As filed with the Securities and Exchange Commission on August 11,
1995.
33-5186
811-4651
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934 (Amendment No. ___)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[ ] Confidential, for Use of
the Commission Only (as
permitted by Rule 14a-
6(e)(2)
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
JOHN HANCOCK STRATEGIC SERIES
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than
Registrant)
Payment of filing fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
[X] 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.
<PAGE>
[Letterhead]
John Hancock Funds
A Global Investment Managment Firm
101 Huntington Avenue
Boston, Massachusetts 02199-7603
August 11, 1995
Dear Fellow Shareholder:
In the nearly four years that the John Hancock Independence Diversified
Core Equity Fund ("the Fund") has been in existence, we have successfully
delivered competitive investment returns. Our intention now is to market the
Fund to a broad universe, as is the case for our other established retail mutual
funds. This will enable us to attract additional assets, which will benefit all
shareholders.
To achieve this, the Trustees have determined that the Fund's minimum
initial investment requirement should be lowered to $1,000. The Trustees also
approved the activation of the Fund's existing 12b-1 distribution plan and the
establishment of a second class (Class B) of Fund shares. As a result of these
enhancements, we are proposing certain changes. These proposals are outlined in
greater detail in your proxy statement and have been carefully reviewed by your
Fund's Board of Trustees, which is responsible for protecting your interests as
a shareholder. Here is a brief summary:
1) Proposed Investment Management Contract. A fund's management fee
pays for expenses associated with providing portfolio advisory services to the
fund. The Adviser must continue to keep abreast of new types of securities, as
well as monitor the ever increasing complexity of the securities market. The
Trustees are recommending that you vote for an increase in the investment
advisory fee currently paid by the Fund. In considering this proposal, your
Trustees considered the investment management fees and expense ratios of the
mutual fund industry in general, as well as those of comparable funds.
2) Proposed Subadvisory Contract. Your Trustees are also recommending
that you vote for an increase in the subadvisory fee currently paid by the
Adviser. This will allow the Subadvisor to continue to offer the highest levels
of expertise and to retain and attract capable personnel to serve the Fund. The
Fund does not pay the subadvisory fee, so this increase will have no impact on
the expenses you bear as a shareholder.
Your Vote Is Important!
At a special meeting of shareholders to be held on August 31, 1995 at
9:00 a.m., you will be asked to approve the changes noted above. Your Board of
Trustees recommends that you vote in favor of all proposals.
We urge you to exercise your right as a shareholder and vote by
completing, signing and returning the enclosed proxy ballot form to us
immediately. Your prompt response will help avoid the necessity for additional
mailings at your Fund's expense. This is extremely important, no matter how many
shares you own. For your convenience, we have provided a postage-paid envelope.
If you have questions, please call your Financial Advisor or a John
Hancock Funds Customer Service Representative at 1-800-225-5291, Monday through
Friday between 8:00 a.m. and 8:00 p.m. Eastern time. Thank you for your prompt
attention to these important matters.
Sincerely,
/s/ Edward J. Boudreau, Jr.
Edward J. Boudreau, Jr.
Chairman and CEO
25PXL 7/95
- -----------------------------------------------------------[logo] John Hancock
John Hancock Advisers, Inc. Financial Services
John Hancock Funds, Inc.*
John Hancock Investor Services Corporation
The Patriot Group, Inc.
John Hancock Advisers International, Ltd.
NM Capital Management, Inc.
Sovereign Asset Management Corporation
*Member of National Association of Securities Dealers, Inc.
<PAGE>
JOHN HANCOCK INDEPENDENCE DIVERSIFIED CORE EQUITY FUND
101 Huntington Avenue
Boston, Massachusetts 02199
______________________________________________
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
______________________________________________
To Be Held August 31, 1995
A Special Meeting of Shareholders of John Hancock Independence
Diversified Core Equity Fund (the "Fund"), a series of John Hancock
Strategic Series (the "Trust") (telephone 1-800-225-5291), will be held
at the office of the Trust located at 101 Huntington Avenue (across
from the Colonnade Hotel), Boston, Massachusetts 02199, at 9:00 a.m.,
Boston time, on Thursday, August 31, 1995. The purpose of the meeting
is to consider and act upon the following proposals:
(1) To approve the terms of a new Investment Management
Contract for the Fund. The new Contract includes an
increase in the fee payable by the Fund for investment
advisory services.
(2) To approve the terms of a new Sub-advisory Contract for
the Fund. At current asset levels, the new Contract
includes an increase in the fee payable by the Fund's
investment adviser for investment sub-advisory services.
The Fund will not pay any part of the sub-advisory fee.
(3) To transact other business that may properly come before
the meeting or any adjournment of the meeting.
Your Board of Trustees Recommends that You Vote in Favor of all
Proposals.
Shareholders of record as of the close of business on August 7,
1995 are entitled to vote at the meeting or any adjournment of the
meeting. The Proxy Statement and form of proxy are being mailed to
shareholders on or about August 11, 1995.
THOMAS H. DROHAN
Senior Vice President
and Secretary
Boston, Massachusetts
August 11, 1995
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE COMPLETE
AND RETURN THE ENCLOSED FORM OF PROXY. YOU MAY STILL VOTE IN PERSON IF
YOU ATTEND THE MEETING.
<PAGE>
JOHN HANCOCK INDEPENDENCE DIVERSIFIED CORE EQUITY FUND
101 Huntington Avenue
Boston, Massachusetts 02199
__________________
PROXY STATEMENT
GENERAL
This statement is furnished in connection with the solicitation of
proxies by the management of John Hancock Strategic Series (the
"Trust"), which consists of John Hancock Independence Diversified Core
Equity Fund (the "Fund"), John Hancock Utilities Fund and John Hancock
Strategic Income Fund. The proxies will be used at the Special Meeting
of the Fund's shareholders (the "Shareholder Meeting") to be held at
the offices of the Trust located on the 2nd floor at 101 Huntington
Avenue, Boston, Massachusetts on Thursday, August 31, 1995 at 9:00
a.m., Boston time. Proxies will be solicited by mail and may also be
solicited in person or by telephone by officers, Trustees, directors
and/or registered representatives of the Trust's principal distributor,
John Hancock Funds, Inc. ("John Hancock Funds"); and by employees,
officers and/or directors of the Fund's investment adviser and
sub-adviser, John Hancock Advisers, Inc. (the "Adviser") and
Independence Investment Associates, Inc. (the "Sub-adviser"),
respectively, or the Fund's transfer agent, John Hancock Investor
Services Corporation.
The cost of preparing and mailing this Proxy Statement and the
accompanying form of notice and proxy will be borne by the Adviser. The
mailing address of the Trust is 101 Huntington Avenue, Boston,
Massachusetts 02199. This Proxy Statement and form of proxy are being
mailed to shareholders on or about August 11, 1995.
The Fund's annual report for its 1994 fiscal year and subsequent
semi-annual report, if any, may be obtained free of charge by writing
to the Fund's transfer agent, John Hancock Investor Services
Corporation ("Investor Services"), at P.O. Box 9116, Boston,
Massachusetts 02205-9116, or by calling 1-800-225-5291.
The address of both the Adviser and John Hancock Funds is 101
Huntington Avenue, Boston, Massachusetts 02199.
Outstanding Shares and Voting Requirements
The Board of Trustees has fixed the close of business on August 7,
1995 (the "Record Date") as the record date for determination of
shareholders of the Fund entitled to notice of and to vote at the
Shareholder Meeting. Shareholders of record on the Record Date are
entitled to one vote per share at the Shareholder Meeting or any
adjournment of the meeting. On the Record Date, 67,249.05 shares of
beneficial interest of the Fund were outstanding.
To the knowledge of the Trust, the following persons owned
beneficially or of record more than 5% of the outstanding shares of the
Fund on the Record Date:
-2-
<PAGE>
No. of Percentage
Name and Address Shares of Fund
---------------- ------ ----------
Daniel Rader, Trustee 9,303.781 13.83%
First Professional
Bank 401(k) Savings Plan
606 Broadway
Santa Monica, CA
William L. Boyan and Gail 8,355.583 12.42%
A Boyan, as joint tenants
21 Phillips Road
Nahant, MA
Diane M. Capstaff and 7,014.213 10.43%
Arthur E. Capstaff,
as joint tenants
146 Atlantic Avenue
Marblehead, MA
California Innkeepers 5,051.455 7.71%
Savings & Retirement Plan
1350 Bayshore Highway
Burlingame, CA
Foster L. Aborn 3,927.379 5.84%
P.O. Box 111
Boston, MA
New Hope Communications 3,533.702 5.18%
401(k) Plan
1301 Spruce Street
Boulder, CO
PROPOSAL 1
APPROVAL OF THE TERMS OF A NEW INVESTMENT
MANAGEMENT CONTRACT FOR THE FUND
Status of the Existing Investment Management Contract
The Trust, on behalf of the Fund, has entered into an Investment
Management Contract dated January 1, 1994 (the "Existing Management
Contract") with the Adviser. Shareholders of the Fund approved the
Existing Management Contract at a meeting held on September 21, 1993.
The purpose of submitting the Existing Management Contract for
shareholder approval at this meeting was to obtain their approval of
changes to the Contract which eliminated the requirement that the Fund
pay the compensation of certain officers of the Trust and changed the
frequency of payments of the management fee from quarterly to monthly.
The shareholders also approved certain modernizing changes to the
Existing Management Contract at that meeting. The Existing Management
Contract was most recently approved by the Trust's Board of Trustees,
including the Trustees who are not "interested persons" (the
"Independent Trustees") as defined in the Investment Company Act of
1940 (the "1940 Act"), on May 1, 1995.
Pursuant to the Existing Management Contract and subject to the
supervision and approval of the Board of Trustees, the Adviser is
responsible for using its best efforts to provide the Fund with
continuing and suitable investment programs, consistent with the Fund's
investment policies, objectives and restrictions. Specifically, the
Adviser is required to: (a) furnish the Fund with advice regarding
policy decisions and the purchase, holding and disposition of portfolio
securities; (b) submit reports to the Trustees as to the valuation of
the Fund's assets and as to other subjects; (c) assist the Fund in any
negotiations relating to the Fund's investments; (d) place orders for
the purchase and sale of portfolio securities; (e) provide office space
and equipment and executive and clerical personnel necessary for the
administration of the Fund's affairs; (f) maintain certain Fund
records; (g) instruct the Fund's custodian; and (h) oversee the
performance of the Fund's custodian, transfer agent and other similar
agents. In addition, the Adviser agrees, from time to time or at any
time requested by the Trustees, to furnish the Trustees with reports as
to the Adviser's performance under the Existing Management Contract.
By its terms, the Existing Management Contract continues in effect
automatically until May 31, 1996 and for successive annual periods
thereafter, provided that the continuance is specifically approved at
least annually by (i) the Trust's Board of Trustees or (ii) a vote of a
"majority" (as defined in the 1940 Act) of the Fund's outstanding
voting securities and provided further that, in either event, the
continuance is also approved by a majority of the Trust's Independent
Trustees, by vote cast in person at a meeting called for the purpose of
voting on this approval. The Existing
-3-
<PAGE>
Management Contract is terminable, without penalty, on not less than 60
days' notice by the Trust's Board of Trustees, by vote of holders of a
majority of the Fund's shares, or by the Adviser. The Existing
Management Contract terminates automatically in the event of its
"assignment" (as defined in the 1940 Act).
The Existing Management Contract provides that the Adviser is not
liable for any error of judgment or mistake of law or for any loss
suffered by the Trust or the Fund in connection with the matters to
which the Existing Management Contract relates, except a loss resulting
from willful misfeasance, bad faith or gross negligence on the part of
the Adviser in the performance of its duties or from reckless disregard
by the Adviser of its obligations and duties under the Contract.
Under the Existing Management Contract, the Adviser may appoint
and employ one or more sub-advisers that are satisfactory to the Fund.
The Adviser has entered into a sub-investment management contract (the
"Existing Sub-advisory Contract") with the Sub-adviser, which is
described in Proposal 2 of this Proxy Statement.
The Adviser is a wholly-owned subsidiary of The Berkeley Financial
Group ("The Berkeley Group"), which is a wholly-owned subsidiary of
John Hancock Asset Management, which is a wholly-owned subsidiary of
John Hancock Subsidiaries, Inc., which is a wholly-owned subsidiary of
John Hancock Mutual Life Insurance Company (the "Life Company"). The
address of the Life Company, John Hancock Subsidiaries, Inc. and John
Hancock Asset Management is John Hancock Place, Boston, Massachusetts
02117. The address of The Berkeley Group is 101 Huntington Avenue,
Boston, Massachusetts 02199. The directors of the Adviser and their
principal occupations or employment are set forth below under
"Directors of the Adviser and Sub-adviser."
Proposed Investment Management Contract
At a meeting of the Trust's Board of Trustees held on May 1, 1995,
the Trustees, including all of the Independent Trustees, approved, and
voted to recommend that the shareholders of the Fund approve, a
proposal to adopt a new Investment Management Contract between the
Trust, on behalf of the Fund, and the Adviser (the "Proposed Management
Contract"). The terms of the Proposed Management Contract would
increase the investment advisory fee currently paid by the Fund under
the Existing Management Contract, as further described below. All other
provisions (excluding dates) would remain the same as in the Existing
Management Contract. The terms of the Proposed Management Contract
are being submitted under this Proposal for approval by shareholders
of the Fund.
For a copy of the Proposed Management Contract, see Exhibit A
attached to this Proxy Statement. The description of the Proposed
Management Contract contained in the text of this Proxy Statement is
qualified in its entirety by Exhibit A.
-4-
<PAGE>
The Fund currently has a $250,000 minimum initial investment
requirement, subject to certain limited exceptions. The Trustees have
determined that the Fund's minimum initial investment requirement
should be reduced to $1,000 and that shares of the Fund should be
marketed to retail investors. Accordingly, at a meeting held on May 1,
1995, the Trustees approved the activation of the Fund's existing Rule
12b-1 distribution plan, effective as of September 1, 1995. Under this
plan, the Fund will be able to reimburse its principal underwriter for
distribution and service expenses incurred in connection with shares of
the Fund at an annual rate of up to 0.30% of the Fund's average net
assets attributable to shares covered by the Plan; provided, that no
more than 0.25% may be paid for service expenses.
At their meeting on May 1, 1995, the Trustees also established a
second class (Class B) of shares of the Fund and adopted a Rule 12b-1
distribution plan for this class of shares. Class B shares of the Fund
may be issued beginning on September 1, 1995, and the distribution plan
covering these shares will become effective on that date. All shares of
the Fund that are outstanding prior to September 1, 1995 will be
designated as Class A shares and, beginning on September 1, 1995, will
be subject to the distribution plan described in the preceding
paragraph. Under the distribution plan covering Class B shares, the
Fund will be able to reimburse its principal underwriter for
distribution and service expenses incurred in connection with Class B
shares of the Fund at an annual rate of up to 1.00% of the Fund's
average net assets attributable to Class B shares; provided, that no
more than 0.25% may be paid for service expenses.
The size of the Fund has been greatly reduced recently, due to the
movement of institutional investors from the Fund to a similar mutual
fund that is part of a recently established institutional family of
funds managed by the Adviser. The Trustees expect that the actions
described in the two preceding paragraphs will result in a significant
increase in the Fund's net assets; however, there can be no assurance
that this will occur. The Adviser believes that the proposed fee
increase will allow it and the Sub-adviser (see Proposal 2 below) to
continue to offer the highest levels of expertise and to retain and
attract capable personnel to serve the Fund.
UNDER THE EXISTING MANAGEMENT CONTRACT, the Fund pays the Adviser
a monthly fee that is equal on an annual basis to 0.50% of the Fund's
average daily net assets.
UNDER THE PROPOSED MANAGEMENT CONTRACT, the Fund would pay the
Adviser a monthly fee that is equal on an annual basis to a stated
percentage of the Fund's average daily net assets as follows:
Net Asset Value Annual Rate
First $750,000,000....................... 0.75%
Amount over $750,000,000................. 0.70%
On the Record Date, the Fund had net assets of $1,027,762.19.
-5-
<PAGE>
The Adviser acts as investment adviser to certain investment
companies that have investment objectives similar to the Fund's
objective of seeking above average total return. These investment
companies, their asset sizes and the rates of compensation that they
pay to the Adviser are listed on Schedule I to this Proxy Statement.
Analysis of the Proposed Management Contract and Review Process of
Trustees
The Trustees have determined that the terms of the Proposed
Management Contract, including the increase in the investment
management fee, are fair and reasonable. In approving the Proposed
Management Contract and recommending its approval by the shareholders,
the Trustees, including the Independent Trustees, considering the best
interests of the Fund's shareholders, took into account all such
factors as they deemed relevant. The factors considered by the
Independent Trustees included (without limitation) the nature, quality
and scope of the services provided to the Fund; the necessity of the
Adviser's maintaining and enhancing its ability to retain capable
sub-advisers for the Fund and the increased competition for high
quality investment management personnel and sub-advisers; and the
investment record of the Adviser in supervising the management of the
Fund and managing other John Hancock mutual funds. The Trustees believe
that the level of administrative and advisory services required by the
Fund and the Adviser's past performance in managing other mutual funds
support their recommendation that shareholders approve the Proposed
Management Contract.
In evaluating the Proposed Management Contract, the Trustees
relied on their ongoing review of the Adviser's activities on behalf of
the Fund and were also provided extensive additional specific data and
analyses by the Adviser. The Trustees considered information obtained
from Lipper Analytical Services, Inc. relating to the investment
management fees and total expenses paid by other investment companies
comparable to the Fund and the performance of such investment
companies. In addition, the Trustees considered that, effective on
September 1, 1995, the Fund's existing Rule 12b-1 distribution plan
will be activated and the Fund will implement a new class of shares
with its own Rule 12b-1 plan, as described above. The Trustees
determined that the Fund's management fee and total expenses (for Class
A Shares) would be appropriate and comparable to management fees and
total expenses paid by investment companies that are (or, beginning on
September 1, 1995, will be) comparable to the Fund. Throughout the
review process, the Independent Trustees were advised by their
independent legal counsel, who was not counsel to the Fund, the Adviser
or the Sub-adviser.
Set forth below is a comparative fee table showing the amount of
fees and expenses payable under the Existing Management Contract and
the amount of fees and expenses the Fund's Class A shareholders
(includes all current shareholders) will pay if the Proposed Management
Contract, including the increase in the investment management fee, goes
into effect. The Trustees reviewed this and related data in considering
the Proposed Management Contract.
-6-
<PAGE>
+------------------------------------------------------------------------------+
| COMPARATIVE FEE TABLE |
| |
|Annual Fund Operating Expenses |
| (as a percentage of average net assets) |
| |
+------------------------------------------------------------------------------+
| Fees With |
| Fees With Proposed |
| Existing Management Fee |
| Management Fee (Class A Shares) |
| -------------- ---------------- |
| |
|Management Fee (after fee reduction) 0.50% 0.58%* |
| |
|12b-1 Fees.......................... 0.30% 0.30% |
| |
|Other Expenses...................... 0.42% 0.42% |
| |
|Total Fund Operating Expenses |
| (after fee reduction)............. 1.22% 1.30%* |
| |
|_______________ |
|* The management fee and total operating expenses shown for Class A shares |
| under the proposed fee structure reflect the Adviser's agreement to limit |
| Class A share expenses to 1.30% of the first $100 million of the Fund's |
| average daily net assets. If this agreement were not in place, the |
| management fee and total operating expenses for Class A shares under the |
| proposed fee structure would be 0.75% and 1.47%, respectively. |
| |
| |
|Example |
| |
|The following example illustrates the expenses on a $1,000 investment under |
|the existing and proposed fees and the expenses stated above, assuming (1) a |
|5% annual return and (2) redemption at the end of each time period. The |
|example does not reflect the payment of a sales charge because investors did |
|not pay sales charges in connection with their existing investments in the |
|Fund. Investments made on or after September 1, 1995 will be subject to a |
|sales charge. |
| Fees With |
| Fees With Proposed Management Fee |
| Existing Management Fee (Class A Shares) |
| ----------------------- ----------------------- |
| |
|1 year $ 12 $ 13 |
|3 years $ 39 $ 41 |
|5 years $ 67 $ 71 |
|10 years $148 $157 |
| |
| The purpose of this example and the table is to assist investors in |
|understanding the various costs and expenses of investing in shares of the |
|Fund. The example above should not be considered a representation of past or |
|future expenses of the Fund. Actual expenses may vary from year to year and |
|may be higher or lower than those shown above. |
+------------------------------------------------------------------------------+
| |
+------------------------------------------------------------------------------+
-7-
<PAGE>
Set forth below are: (1) the Fund's investment management fees,
expressed as dollar amounts for the Fund's fiscal year ended May 31,
1995; (2) the Fund's pro forma investment management fees, expressed as
dollar amounts for such year, which assume that the Proposed Management
Contract was in effect for such year; and (3) the differences between
the actual and pro forma fee figures, expressed both as dollar amounts
and as percentages of the Fund's actual management fees for such year.
The first set of figures shown does not give effect to, in the
case of actual fees, the 0.70% expense limitation that was in effect
during such year, and, in the case of pro forma fees, the new 1.30%
Class A expense limitation. See footnote in Comparative Fee Table on
p. 8. The second set of figures gives effect to both limitations.
Investment Management Fee
-----------------------------------------------
Pro
Actual Forma Difference
-----------------------------------------------
Without Giving Effect to Expense Limitations:
$457,613 $686,420 $228,807
50%
Giving Effect to Expense Limitations:
$423,313 $530,832* $107,519
25%
-------------
* Assumes that expenses shown in Comparative Fee Table on Page 8,
including Class A Rule 12b-1 fee of 0.30%, were in effect.
The Independent Trustees also considered specific information
provided by the Adviser relating to the revenues, expenses and
profitability attributable to the management of the Fund in the John
Hancock fund complex. The Adviser advised the Independent Trustees that
the data presented was based on internal allocations of costs and
revenues pursuant to methods which the Adviser believed to be
reasonable. However, different allocation methods might have produced
different results. The Independent Trustees also considered comparative
information relating to the profitability of other investment company
investment managers. The Trustees believe that the Adviser's
profitability will not be unduly enhanced by adoption of the Proposed
Management Contract.
The following table reflects, for the three years ending December
31, 1994, management fees received, operating expenses and net income
of the Adviser for all John Hancock funds. The Trustees reviewed this
data in considering the Proposed Management Contract.
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Management fee income for
all John Hancock funds
(net of fee reductions and
expense limitations) ..... $48,791,575 $39,183,829 $24,586,054
Operating expenses directly
attributable to management
fee income ............... $ 6,146,068 $ 5,469,565 $ 3,736,996
Net management fee income
(before provision for
federal income taxes) .... $42,645,507 $33,714,264 $20,849,058
Profit margin before
federal income taxes ..... 87.4% 86.0% 84.8%
Total net management fee
income as a percentage of
average net assets under
management ............... 0.43% 0.40% 0.38%
</TABLE>
-8-
<PAGE>
For funds in the John Hancock fund complex other than certain
closed-end and money market funds, John Hancock Funds, a subsidiary
of the Adviser, received during the years ended December 31, 1992,
1993 and 1994 distribution plan fees of $18,229,941, $25,868,038 and
$28,925,841, respectively, and incurred related expenses of
$6,646,492, $11,843,728 and $13,314,971, respectively; and Investor
Services, an affiliate of the Adviser, received during 1992, 1993 and
1994 transfer agency fees of $15,235,004, $20,770,366 and
$23,528,596, respectively, and incurred related expenses of
$6,026,088, $8,126,183 and $9,268,894, respectively.
In addition to the information summarized in the preceding
discussion, the Independent Trustees reviewed and evaluated other
facts and information deemed by them to be relevant to their
consideration of the Proposed Management Contract. For example, the
Independent Trustees also considered benefits that may accrue to the
Adviser or its affiliated companies by virtue of their association
with the Fund and other funds in the John Hancock fund complex. These
"spin off" benefits may include, among others, the placement of Fund
portfolio transactions through broker-dealers that are affiliated
with the Adviser, the provision of transfer agency services to
certain of the funds in the John Hancock fund complex and the
promotion to shareholders of the Fund of various other products and
services offered by the Adviser and its affiliated companies. The
Trustees determined that the possibility of such benefits to the
Adviser does not detract from their conclusion that the terms of the
Proposed Management Contract are fair and reasonable.
Trustees' Evaluation and Recommendation
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS APPROVE THE PROPOSED
MANAGEMENT CONTRACT INCLUDING AN INCREASE TO THE INVESTMENT
MANAGEMENT FEE.
If the Proposed Management Contract is approved by the Fund's
shareholders, it will take effect on September 1, 1995. If the
Proposed Management Contract is not approved by the Fund's
shareholders, the Existing Management Contract will continue in
accordance with its terms.
Vote Required
Approval of Proposal 1 requires the affirmative vote of a
majority of the outstanding voting securities of the Fund, as defined
in the 1940 Act, which means the lesser of (1) 67 percent or more of
the shares of the Fund represented at the Shareholder Meeting, if at
least 50 percent of all outstanding shares of the Fund are
represented at that meeting; or (2) 50 percent or more of the
outstanding shares of the Fund entitled to vote at the meeting.
-9-
<PAGE>
(Proposal 2)
APPROVAL OF THE TERMS OF A NEW SUB-ADVISORY CONTRACT
FOR THE FUND
Status of the Existing Sub-advisory Contract
The Trust, on behalf of the Fund, has entered into a
Sub-advisory Contract dated January 1, 1994 (the "Existing
Sub-advisory Contract") with the Adviser and the Sub-adviser.
Shareholders of the Fund approved the Existing Sub-advisory Contract
at a meeting held on September 21, 1993. The purpose of submitting
the Existing Sub-advisory Contract for shareholder approval at that
meeting was to obtain their approval of changes to the Contract which
incorporated the terms of a fee reduction by the Sub-adviser that had
been in effect prior to the meeting and changed the frequency of
payments of the sub-advisory fee from quarterly to monthly. The
shareholders also approved certain modernizing changes to the
Existing Sub-advisory Contract at that meeting. The Existing
Sub-advisory Contract was most recently approved by the Trust's Board
of Trustees, including the Independent Trustees, on May 1, 1995.
Pursuant to the Existing Sub-advisory Contract, the
Sub-adviser, subject to the review of the Trustees and the overall
supervision of the Adviser, is required to use its best efforts to
provide the Fund with continuing and suitable investment advice with
respect to investments. Specifically, the Sub-adviser is required
to: (a) give the Adviser and the Fund advice and recommendations
regarding the purchase, holding and disposition of portfolio
securities, (b) give the Adviser and the Fund advice as to the manner
in which voting rights, subscription rights, rights to consent to
corporate action and any other rights pertaining to the Fund's assets
will be exercised, (c) give the Adviser and the Fund research,
economic and statistical data in connection with the Fund's
investments and investment policies, (d) submit such reports relating
to the valuation of the Fund's portfolio securities as the Adviser
may reasonably request, (e) engage in negotiations relating to the
Fund's investments, (f) place orders for the purchase and sale of
portfolio securities, (g) maintain and preserve the records required
by the 1940 Act to be maintained by the Sub-adviser, (h) instruct the
Fund's custodian, and (i) from time to time or at any time requested
by the Adviser or the Trustees, make reports to the Adviser or the
Trust of its performance under the Contract.
By its terms, the Existing Sub-advisory Contract continues in
effect automatically until May 31, 1996 and for successive annual
periods thereafter, provided that the continuance is specifically
approved at least annually by (i) the Trust's Board of Trustees or
(ii) a vote of a "majority" (as defined in the 1940 Act) of the
Fund's outstanding voting securities and provided further that, in
either event, the continuance is also approved by a majority of the
Trust's Independent Trustees, by vote cast in person at a meeting
called for the purpose of voting on such approval. The Existing
Sub-advisory Contract is terminable, without penalty, on not less
than 60 days' notice by the Trust's Board of Trustees, by vote of
holders of a majority of the Fund's shares, or by
-10-
<PAGE>
the Adviser or the Sub-adviser. The Existing Sub-advisory Contract
terminates automatically in the event of its "assignment" (as defined
in the 1940 Act).
Under the Existing Sub-advisory Contract, the Sub-adviser is
not liable for any error of judgment or mistake of law or for any
loss suffered by the Trust or the Fund or the Adviser in connection
with the matters to which such contract relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on
the Sub-adviser's part in the performance of its duties or from
reckless disregard by the Sub-adviser of its obligations and duties
under the contract.
The Sub-adviser is a wholly-owned subsidiary of John Hancock
Asset Management, which is a wholly-owned subsidiary of John Hancock
Subsidiaries, Inc., which is a wholly-owned subsidiary of the Life
Company. The address of the Sub-adviser is 53 State Street, Boston,
Massachusetts 02109. The directors of the Sub-adviser and their
principal occupations or employment are set forth below under
"Directors of the Adviser and Sub-adviser."
Proposed Sub-advisory Contract
At a meeting of the Trust's Board of Trustees held on May 1,
1995, the Trustees, including all of the Independent Trustees,
approved, and voted to recommend that the shareholders of the Fund
approve, a proposal to adopt a new Sub-advisory Contract among the
Trust on behalf of the Fund, the Adviser and the Sub-adviser (the
"Proposed Sub-advisory Contract"). The terms of the Proposed
Sub-advisory Contract would increase the sub-advisory fee currently
paid by the Adviser under the Existing Sub-advisory Contract, as
further described below. All other provisions (excluding dates) would
remain the same as in the Existing Sub-advisory Contract. The terms
of the Proposed Sub-advisory Contract are being submitted under this
Proposal for approval by shareholders of the
Fund.
For a copy of the Proposed Sub-advisory Contract, see Exhibit B
attached to this Proxy Statement. The description of the Proposed
Sub-advisory Contract contained in the text of this Proxy Statement
is qualified in its entirety by Exhibit B.
As described in Proposal 1, the Trustees have determined that
the Fund should take certain actions that they believe will result in
a significant increase in the Fund's net assets; however, there can
be no assurance that this will occur. The Adviser and the Sub-adviser
believe that the proposed fee increases will allow them to continue
to offer the highest levels of expertise and to retain and attract
capable personnel to serve the Fund.
UNDER THE EXISTING SUB-ADVISORY CONTRACT, the Adviser pays the
Sub-adviser a monthly fee based on a stated percentage of the Fund's
average daily net assets, as follows:
-11-
<PAGE>
(a) While the Fund's average daily net assets are below or
equal to $30 million and are: the fee shall be
between $0 and $10 million: 0% of average daily
net assets
between $10 million and
$20 million: 0.15% of average daily
net assets
between $20 million and
$30 million: 0.225% of average daily
net assets
(b) While the Fund's average daily net assets exceed $30
million, the fee shall be as follows:
0.30% of average daily net assets up to $50 million;
plus 0.35% of average daily net assets, if any, between $50
million and $100 million;
plus 0.40% of average daily net assets, if any, over $100
million.
UNDER THE PROPOSED SUB-ADVISORY CONTRACT, the Adviser would pay
the Sub-adviser a quarterly fee at the annual rate of 55% of the
management fee paid by the Fund to the Adviser for the preceding
three months.
Under the Proposed Sub-advisory Contract, the sub-advisory fee
would be increased from 0.225% to 0.4125% of the Fund's average daily
net assets, assuming net assets of $30 million; from 0.30% to
0.4125%, assuming net assets of $50 million; and from 0.325% to
0.4125%, assuming net assets of $100 million. On the Record Date, the
Fund had net assets of $1,027,762.19.
Analysis of the Proposed Sub-advisory Contract and Review Process of
Trustees
The Trustees have determined that the terms of the Proposed
Sub-advisory Contract, including the increase in the sub-advisory
fee, are fair and reasonable. In approving the Proposed Sub-advisory
Contract and recommending its approval by the shareholders, the
Trustees, including the Independent Trustees, considered the best
interests of the Fund's shareholders and took into account all the
factors they deemed relevant. These factors included (without
limitation) the nature, quality and scope of the services provided by
the Sub-adviser to the Fund; the necessity of the Sub-adviser's
maintaining and enhancing its ability to retain capable personnel and
the increased competition for high quality investment management
personnel; and the investment record of the Sub-adviser in managing
the Fund and certain private accounts. The Trustees believe that the
level of advisory services required by the Fund and the Sub-adviser's
past performance in managing the Fund and certain private accounts
support their recommendation that shareholders approve the Proposed
Sub-advisory Contract.
-12-
<PAGE>
In evaluating the Proposed Sub-advisory Contract, the Trustees
relied on their ongoing review of the Sub-adviser's activities on
behalf of the Fund and were also given additional specific data and
analyses by the Sub-adviser. The Trustees considered information
obtained from Lipper Analytical Services, Inc. relating to the
sub-advisory fees and total expenses paid by other investment
companies comparable to the Fund, as well as all the information
described in Proposal 1 with respect to the Proposed Management
Contract. The Trustees determined that the Fund's sub-advisory fee
would be appropriate and comparable to subadvisory fees of investment
companies that are (or, beginning on September 1, 1995, will be)
comparable to the Fund. Throughout the review process, the
Independent Trustees were advised by their independent legal counsel,
who was not counsel to the Fund, the Adviser or the Sub-adviser.
Set forth below are: (1) the Fund's sub-advisory fee (payable
by the Adviser), expressed as dollar amounts for the Fund's fiscal
year ended May 31, 1995; (2) the Fund's pro forma sub-advisory fees,
expressed as dollar amounts, which assume that the Proposed
Sub-Advisory Contract was in effect during such year; and (3) the
differences between the actual and pro forma fee figures, expressed
both as dollar amounts and as percentages of the Fund's actual
sub-advisory fees for such year.
The first set of figures shown does not give effect to, in the
case of pro forma fees, the new 1.30% Class A expense limitation. The
second set of figures gives effect to this limitation.
Sub-advisory Fee
------------------------------------------------
Pro
Actual Forma Difference
------------------------------------------------
Without Giving Effect to Expense Limitation:
$295,329 $377,531 $82,202
28%
Giving Effect to Expense Limitation:
$295,329 $291,957* $(3,372)
(1)%
-------------
* Assumes that expenses shown in Comparative Fee Table on Page 8,
including Class A Rule 12b-1 fee of 0.30%, were in effect.
In addition to the information summarized in the preceding
discussion, the Independent Trustees reviewed and evaluated other
facts and information that they deemed to be relevant to their
consideration of the Proposed Sub-advisory Contract. For example, the
Independent Trustees also considered benefits that may accrue to the
Sub-adviser or its affiliated companies by virtue of their
association with the Fund. These "spin off" benefits may include,
among others, the placement of Fund portfolio transactions through
broker-dealers that are affiliated with the Sub-adviser, the
provision of transfer agency services to certain of the funds in the
John Hancock fund complex, and the promotion to Fund shareholders of
various other products and services offered by the Sub-adviser and
its affiliated companies. The Trustees determined that the
possibility of such benefits to the Sub-adviser does not detract from
their conclusion that the terms of the Proposed Sub-advisory Contract
are fair and reasonable.
Trustees' Evaluation and Recommendation
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS APPROVE THE PROPOSED
SUB-ADVISORY CONTRACT INCLUDING AN INCREASE TO THE SUB-ADVISORY FEE
PAYABLE BY THE ADVISER.
-13-
<PAGE>
If the Proposed Sub-advisory Contract is approved by the Fund's
shareholders, it will take effect on September 1, 1995. If the
Proposed Sub-advisory Contract is not approved by the Fund's
shareholders, the Existing Sub-advisory Contract will continue in
accordance with its terms.
Vote Required
Approval of the Proposed Sub-advisory Contract requires the
affirmative vote of a majority of the Fund's outstanding voting
securities, as defined in Proposal 1.
_________________________________________________
DIRECTORS OF THE ADVISER AND SUB-ADVISER
Edward J. Boudreau, Jr., Chairman and Chief Executive Officer,
and William C. Fletcher, President and Chief Executive Officer, are
the principal executive officers of the Adviser and the Sub-adviser,
respectively. Their principal occupations and addresses, as well as
those of the other Directors of the Adviser and the Sub-adviser, are
set forth below.
<TABLE>
<CAPTION>
Directors of the Adviser
<S> <C>
Edward J. Boudreau, Jr. Chairman and Chief Executive Officer, the
101 Huntington Avenue Adviser and The Berkeley Group;
Boston, MA 02199 Chairman, John Hancock Advisers
International Ltd., John Hancock Funds
and Investor Services (collectively, the
"Affiliated Companies"); Chairman, NM Capital
Management, Inc., Sovereign Asset Management
Corporation and First Signature Bank & Trust.
Stephen L. Brown Chairman and Chief Executive Officer, the
John Hancock Place Life Company; Director, the Adviser and
Boston, MA 02117 the Affiliated Companies; Trustee, The Berkeley
Group and John Hancock Asset Management.
Foster L. Aborn Vice Chairman, Director and President, Investment and
John Hancock Place Pension Sector, the Life Company; Director,
Boston, MA 02117 the Adviser, the Sub-adviser, Investor
Services, John Hancock Funds, John Hancock
Subsidiaries, Inc., Hancock Venture Partners,
Inc., John Hancock Capital Growth Management,
Inc., John Hancock Capital Corp. and John
Hancock Freedom Securities Corp.; Trustee, The
Berkeley Group and John Hancock Asset
Management.
-14-
<PAGE>
Richard S. Scipione Director, the Adviser, NM Capital Management,
John Hancock Place Inc., Sovereign Asset Management Corporation
Boston, MA 02117 and the Affiliated Companies; General Counsel,
the Life Company; Trustee, The Berkeley Group.
Thomas E. Moloney Chief Financial Officer, the Life Company;
John Hancock Place Director, the Adviser and the Affiliated
Boston, MA 02117 Companies; Trustee, The Berkeley Group.
John M. DeCiccio Senior Vice President, Investment Policy
John Hancock Place and Research, the Life Company; Director,
Boston, MA 02117 the Adviser and the Affiliated Companies;
Trustee, The Berkeley Group.
Jeanne M. Livermore Senior Vice President, Group Pension Guaranteed
John Hancock Place and Stable Value Products, the Life Company;
Boston, MA 02117 Director, the Adviser and the Affiliated
Companies; Trustee, The Berkeley Group.
John Goldsmith Chairman and Chief Executive Officer, John
One Beacon Street Hancock Freedom Securities Corp.; Director, the
Boston, MA 02108 Adviser and the Affiliated Companies; Trustee,
The Berkeley Group.
Richard O. Hansen Vice President, Managerial Department, the Life
John Hancock Place Company; Director, the Adviser and the
Boston, MA 02117 Affiliated Companies; Trustee, The Berkeley
Group.
William C. Fletcher President and Director, the Sub-Adviser;
53 State Street Director, the Adviser, John Hancock Funds, Investor
Boston, MA 02109 Services, Hancock Natural Resource Group, Inc.
and John Hancock Energy Resources Management,
Inc.; Trustee, President and Chief Executive
Officer, John Hancock Asset Management; Trustee,
The Berkeley Group.
Robert G. Freedman Vice Chairman and Chief Investment Officer, the
101 Huntington Avenue Adviser; Director, the Affiliated Companies,
Boston, MA 02199 NM Capital Management, Inc. and Sovereign Asset
Management Corporation; Senior Vice President,
The Berkeley Group.
Robert H. Watts President, Chief Executive Officer and Director,
John Hancock Place John Hancock Distributors, Inc.; Director, the
Boston, MA 02117 Adviser and the Affiliated Companies.
-15-
<PAGE>
C. Troy Shaver, Jr. President, Chief Executive Officer and Director,
101 Huntington Avenue John Hancock Funds; Director, the Adviser,
Boston, MA 02199 NM Capital Management, Inc., Sovereign Asset
Management Corporation and the Affiliated
Companies.
David A. King President, Chief Executive Officer and Director,
101 Huntington Avenue Investor Services; Director, the Adviser and the
Boston, MA 02199 Affiliated Companies.
</TABLE>
In addition to Messrs. Boudreau, Scipione and Freedman, the
following persons are officers and/or directors of both the Trust and
the Adviser: Anne C. Hodsdon, President of the Trust and President
and Chief Operations Officer of the Adviser; Thomas H. Drohan, Senior
Vice President and Secretary of both the Trust and the Adviser; James
K. Ho, Senior Vice President of both the Trust and the Adviser; James
B. Little, Senior Vice President and Chief Financial Officer of the
Trust and Senior Vice President of the Adviser; Michael P. DiCarlo,
Senior Vice President of both the Trust and the Adviser; Andrew F.
St. Pierre, Senior Vice President of both the Trust and the Adviser;
Frederick L. Cavanaugh, Jr., Senior Vice President of both the Trust
and the Adviser; John A. Morin, Vice President of both the Trust and
the Adviser; Susan S. Newton, Vice President, Assistant Secretary and
Compliance Officer of the Trust and Vice President and Assistant
Secretary of the Adviser; and James J. Stokowski, Vice President and
Treasurer of the Trust and Vice President of the Adviser.
<TABLE>
<CAPTION>
Directors of the Sub-adviser
<S> <C>
William C. Fletcher See "Directors of the Adviser" above for a
53 State Street description of Mr. Fletcher's principal
Boston, MA 02109 occupations.
Foster L. Aborn See "Directors of the Adviser" above for a
John Hancock Place description of Mr. Aborn's principal
Boston, MA 02117 occupations.
Henry D. Shaw Director, the Sub-adviser; Senior Vice
John Hancock Place President, the Life Company.
Boston, MA 02117
John T. Farady Director, the Sub-adviser; Senior Vice
John Hancock Place President and Treasurer, the Life Company.
Boston, MA 02117
Lewis J. Kleinrock Director, the Sub-adviser.
11 Longwood Lane
Walpole, MA 02081
Joseph A. Tomlinson Director, the Sub-adviser; Vice President,
John Hancock Place the Life Company.
Boston, MA 02117
</TABLE>
-16-
<PAGE>
PROXIES AND VOTING AT THE SHAREHOLDER MEETING
Any person giving a proxy has the power to revoke it any time
prior to its exercise by executing a superseding proxy or by
submitting a written notice of revocation to the Secretary of the
Trust. In addition, although mere attendance at the Shareholder
Meeting will not revoke a proxy, a shareholder present at the
Shareholder Meeting may withdraw his or her proxy by notifying the
Secretary, and vote in person. All properly executed and unrevoked
proxies received in time for the meeting will be voted in accordance
with the instructions contained in the proxies. If no instruction is
given, the persons named as proxies will vote the shares represented
thereby in favor of the matters set forth in Proposals 1 and 2, and
will use their best judgment in connection with the transaction of
any other business that may properly come before the Shareholder
Meeting or any adjournment of the Shareholder Meeting.
In the event that, at the time any session of the Shareholder
Meeting is called to order, a quorum is not present in person or by
proxy, the persons named as proxies may vote the proxies that have
been received to adjourn the Shareholder Meeting to a later date. In
the event that there is a quorum but there are not enough votes in
favor of either of Proposals 1 and 2, the persons named as proxies
will vote the proxies that they are entitled to vote in favor of the
relevant Proposal for an adjournment and will vote the proxies
required to be voted against the Proposal against an adjournment. A
shareholder vote may be taken on one or more of the Proposals in the
Proxy Statement prior to the adjournment if enough votes for its
approval have been received and it is otherwise appropriate.
Shares of beneficial interest of the Fund represented in person
or by proxy (including shares that abstain or do not vote with
respect to one or more of the Proposals presented for shareholder
approval) will be counted for purposes of determining whether a
quorum is present at the Shareholder Meeting. Abstentions will be
treated as shares that are present and entitled to vote with respect
to each Proposal, but will not be counted as a vote in favor of the
Proposal. Accordingly, an abstention from voting on a Proposal has
the same effect as a vote against the Proposal. As noted above, the
adoption by the Fund's shareholders of Proposals 1 and 2 requires the
affirmative vote of the lesser of (i) 67 percent or more of the
Fund's outstanding voting securities present at the Shareholder
Meeting, if the holders of more than 50 percent of the Fund's shares
of beneficial interest are present or represented by proxy; or (ii)
50 percent or more of the Fund's outstanding shares of beneficial
interest. If a broker or nominee holding shares in "street name"
indicates on the proxy that it does not have discretionary authority
to vote as to a particular Proposal, those shares will not be
considered as present and entitled to vote with respect to the
Proposal. Accordingly, a "broker non-vote" has no effect on the
voting in determining whether a Proposal has been adopted pursuant to
item (i) above. However, in determining whether a Proposal has been
adopted pursuant to item (ii) above, because shares represented by a
-17-
<PAGE>
"broker non-vote" are considered outstanding shares, a "broker
non-vote" will have the same effect as a vote against the Proposal.
MISCELLANEOUS
Affiliated Brokers
During the Fund's fiscal year ended May 31, 1995, the Fund paid
no brokerage commissions to brokers affiliated with the Adviser or
the Sub-adviser.
Payments by the Fund to an Affiliate of the Adviser and the Sub-adviser
For the Fund's fiscal year ended May 31, 1995, the Fund paid
transfer agency fees of $91,523 (0.10% of the Fund's average daily
net assets for the year) to Investor Services, an affiliate of the
Adviser and the Sub-adviser. It is expected that Investor Services
will continue to provide transfer agency services to the Fund after
the Shareholder Meeting.
Trustee Share Ownership
On the Record Date, Edward Spellman, Gail Fosler and Dennis
Aronowitz were the only Trustees who owned shares of the Fund. On such
date, Ms. Fosler owned 80.833 shares of the Fund and Messrs. Spellman
and Aronowitz owned 2,634.442 and 78.311 shares, respectively, of the
Fund.
Other Matters
The Trust's management knows of no business to be brought
before the Shareholder Meeting except as described above. However, if
any other matters properly come before the Shareholder Meeting, the
persons named in the enclosed form of proxy intend to vote on such
matters in accordance with their best judgment. If shareholders want
additional information about the matters proposed for action, the
Trust's management will be glad to hear from them and to provide
further information.
SHAREHOLDERS' PROPOSALS
The Trust is not required, and does not intend, to hold
meetings of shareholders each year. Instead, meetings will be held
only when and if required. Any shareholders wishing to present a
proposal for consideration at the next meeting of the Fund's
shareholders must submit the proposal in writing, so that the Trust
receives it at 101 Huntington Avenue, Boston, Massachusetts 02199
within a reasonable time before the meeting.
August 11, 1995
JOHN HANCOCK INDEPENDENCE DIVERSIFIED CORE EQUITY FUND
-18-
<PAGE>
SCHEDULE I
Other Investment Companies Managed by the Adviser
The Adviser acts as investment adviser to certain investment
companies that have investment objectives similar to the Fund's
objective of seeking above average total return. These funds and the
rates of compensation that they pay to the Adviser are listed below,
along with the funds' net assets as of June 1, 1995.
<TABLE>
<CAPTION>
Annual Rate as a Net Assets as of
Investment Company Percentage of Net Assets June 1, 1995
-----------------------------------------------------------------------------------
<S> <C> <C>
John Hancock Independence 0.50% $ 5,897,840
Diversified Core Equity
Fund II*
John Hancock Growth and 0.625% $ 240,559,452
Income Fund
John Hancock Sovereign 0.60% of first $750,000,000 $1,378,706,479
Investors Fund 0.55% of next $750,000,000
0.50% of next $1,000,000,000
0.45% of excess over $2,500,000,000
John Hancock Sovereign 0.60% $ 148,782,549
Balanced Fund
-----------------------------------------------------------------------------------
</TABLE>
* The Adviser has agreed to an expense limitation with respect to
John Hancock Independence Diversified Core Equity Fund II ("Core
Equity Fund II"). While this limitation is in effect, it is
expected that the management fee of Core Equity Fund II will amount
to 0.12% of Core Equity Fund II's average net assets. Unlike the
Fund, which will have a $1,000 minimum initial investment and will
be marketed to retail investors, Core Equity Fund II has a $250,000
minimum initial investment and is available only to certain
institutional investors.
The Sub-adviser acts as sub-adviser to Core Equity Fund II, an
investment company whose investment objective is identical to the
Fund's objective of seeking above average total return. As compensation
for services rendered to Core Equity Fund II, the Sub-adviser is
entitled to a monthly fee from the Adviser, Core Equity Fund II's
investment adviser, that is equal on an annual basis to 0.40% of Core
Equity Fund II's average daily net assets. However, while the Adviser's
expense limitation referred to above is in effect, the Sub-adviser
receives only 80% of the Adviser's management fee, such amount being
equal to 0.096% of Core Equity Fund II's average daily net assets.
-19-
Exhibit A
JOHN HANCOCK STRATEGIC SERIES
John Hancock Independence Diversified Core Equity Fund
Investment Management Contract
Dated ________ __, 1995
Page 1
<PAGE>
JOHN HANCOCK STRATEGIC SERIES
John Hancock Independence Diversified Core Equity Fund
Boston, Massachusetts
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199
Investment Management Contract
Ladies and Gentlemen:
John Hancock Strategic Series (the "Trust") has been organized as a
business trust under the laws of the Commonwealth of Massachusetts to engage in
the business of an investment company. The Trust's shares of beneficial interest
may be classified into series, each series representing the entire undivided
interest in a separate portfolio of assets. Series may be established or
terminated from time to time by action of the Board of Trustees of the Trust. As
of the date hereof, the Trust has two series of shares, representing interests
in John Hancock Strategic Income Fund and John Hancock Independence Diversified
Core Equity Fund.
The Board of Trustees of the Trust (the "Trustees") has selected John
Hancock Advisers, Inc. (the "Adviser") to provide overall investment advice and
management for the John Hancock Independence Diversified Core Equity Fund (the
"Fund"), and to provide certain other services, as more fully set forth below,
and the Adviser is willing to provide such advice, management and services under
the terms and conditions hereinafter set forth. Accordingly, the Trust and the
Adviser agree as follows:
1. Delivery of Documents. The Trust has furnished the Adviser with copies,
properly certified or otherwise authenticated, of each of the following:
Page 2
<PAGE>
(a) Declaration of Trust of the Trust dated April 16, 1986 as amended
and restated (the "Declaration of Trust");
(b) By-Laws of the Trust as in effect on the date hereof;
(c) Resolutions of the Trustees selecting the Adviser as investment
adviser for the Fund and approving the form of this Agreement;
(d) Resolutions of the Trustees approving the form of the Sub-Adviser's
contract by and among the Adviser, Independence Investment Associates, Inc.
("IIA") and the Trust on behalf of the Fund (the "Sub-Investment Management
Contract");
(e) the Sub-Investment Management Contract; and
(f) commitments, limitations and undertakings made by the Fund to state
securities or "blue sky" authorities for the purpose of qualifying shares of the
Fund for sale in such states.
The Trust will furnish to the Adviser from time to time copies, properly
certified or otherwise authenticated, of all amendments of or supplements to the
foregoing, if any.
2. Investment and Management Services. The Adviser will use its best efforts to
provide to the Fund continuing and suitable investment programs with respect to
investments, consistent with the investment policies, objectives and
restrictions of the Fund. In the performance of the Adviser's duties hereunder,
subject always (x) to the provisions contained in the documents delivered to the
Adviser pursuant to Section 1, as each of the same may from time to time be
amended or supplemented, and (y) to the limitations set forth in the
registration statement of the Trust, on behalf of the Fund, as in effect from
time to time under the Securities Act of 1933, as amended, and the Investment
Company Act of 1940, as amended (the "1940 Act"), the Adviser will, at its own
expense:
(a) furnish the Fund with advice and recommendations, consistent with
the investment policies, objectives and restrictions of the Fund, with respect
to the purchase, holding and disposition of portfolio securities including, the
purchase and sale of options, alone or in consultation with any sub-adviser or
sub-advisers appointed pursuant to this Agreement and subject to the provisions
of any sub-investment management contract respecting the responsibilities of
such sub-adviser or sub-advisers;
(b) advise the Fund in connection with policy decisions to be made by
the Trustees or any committee thereof with respect to the Fund's investments
and, as requested, furnish the Fund with research, economic and statistical data
in connection with the Fund's investments and investment policies;
Page 3
<PAGE>
(c) provide administration of the day-to-day investment operations of
the Fund;
(d) submit such reports relating to the valuation of the Fund's
securities as the Trustees may reasonably request;
(e) assist the Fund in any negotiations relating to the Fund's
investments with issuers, investment banking firms, securities brokers or
dealers and other institutions or investors;
(f) consistent with the provisions of Section 7 of this Agreement, place
orders for the purchase, sale or exchange of portfolio securities with brokers
or dealers selected by the Adviser, provided that in connection with the placing
of such orders and the selection of such brokers or dealers the Adviser shall
seek to obtain execution and pricing within the policy guidelines determined by
the Trustees and set forth in the Prospectus and Statement of Additional
Information of the Fund as in effect from time to time;
(g) provide office space and office equipment and supplies, the use of
accounting equipment when required, and necessary executive, clerical and
secretarial personnel for the administration of the affairs of the Fund;
(h) from time to time or at any time requested by the Trustees, make
reports to the Trust of the Adviser's performance of the foregoing services and
furnish advice and recommendations with respect to other aspects of the business
and affairs of the Fund;
(i) maintain all books and records with respect to the Fund's securities
transactions required by the 1940 Act, including sub-paragraphs (b)(5), (6), (9)
and (10) and paragraph (f) of Rule 31a-1 thereunder (other than those records
being maintained by the Fund's custodian or transfer agent) and preserve such
records for the periods prescribed therefor by Rule 31a-2 of the 1940 Act (the
Adviser agrees that such records are the property of the Trust and will be
surrendered to the Trust promptly upon request therefor);
(j) obtain and evaluate such information relating to economies,
industries, businesses, securities markets and securities as the Adviser may
deem necessary or useful in the discharge of the Adviser's duties hereunder;
(k) oversee, and use the Adviser's best efforts to assure the
performance of the activities and services of the custodian, transfer agent or
other similar agents retained by the Trust;
(l) give instructions to the Fund's custodian as to deliveries of
securities to and from such custodian and transfer of payment of cash for the
account of the Fund; and
Page 4
<PAGE>
(m) appoint and employ one or more sub-advisers satisfactory to the
Fund under sub-investment management agreements.
3. Expenses paid by the Adviser. The Adviser will pay:
(a) the compensation and expenses of all officers and employees of the
Fund;
(b) the expenses of office rent, telephone and other utilities, office
furniture, equipment, supplies and other expenses of the Fund;
(c) any other expenses incurred by the Adviser in connection with the
performance of its duties hereunder; and
(d) premiums for such insurance as may be agreed upon by the Adviser and
the Trustees.
4. Expenses of the Fund Not Paid by the Adviser. The Adviser will not be
required to pay any expenses which this Agreement does not expressly make
payable by it. In particular, and without limiting the generality of the
foregoing but subject to the provisions of Section 3, the Adviser will not be
required to pay under this Agreement:
(a) The expenses of organizing the Fund (including without limitation,
legal, accounting and auditing fees and expenses incurred in connection with the
matters referred to in this clause (a)), of initially registering shares of the
Fund under the Securities Act of 1933, as amended, and of qualifying the shares
for sale under state securities laws for the initial offering and sale of
shares;
(b) the compensation and expenses of Trustees who are not interested
persons (as used in this Agreement, such term shall have the meaning specified
in the 1940 Act) of the Adviser and of independent advisers, independent
contractors, consultants, managers and other unaffiliated agents employed by the
Fund other than through the Adviser;
(c) legal, accounting and auditing fees and expenses of the Trust or the
Fund;
(d) the fees and disbursements of custodians and depositories of the
Fund's assets, transfer agents, disbursing agents, plan agents and registrars;
(e) taxes and governmental fees assessed against the Trust's or the
Fund's assets and payable by the Trust;
(f) the cost of preparing and mailing dividends, distributions, reports,
notices and proxy materials to shareholders of the Fund;
Page 5
<PAGE>
(g) brokers' commissions and underwriting fees; and
(h) the expense of periodic calculations of the net asset value of the
shares of the Fund.
5. Compensation of the Adviser. For all services to be rendered, facilities
furnished and expenses paid or assumed by the Adviser as herein provided, the
Fund will pay to the Adviser monthly in arrears a fee based on a stated
percentage of the Fund's average daily net assets during the preceding month as
follows:
Net Asset Value Annual Rate
First $750,000,000 ............... 0.75%
Amount over $750,000,000 ......... 0.70%
The "average daily net assets" of the Fund shall be determined on the
basis set forth in the Fund's Prospectus or otherwise consistent with the 1940
Act and the regulations promulgated thereunder. The Adviser will receive a pro
rata portion of such monthly fee for any periods in which the Adviser serves as
investment adviser to the Fund for less than a full month.
In the event that normal operating expenses of the Fund, exclusive of
certain expenses prescribed by state law, are in excess of any limitation
imposed by the law of a state where the Fund is registered to sell shares of
beneficial interest, the fee payable to the Adviser will be reduced to the
extent required by law, and the Adviser will make any additional arrangements
that the Adviser is required by law to make.
In addition to the foregoing, the Adviser may from time to time agree
not to impose all or a portion of its fee otherwise payable hereunder (in
advance of the time such fee or portion thereof would otherwise accrue) and/or
undertake to pay or reimburse the Fund for all or a portion of its expenses not
otherwise required to be borne or reimbursed by the Adviser. Any such fee
reduction or undertaking may be discontinued or modified by the Adviser at any
time.
6. Other Activities of the Adviser and Its Affiliates. Nothing herein contained
shall prevent the Adviser or any affiliate or associate of the Adviser from
engaging in any other business or from acting as investment adviser or
investment manager for any other person or entity, whether or not having
investment policies or portfolios similar to the Fund's; and it is specifically
understood that officers, directors and employees of the Adviser and those of
its parent company, John Hancock Mutual Life Insurance Company, or other
affiliates may continue to engage in providing portfolio management services and
advice to other investment companies, whether or not registered, to other
investment advisory clients of the Adviser or of its affiliates and to said
affiliates themselves.
Page 6
<PAGE>
7. Avoidance of Inconsistent Position. In connection with purchases or sales of
portfolio securities for the account of the Fund, neither the Adviser nor any of
its investment management subsidiaries, nor any of the Adviser's or such
investment management subsidiaries' directors, officers or employees will act as
principal or agent or receive any commission, except as may be permitted by the
1940 Act and rules and regulations promulgated thereunder. If any occasions
shall arise in which the Adviser advises persons concerning the shares of the
Trust, the Adviser will act solely on its own behalf and not in any way on
behalf of the Trust or the Fund.
Nothing herein contained shall limit or restrict the Adviser or any of
its officers, affiliates or employees from buying, selling or trading in any
securities for its or their own account or accounts. The Trust and Fund
acknowledge the Adviser and its officers, affiliates, and employees, and its
other clients may at any time have, acquire, increase, decrease or dispose of
positions in investments which are at the same time being acquired or disposed
of hereunder. The Adviser shall have no obligation to acquire with respect to
the Fund, a position in any investment which the Adviser, its officers,
affiliates or employees may acquire for its or their own accounts or for the
account of another client, if in the sole discretion of the Adviser, it is not
feasible or desirable to acquire a position in such investment on behalf of the
Fund. Nothing herein contained shall prevent the Adviser from purchasing or
recommending the purchase of a particular security for one or more funds or
clients while other funds or clients may be selling the same security.
8. No Partnership or Joint Venture. The Trust, the Fund and the Adviser are not
partners of or joint venturers with each other and nothing herein shall be
construed so as to make them such partners or joint venturers or impose any
liability as such on any of them.
9. Name of the Trust and the Fund. The Trust and the Fund may use the name "John
Hancock" or any name derived from or similar to the name "John Hancock Advisers,
Inc." or "John Hancock Mutual Life Insurance Company" only for so long as this
Agreement remains in effect. At such time as this Agreement shall no longer be
in effect, the Trust and the Fund will (to the extent that they lawfully can)
cease to use such names or any other names indicating that the Fund is advised
by or otherwise connected with the Adviser. The Trust acknowledges that it has
adopted the name "John Hancock Strategic Series" and the Fund has adopted the
name "John Hancock Independence Diversified Core Equity Fund" through permission
of John Hancock Mutual Life Insurance Company and agrees that John Hancock
Mutual Life Insurance Company reserves to itself and any successor to its
business the right to grant the non-exclusive right to use the name "John
Hancock" or any similar name to any other corporation or entity, including but
not limited to any investment company of which John Hancock Mutual Life
Insurance Company or any subsidiary or affiliate thereof shall be the investment
adviser.
10. Limitation of Liability of the Adviser. The Adviser shall not be liable for
any error of judgment or mistake of law or for any loss suffered by the Trust or
the Fund in connection with the matters to which this Agreement relates, except
a loss resulting from willful misfeasance, bad
Page 7
<PAGE>
faith or gross negligence on the part of the Adviser in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement. Any person, even though also employed by the Adviser, who may be or
become an employee of and paid by the Trust or the Fund shall be deemed, when
acting within the scope of his employment by the Trust or the Fund, to be acting
in such employment solely for the Trust or the Fund and not as the Adviser's
employee or agent.
11. Duration and Termination of this Agreement. This Agreement shall remain in
force until the second anniversary of the date upon which this Agreement was
executed by the parties hereto, and from year to year thereafter, but only so
long as such continuance is specifically approved at least annually by (a) a
majority of the Trustees who are not interested persons of the Adviser or (other
than as Board members) of the Trust or the Fund, cast in person at a meeting
called for the purpose of voting on such approval, and (b) either (i) the
Trustees or (ii) a majority of the outstanding voting securities of the Fund.
This Agreement may, on 60 days' written notice, be terminated at any time
without the payment of any penalty by the Trust or the Fund by vote of a
majority of the outstanding voting securities of the Fund, by the Trustees or by
the Adviser. Termination of this Agreement with respect to the Fund shall not be
deemed to terminate or otherwise invalidate any provisions of any contract
between the Adviser and any other series of the Trust. This Agreement shall
automatically terminate in the event of its assignment. In interpreting the
provisions of this Section 11, the definitions contained in Section 2(a) of the
1940 Act (particularly the definitions of "assignment," "interested person" or
"voting security"), shall be applied.
12. Amendment of this Agreement. No provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought, and no amendment, transfer, assignment, sale,
hypothecation or pledge of this Agreement shall be effective until approved by
(a) the Trustees, including a majority of the Trustees who are not interested
persons of the Adviser or (other than as Board members) of the Trust or the
Fund, cast in person at a meeting called for the purpose of voting on such
approval, and (b) a majority of the outstanding voting securities of the Fund,
as defined in the 1940 Act.
13. Governing Law. This Agreement shall be governed and construed in accordance
with the laws of the Commonwealth of Massachusetts.
14. Severability. The provisions of this Agreement are independent of and
separable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be deemed invalid or unenforceable in whole or in part.
15. Miscellaneous. The captions in this Agreement are included for convenience
of reference only and in no way define or limit any of the provisions hereof or
otherwise affect their
Page 8
<PAGE>
construction or effect. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. The name John Hancock
Strategic Series is the designation of the Trustees under the Declaration of
Trust dated April 16, 1986, as amended and restated from time to time. The
Declaration of Trust has been filed with the Secretary of the Commonwealth of
Massachusetts. The obligations of the Trust and the Fund are not personally
binding upon, nor shall resort be had to the private property of, any of the
Trustees, shareholders, officers, employees or agents of the Fund, but only the
Fund's property shall be bound. The Trust or the Fund shall not be liable for
the obligations of any other series of the Trust.
Yours very truly,
JOHN HANCOCK STRATEGIC SERIES on behalf
of John Hancock Independence Diversified
Core Equity Fund
By:_______________________________
Title: Senior Vice President and Secretary
The foregoing contract
is hereby agreed to as
of the date hereof.
JOHN HANCOCK ADVISERS, INC.
By:____________________________
Title: President
Page 9
Exhibit B
JOHN HANCOCK STRATEGIC SERIES
John Hancock Independence Diversified Core Equity Fund
Sub-Investment Management Contract
Dated _________ ___, 1995
Page 1
<PAGE>
JOHN HANCOCK ADVISERS, INC.
Boston, Massachusetts
JOHN HANCOCK STRATEGIC SERIES
-- John Hancock Independence Diversified
Core Equity Fund
101 Huntington Avenue
Boston, Massachusetts 02199
INDEPENDENCE INVESTMENT
ASSOCIATES, INC.
53 State Street
Boston, Massachusetts 02109
Sub-Investment Management Contract
Ladies and Gentlemen:
John Hancock Strategic Series (the "Trust") has been organized as a
business trust under the laws of The Commonwealth of Massachusetts to engage in
the business of an investment company. The Trust's shares of beneficial interest
may be classified into series, each series representing the entire undivided
interest in a separate portfolio of assets. Series may be established or
terminated from time to time by action of the Board of Trustees of the Trust. As
of the date hereof, the Trust has two series of shares, representing interests
in John Hancock Strategic Income Fund and John Hancock Independence Diversified
Core Equity Fund.
The Board of Trustees of the Trust (the "Trustees") has selected John
Hancock Advisers, Inc. (the "Adviser") to provide overall investment advice and
management for the John Hancock Independence Diversified Core Equity Fund (the
"Fund"), and to provide certain other services, under the terms and conditions
provided in the Investment Management Contract, dated as of the date hereof,
between the Trust, the Fund and the Adviser (the "Investment Management
Contract").
The Adviser and the Trustees have selected Independence Investment
Associates, Inc. (the "Sub-Adviser") to provide the Adviser and the Fund with
the advice and services set forth below, and the Sub-Adviser is willing to
provide such advice and services, subject to the review of the Trustees and
overall supervision of the Adviser, under the terms and conditions hereinafter
set forth. The Sub-Adviser hereby represents and warrants that it is registered
as an investment adviser under the Investment Advisers Act of 1940, as amended.
Accordingly, the Trust, on behalf of the Fund, and the Adviser agree with the
Sub-Adviser as follows:
Page 2
<PAGE>
1. Delivery of Documents. The Trust has furnished the Sub-Adviser with copies,
properly certified or otherwise authenticated, of each of the following:
(a) Declaration of Trust of the Trust, dated April 16, 1986, as amended
(the "Declaration of Trust");
(b) By-Laws of the Trust as in effect on the date hereof;
(c) Resolutions of the Trustees approving the form of this Agreement by
and among the Adviser, the Sub-Adviser and the Trust, on behalf of the Fund;
(d) Resolutions of the Trustees selecting the Adviser as investment
adviser for the Fund and approving the form of the Investment Management
Contract;
(e) the Investment Management Contract;
(f) commitments, limitations and undertakings made by the Fund to state
securities or "blue sky" authorities for the purpose of qualifying shares of the
Fund for sale in such states;
(g) the Fund's portfolio compliance checklists; and
(h) the Fund's current Registration Statement, including the Fund's
Prospectus and Statement of Additional Information.
The Trust will furnish to the Sub-Adviser from time to time copies,
properly certified or otherwise authenticated, of all amendments of or
supplements to the foregoing, if any.
2. Investment Services. The Sub-Adviser will use its best efforts to provide to
the Fund continuing and suitable investment advice with respect to investments,
consistent with the investment policies, objectives and restrictions of the Fund
as set forth in the Fund's Prospectus and Statement of Additional Information.
In the performance of the Sub-Adviser's duties hereunder, subject always (x) to
the provisions contained in the documents delivered to the Sub-Adviser pursuant
to Section 1, as each of the same may from time to time be amended or
supplemented, and (y) to the limitations set forth in the Registration Statement
of the Trust, on behalf of the Fund, as in effect from time to time under the
Securities Act of 1933, as amended, and the Investment Company Act of 1940, as
amended (the "1940 Act"), the Sub-Adviser will, at its own expense:
(a) furnish the Adviser and the Fund with advice and recommendations,
consistent with the investment policies, objectives and restrictions of the Fund
as set forth in the Fund's Prospectus and Statement of Additional Information,
with respect to the purchase, holding and disposition of portfolio securities
including, the purchase and sale of options;
(b) furnish the Adviser and the Fund with advice as to the manner in
which voting rights, subscription rights, rights to consent to corporate action
and any other rights pertaining to the Fund's assets shall be exercised, the
Fund having the responsibility to exercise such voting and other rights;
Page 3
<PAGE>
(c) furnish the Adviser and the Fund with research, economic and
statistical data in connection with the Fund's investments and investment
policies;
(d) submit such reports relating to the valuation of the Fund's
securities as the Trustees may reasonably request;
(e) subject to prior consultation with the Adviser, engage in
negotiations relating to the Fund's investments with issuers, investment banking
firms, securities brokers or dealers and other institutions or investors;
(f) consistent with provisions of Section 7 of this Agreement, place
orders for the purchase, sale or exchange of portfolio securities with brokers
or dealers selected by the Adviser or the Sub-Adviser, provided that in
connection with the placing of such orders and the selection of such brokers or
dealers the Sub-Adviser shall seek to obtain execution and pricing within the
policy guidelines determined by the Trustees and set forth in the Prospectus and
Statement of Additional Information of the Fund as in effect and furnished to
the Sub-Adviser from time to time;
(g) from time to time or at any time requested by the Adviser or the
Trustees, make reports to the Adviser or the Trust of the Sub-Adviser's
performance of the foregoing services;
(h) subject to the supervision of the Adviser, maintain all books and
records with respect to the Fund's securities transactions required by the 1940
Act, and preserve such records for the periods prescribed therefor by the 1940
Act (the Sub-Adviser agrees that such records are the property of the Trust and
copies will be surrendered to the Trust promptly upon request therefor);
(i) give instructions to the Fund's custodian as to deliveries of
securities to and from such custodian and transfer of payment of cash for the
account of the Fund, and advise the Adviser on the same day such instructions
are given; and
(j) cooperate generally with the Fund and the Adviser to provide
information necessary for the preparation of registration statements and
periodic reports to be filed with the Securities and Exchange Commission,
including Form N-1A, periodic statements, shareholder communications and proxy
materials furnished to holders of shares of the Fund, filings with state "blue
sky" authorities and with United States agencies responsible for tax matters,
and other reports and filings of like nature.
3. Expenses Paid by the Sub-Adviser. The Sub-Adviser will pay the cost of
maintaining the staff and personnel necessary for it to perform its obligations
under this Agreement, the expenses of office rent, telephone, telecommunications
and other facilities it is obligated to provide in order to perform the services
specified in Section 2, and any other expenses incurred by it in connection with
the performance of its duties hereunder.
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<PAGE>
4. Expenses of the Fund Not Paid by the Sub-Adviser. The Sub-Adviser will not be
required to pay any expenses which this Agreement does not expressly make
payable by the Sub-Adviser. In particular, and without limiting the generality
of the foregoing but subject to the provisions of Section 3, the Sub-Adviser
will not be required to pay under this Agreement:
(a) the compensation and expenses of Trustees and of independent
advisers, independent contractors, consultants, managers and other agents
employed by the Trust or the Fund other than through the Sub-Adviser;
(b) legal, accounting and auditing fees and expenses of the Trust or the
Fund;
(c) the fees and disbursements of custodians and depositories of the
Trust or the Fund's assets, transfer agents, disbursing agents, plan agents and
registrars;
(d) taxes and governmental fees assessed against the Trust or the Fund's
assets and payable by the Trust or the Fund;
(e) the cost of preparing and mailing dividends, distributions, reports,
notices and proxy materials to shareholders of the Trust or the Fund except that
the Sub-Adviser shall bear the costs of providing the information referred to
in Section 2(j) to the Adviser;
(f) brokers' commissions and underwriting fees; and
(g) the expense of periodic calculations of the net asset value of the
shares of the Fund.
5. Compensation of the Sub-Adviser. For all services to be rendered, facilities
furnished and expenses paid or assumed by the Sub-Adviser as herein provided for
the Fund, the Adviser will pay the Sub-Adviser quarterly, in arrears, a fee at
the annual rate of 55% of the investment advisory fee payable to the Adviser for
the preceding 3 months.
The "average daily net assets" of the Fund shall be determined on the
basis set forth in the Fund's Prospectus or otherwise consistent with the 1940
Act and the regulations promulgated thereunder. The Sub-Adviser will receive a
pro rata portion of such monthly fee for any periods in which the Sub-Adviser
advises the Fund less than a full month. The Fund shall not be liable to the
Sub-Adviser for the Sub-Adviser's compensation hereunder. Calculations of the
Sub-Adviser's fee will be based on average net asset values as provided by the
Adviser.
Page 5
<PAGE>
In addition to the foregoing, the Sub-Adviser may from time to time
agree not to impose all or a portion of its fee otherwise payable hereunder (in
advance of the time such fee or portion thereof would otherwise accrue) and/or
undertake to pay or reimburse the Fund for all or a portion of its expenses not
otherwise required to be borne or reimbursed by it. Any such fee reduction or
undertaking may be discontinued or modified by the Sub-Adviser at any time.
6. Other Activities of the Sub-Adviser and Its Affiliates. Nothing herein
contained shall prevent the Sub-Adviser or any associate of the Sub-Adviser
from engaging in any other business or from acting as investment adviser or
investment manager for any other person or entity, whether or not having
investment policies or portfolios similar to the Fund's; and it is specifically
understood that officers, directors and employees of the Sub-Adviser and those
of its parent company, John Hancock Mutual Life Insurance Company, or other
affiliates may continue to engage in providing portfolio management services and
advice to other investment companies, whether or not registered, to other
investment advisory clients of the Sub-Adviser or its affiliates and to said
affiliates themselves.
7. Avoidance of Inconsistent Position. In connection with purchases or sales of
portfolio securities for the account of the Fund, neither the Sub-Adviser nor
any of its investment management subsidiaries nor any of such investment
management subsidiaries' directors, officers or employees will act as principal
or agent or receive any commission, except as may be permitted by the 1940 Act
and rules and regulations promulgated thereunder. The Sub-Adviser shall not
knowingly recommend that the Fund purchase, sell or retain securities of any
issuer in which the Sub-Adviser has a financial interest without obtaining prior
approval of the Adviser prior to the execution of any such transaction.
Nothing herein contained shall limit or restrict the Sub-Adviser or any
of its officers, affiliates or employees from buying, selling or trading in any
securities for its or their own account or accounts. The Trust and Fund
acknowledge the Sub-Adviser and its officers, affiliates, and employees, and its
other clients may at any time have, acquire, increase, decrease or dispose of
positions in investments which are at the same time being acquired or disposed
of hereunder. The Sub-Adviser shall have no obligation to acquire with respect
to the Fund, a position in any investment which the Sub-Adviser, its officers,
affiliates or employees may acquire for its or their own accounts or for the
account of another client, if in the sole discretion of the Sub-Adviser, it is
not feasible or desirable to acquire a position in such investment on behalf of
the Fund. Nothing herein contained shall prevent the Sub-Adviser from purchasing
or recommending the purchase of a particular security for one or more funds or
clients while other funds or clients may be selling the same security.
Page 6
<PAGE>
8. No Partnership or Joint Venture. The Trust, the Fund, the Adviser and the
Sub-Adviser are not partners of or joint venturers with each other and nothing
herein shall be construed so as to make them such partners or joint venturers or
impose any liability as such on any of them.
9. Name of Fund. The Trust and the Fund may use the name "Independence" or any
name similar to "Independence Investment Associates, Inc." only for so long as
this Agreement remains in effect. At such time as this Agreement shall no longer
be in effect, the Fund will (to the extent that it lawfully can) cease to use
such names or any other names indicating that the Fund is advised by or
otherwise connected with the Sub-Adviser. The Fund acknowledges that it has
adopted a name that includes the name "Independence" through permission of the
Sub-Adviser and agrees that the Sub-Adviser reserves to itself and any
successor to its business the right to grant the non-exclusive right to use the
name "Independence" or any similar name to any other corporation or entity,
including but not limited to any investment company of which it or any of its
subsidiaries or affiliates shall be the investment adviser.
10. Limitation of Liability of Sub-Adviser. The Sub-Adviser shall not be liable
for any error of judgment or mistake of law or for any loss suffered by the
Trust or the Fund or the Adviser in connection with the matters to which this
Agreement relates, except a loss resulting from willful misfeasance, bad faith
or gross negligence on the Sub-Adviser's part in the performance of its duties
or from reckless disregard by it of its obligations and duties under this
Agreement. Any person, even though also employed by the Sub-Adviser, who may be
or become an employee of and paid by the Trust or the Fund shall be deemed, when
acting within the scope of his employment by the Trust or the Fund, to be acting
in such employment solely for the Trust or the Fund and not as the Sub-Adviser's
employee or agent.
11. Duration and Termination of this Agreement. This Agreement shall remain in
force until the second anniversary of the date upon which this Agreement was
executed by the parties hereto, and from year to year thereafter, but only so
long as such continuance is specifically approved at least annually by (a) a
majority of the Trustees who are not interested persons of the Adviser, the
Sub-Adviser, or (other than as Board members) of the Trust or the Fund, cast in
person at a meeting called for the purpose of voting on such approval, and (b)
either (i) the Trustees or (ii) a majority of the outstanding voting securities
of the Fund. This Agreement may, on 60 days' written notice, be terminated at
any time without the payment of any penalty by the Trust or the Fund by vote of
a majority of the outstanding voting securities of the Fund, by the Trustees,
the Adviser or the Sub-Adviser. Termination of this Agreement with respect to
the Fund shall not be deemed to terminate or otherwise
Page 7
<PAGE>
invalidate any provisions of any contract between the Sub-Adviser and any other
series of the Trust. This Agreement shall automatically terminate in the event
of its assignment or upon termination of the Investment Management Contract. In
interpreting the provisions of this Section 11, the definitions contained in
Section 2(a) of the 1940 Act (particularly the definitions of "assignment,"
"interested person" or "voting security"), shall be applied.
12. Amendment of this Agreement. No provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought, and no amendment, transfer, assignment, sale,
hypothecation or pledge of this Agreement shall be effective until approved by
(a) the Trustees, including a majority of the Trustees who are not interested
persons of the Adviser, the Sub-Adviser, or (other than as Board members) of
the Trust or the Fund, cast in person at a meeting called for the purpose of
voting on such approval, and (b) a majority of the outstanding voting securities
of the Fund, as defined in the 1940 Act.
13. Governing Law. This Agreement shall be governed and construed in accordance
with the laws of the Commonwealth of Massachusetts.
14. Severability. The provisions of this Agreement are independent of and
separable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be deemed invalid or unenforceable in whole or in part.
15. Miscellaneous. (a) The captions in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. The name John Hancock Strategic Series is the
designation of the Trustees under the Declaration of Trust dated April 16, 1986,
as amended from time to time. The Declaration of Trust has been filed with the
Secretary of The Commonwealth of Massachusetts. The obligations of the Trust and
the Fund are not personally binding upon, nor shall resort be had to the private
property of, any of the Trustees, shareholders, officers, employees or agents of
the Fund, but only the Fund's property shall be
Page 8
<PAGE>
bound. The Trust or the Fund shall not be liable for the obligations of any
other series of the Trust. (b) Any information supplied by the Sub-Adviser,
which is not otherwise in the public domain, in connection with the performance
of its duties hereunder is to be regarded as confidential and for use only by
the Fund and/or its agents, and only in connection with the Fund and its
investments.
Yours very truly,
JOHN HANCOCK ADVISERS, INC.
By _________________________
Title: Chairman & CEO
The foregoing contract
is hereby agreed to as
of the date hereof.
JOHN HANCOCK STRATEGIC SERIES
on behalf of John Hancock
Independence Diversified
Core Equity Fund
By: _______________________
Title: Senior Vice President & Secretary
INDEPENDENCE INVESTMENT
ASSOCIATES, INC.
By: _______________________
Title: President
Page 9
JOHN HANCOCK INDEPENDENCE DIVERSIFIED CORE EQUITY FUND
PROXY SOLICITATION BY THE BOARD OF TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s)
Edward J. Boudreau, Jr., Thomas H. Drohan and James B. Little, with
full power of substitution in each, to vote all the shares of
beneficial interest of John Hancock Independence Diversified Core
Equity Fund (the "Fund"), a series of John Hancock Strategic Series
(the "Trust"), which the undersigned is (are) entitled to vote at the
Special Meeting of Shareholders (the "Meeting") of the Fund to be held
at 101 Huntington Avenue, Boston, Massachusetts, on August 31, 1995 at
9:00 a.m., Boston time, and at any adjournment of the Meeting. All
powers may be exercised by a majority of said proxy holders or
substitutes voting or acting, or, if only one votes and acts, then by
that one. Receipt of the Proxy Statement dated August 11, 1995 is hereby
acknowledged. If not revoked, this proxy shall be voted:
(1) To approve the terms of a new Investment Management Contract
for the Fund, including an increase in the fee payable by the
Fund for investment advisory services.
____ ____ ____
FOR :____: AGAINST :____: ABSTAIN :____:
(2) To approve the terms of a new Sub-advisory Contract for the
Fund, including (at current asset levels) an increase in the
fee payable by the Fund's investment adviser for investment
sub-advisory services. The Fund will not pay any part of the
sub-advisory fee.
____ ____ ____
FOR :____: AGAINST :____: ABSTAIN :____:
<PAGE>
THIS PROXY SHALL BE VOTED IN FAVOR OF (FOR) PROPOSALS (1) AND (2) IF NO
SPECIFICATION IS MADE ABOVE. AS TO ANY OTHER MATTER, SAID PROXY OR
PROXIES SHALL VOTE IN ACCORDANCE WITH THEIR BEST JUDGMENT.
Date __________________, 1995 ________________________________
Signature(s)
________________________________
NOTE: Signature(s) should agree
with name(s) printed herein. When
signing as attorney, executor,
administrator, trustee or guardian,
please give your full title as
such. If a corporation, please
sign in full corporate name by
president or other authorized
officer. If a partnership, please
sign in partnership name by
authorized person.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE
