' custodian, distributor, transfer agent or any Sub-Investment Manager;
(g) oversee, and use its best efforts to assure the performance of all the
activities and services of any custodian, distributor, transfer agent or other
similar agent retained by the Series;
(h) value the assets and liabilities of the Series, compute the daily
income, net asset value and yield of each Portfolio; and
(i) supervise the activities of each Sub-Investment Manager.
<PAGE>
4
The Series will provide timely information to JHMLICO regarding such
matters as purchases and redemptions of shares in each Portfolio and the cash
requirements of, and cash available for investment in, each Portfolio, and all
other information as may be reasonably necessary or appropriate in order for
JHMLICO to perform its responsibilities hereunder.
3. ALLOCATION OF EXPENSES.
Except as set forth below, each party to this Agreement shall bear the
costs and expenses of performing its obligations hereunder.
(a) The Series agrees to assume the Portfolios' share of the expense of:
(i) brokerage commissions for transactions in the portfolio
investments of the Series and similar fees and charges for the acquisition,
disposition, lending or borrowing of such portfolio investments;
(ii) the advisory fees called for in this Agreement;
(iii) all taxes, including issuance and transfer taxes, and reserves
for taxes payable by the Series to federal, state or other governmental
agencies, and the expenses and costs associated with the preparation and filing
of all tax returns;
(iv) interest payable on the Series' borrowings;
(v) extraordinary or non-recurring expenses, such as legal claims
and liabilities and litigation costs and indemnification payments by the Series
in connection therewith;
(vi) the charges and expenses of any custodian or depository
appointed by the Series for the safekeeping of its cash, portfolio securities
and other property, for providing accounting and valuation services, and for
monitoring compliance with federal laws and regulations, subject to the Board of
Trustees' approval as to the scope of such accounting, valuation, and monitoring
functions;
(vii) the charges and expenses of its independent auditors;
(viii)the cost of the fidelity bond required by 1940 Act Rule 17g-l;
<PAGE>
5
(ix) the compensation and travel expenses of trustees who are not
"interested persons" within the meaning of the 1940 Act;
(x) the expenses in preparing, printing and distributing voting
instruction information statements to persons entitled to give voting
instructions in tabulating proxy votes and in printing and distributing to
policyowners and contractowners annual and semi-annual reports;
(xi) fees and costs for legal services provided to or on behalf of
the Series (including fees and costs of independent counsel and an allocable
portion of the cost of JHMLICO's Law Department rendering such services) (for
this purpose, "legal services" includes (but is not limited to) the services of
such independent counsel or Law Department employees in the course of
administering the business and affairs of the Series);
(xii) charges of any independent agents (other than independent
counsel) approved by the Board of Trustees;
(xiii) the fees and expenses involved in registering and maintaining
registrations of the Series and its shares with the Securities and Exchange
Commission and various states and other jurisdictions; and
(xiv) membership or association dues for the Investment Company
Institute, the National Association of Variable Annuities, or similar trade
association or for any self-regularly organization.
(b) To the extent not assumed by the Series pursuant to (a) above, JHMLICO
agrees to assume the Portfolios' share of the expense of:
(i) the charges and expenses of any registrar, stock transfer or
dividend disbursing agent;
(ii) the cost of any stock certificates representing shares of the
Series;
(iii) the expenses of shareholders' meetings; trustees' meetings;
printing and distributing Prospectuses and statements of additional information
to prospective and
<PAGE>
6
existing policyowners and contractowners; preparing, printing, and distributing
any advertising or sales literature to prospective and existing policyowners and
contractowners; and any other activity and related legal services primarily
intended to result in the sale of the Series' shares;
(vi) the expense of furnishing each shareholder statements of account;
and
(v) the cost of and any errors and omissions insurance or other liability
insurance covering the Series and/or its officers, directors and employees.
(vi) fees and costs of independent counsel to Series not incurred in the
actual conduct of the Series' affairs.
4. SUB-INVESTMENT MANAGERS.
Notwithstanding any other provision hereof, JHMLICO, with the approval of
the Series, may contract with one or more Sub-Investment Managers to perform any
of the investment management services required of JHMLICO under this Agreement;
provided, however, that the compensation of any such Sub-Investment Manager will
be the sole responsibility of JHMLICO and the duties and responsibilities of any
such Sub-Investment Manager shall be as set forth in an agreement between the
Series, JHMLICO and such Sub-Investment Manager. It is anticipated that JHMLICO
and the Series will agree to contract initially [list of names of sub-investment
managers].
JHMLICO shall exercise reasonable care in selecting, for approval by the
Series, any Sub-Investment Manager and in monitoring and supervising the
performance of any Sub-Investment Manager but, except as provided in Section 14
hereof, shall not otherwise be legally responsible or liable for any action of
any Sub-Investment Manager. It shall be a particular responsibility of JHMLICO
to evaluate the investment performance of Sub-Investment Managers and that of
potential Sub-Investment Managers and
<PAGE>
7
to supervise and monitor the practices of Sub-Investment Managers in selecting
brokers and dealers to effect portfolio transactions, including the negotiation
of commissions and the evaluation of services provided by such brokers and
dealers.
5. INVESTMENT ADVISORY FEE AND EXPENSE LIMITATION.
For all of the services rendered, facilities furnished and expenses paid or
assumed as herein provided, the Series shall pay to JHMLICO a fee, which fee
shall, with respect to each Portfolio, be at an effective rate of:
[list of investment advisory fees for each Portfolio on an annual basis.]
The fee shall be accrued daily and payable monthly as soon as possible
after the last day of each calendar month. In the case of termination of this
Agreement with respect to any Portfolio during any calendar month, the amount of
the fee accrued to the date of termination shall be paid.
"Current Net Assets" of any Portfolio for purposes of computing the amount
of advisory fee accrued for any day shall mean that Portfolio's net assets for
the most recent preceding day for which that Portfolio's net assets were
computed.
For any fiscal year in which the normal operating costs and expenses of any
Portfolio of the Series, exclusive of the investment advisory fee, interest,
brokerage commissions, taxes and extraordinary expenses outside the control of
JHMLICO exceed 0.25% of that Portfolio's average daily net assets, JHMLICO will
reimburse that Portfolio promptly after the end of the fiscal year in an amount
equal to such excess. In the event of termination of this Agreement as of a
date other than the last day of Series' fiscal year, JHMLICO shall pay any
Portfolio of Series the amount by which such expenses incurred by that Portfolio
prior to the date of termination exceeds a pro rata portion of the expense
limitation.
6. PORTFOLIO TRANSACTIONS.
<PAGE>
8
In connection with the investment and reinvestment of the assets of the
Portfolios, JHMLICO is authorized to select the brokers or dealers that will
execute purchase and sale transactions for the Series and to use its best
efforts to obtain the best available price and most favorable execution with
respect to all such purchases and sales of portfolio securities for the Series.
JHMLICO shall maintain records adequate to demonstrate compliance with this
requirement. Subject to this primary requirement, and maintaining as its first
consideration the benefits to the Series and its shareholders, JHMLICO shall
have the right, subject to the control of the Board of Trustees, and to the
extent authorized by the Securities and Exchange Act of 1934, to follow a policy
of selecting brokers who furnish brokerage and research services to the Series
or to JHMLICO, who charge a higher commission rate to the Series than may result
when allocating brokerage solely on the basis of seeking the most favorable
price and execution. JHMLICO shall determine in good faith that such higher
cost was reasonable in relation to the value of the brokerage and research
services provided.
The fees payable to JHMLICO by the Series hereunder shall be reduced by any
tender solicitation fees or similar payments received by JHMLICO, or any
affiliated person of JHMLICO, in connection with the tender of investments of
any Portfolio (less any direct expenses incurred by JHMLICO, or any affiliated
person of JHMLICO, in connection with obtaining such fees or payments). JHMLICO
shall use its best efforts to recapture all available tender offer solicitation
fees and similar payments in connection with tenders of the securities of any
Portfolio, provided, however, that neither JHMLICO nor any affiliated person
shall be required to register as a broker-dealer for this purpose. JHMLICO
shall advise the Board of Trustees of any fees or payments of whatever type
which it may be possible for JHMLICO or an affiliate of JHMLICO to receive in
connection with the purchase or sale of investment securities for any Portfolio.
7. INFORMATION, RECORDS, AND CONFIDENTIALITY.
<PAGE>
9
The Series shall own and control all records maintained hereunder by
JHMLICO on the Series' behalf and, in the event of termination of this Agreement
with respect to any Portfolio for any reason, all records relating to that
Portfolio shall promptly be returned to the Series, free from any claim or
retention of rights by JHMLICO. JHMLICO also agrees, upon request of the Series,
promptly to surrender such books and records or, at JHMLICO's expense, copies
thereof to the Series or make such books and records available for inspection by
representatives of regulatory authorities or other persons reasonably designated
by the Series. JHMLICO further agrees to maintain, prepare and preserve such
books and records in accordance with the 1940 Act and rules thereunder,
including but not limited to, Rules 31a-1 and 31a-2. JHMLICO shall supply all
information requested by any insurance regulatory authorities to determine
whether all insurance laws and regulations are being complied with.
JHMLICO shall not disclose or use any records or information obtained
pursuant hereto in any manner whatsoever except as expressly authorized herein,
and will keep confidential any information obtained pursuant hereto, and
disclose such information only if the Series has authorized such disclosure, or
if such disclosure is expressly required by applicable Federal or state
regulatory authorities.
JHMLICO shall supply the Board of Trustees and officers of the Series with
all statistical information regarding investments of the Portfolios which is
reasonably required by them and reasonably available to JHMLICO.
8. LIABILITY.
No provision of this Agreement shall be deemed to protect JHMLICO against
any liability to the Series or its shareholders to which it might otherwise be
subject by reason of any willful misfeasance, bad faith or negligence in the
performance of its duties or the reckless disregard of its obligations and
duties under this Agreement. Nor shall any provision hereof be deemed to protect
any Trustee or officer of the Series against any such liability to which he
might otherwise
<PAGE>
10
be subject by reason of any willful misfeasance, bad faith or negligence in the
performance of his duties or the reckless disregard of his obligations and
duties.
9. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) Duration. This Agreement shall become effective with respect to each
--------
Initial Portfolio on the date hereof and, with respect to any additional
Portfolio, on the date of receipt by the Series of notice from JHMLICO in
accordance with Paragraph 1(b) hereof that JHMLICO is willing to serve with
respect to such Portfolio. Unless terminated as herein provided, this Agreement
shall remain in full force and effect for two years from the date hereof with
respect to the Initial Portfolios and, with respect to each additional Portfolio
until two years following the date on which such Portfolio becomes a Portfolio
hereunder, and shall continue in full force and effect thereafter with respect
to each Portfolio so long as such continuance with respect to any such Portfolio
is approved at least annually (i) by either the Board of Trustees of the Series
or by vote of a majority of the outstanding voting shares of such Portfolio, and
(ii) in either event by the vote of a majority of the Board of Trustees of the
Series who are not parties to this Agreement or "interested persons" of any such
party, cast in person at a meeting called for the purpose of voting on such
approval.
Any approval of this Agreement by the holders of a majority of the
outstanding shares of any Portfolio shall be effective to continue this
Agreement with respect to any such Portfolio notwithstanding (A) that this
Agreement has not been approved by the holders of a majority of the outstanding
shares of any other Portfolio affected hereby, and (B) that this Agreement has
not been approved by the vote of a majority of the outstanding shares of the
Series, unless such approval shall be required by any other applicable law or
otherwise. The terms "assignment", "vote of a majority of the outstanding
shares" and "interested person", when used in this Agreement, shall have the
respective meanings specified in the 1940 Act and rules thereunder.
(b) Termination. This Agreement may be terminated with respect to any
-----------
Portfolio at any time, without payment of any penalty, by vote of the Board of
Trustees of the Series, by vote of
<PAGE>
11
a majority of the outstanding shares of such Portfolio, or by JHMLICO on at
least sixty (60) days written notice to the Series.
(c) Automatic Termination. This Agreement shall automatically and
---------------------
immediately terminate in the event of its assignment.
10. NAME OF JOHN HANCOCK.
It is understood that the name "John Hancock", or any name derived from or
similar to that name, and any logo associated with that name, is the valuable
property of JHMLICO, and that the Series has the right to include "John Hancock"
as a part of its name only so long as this Agreement shall continue. Upon
termination of this Agreement the Series shall forthwith cease to use the John
Hancock name and logos and shall submit to its shareholders, if necessary, an
amendment to its Declaration of Trust to change the Series' name.
11. SERVICES NOT EXCLUSIVE.
The services of JHMLICO to the Series with respect to the Portfolios are
not to be deemed exclusive and JHMLICO shall be free to render similar services
to others so long as its services hereunder are not impaired thereby. It is
specifically understood that directors, officers and employees of JHMLICO and of
its subsidiaries and affiliates may continue to engage in providing portfolio
management services and advice to other investment companies, whether or not
registered, and other investment advisory clients.
12. AVOIDANCE OF INCONSISTENT POSITION.
In connection with the purchase and sale of portfolio securities of the
Portfolios, JHMLICO and its directors, officers and employees will not act as
principal or agent or receive any commission. Nothing in this Agreement,
however, shall preclude the combination of orders for the sale or purchase of
portfolio securities of the Series with those for other registered
<PAGE>
12
investment companies managed by JHMLICO or its affiliates, if orders are
allocated in a manner deemed equitable by JHMLICO among the accounts and at a
price approximately averaged.
13. AMENDMENT.
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing. No amendment of this
Agreement shall be effective with respect to any Portfolio until approved
specifically by (a) the Board of Trustees of the Series, or by vote of a
majority of the outstanding shares of that Portfolio, and (b) by vote of a
majority of those Trustees of the Series who are not interested persons of any
party to this Agreement cast in person at a meeting called for the purpose of
voting on such approval.
14. INDEMNIFICATION
Except to the extent that a member of the Board of Trustees would thereby
be protected against any liability to the Series or its shareholders to which he
or she would otherwise be subject by reason of willful misfeasance, bad faith,
or gross negligence in the performance of the member's duties, or by reason of
the member's reckless disregard either of the member's obligations and duties
under this Agreement or of the duties involved in the conduct of the member's
office, JHMLICO hereby indemnifies each person who is or has been a member of
the Board of Trustees and will hold each harmless against any and all losses,
claims, damages, liabilities or litigation (including legal and other expenses)
to which the member may become subject under the 1940 Act or any other statute
or at common law or otherwise, by reason of his or her failure or alleged
failure to take any action relating to the investment or reinvestment of assets
in the Portfolios, regardless of whether a Sub-Investment Manager has been
retained in connection with the Portfolio concerned, including any failure or
alleged failure to seek or retain investment advice or management in addition to
or in place of that provided by JHMLICO and its Sub-Investment Managers, if any.
With respect to any losses, claims, damages, liabilities or
<PAGE>
13
litigation arising out of events occurring prior to the termination of this
Agreement, this indemnity shall survive said termination.
15. LIMITATION OF LIABILITY
It is expressly agreed that the obligations of the Series hereunder shall
not be binding upon any of the Trustees, shareholders, officers, agents or
employees of Series personally, but bind only the trust property of the Series,
as provided in the Series' Declaration of Trust.
16. GOVERNING LAW.
This Agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts and the applicable provisions of the 1940 Act and
rules thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first set forth above.
JOHN HANCOCK VARIABLE SERIES TRUST I
ATTEST:
____________________ By:______________________________
____________________ Title:Chairman and CEO
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
ATTEST:
____________________ By:______________________________
____________________ Title: Vice President
<PAGE>
APPENDIX C
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio Investment Advisory Fee as an Annual Percentage of Each
Portion of the Portfolios Average Daily Net Assets
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Managed .40% of first $500 million; .35% of next $500 million; .30% of net assets
Large Cap Growth above $1 billion
- ---------------------------------------------------------------------------------------------------------------------------------
Growth & Income .25% of all net assets
Sovereign Bond
Money Market
- ---------------------------------------------------------------------------------------------------------------------------------
Large Cap Value .75% of all net assets
Small Cap Growth
- ---------------------------------------------------------------------------------------------------------------------------------
Equity Index .15% of first $75 million; .14% of next $50 million; .13% of net assets above $125 million
- ---------------------------------------------------------------------------------------------------------------------------------
Small Cap Value .80% of first $100 million; .75% of next $100 million; .65% of net assets above $200 million
- ---------------------------------------------------------------------------------------------------------------------------------
Mid Cap Value .80% of first $250 million; .775% of next $250 million; .75% of next $250 million; .725% of
net assets above $750 million
- ---------------------------------------------------------------------------------------------------------------------------------
Mid Cap Growth .85% of first $100 million; .80% of net assets above $100 million
- ---------------------------------------------------------------------------------------------------------------------------------
Diversified Mid Cap .75% of first $250 million; .70% of next $250 million; .65% of net assets above $500 million
Growth
- ---------------------------------------------------------------------------------------------------------------------------------
Real Estate Equity .60% of first $300 million; .50% of next $500 million; .40% of net assets above $800 million
- ---------------------------------------------------------------------------------------------------------------------------------
Small/Mid Cap CORE .80% of first $50 million; .70% of net assets above $50 million
- ---------------------------------------------------------------------------------------------------------------------------------
Global Equity .90% of first $50 million; .80% of next $100 million; .70% of net assets above $150 million
- ---------------------------------------------------------------------------------------------------------------------------------
International .85% of first $100 million; .70% of net assets above $100 million
Balanced
- ---------------------------------------------------------------------------------------------------------------------------------
International .18% of first $100 million; .15% of next $100 million; .11% of net assets above $200 million
Equity Index
- ---------------------------------------------------------------------------------------------------------------------------------
International 1% of first $20 million; .85% of next $30 million; .75% of net assets above $50 million
Opportunities
- ---------------------------------------------------------------------------------------------------------------------------------
Emerging Markets 1.30% of first $10 million; 1.20% of next $140 million; 1.10% of net assets above $150
Equity million
- ---------------------------------------------------------------------------------------------------------------------------------
Short-Term Bond .30% of all net assets
- ---------------------------------------------------------------------------------------------------------------------------------
Bond Index .15% of first $100 million; .13% on next $150 million; .11% of net assets over $250 million
- ---------------------------------------------------------------------------------------------------------------------------------
Strategic Bond .75% of first $25 million; .65% of next $50 million; .55% of next $75 million; .50% of net
assets above $150 million
- ---------------------------------------------------------------------------------------------------------------------------------
High Yield Bond .65% of first $100 million; .60% on next $100 million; .50% of net assets above $200 million
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
APPENDIX D
JHVLICO AND JOHN HANCOCK;
THE SUB-INVESTMENT MANAGERS; A SUMMARY OF THE SUB-INVESTMENT MANAGEMENT
AGREEMENTS; BROKERAGE TRANSACTIONS
JHVLICO AND JOHN HANCOCK
JHVLICO, John Hancock Place, Boston, Massachusetts 02117, is a stock life
insurance company chartered in 1979 under Massachusetts law. It is a wholly-
owned subsidiary of John Hancock, authorized to transact a life insurance and
annuities business in 49 states. JHVLICO began selling variable life insurance
policies in 1980 and its Accounts owned Fund shares representing [ %] of the
total net assets of the Fund on December 31, 1998.
John Hancock, John Hancock Place, Boston, Massachusetts 02117, is a mutual
life insurance company chartered in Massachusetts in 1862. It is authorized to
transact a life insurance and annuity business in all fifty states. John Hancock
began selling variable annuity contracts in 1971 and variable life insurance
policies in 1993. Its Accounts owned Fund shares representing [ %] of the total
net assets of the Fund on December 31, 1998. John Hancock acts as "principal
underwriter" of the Fund's shares pursuant to an Underwriting and Administrative
Services Agreement, dated January 17, 1986, to which John Hancock and the Fund
are parties. Under the Agreement, John Hancock collects no additional charges or
commissions in connection with its duties as principal underwriter.
John Hancock is managed by its Board of Directors, the members of which are
elected by its policyholders. All of the Directors must be policyholders of John
Hancock. The business address of all Directors and Executive Officers of John
Hancock is John Hancock Place, Boston, Massachusetts 02117.
The following are the Directors and Chief Executive Officer of John
Hancock:
NAME PRINCIPAL OCCUPATION
- ---- --------------------
Nelson F. Gifford Principal, Fleetwing Capital Management
(financial services)
Stephen L. Brown Chairman of the Board and Chief Executive
Officer, John Hancock
E. James Morton Director, formerly Chairman of the Board and
Chief Executive Officer, John Hancock
David F. D'Alessandro President and Chief Operating Officer, John
Hancock
Foster L. Aborn Vice Chairman of the Board, John Hancock
<PAGE>
Joan T. Bok Chairman of the Board, New England Electric
System (electric utility)
Robert E. Fast Senior Partner, Hale and Dorr (law firm)
John M. Connors, Jr. President and Chief Executive Officer and
Director, Hill, Holiday Connors Cosmopulos
(advertising)
I. Macallister Booth Retired Chairman of the Board and Chief
Executive Officer, Polaroid Corporation
(photographic products)
Samuel W. Bodman Chairman of the Board and Chief Executive
Officer, Cabot Corporation (chemicals)
Kathleen F. Feldstein President, Economic Studies, Inc. (economic
consulting)
Richard F. Syron Chairman of the Board and Chief Executive
Officer, American Stock Exchange
Michael C. Hawley President and Chief Operating Officer, The
Gillette Company (razors, etc.)
Robert J. Tarr, Jr. Former President, Chief Executive Officer,
Chief Operations Officer; Harcourt General,
Inc. (publishing)
Edward H. Linde President and Chief Executive Officer, Boston
Properties, Inc.
Wayne A. Budd Group President, Bell Atlantic - New England
(telecommunications)
BROKERAGE COMMISSIONS ON PORTFOLIO TRANSACTIONS
Orders for the purchase and sale of portfolio securities of the portfolios
of Variable Series Trust I (the "Portfolios") are placed in such a manner as in
the opinion of John Hancock or the sub-investment manager will offer the best
price and market for the execution of each transaction. In seeking best price
and execution for securities traded in the over-the-counter market, John Hancock
and the respective sub-investment managers normally deal directly with the
principal market-makers. Evaluations of the overall reasonableness of any
brokers' commissions are made by the persons placing transactions for the
Portfolio on the basis of their experience and judgment. Such persons are
authorized to pay a brokerage commission on a particular transaction that is in
excess of what another broker might have charged in recognition of the value of
the brokerage and research services received from the broker, although such
authority is expected to be used very infrequently.
Research and statistical services furnished by brokers handling
transactions for the Portfolios may include analysts' reports on companies and
industries, market forecasts, economic analyses, and the like. Such materials
may be used by John Hancock and the sub-investment manager for the benefit of
all the portfolios managed by John Hancock and the sub-investment manager and,
accordingly, not all such research and statistical services may be used in
connection with the Portfolios.
While John Hancock and each sub-investment manager will be responsible for
the allocation of the corresponding Portfolio's brokerage, their policies and
practices in this regard must be consistent with the foregoing and will at all
times be subject to review by the Board of Trustees of Variable Series Trust I.
<PAGE>
APPENDIX E
<TABLE>
<CAPTION>
CURRENT PROPOSED
ALLOCATION METHOD ALLOCATION METHOD
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Custodial and Administrative Costs:
- ---------------------------------------------------------------------------------------------------------------------
Domestic Custodianship Fees On a Portfolio-specific basis On an asset-weighted basis among all
domestic and global Portfolios
- ---------------------------------------------------------------------------------------------------------------------
Foreign Custodianship Fees On a Portfolio-specific basis No change
- ---------------------------------------------------------------------------------------------------------------------
Transaction Charges On a Portfolio-specific basis No change
- ---------------------------------------------------------------------------------------------------------------------
Accounting Fee Equally across all Portfolios On an asset-weighted basis among all
Portfolios
- ---------------------------------------------------------------------------------------------------------------------
Valuation Fee Equal basic fee for all Portfolios No change
plus a Portfolio-specific fee
- ---------------------------------------------------------------------------------------------------------------------
Fund Administrative Service Fees Equally across all Portfolios On an asset-weighted basis among all
Portfolios
- ---------------------------------------------------------------------------------------------------------------------
Proxy Vote Costs One-half equally across all On an asset-weighted basis among all
Portfolios to which the proxy Portfolios to which the proxy applies
applies and one-half on an
asset-weighted basis among all
such Portfolios
- ---------------------------------------------------------------------------------------------------------------------
Annual / Semi-Annual Report Costs One-half equally across all On an asset-weighted basis among all
Portfolios and one-half on an Portfolios
asset-weighted basis among all
Portfolios
- ---------------------------------------------------------------------------------------------------------------------
Trust Prospectus Costs Equally across all Portfolios On an asset-weighted basis among all
Portfolios
- ---------------------------------------------------------------------------------------------------------------------
Legal Costs:
- ---------------------------------------------------------------------------------------------------------------------
Trust Prospectus Equally across all Portfolios On an asset-weighted basis among all
Portfolios
- ---------------------------------------------------------------------------------------------------------------------
Proxy Votes Equally across all Portfolios On an asset-weighted basis among all
Portfolios to which the proxy applies
- ---------------------------------------------------------------------------------------------------------------------
General Equally across all Portfolios On an asset-weighted basis among all
Portfolios
- ---------------------------------------------------------------------------------------------------------------------
Auditing Costs One-half equally across all On an asset-weighted basis among all
Portfolios and one-half on an Portfolios
asset-weighted basis among all
Portfolios
- ---------------------------------------------------------------------------------------------------------------------
Fidelity Bond Costs Equally across all Portfolios On an asset-weighted basis among all
Portfolios
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
APPENDIX F
1998 VARIABLE SERIES TRUST NON-ADVISORY EXPENSES
($000)
<TABLE>
<CAPTION>
PORTFOLIO Actual Allocation for 1998 REVISED ALLOCATION
- ---------
Non-Advisory Expenses JH Reimbursement* Non-Advisory Expenses JH Reimbursement**
<S> <C> <C> <C> <C>
Large Cap Growth 319 0 534 0
Sovereign Bond 331 0 446 0
Emerging Markets Equity 125 112 50 43
International Equity Index 528 124 399 226
Global Equity 150 126 77 61
Small Cap Growth 167 27 59 0
International Balanced 269 199 196 165
Mid Cap Growth 164 15 71 0
Large Cap Value 173 0 84 0
Money Market 167 0 194 0
Mid Cap Value 142 0 50 0
Diversified Mid Cap Growth 270 0 104 0
Bond Index 100 55 14 0
Small/Mid Cap CORE 115 107 12 6
Real Estate Equities 158 0 74 0
Growth & Income 787 0 1726 0
Managed 1141 0 1594 0
Short Term Bond 149 0 38 0
Small Cap Value 156 17 43 0
International Opportunities 267 145 203 138
Equity Index 272 272 188 0
High Yield Bond 105 86 10 0
Strategic Bond 149 31 39 0
Totals 6,203 1,316 6,203 639
</TABLE>
<PAGE>
APPENDIX G
1998 VARIABLE SERIES TRUST NON-ADVISORY EXPENSE RATIOS
(in percentages)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
PORTFOLIO BASED UPON ACTUAL BASED UPON CHANGE IN
ALLOCATION FOR REVISED EXPENSE RATIO
1998* ALLOCATION**
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Large Cap Growth 2.8 4.7 +1.9
- -------------------------------------------------------------------------------------------
Sovereign Bond 3.7 4.9 +1.2
- -------------------------------------------------------------------------------------------
Emerging Markets Equity 25.0 10.0 -15.0
- -------------------------------------------------------------------------------------------
International Equity Index 25.0 10.0 -15.0
- -------------------------------------------------------------------------------------------
Global Equity 25.0 10.0 -15.0
- -------------------------------------------------------------------------------------------
Small Cap Growth 22.3 7.8 -14.5
- -------------------------------------------------------------------------------------------
International Balanced 25.0 10.0 -15.0
- -------------------------------------------------------------------------------------------
Mid Cap Growth 17.4 7.5 -9.9
- -------------------------------------------------------------------------------------------
Large Cap Value 14.0 6.8 -7.2
- -------------------------------------------------------------------------------------------
Money Market 4.2 4.9 +0.7
- -------------------------------------------------------------------------------------------
Mid Cap Value 15.0 5.3 -9.7
- -------------------------------------------------------------------------------------------
Diversified Mid Cap Growth 13.9 5.4 -8.5
- -------------------------------------------------------------------------------------------
Bond Index 25.0 5.0 -20.0
- -------------------------------------------------------------------------------------------
Small/Mid Cap CORE 25.0 10.0 -15.0
- -------------------------------------------------------------------------------------------
Real Estate Equities 10.3 4.8 -5.5
- -------------------------------------------------------------------------------------------
Growth & Income 2.1 4.7 +2.6
- -------------------------------------------------------------------------------------------
Managed 3.5 4.8 +1.3
- -------------------------------------------------------------------------------------------
Short Term Bond 19.3 4.9 -14.4
- -------------------------------------------------------------------------------------------
Small Cap Value 24.4 6.7 -17.7
- -------------------------------------------------------------------------------------------
International Opportunities 25.0 10.0 -15.0
- -------------------------------------------------------------------------------------------
Equity Index 11.7 8.1 -3.6
- -------------------------------------------------------------------------------------------
High Yield Bond 25.0 6.5 -18.5
- -------------------------------------------------------------------------------------------
Strategic Bond 22.3 5.9 -16.4
- -------------------------------------------------------------------------------------------
ARITHMETIC 16.8 6.9 -9.9
AVERAGE
- -------------------------------------------------------------------------------------------
</TABLE>
* Based upon 0.25% expense cap
** Based upon 0.10% expense cap
<PAGE>
VOTING INSTRUCTIONS FORM
JOHN HANCOCK
VARIABLE SERIES TRUST 1 PLEASE SIGN, DATE AND RETURN ALL VOTING
INSTRUCTION FORMS RECEIVED IN THE ENCLOSED POSTAGE-
PAID ENVELOPE
Please detach card at perforation
JOHN HANCOCK VARIABLE SERIES TRUST 1 THESE VOTING INSTRUCTIONS ARE SOLICITED
FUND NAME PRINTS HERE BY THE TRUSTEES SPECIAL MEETING OF
SHAREHOLDERS-APRIL 23, 1999-11:00 AM
197 CLARENDON STREET
BOSTON, MASSACHUSETTS
A Special Meeting of Shareholders of the John Hancock Variable Series Trust 1
(the Fund") will be held at the office of John Hancock Variable Life Insurance
Company, 197 Clarendon Street, Boston, Massachusetts, (telephone 1-800-732-5543)
at 11:00 a.m., on Friday, April 23, 1999. By signing and dating below, you
instruct the persons named below to, and they will, vote each applicable
proposal on the reverse side as marked or, if not marked, to vote "FOR" each
applicable proposal, on the reverse side, 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
PORTFOLIO 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)
<PAGE>
Please detach at perforation before mailing
A SPECIAL MEETING OF SHAREHOLDERS OF THE VARIABLE SERIES TRUST I ("the Fund")
WILL BE HELD AT THE OFFICE OF JOHN HANCOCK LIFE INSURANCE COMPANY, 197 CLARENDON
STREET, BOSTON, MASSACHUSETTS (TELEPHONE 1-800-732-5543) AT 11:00 A.M. ON
FRIDAY, APRIL 23, 1999 FOR THE FOLLOWING PURPOSES:
Please vote by filling in the appropriate box(es) below.
<TABLE>
<S> <C> <C> <C>
FOR ALL
FOR ALL EXCEPT WITHHOLD
1. TO ELECT TRUSTEES TO THE BOARD OF TRUSTEES AS MARKED TO ALL
MICHELE G. VAN LEER, THOMAS J. LEE, WILLIAM H. DYSKTRA, THE LEFT
ELIZABETH G. COOK, DIANE C. KESSLER AND ROBERT VERDONCK [_] [_] [_]
To withhold authority for any individual nominee, print that nominee's
name on the line below.
________________________________________________
2. (FOR THE GROWTH & INCOME, LARGE CAP GROWTH, REAL ESTATE EQUITY,
AND SOVEREIGN BOND PORTFOLIOS ONLY) FOR AGAINST ABSTAIN
APPROVAL TO MAKE NON-FUNDAMENTAL THE INVESTMENT OBJECTIVES AND POLICIES OF [_] [_] [_]
THE PORTFOLIO
3. (FOR THE MANAGED, GROWTH & INCOME, LARGE CAP GROWTH, REAL ESTATE EQUITY, FOR AGAINST ABSTAIN
SOVEREIGN BOND, AND MONEY MARKET PORTFOLIOS ONLY) [_] [_] [_]
APPROVAL TO PERMIT THE PORTFOLIO TO ENGAGE IN SECURITIES LENDING.
4. (FOR THE DIVERSIFIED MID CAP GROWTH AND SHORT-TERM BOND PORTFOLIOS ONLY) FOR AGAINST ABSTAIN
A PROPOSAL TO CHANGE THE INVESTMENT RESTRICTIONS OF THE PORTFOLIO WITH [_] [_] [_]
RESPECT TO ILLIQUID SECURITIES.
5. A PROPOSAL TO CHANGE METHOD FOR ALLOCATING NON-ADVISORY EXPENSES AND TO FOR AGAINST ABSTAIN
REDUCE THE "EXPENSE CAP" [_] [_] [_]
</TABLE>
