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:
[X] Preliminary proxy statement
[ ] 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)
JOHN HANCOCK STRETEGIC SERIES
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) or Schedule 14A (sent by wire transmission).
<PAGE>
JOHN HANCOCK MANAGED TAX-EXEMPT FUND
JOHN HANCOCK SOVEREIGN U.S. GOVERNMENT INCOME FUND
JOHN HANCOCK INDEPENDENCE DIVERSIFIED CORE EQUITY FUND
JOHN HANCOCK UTILITIES FUND
JOHN HANCOCK GROWTH FUND
Dear Fellow Shareholder:
As an investor in one of the funds noted above, you are cordially invited to a
special shareholder meeting on Wednesday, June 26, 1996, to be held at 9:00 A.M.
in your Fund's offices at the location shown on the enclosed proxy statement. At
this meeting, you will be asked to consider and approve several proposals
pertaining to your Fund. These are highlighted below, and are discussed in more
detail in your proxy statement.
You will notice that this proxy statement addresses several funds. This is part
of our effort to minimize printing and administrative expenses for your Fund --
and, therefore, for you. However, if you invest in more than one John Hancock
fund, you may receive other proxy statements. Be sure to review and vote on
these as well.
Listed below is a brief explanation of the proposals you will find in the
enclosed proxy statement:
o Election of your Fund's Board of Trustees. The Board of Trustees is
responsible for protecting your interests as a shareholder of the Fund. You will
find a list of nominees and a brief description of their backgrounds in your
proxy statement.
o For the Sovereign U.S. Government Income Fund and the Managed Tax-Exempt Fund
ONLY: A new investment contract to bring the funds' administration into
conformity with that of the other John Hancock funds.
o For the Sovereign U.S. Government Income Fund ONLY: increased investment
flexibility. These proposals pertain to certain investment restrictions, such as
the single-issuer limitation and the restriction on investing in other
investment companies. Relaxing these restrictions should, in the opinion of the
Fund's Trustees, give the Fund more flexibility to take advantage of potential
investment opportunities.
o Other administrative issues, such as the reorganization or restatement of your
Fund's underlying trust, which are intended to increase efficiency while
reducing printing, registration, accounting, legal and other costs. These
changes have no tax consequences to you and will have no effect on the way your
Fund's portfolio is invested.
ALL OF THE PROPOSALS HAVE BEEN REVIEWED AND UNANIMOUSLY APPROVED
BY YOUR FUND'S BOARD OF TRUSTEES, WHO BELIEVE THAT THE
CHANGES WILL BE BENEFICIAL TO YOU AND YOUR FUND.
YOUR VOTE IS IMPORTANT!
No matter how large or small your investment may be, your vote makes a
difference. We urge you to review the enclosed proxy statement carefully, and to
vote by completing, signing and returning the enclosed proxy ballot form(s) to
us immediately. Your prompt response will help avoid the cost of additional
mailings. For your convenience, we have enclosed a postage-paid envelope.
If you have any questions, please call your 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.
Sincerely,
/s/ Edward J. Boudreau, Jr.
Edward J. Boudreau, Jr.
Chairman and CEO
<PAGE>
Draft 4/10/96
PROXY #2
JOHN HANCOCK MANAGED TAX-EXEMPT FUND
JOHN HANCOCK SOVEREIGN U.S. GOVERNMENT INCOME FUND
(EACH A SERIES OF FREEDOM INVESTMENT TRUST)
JOHN HANCOCK INDEPENDENCE DIVERSIFIED CORE EQUITY FUND
JOHN HANCOCK UTILITIES FUND
(EACH A SERIES OF JOHN HANCOCK STRATEGIC SERIES)
JOHN HANCOCK GROWTH FUND
(A SERIES OF JOHN HANCOCK CAPITAL SERIES)
(COLLECTIVELY, THE "FUNDS")
101 HUNTINGTON AVENUE
BOSTON, MASSACHUSETTS 02199
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 26, 1996
A Special Meeting of Shareholders of each Fund will be held at the Funds'
offices located on the 2nd floor at 101 Huntington Avenue, Boston, Massachusetts
02199, at 9:00 a.m., Eastern time, on Wednesday, June 26, 1996. The telephone
number of each Fund is 1-800-225-5291. The Special Meetings of the Funds are
expected to be held concurrently and are referred to collectively as the
"Meeting." The purpose of the Meeting is to consider and act upon the following
proposals:
(1) To elect sixteen Trustees to hold office until their respective successors
have been duly elected and qualified. FOR (I) JOHN HANCOCK MANAGED
TAX-EXEMPT FUND (THE "TAX- EXEMPT FUND") AND JOHN HANCOCK SOVEREIGN U.S.
GOVERNMENT INCOME FUND (THE "U.S. GOVERNMENT FUND") VOTING TOGETHER WITH
THE OTHER SERIES OF FREEDOM INVESTMENT TRUST, (II) JOHN HANCOCK
INDEPENDENCE DIVERSIFIED CORE EQUITY FUND (THE "CORE EQUITY FUND") AND
JOHN HANCOCK UTILITIES FUND (THE "UTILITIES FUND") VOTING TOGETHER WITH
THE OTHER SERIES OF JOHN HANCOCK STRATEGIC SERIES AND (III) JOHN HANCOCK
GROWTH FUND (THE "GROWTH FUND") VOTING TOGETHER WITH THE OTHER SERIES OF
JOHN HANCOCK CAPITAL SERIES.
(2) To approve an Amended and Restated Declaration of Trust for Freedom
Investment Trust. FOR TAX-EXEMPT FUND AND U.S. GOVERNMENT FUND VOTING
TOGETHER WITH THE OTHER SERIES OF FREEDOM INVESTMENT TRUST.
(3) To approve an Agreement and Plan of Reorganization for each Fund which
will reorganize each Fund as a series of a different trust as follows:
(a) the Tax-Exempt Fund will become a series fund of John Hancock
Tax-Exempt Series Fund. FOR TAX-EXEMPT FUND VOTING SEPARATELY.
(b) the U.S. Government Fund will become a series fund of John
Hancock Strategic Series. FOR U.S. GOVERNMENT FUND VOTING
SEPARATELY.
<PAGE>
(c) the Core Equity Fund will become a series fund of John Hancock
Capital Series. FOR CORE EQUITY FUND VOTING SEPARATELY.
(d) the Utilities Fund will become a series fund of John Hancock
Capital Series. FOR UTILITIES FUND VOTING SEPARATELY.
(e) the Growth Fund will become a series fund of Freedom Investment
Trust II. FOR GROWTH FUND VOTING SEPARATELY.
(4) To approve a new investment management contract between John Hancock
Advisers, Inc. and
(a) Tax-Exempt Fund. FOR TAX-EXEMPT FUND VOTING SEPARATELY.
(b) U.S. Government Fund. FOR U.S. GOVERNMENT FUND VOTING SEPARATELY.
(5) To eliminate the U.S. Government Fund's fundamental investment restriction
on investing in a single class of securities of an issuer. FOR U.S.
GOVERNMENT FUND VOTING SEPARATELY.
(6) To redesignate as nonfundamental the U.S. Government Fund's fundamental
investment restriction on investing in other investment companies. FOR
U.S. GOVERNMENT FUND VOTING SEPARATELY.
(7) 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 THE PROPOSALS
RELATING TO YOUR FUND.
Shareholders of record of each Fund as of the close of business on May 1,
1996 are entitled to notice of and to vote at the Meeting or any adjournment of
the Meeting. The proxy statement and proxy card are being mailed to shareholders
on or about May 17, 1996.
THOMAS H. DROHAN
Senior Vice President and
Secretary
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE COMPLETE AND
RETURN THE ENCLOSED PROXY CARD. YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE
MEETING.
Boston, Massachusetts
May 17, 1996
-2-
<PAGE>
JOHN HANCOCK MANAGED TAX-EXEMPT FUND
JOHN HANCOCK SOVEREIGN U.S. GOVERNMENT INCOME FUND
(EACH A SERIES OF FREEDOM INVESTMENT TRUST)
JOHN HANCOCK INDEPENDENCE DIVERSIFIED CORE EQUITY FUND
JOHN HANCOCK UTILITIES FUND
(EACH A SERIES OF JOHN HANCOCK STRATEGIC SERIES)
JOHN HANCOCK GROWTH FUND
(A SERIES OF JOHN HANCOCK CAPITAL SERIES)
(COLLECTIVELY, THE "FUNDS")
101 HUNTINGTON AVENUE
BOSTON, MASSACHUSETTS 02199
----------------------
PROXY STATEMENT
GENERAL
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Trustees (the "Trustees") of each of the investment
companies (the "Trusts") on behalf of themselves or their respective series
funds (the "Funds") set forth below.
<TABLE>
<CAPTION>
The Trusts The Funds
- ---------- ---------
<S> <C>
Freedom Investment Trust (the John Hancock Managed Tax-Exempt Fund (the "Tax-
"Freedom Trust") Exempt Fund")
John Hancock Sovereign U.S. Government Income
Fund (the "U.S. Government Fund")
John Hancock Strategic Series (the John Hancock Independence Diversified Core Equity
"Strategic Series Trust") Fund (the "Core Equity Fund")
John Hancock Utilities Fund (the "Utilities Fund")
John Hancock Capital Series (the John Hancock Growth Fund (the "Growth Fund")
"Capital Series Trust")
</TABLE>
For purposes of this Proxy Statement, the term "Funds" shall also
include the Trusts where appropriate.
The proxies will be used at the special meeting of each Fund's
shareholders to be held concurrently (collectively, the "Meeting") at the Funds'
offices located on the 2nd floor at 101 Huntington Avenue, Boston, Massachusetts
02199, at 9:00 a.m., Eastern Time, on Wednesday, June 26, 1996.
<PAGE>
Proxies will be solicited by mail and may also be solicited in person
or by telephone by officers, directors and/or registered representatives of the
Funds' principal distributor, John Hancock Funds, Inc. ("John Hancock Funds"),
and by employees, officers and/or directors of John Hancock Advisers, Inc. (the
"Adviser"). In addition, the Funds' transfer agent, John Hancock Investor
Services Corporation ("Investor Services") will solicit proxies in person and/or
by telephone at a cost to each Fund of between $3,000 and $5,000. Investor
Services plans to engage an independent proxy solicitation firm, _______________
to assist it in soliciting proxies at an additional cost to each fund of
approximately $_______________.
The cost of preparing and mailing this Proxy Statement and the
accompanying Notice and proxy card will be borne by each Fund. The mailing
address of each Fund, the Adviser, John Hancock Funds and Investor Services is
101 Huntington Avenue, Boston, Massachusetts 02199. This Proxy Statement and the
proxy card are being mailed to shareholders of each Fund on or about May 17,
1996.
Each Fund will furnish without charge a copy of its Annual Report and
most recent Semi-Annual Report succeeding the Annual Report, if any, to any
shareholder upon request. Shareholders desiring to obtain a copy of their Fund's
report(s) should direct all written requests to the attention of their Fund, 101
Huntington Avenue, Boston, Massachusetts 02199 or should call John Hancock Funds
at 1-800-225-5291.
OUTSTANDING SHARES AND VOTING REQUIREMENTS
The Trustees have fixed the close of business on May 1, 1996, as the
record date (the "Record Date") for determining the shareholders of each Fund
entitled to notice of and to vote at the Meeting. Shareholders of record of each
Fund on the Record Date are entitled to one vote per share at the Meeting or any
adjournment of the Meeting relating to their Fund.
As of April 22, 1996, each Fund had the following number of shares of
beneficial interest of each class outstanding:
<TABLE>
<CAPTION>
Class A Shares Class B Shares
Funds Outstanding Outstanding
----- -------------- --------------
<S> <C> <C>
Tax-Exempt Fund
U.S. Government Fund
Core Equity Fund
Utilities Fund
Growth Fund
</TABLE>
As of April 22, 1996, the following persons or entities owned
beneficially or of record more than 5% of the outstanding Class A and Class B
shares of each Fund:
<TABLE>
<CAPTION>
Owners of more Owners of more
than 5% of than 5% of
Funds Class A Shares Class B Shares
----- -------------- --------------
<S> <C> <C>
Tax-Exempt Fund
U.S. Government Fund
Core Equity Fund
Utilities Fund
Growth Fund
</TABLE>
-2-
<PAGE>
[JH: PLEASE PROVIDE NAMES, ADDRESSES, % OF OWNERSHIP FOR ABOVE]
SUMMARY OF VOTING ON PROPOSALS
Although each Fund is participating separately in the Meeting, proxies
are being solicited through the use of this combined proxy statement.
Shareholders of Funds that are series of the same Trust will vote separately as
to those Proposals affecting only their Fund or affecting a Fund differently
than other Funds. Each class of shares of each Fund will vote together with the
other class(es) of shares of that Fund. Voting by shareholders of one Fund or
class will not affect voting by any other Fund or class.
<TABLE>
<CAPTION>
Proposal Fund Entitled to Vote
- -------- ---------------------
<S> <C>
(1) (i) Tax-Exempt Fund and U.S. Government Fund will vote
together with the other series of Freedom Trust, (ii) Core
Equity Fund and Utility Fund will vote together with the
other series of Strategic Series Trust, and (iii) Growth
Fund will vote together with the other series of Capital
Series Trust.
(2) Tax-Exempt Fund and U.S. Government Fund will vote together
with the other series of Freedom Trust.
(3)(a) Tax-Exempt Fund will vote separately.
(b) U.S. Government Fund will vote separately.
(c) Core Equity Fund will vote separately.
(d) Utilities Fund will vote separately.
(e) Growth Fund will vote separately.
(4)(a) Tax-Exempt Fund will vote separately.
(b) U.S. Government Fund will vote separately.
(5) U.S. Government Fund will vote separately.
(6) U.S. Government Fund will vote separately.
</TABLE>
-3-
<PAGE>
PROPOSAL 1
ELECTION OF TRUSTEES
(FOR SHAREHOLDERS OF (I) TAX-EXEMPT FUND AND U.S. GOVERNMENT FUND
VOTING TOGETHER, (II) CORE EQUITY FUND AND UTILITY FUND VOTING
TOGETHER AND (III) GROWTH FUND VOTING SEPARATELY, IN EACH
CASE WITH THE SHAREHOLDERS OF THE OTHER FUNDS WHICH ARE
SERIES OF THE SAME TRUSTS)
The Core Equity Fund, Utilities Fund and Growth Fund (the "Panel A
Funds") are currently governed by a Board of Trustees which will be known as the
Panel A Trustees. The Tax-Exempt Fund and U.S. Government Fund (the "Panel C
Funds") are currently governed by a different Board of Trustees which will be
known as the Panel C Trustees. At a meeting on March 5, 1996, the Panel A
Trustees and the Panel C Trustees, including the Trustees who are not
"interested persons" (as defined by the Investment Company Act of 1940, as
amended (the "1940 Act")) of the Funds (the "Independent Trustees"), voted to
approve, and voted to recommend to the shareholders of their respective Funds
that they approve, a proposal to consolidate the Panel A Trustees and the Panel
C Trustees so that each Fund will be governed by the same Board of Trustees. The
Panel A Trustees hereby recommend to the shareholders of the Panel A Funds that
they re-elect their current Trustees and elect the Panel C Trustees. The Panel C
Trustees recommend to the shareholders of the Panel C Funds that they re-elect
their current Trustees and elect the Panel A Trustees. If Proposal 1 is
approved, each Fund will be governed by the same sixteen Trustees (collectively,
the "Nominees").
Nine of the sixteen Nominees currently serve as Panel A Trustees and
eight of the sixteen Nominees currently serve as Panel C Trustees (Mr. Boudreau
serves on both Panels). Information concerning the Nominees and other relevant
factors is discussed below.
Using the enclosed form of proxy, a shareholder may authorize the
proxies to vote his or her shares for the Nominees or may withhold from the
proxies authority to vote his or her shares for one or more of the Nominees. If
no contrary instructions are given, the proxies will vote FOR the Nominees. Each
of the Nominees has consented to his or her nomination and has agreed to serve
if elected. If, for any reason, any Nominee should not be available for election
or able to serve as a Trustee, the proxies will exercise their voting power in
favor of such substitute Nominee, if any, as the Trustees may designate. None of
the Funds has any reason to believe that it will be necessary to designate a
substitute Nominee.
INFORMATION CONCERNING NOMINEES
The following table sets forth each Nominee's principal occupation or
employment during the past five years. The table also sets forth the Panel on
which each Nominee currently serves, if applicable, and the date he or she first
became a Trustee of each Fund.
<TABLE>
<CAPTION>
Name, Age and Principal Occupation
Position With or Employment First Became
Each Fund During Last Five Years A Trustee
- ------------- ---------------------- ------------
<S> <C> <C>
Edward J. Boudreau, Jr.* Chairman and Chief Executive Tax-Exempt Fund: 1992
(age 51) Officer of the Adviser and The U.S. Government Fund: 1992
</TABLE>
-4-
<PAGE>
<TABLE>
<S> <C> <C>
Chairman and Chief Executive Berkeley Financial Group ("The Core Equity Fund: 1988
Officer, Panel A and C Funds; Berkeley Group"); Chairman, John Utilities Fund: 1988
Nominee Hancock Advisers International Ltd. Growth Fund: 1988
("Advisers International"), NM
Capital Management, Inc. ("NM
Capital"), John Hancock Funds,
Investor Services, First Signature
Bank and Trust Company and Sovereign
Asset Management Corporation
("SAMCorp"); Director, John Hancock
Capital Corp., John Hancock Freedom
Securities Corp. and New
England/Canada Business Council;
Member, Investment Company Institute
Board of Governors; Director, Asia
Strategic Growth Fund, Inc.; Trustee,
Museum of Science; Vice Chairman and
President, the Adviser (until July
1992); Chairman, John Hancock
Distributors, Inc. (until April
1994); Trustee or Director and
Chairman of 61 funds managed by the
Adviser.
Dennis S. Aronowitz Professor of Law, Boston University Core Equity Fund: 1986
(age 64) School of Law; Trustee, Brookline Utilities Fund: 1986
Panel A Trustee; Nominee Savings Bank; Trustee or Director of Growth Fund: 1988
16 funds managed by the Adviser.
Richard P. Chapman, Jr. President, Brookline Savings Bank; Core Equity Fund: 1986
(age 61) Director, Federal Home Loan Bank of Utilities Fund: 1986
Panel A Trustee; Nominee Boston (lending); Director, Lumber Growth Fund: 1984
Insurance Companies (fire and
casualty insurer); Trustee,
Northeastern University; Director,
Depositors Insurance Fund, Inc.
(insurer); Trustee or Director of 16
funds managed by the Adviser.
William J. Cosgrove Vice President, Senior Banker and Core Equity Fund: 1991
(age 63) Senior Credit Officer, Citibank, N.A. Utilities Fund: 1991
Panel A Trustee; Nominee (retired September, 1991); Executive Growth Fund: 1991
Vice President, Citadel Group
Representative Inc.; EVP
</TABLE>
-5-
<PAGE>
<TABLE>
<S> <C> <C>
Resource Evaluation Inc. (consulting)
(until October 1993); Trustee, the
Hudson City Savings Bank (until
October 1993); Trustee or Director of
16 funds managed by the Adviser.
Gail D. Fosler Vice President and Chief Economist, Core Equity Fund: 1994
(age 48) The Conference Board (nonprofit Utilities Fund: 1994
Panel A Trustee; Nominee economic and business research); Growth Fund: 1994
Trustee or Director of 16 funds
managed by the Adviser.
Bayard Henry Corporate Advisor; Director, Core Equity Fund: 1986
(age 64) Fiduciary Trust Company (trust Utilities Fund: 1986
Panel A Trustee; Nominee company); Director, Groundwater Growth Fund: 1984
Technology, Inc. (remediation);
Director, Samuel Cabot, Inc.;
Advisor, Kestrel Venture Management;
Trustee or Director of 16 funds
managed by the Adviser.
Anne C. Hodsdon* President and Chief Operating Core Equity Fund: 1996
(age 42) Officer, the Adviser and John Hancock Utilities Fund: 1996
President, Panel A and C open-end funds; Director, Advisers Growth Fund: 1996
Funds; Panel A Trustee; International; Executive Vice
Nominee President, the Adviser (until
December 1994); Senior Vice
President, the Adviser (until
December 1993); Vice President, the
Adviser (until 1991); Trustee or
Director of 56 funds managed by the
Adviser.
Richard S. Scipione* General Counsel, John Hancock Mutual Core Equity Fund: 1986
(age 58) Life Insurance Company; Director, the Utilities Fund: 1986
Panel A Trustee; Nominee Adviser, John Hancock Funds, Investor Growth Fund: 1985
Services, John Hancock Distributors,
Inc., John Hancock Subsidiaries,
Inc., John Hancock Property and
Casualty Insurance and its affiliates
(until November 1993), SAMCorp and NM
Capital; Trustee, The Berkeley Group;
Director, JH Networking Insurance
Agency, Inc.; Trustee or Director of
44 funds managed by the Adviser.
</TABLE>
-6-
<PAGE>
<TABLE>
<S> <C> <C>
Edward J. Spellman Partner, KPMG Peat Marwick LLP Core Equity Fund: 1990
(age 63) (retired June, 1990); Trustee or Utilities Fund: 1990
Panel A Trustee; Nominee Director of 16 funds managed by the Growth Fund: 1990
Adviser.
Douglas M. Costle Director, Chairman of the Board and Tax-Exempt Fund: 1991
(age 56) Distinguished Senior Fellow, U.S.Government Fund: 1991
Panel C Trustee; Nominee Institute for Sustainable
Communities, Montpelier, Vermont
(since 1991); Dean, Vermont Law
School (until 1991); Director, Air
and Water Technologies Corporation
(environmental services and
equipment), Niagara Mohawk Power
Company (electric services) and MITRE
Corporation (governmental consulting
services); Trustee or Director of 12
funds managed by the Adviser.
Leland O. Erdahl Director of Santa Fe Ingredients Tax-Exempt Fund: 1985
(age 67) Company of California, Inc. and Santa U.S. Government Fund: 1985
Panel C Trustee; Nominee Fe Ingredients Company, Inc. (private
food processing companies); Director
of Uranium Resources, Inc.; President
of Stolar, Inc. (from 1987 to 1991)
and President of Albuquerque Uranium
Corporation (from 1985 to 1992);
Director of Freeport-McMoRan Copper &
Gold Company, Inc., Hecla Mining
Company, Canyon Resources Corporation
and Original Sixteen to One Mine,
Inc. (from 1984 to 1987 and from 1991
to 1995) (management consultant);
Trustee or Director of 12 funds
managed by the Adviser.
Richard A. Farrell President of Farrell, Healer & Co., Tax-Exempt Fund: 1984
(age 63) (venture capital management firm) U.S. Government Fund: 1984
Panel C Trustee; Nominee (since 1980); Prior to 1980, headed
the venture capital group at Bank of
Boston Corporation; Trustee or
Director of 12 funds managed by the
Adviser.
William F. Glavin President, Babson College; Vice Tax-Exempt Fund: 1992
(age 65) Chairman, Xerox Corporation (until U.S. Government Fund: 1992
Panel C Trustee; Nominee June 1989); Director, Caldor Inc.,
</TABLE>
-7-
<PAGE>
<TABLE>
<S> <C> <C>
Reebok, Ltd. (since 1994), and Inco
Ltd; Trustee or Director of 12 funds
managed by the Adviser.
Dr. John A. Moore President and Chief Executive Tax-Exempt Fund: 1991
(age 57) Officer, Institute for Evaluating U.S. Government Fund: 1991
Panel C Trustee; Nominee Health Risks (nonprofit institution)
(since September 1989); Trustee or
Director of 12 funds managed by the
Adviser.
Patti McGill Peterson President, St. Lawrence University; Tax-Exempt Fund: 1993
(age 52) Director, Niagara Mohawk Power U.S. Government Fund: 1993
Panel C Trustee; Nominee Corporation and Security Mutual Life;
Trustee or Director of 12 funds
managed by the Adviser.
John W. Pratt Professor of Business Administration Tax-Exempt Fund: 1985
(age 64) at Harvard University Graduate School U.S. Government Fund: 1985
Panel C Trustee; Nominee of Business Administration (since
1961); Trustee or Director of 12
funds managed by the Adviser.
</TABLE>
- --------------
* "Interested person," as defined in the 1940 Act of the Funds or the
Adviser.
The number of shares of beneficial interest of each class of the Funds
beneficially owned by each of the Nominees, directly or indirectly, as of April
22, 1996, is as follows:
(See chart on next page)
-8-
<PAGE>
<TABLE>
<CAPTION>
U.S.
Tax-Exempt Government Growth Core Equity Utilities
Fund Fund Fund Fund Fund
-------------- -------------- -------------- --------------- -------------
Class Class Class Class Class Class Class Class Class Class
A B A B A B A B A B
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Edward J. Boudreau, Jr.
Dennis S. Aronowitz
Richard P. Chapman, Jr.
William J. Cosgrove
Gail D. Fosler
Bayard Henry
Anne C. Hodsdon
Richard S. Scipione
Edward J. Spellman
Douglas M. Costle
Leland O. Erdahl
Richard A. Farrell
William F. Glavin
Dr. John A. Moore
Patti McGill Peterson
John W. Pratt
</TABLE>
-9-
<PAGE>
The information as to beneficial ownership set forth in the above chart
is based on statements furnished to the Funds by the Nominees. Each has all
voting and investment powers with respect to the shares indicated.
None of the Nominees beneficially owned individually, and the Nominees
and executive officers of each Fund as a group did not beneficially own, in
excess of one percent of the outstanding shares of any of the Funds on the as of
April 22, 1996.
The Board of Trustees of each Fund held four meetings during the last
completed fiscal year of each Fund. With respect to each Fund, no Trustee with
the exception of Mr. Scipione attended fewer than 75% of the aggregate of (1)
the total number of meetings of the Trustees of each Fund; and (2) the total
number of meetings held by all committees of the Trustees on which he or she
served.
Each Fund has an Audit Committee of the Trustees. The Committee
members for the Panel A Funds are: Messrs. Aronowitz, Chapman, Cosgrove, Henry
and Spellman and Ms. Fosler. The Committee members for the Panel C Funds are:
Messrs. Costle, Erdahl, Farrell, Glavin, Moore and Pratt and Ms. Peterson. Each
of the members of each Audit Committee is an Independent Trustee. The Audit
Committee of each Fund held two meetings during the last completed fiscal year
of each Fund.
The functions performed by each Audit Committee are to recommend
annually to the Trustees a firm of independent certified public accountants to
audit the books and records of each Fund for the ensuing year; to monitor that
firm's performance; to review with the firm the scope and results of each audit
and determine the need, if any, to extend audit procedures; to confer with the
firm and representatives of each Fund on matters concerning each of the Funds'
financial statements and reports, including the appropriateness of their
accounting practices and of their internal controls and procedures; to evaluate
the independence of the firm; to review procedures to safeguard portfolio
securities; to approve the purchase from the firm of all non-audit services; to
review all fees paid to the firm; to recommend to the Trustees, at the request
of the Fund's officers or Trustees, a resolution of any potential or actual
conflict of interest, and to facilitate communication between the firm and each
Fund's officers and Trustees.
Each Fund has a Special Nominating Committee of the Trustees known as
the Administration Committee (the "Committee"). The Committee members for the
Panel A Funds are: Messrs. Aronowitz, Chapman, Cosgrove, Henry and Spellman and
Ms. Fosler. The Committee members for the Panel C Funds are: Messrs. Costle,
Erdahl, Farrell, Glavin, Moore and Pratt and Ms. Peterson. All of the members
of each Committee are Independent Trustees. Each Fund's Committee held 4
meetings during the last completed fiscal year of each Fund.
Included among the functions of each Committee is the selection and
nomination for appointment and election of candidates to serve as Trustees who
are not "interested persons," as defined in the 1940 Act. Each Committee also
coordinates with Trustees who are interested persons in the selection of Fund
officers. Each Committee will consider nominees recommended by shareholders to
serve as Trustees provided that the shareholders submit such recommendations in
compliance with all of the pertinent provisions of Rule 14a-8 under the
Securities Exchange Act of 1934.
EXECUTIVE OFFICERS
Except for the Chairman (Mr. Boudreau) and the President (Ms. Hodsdon),
the table below lists the executive officers of each Fund. Information about Mr.
Boudreau and Ms. Hodsdon is provided under "Information Concerning Nominees."
-10-
<PAGE>
<TABLE>
<CAPTION>
NAME, AGE AND POSITION PRINCIPAL OCCUPATION DURING
WITH EACH TRUST THE PAST FIVE YEARS FIRST BECAME AN OFFICER
- ---------------------- --------------------------- -----------------------
<S> <C> <C>
Robert G. Freedman Vice Chairman and Chief Investment Officer, Tax-Exempt Fund: 1992
(age 57) the Adviser and each of the John Hancock U.S. Government Fund: 1992
Vice Chairman and Chief Investment funds; President, the Adviser (until Core Equity Fund: 1987
Officer 1994); Director, the Adviser, Advisers Utilities Fund: 1987
International, John Hancock Funds, Investor Growth Fund: 1984
Services, SAMCorp and NM Capital; Senior
Vice President, The Berkeley Group.
James B. Little Senior Vice President, the Adviser, The Tax-Exempt Fund: 1992
(age 61) Berkeley Group, John Hancock Funds, and U.S. Government Fund: 1992
Senior Vice President Investor Services; Senior Vice President and Core Equity Fund: 1986
and Chief Financial Officer Chief Financial Officer, each of the John Utilities Fund: 1986
Hancock funds. Growth Fund: 1986
Thomas H. Drohan Senior Vice President and Secretary, the Tax-Exempt Fund: 1992
(age 59) Adviser, The Berkeley Group and each of the U.S. Government Fund: 1992
Senior Vice President John Hancock funds; Senior Vice President, Core Equity Fund: 1986
and Secretary Investor Services, John Hancock Funds and Utilities Fund: 1986
John Hancock Distributors (until 1994); Growth Fund: 1978
Director, Advisers International; Secretary,
NM Capital.
John A. Morin Vice President, the Adviser, Investor Tax-Exempt Fund: 1992
(age 45) Services and John Hancock Funds; Vice U.S. Government Fund: 1992
Vice President President and Compliance Officer, certain Core Equity Fund: 1991
John Hancock funds; Vice President and Utilities Fund: 1991
Assistant Secretary, The Berkeley Group. Growth Fund: 1991
Susan S. Newton Vice President and Assistant Secretary, the Tax-Exempt Fund: 1992
(age 46) Adviser; Vice President, Assistant Secretary U.S. Government Fund: 1992
Vice President, and Compliance Officer, certain John Hancock Core Equity Fund: 1986
Assistant Secretary funds; Vice President and Secretary, John Utilities Fund: 1986
and Compliance Officer Hancock Funds, Investor Services and John Growth Fund: 1985
Hancock Distributors (until 1994);
</TABLE>
-11-
<PAGE>
<TABLE>
<S> <C> <C>
Secretary, SAMCorp; Vice President, The
Berkeley Group.
James J. Stokowski Vice President, the Adviser; Vice President Tax-Exempt Fund: 1992
(age 49) and Treasurer, each of the John Hancock U.S. Government Fund: 1992
Vice President and Treasurer funds. Core Equity Fund: 1987
Utilities Fund: 1987
Growth Fund: 1991
</TABLE>
REMUNERATION OF OFFICERS AND TRUSTEES
The following tables provide information regarding the compensation
paid by each Fund and the other investment companies in the John Hancock fund
complex to the current Independent Trustees for their services for the fiscal
year end of each Fund. Mr. Boudreau, Ms. Hodsdon, Mr. Scipione and each officer
of the Funds are interested persons of the Adviser who are compensated by the
Adviser or affiliates and receive no compensation from the Funds.
(SEE CHART ON NEXT PAGE)
-12-
<PAGE>
Aggregate Compensation From Each Fund
For Each Fund's Last Fiscal Year
<TABLE>
<CAPTION>
U.S.
Tax-Exempt Government Core Equity Utilities Growth
Independent Trustee Fund Fund Fund Fund Fund
- ------------------- ---------- ---------- ------------ --------- ------
<S> <C> <C> <C> <C> <C>
Dennis S. Aronowitz N/A N/A $1,601 $524 $2,366
Richard P. Chapman, Jr. N/A N/A $1,638 $544 $722
William J. Cosgrove N/A N/A $1,601 $524 $722
Gail D. Fosler N/A N/A $1,601 $524 $2,366
Bayard Henry N/A N/A $1,638 $544 $2,282
Edward J. Spellman N/A N/A $1,601 $524 $2,366
William A. Barron, III* $4,232 $9,344 N/A N/A N/A
Douglas M. Costle $4,232 $9,344 N/A N/A N/A
Leland O. Erdahl $4,232 $9,344 N/A N/A N/A
Richard A. Farrell $4,388 $9,690 N/A N/A N/A
William F. Glavin $1,275 $2,774 N/A N/A N/A
Patrick Grant* $4,440 $9,805 N/A N/A N/A
Ralph Lowell, Jr.* $4,232 $9,344 N/A N/A N/A
Dr. John A. Moore $4,232 $9,344 N/A N/A N/A
Patti McGill Peterson $4,232 $9,344 N/A N/A N/A
John W. Pratt $4,232 $9,344 N/A N/A N/A
Total $39,727 $87,677 $9,680 $3,184 $10,824
</TABLE>
- -----------
* Messrs. Barron, Grant and Lowell retired from their respective positions
as Panel C Trustees effective January 1, 1996.
-13-
<PAGE>
<TABLE>
<CAPTION>
Total Compensation*
Pension or Retirement From Each Fund and
Benefits Accrued Other Funds in the
as Part of John Hancock Fund
Independent Trustee each Fund's Expenses(1) Complex
- ------------------- ----------------------- -------------------
<S> <C> <C>
Panel A Trustees:
Dennis S. Aronowitz $ 0 $ 61,050
Richard P. Chapman, Jr. 1,719 $ 62,800
William J. Cosgrove 1,644 $ 61,050
Gail D. Fosler 0 $ 60,800
Bayard Henry 0 $ 58,850
Edward S. Spellman 0 $ 61,050
Total $3,353 $365,600
====== ========
Panel C Trustees:
William A. Barron, III** $ 0 $ 41,750
Douglas M. Costle 0 $ 41,750
Leland O. Erdahl 0 $ 41,750
Richard A. Farrell 0 $ 43,250
William F. Glavin 8,368 $ 37,500
Patrick Grant** 0 $ 43,750
Ralph Lowell, Jr.** 0 $ 41,750
Dr. John A. Moore 0 $ 41,750
Patti McGill Peterson 0 $ 41,750
John W. Pratt 0 $ 41,750
Total $8,368 $416,750
====== ========
</TABLE>
- ----------
* Total compensation from each Fund and other John Hancock funds is as of
December 31, 1995. As of this date there were sixty-one funds in the John
Hancock fund complex. Messrs. Aronowitz, Chapman, Cosgrove, Henry and
Spellman and Ms. Fosler served 16 and Messrs. Barron, Costle, Erdahl,
Farrell, Glavin, Grant, Lowell, Moore and Pratt and Ms. Peterson served 12
of these funds.
** Messrs. Barron, Grant and Lowell retired from their respective positions
as Panel C Trustees effective January 1, 1996.
(1) REPRESENTS THE AGGREGATE VALUE AS OF DECEMBER 31, 1995 OF THE AMOUNT OF
TRUSTEES' FEES DEFERRED BY EACH INDEPENDENT TRUSTEE UNDER THE JOHN HANCOCK
DEFERRED COMPENSATION PLAN FOR INDEPENDENT TRUSTEES (THE "PLAN"). UNDER
THE PLAN, THE INDEPENDENT TRUSTEES MAY ELECT TO DEFER THE RECEIPT OF ALL
OR A PORTION OF THEIR TRUSTEES' FEES PAYABLE BY EACH FUND IN THE JOHN
HANCOCK FUND COMPLEX. THE VALUE OF AN INDEPENDENT TRUSTEE'S PLAN ACCOUNT
IS DETERMINED BY A HYPOTHETICAL INVESTMENT OF THE DEFERRED TRUSTEES' FEES
IN CERTAIN JOHN HANCOCK FUNDS SELECTED BY THE INDEPENDENT TRUSTEE FROM A
LIST OF DESIGNATED FUNDS. The Independent Trustees do not beneficially own
shares of any John Hancock fund under the Plan and a fund's obligation to
make payments of amounts deferred under the Plan is an unsecured
liability, payable solely from that fund's general assets. If the value of
the Independent Trustees' Plan accounts in all the John Hancock funds were
actually received and
-14-
<PAGE>
invested on December 31, 1995 by the Independent Trustees in shares of the
John Hancock funds against which the Plan accounts are valued, the
Independent Trustees participating in the Plan would own shares of the
John Hancock funds as set forth below:
<TABLE>
<CAPTION>
Shares Assuming Hypothetical Investment of Deferred Trustees' Fees
------------------------------------------------------------------
Special Special Sovereign Sovereign
Opportunities Growth International Value Bond Investors
Independent Trustee Fund Fund Fund Fund Fund Fund
- ------------------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Panel A Trustees:
Dennis S. Aronowitz -- -- -- -- -- --
Richard P. Chapman, Jr. -- 1,192 2,490 1,041
William J. Cosgrove -- -- -- 995 675 1,875
Gail D. Fosler -- -- -- -- -- --
Bayard Henry -- -- -- -- -- --
Edward S. Spellman -- -- -- -- -- --
Panel C Trustees:
William A. Barron, III -- -- -- -- -- --
Douglas M. Costle -- -- -- -- -- --
Leland O. Erdahl -- -- -- -- -- --
Richard A. Farrell -- -- -- -- -- --
William F. Glavin 1,309 -- -- 566 -- --
Patrick Grant -- -- -- -- -- --
Ralph Lowell, Jr. -- -- -- -- -- --
Dr. John A. Moore -- -- -- -- -- --
Patti McGill Peterson -- -- -- -- -- --
John W. Pratt -- -- -- -- -- --
</TABLE>
TRUSTEES' RECOMMENDATION
THE TRUSTEES RECOMMEND THAT THE SHAREHOLDERS OF THE FUNDS ELECT EACH OF
THE NOMINEES TO SERVE AS A TRUSTEE.
REQUIRED VOTE
Because your Fund is part of an overriding Trust, your vote will be
counted on a Trust- wide basis. Shareholders of each Fund which is a series of a
Trust vote together with each other Fund that is a series of the same Trust on
the election of Trustees for their Trust. Shareholders of Funds which are series
of different Trusts vote separately. Election of each Nominee of a Trust
requires a plurality of votes of the shareholders of the entire Trust present at
meetings of the shareholders of each Fund which is a series of the Trust,
provided, in each case, that there is a quorum.
-15-
<PAGE>
PROPOSAL 2
TO APPROVE AN AMENDED AND RESTATED DECLARATION OF TRUST
(FOR SHAREHOLDERS OF TAX-EXEMPT FUND AND
U.S. GOVERNMENT FUND VOTING TOGETHER WITH
EACH OTHER SERIES IN THE FREEDOM TRUST)
GENERAL
The Master Trust Agreement of the Tax-Exempt Fund and U.S. Government
Fund (the "Current Declaration") has not changed significantly since it was last
amended and restated on September 10, 1991. The Current Declaration is proposed
to be amended and restated (the "Amended Declaration") to provide the Trustees
of the Funds with greater flexibility to manage the Funds and each other series
of the Freedom Trust and to take advantage of potential investment
opportunities. This enhanced flexibility may result in the more efficient
operation of the Funds and lower costs. In addition, the Amended Declaration
contains more modern provisions then the Current Declaration and substantially
conforms to the governing documents of other John Hancock funds.
Effective March 6, 1996, the Trustees of the Funds voted to amend and
modernize the Funds' By-Laws. The Amended Declaration, substantially in the form
attached to this Proxy Statement as Exhibit A, will become effective on July 1,
1996, if approved by the shareholders.
The description of the Amended Declaration is qualified in its entirety
by the full text of the proposed Amended Declaration set forth as Exhibit A to
this Proxy Statement.
MATERIAL DIFFERENCES BETWEEN THE CURRENT DECLARATION AND THE AMENDED DECLARATION
Set forth below is a description of the material differences between
the Current Declaration and the Amended Declaration.
A. SHAREHOLDER VOTING RIGHTS
(i) MERGER, CONSOLIDATION, SALE OF ASSETS
The Amended Declaration would provide that the Freedom Trust,
Tax-Exempt Fund, U.S. Government Fund or any other fund which is a series of the
Freedom Trust could merge or consolidate into, or sell, lease or exchange all or
substantially all of its assets to any other entity when authorized by (a) a
vote of the holders of two-thirds of the Trust's or Fund's outstanding shares
present at a meeting called to consider the question, (b) a written consent
signed by the holders of two-thirds of the Trust's or Fund's outstanding shares,
or (c) a 1940 Act Majority Shareholder Vote (as defined in the "Vote Required"
section below) or written consent of the same proportion of shareholders of the
Trust or Fund if the merger, consolidation or sale, lease or exchange of assets
is recommended by the Trustees. No prior shareholder approval would be required
if another entity merged or consolidated into or sold, leased or exchanged all
or substantially all of its assets to the Trust or a Fund.
-16-
<PAGE>
The Current Declaration requires the Freedom Trust or the
affected Fund to obtain a 1940 Act Majority Shareholder Vote before either (a)
merging or consolidating into or selling all or substantially all of its assets
to another entity or (b) having another entity merge or consolidate into or sell
all or substantially all of its assets to the Trust or Fund.
The Amended Declaration would also provide that the Freedom
Trust may, without prior shareholder approval, create another entity and then
merge or consolidate into or sell all or substantially all of its assets or the
assets of the Tax-Exempt Fund, U.S. Government Fund or any other fund which is a
series of the Freedom Trust to the new entity. The Trust could also contract
with the new entity. The Current Declaration has no similar provisions.
(ii) TERMINATION OF THE TRUST, A FUND OR A CLASS OF SHARES
The Amended Declaration would provide that the Freedom Trust,
Tax-Exempt Fund, U.S. Government Fund or any other fund which is a series of the
Trust, or any class of shares of a Fund may be terminated by (a) a vote of the
holders of two-thirds of the outstanding shares of the Trust, Fund or class
present at a meeting called to consider the question, (b) a written consent
signed by the holders of two-thirds of the Trust's, Fund's or class' outstanding
shares, or (c) a 1940 Act Majority Shareholder Vote or written consent of the
same proportion of shareholders of the Trust, Fund or class if the termination
is recommended by the Trustees. The Trust, Fund or class could also be
terminated without prior shareholder approval upon notice to shareholders by
means of a written instrument signed by a majority of the Trustees, stating that
the Trustees have determined that continuing the Trust, Fund or class is not in
the best interests of the Trust, Fund or class or their respective shareholders.
In addition, the Trustees could abolish any series or class of shares if there
are no shares of such series or class outstanding by means of a written
instrument executed by a majority of the Trustees.
The Current Declaration provides that the Freedom Trust,
Tax-Exempt Fund, U.S. Government Fund or any other fund which is a series of the
Trust, or any class of shares of a Fund may be terminated by a majority of the
Trustees, subject to an affirmative 1940 Act Majority Shareholder Vote of the
shares of the Trust, Fund or class.
(iii) AMENDMENT OF DECLARATION OF TRUST
The Amended Declaration would provide that the Declaration may
be amended upon approval of a majority of the Trustees without prior shareholder
approval. However, the Trustees may not adopt amendments to the Amended
Declaration which would (1) impair the voting or other rights of shareholders
prescribed by law, or (2) impair the exemption from personal liability of the
shareholders, Trustees, officers, employees and agents of the Funds or (3)
permit assessments upon shareholders.
The Current Declaration provides that the Declaration may be
amended upon the approval of a majority of the Trustees without prior
shareholder approval, unless such amendment would repeal the limitations on
personal liability of any shareholder or Trustee or would repeal the prohibition
on assessments upon shareholders. If the amendment would repeal these rights,
then the prior consent of each shareholder or Trustee affected is required. In
addition, any amendment to the Declaration that would adversely affect the
rights of shareholders requires the prior affirmative vote of holders of a
majority of the Trust's shares entitled to vote.
-17-
<PAGE>
(iv) ESTABLISHMENT OF SERIES AND CLASSES
The Amended Declaration and Current Declaration provide that
the Trustees may establish and designate additional series of the Freedom Trust
and additional classes of shares. The Current Declaration further provides that
if such establishment and designation would adversely effect any of the already
established series or classes, then prior approval of holders of a majority of
the shares of the affected series or class is required. The Amended Declaration
would not contain a similar provision.
(v) ACQUISITION OF ASSETS
The Amended Declaration would provide that the Trustees may
issue shares to another party in exchange for other assets and businesses. The
Current Declaration does not contain a similar provision.
(vi) VOTING PROCEDURES
The Amended Declaration would provide that, with certain
exceptions, all shares of all classes of all Funds vote together as a single
class. With respect to matters which affect a single Fund or class or which
affect only certain Funds or classes identically, only the shareholders of the
affected Fund(s) or class(es) will be entitled to vote.
The Current Declaration provides that, with certain
exceptions, shareholders of each Fund vote separately from other Funds. With
respect to matters affecting only certain Funds or classes, only the affected
Fund(s) or class(es) will vote.
B. REDEMPTION AND REPURCHASE OF SHARES
The Amended Declaration would provide that in the event redemptions are
suspended by a Fund, shareholders could revoke any application for redemption of
shares not honored prior to the suspension and resubmit the redemption request
when the suspension is lifted, and the price might be more favorable. The
Current Declaration does not contain similar provisions.
The Amended Declaration would provide that the Trustees could withhold
from any redemption proceeds any amounts arising from liability of the redeeming
shareholder to the Fund or the Freedom Trust or in connection with any tax
withholding requirements. The Amended Declaration would also provide that
account administration fees and other similar charges could be deducted directly
from the income and other distributions paid to a shareholder's account. The
Current Declaration does not contain similar provisions.
In addition to the material differences described above, there are
other substantive and stylistic differences between the Amended Declaration and
the Current Declaration. You are urged to review the form of Amended Declaration
attached to this Proxy Statement as Exhibit A.
TRUSTEES' EVALUATION AND RECOMMENDATION
At the meeting of the Trustees of Tax-Exempt Fund and U.S. Government
Fund held on March 5, 1996, the Trustees, including the Independent Trustees
approved, and voted to recommend to shareholders that they approve, a proposal
to amend and restate the Current Declaration. In taking this action and making
this recommendation, the Trustees considered the likelihood that the Amended
Declaration will result in more efficient and economical operation of the
Tax-Exempt Fund and U.S.
-18-
<PAGE>
Government Fund by giving the Trustees more flexibility to manage the Funds and
adapt the Declaration to changes in applicable law, industry developments and
other changes. This greater flexibility should reduce the need for costly and
time-consuming proxy solicitations and shareholders' meetings.
Except as described in this Proxy Statement, approval of the Amended
Declaration will not result in changes in the Trustees, officers, investment
programs and services or any operations and services of the Funds that are
described in the Funds' current Prospectuses.
If the proposed changes are not approved by the shareholders, the
Current Declaration will continue in its existing form. Alternatively, the
Trustees may consider submitting to shareholders at a future meeting other
proposals to amend and restate the Current Declaration.
THE TRUSTEES OF TAX-EXEMPT FUND AND U.S. GOVERNMENT FUND RECOMMEND THAT
SHAREHOLDERS OF TAX-EXEMPT FUND AND U.S. GOVERNMENT FUND APPROVE THE AMENDMENT
AND RESTATEMENT OF THE CURRENT DECLARATION AND ADOPT THE AMENDED DECLARATION.
VOTE REQUIRED
Because your Fund is part of Freedom Trust, your vote will be counted
on a Trust-wide basis. Approval of Proposal 2 requires an affirmative vote of a
majority of the aggregate outstanding shares of Tax-Exempt Fund, U.S. Government
Fund and each other fund which is a series fund of Freedom Trust. For purposes
of approving this Proposal, a majority of outstanding voting securities shall
mean approval by the lesser of (i) 67% or more of the aggregate shares of the
Tax-Exempt Fund, U.S. Government Fund and each other fund which is a series fund
of Freedom Trust represented at meetings of each Fund's shareholders if at least
50% of each Fund's outstanding shares are present in person or by proxy at the
meetings or (ii) 50% or more of the aggregate of the Funds' outstanding shares
(a "1940 Act Majority Shareholder Vote").
PROPOSALS 3(a), 3(bB), 3(c), 3(d) AND 3(e)
TO APPROVE AGREEMENTS AND PLANS OF REORGANIZATION
(FOR SHAREHOLDERS OF EACH FUND VOTING SEPARATELY)
The Trustees have approved, subject to shareholder approval, an
Agreement and Plan of Reorganization (the "Reorganization Agreement") for each
of their respective Funds in the form attached to this Proxy Statement as
Exhibit B. The Reorganization Agreements provide for the reorganization of each
Fund (the "Reorganizations") as a new fund of a different trust (the "Successor
Trusts") in the John Hancock fund complex. If approved, the result of the
Reorganizations will be as follows:
<TABLE>
<CAPTION>
Successor Trusts and
Funds Current Trusts Dates of Organization
----- -------------- ---------------------
<S> <C> <C>
Tax-Exempt Fund Freedom Trust John Hancock Tax-Exempt Series Fund
(the "Tax-Exempt Series Trust") (3/24/87)
U.S. Government Fund Freedom Trust Strategic Series Trust (4/16/86)
</TABLE>
-19-
<PAGE>
<TABLE>
<S> <C> <C>
Core Equity Fund Strategic Series Capital Series Trust (10/5/84)
Trust
Utilities Fund Strategic Series Capital Series Trust
Trust
Growth Fund Capital Series Freedom Investment Trust II (the "Freedom
Trust Trust II") (3/31/96)
</TABLE>
Each of the Trusts and the Successor Trusts are registered, open-end
management investment companies organized as Massachusetts business trusts. Each
of the Successor Trusts currently have other existing series funds (the
"Existing Funds").
THE REORGANIZATION OF THESE FUNDS INTO SUCCESSOR TRUSTS WILL NOT RESULT
IN ANY CHANGES IN THE INVESTMENT POLICIES OR OPERATIONS OF THE FUNDS.
PURPOSE OF THE PROPOSED REORGANIZATIONS
THE PURPOSE OF EACH REORGANIZATION IS TO INCREASE ADMINISTRATIVE
EFFICIENCY IN THE OPERATION OF EACH FUND AND TO REDUCE EACH FUND'S OPERATING
EXPENSES BY ACHIEVING ADDITIONAL ECONOMIES OF SCALE. Specifically, it is
anticipated that each Fund will incur slightly lower registration, printing,
administrative, legal and accounting expenses if the Fund is organized as a
series of its Successor Trust and adopts the same fiscal year as the Existing
Funds of its Successor Trust. The number of filings with the Securities and
Exchange Commission will be reduced due to the fact that Funds with the same
fiscal year ends will be organized as series of the same Successor Trusts. In
addition, Successor Trusts will have additional opportunities to consolidate the
prospectuses of the Funds and their Existing Funds, which consolidation should
reduce expenses. Over time, these savings should have a positive effect on each
Fund's total return.
The Adviser serves as the investment adviser to each Fund and to each
Existing Fund. Each Fund is currently responsible for all expenses it incurs
that are not expressly stated to be payable by the Adviser under each investment
management contract. Expenses for which Core Equity Fund, Utilities Fund, Growth
Fund and, if Proposals 4(a) and 4(b) in this Proxy Statement are approved,
Tax-Exempt Fund and U.S. Government Fund, are responsible include, without
limitation, fees and expenses of its custodian and transfer agent; fees and
expenses of registering shares; taxes and governmental fees assessed against the
Fund's assets; preparing and mailing dividends, reports, notices and proxy
materials to shareholders of the Fund; and legal, accounting and auditing fees.
If Proposal 4(a) and 4(b) are not approved, then Tax-Exempt Fund and U.S.
Government Fund will be responsible for these expenses except for certain legal,
accounting and auditing fees.
The Trustees have determined that expense reductions resulting from the
Reorganizations will benefit shareholders of each Fund. These expense reductions
include, among other things, lower annual state registration fees and lower
filing, printing and related administrative costs.
BASED ON THE ANTICIPATED INCREASE IN ADMINISTRATIVE EFFICIENCY AND
REDUCTIONS IN THE EXPENSES OF EACH FUND, THE TRUSTEES HAVE DETERMINED THAT EACH
PROPOSED REORGANIZATION WILL BE IN THE BEST INTEREST OF THE FUNDS AND THE FUNDS'
SHAREHOLDERS. The Trustees believe that it is in the Funds' interest to reduce
gross annual operating expense ratios to the lowest possible level. The Trustees
-20-
<PAGE>
believe that it is generally beneficial to the Funds to improve the efficiency
and reduce the annual cost of the Funds' operations and that each Fund will
ultimately benefit from its Reorganization.
SUMMARY OF THE AGREEMENT AND PLAN OF REORGANIZATION
FOR EACH FUND
The following summarizes certain terms of each Reorganization
Agreement. The Reorganization Agreement for each Fund is substantially identical
and this summary is qualified in its entirety by the provisions of the form of
Reorganization Agreement attached to this Proxy Statement as Exhibit B.
Assuming that each Reorganization is approved by shareholders of each
Fund, it is expected that the closing date of each Reorganization will be July
1, 1996, except for the Reorganization of U.S. Government Fund, which will be
September 1, 1996 (collectively, the "Closing Dates"). In order to accomplish
the Reorganizations, new funds (the "Successor Funds") corresponding to each of
the Funds will be established as new series funds of the corresponding Successor
Trust. On the respective Closing Dates, each Fund will transfer all of its
assets to its corresponding Successor Fund in exchange for the assumption by the
Successor Fund of all of the liabilities of the Fund and the issuance to the
Fund of each class of shares of the Successor Fund (the "Successor Fund
Shares.") The number and net asset value per share of each class of Successor
Fund Shares will be identical to the number and net asset value per share of
each class of shares of the corresponding Fund outstanding on the Closing Date.
Each Fund, as the sole shareholder of the corresponding Successor Fund,
will then vote on certain matters that require shareholder approval, as
described below. Immediately thereafter, each Fund will liquidate and distribute
to each Fund shareholder a proportional amount of Successor Fund Shares in
exchange for shareholder's Fund shares of the corresponding class. The existence
of each Fund will then be terminated. The number and net asset value per share
of Successor Fund Shares of each class to be received by each shareholder will
be identical to the number and net asset value per share of shares of the
corresponding class of each Fund held by that shareholder immediately prior to
the Reorganization. A confirmation will be mailed to each shareholder disclosing
the number of Successor Fund Shares registered to each shareholder's account.
If, at any time prior to a Closing Date, the Board of Trustees of any
Trust or Successor Trust determines that it would not be in the best interest of
the affected Fund, the Successor Trust or their respective shareholders to
proceed with that Fund's Reorganization, the Reorganization will not be
consummated, notwithstanding the approval of the Reorganization by shareholders
of the Fund at this Meeting. The obligations of each Trust and Successor Trust
under each Reorganization Agreement are subject to various conditions. In order
to provide against unforeseen events, each Reorganization Agreement may be
terminated or amended at any time prior to its stated Closing Date by the
appropriate Board of Trustees of the Trust or the Successor Trust. Each Trust or
Successor Trust may at any time waive compliance with any of the covenants and
conditions contained in, or may amend, the Reorganization Agreement, provided
that any such waiver or amendment does not materially adversely affect the
interests of shareholders of the respective Fund.
CONTINUATION OF SHAREHOLDER ACCOUNTS AND ELECTIONS
The Funds' transfer agent, Investor Services, will establish accounts
for all shareholders of each Fund containing the appropriate number of Successor
Fund Shares to be received by that shareholder under each Reorganization
Agreement. Each account and its elections will be identical in all material
respects to those currently maintained by each Fund for its shareholders.
-21-
<PAGE>
EXPENSES OF EACH REORGANIZATION
Each Fund will bear all of the expenses associated with the
transactions contemplated by its Reorganization Agreement except for the
expenses associated with printing and mailing this Proxy Statement which will be
borne by each Fund pro rata based on the number of shareholders of each Fund. It
is presently estimated that the expenses of each Reorganization will be
approximately $12,000.
TAX CONSEQUENCES OF EACH REORGANIZATION
It is a condition to the consummation of each Reorganization that the
Trust and the Successor Trust receive on or before the appropriate Closing Date
an opinion from legal counsel, Hale and Dorr, concerning the federal income tax
consequences of the Reorganization. This opinion will provide, among other
things, that the transactions contemplated by the Reorganization Agreement will
constitute a reorganization under Section 368(a)(1) of the Internal Revenue Code
of 1986, as amended, and that, consequently, no gain or loss will be recognized
for federal income tax purposes by a Fund or its shareholders upon (1) the
transfer of all of the Fund's assets to the Successor Fund in exchange solely
for Successor Fund Shares and the assumption by the Successor Fund of the Fund's
liabilities or (2) the distribution by the Fund of the Successor Fund Shares, in
liquidation of the Fund, to the shareholders in exchange for their Fund shares.
The opinion will further state, among other things, that (i) the federal tax
basis of the Successor Fund Shares to be received by shareholders of the Fund
will be the same as the federal tax basis of the Fund shares surrendered in
exchange therefor and (ii) each shareholder's federal tax holding period for his
or her Successor Fund Shares will include each shareholder's tax holding period
for the surrendered Fund shares, provided that these Fund shares were held as
capital assets on the date of the exchange.
GOVERNANCE OF THE TRUSTS AND THE SUCCESSOR TRUSTS
If Proposal 1 of this Proxy Statement is approved, the Trustees of each
Trust and Successor Trust will be identical. Currently, the Trustees of each
Successor Trust except for Freedom Trust II are the Panel A Trustees as defined
in Proposal 1 and the Trustees of the Freedom Trust and Freedom Trust II are the
Panel C Trustees as defined in Proposal 1. The officers of each of the Trusts
and the Successor Trusts are currently identical.
If Proposals 3(a) and 3(b) are approved, the Tax-Exempt Fund and the
U.S. Government Fund will be governed by the terms of the Declarations of Trust
of the Tax-Exempt Series Trust and the Strategic Series Trust, respectively,
rather than the Master Trust Agreement of the Freedom Trust. The current
shareholders of Tax-Exempt Series Trust are considering a proposal under a
separate proxy statement to adopt an Amended and Restated Declaration of Trust
which is substantially identical to the current Declaration of Trust of
Strategic Series Trust and to the Amended and Restated Declaration of Trust
being considered by the shareholders of Freedom Trust under Proposal 2 of this
Proxy Statement (a form of which is attached hereto as Exhibit A). If the
shareholders of Tax-Exempt Series Trust and Freedom Trust vote to adopt their
respective Amended and Restated Declarations of Trust, then the terms of the
Declaration of Trust of each of Tax-Exempt Series Trust, Strategic Series Trust
and Freedom Trust will be substantially identical.
If Proposals 3(c) and 3(d) are approved, the Core Equity Fund and
Utilities Fund, respectively, will be governed by the Declaration of Trust of
the Capital Series Trust (the "Capital Series Trust Declaration"), rather than
the Declaration of Trust of the Strategic Series Trust (the "Strategic Series
Trust Declaration"). The Strategic Series Trust Declaration is substantially
similar to the Capital Series Trust Declaration except that the Strategic Series
Trust Declaration provides that Trustees may not amend the Trust
-22-
<PAGE>
Declaration to impair any voting or other rights of shareholders prescribed by
federal or state law while the Capital Series Trust Declaration provides that
any amendment decreasing the amounts payable to shareholders upon liquidation or
diminishing or eliminating voting rights requires prior approval by two-thirds
of the outstanding shares of the affected series or class of shares.
If Proposal 3(e) is approved, the Growth Fund will be governed by the
Declaration of Trust of the Freedom Trust II rather than the Capital Series
Trust Declaration. The current shareholders of Freedom Trust II are considering
a proposal pursuant to a separate proxy statement to adopt an Amended and
Restated Declaration of Trust (the "Freedom Trust II Trust Declaration") which
is substantially similar to the Capital Series Trust Declaration, except that
the proposed Freedom Trust II Trust Declaration provides that the Trustees may
not amend the Trust Declaration to impair any voting or other rights of
shareholders prescribed by federal or state law while the Capital Series Trust
Declaration provides that any amendment decreasing the amounts payable to
shareholders upon liquidation or diminishing or eliminating voting rights
requires prior approval by two-thirds of the outstanding shares of the affected
series or class of shares. If the shareholders of Freedom Trust II vote to adopt
the proposed Freedom Trust II Trust Declaration, the new Trust Declaration will
be substantially similar except as noted.
AGREEMENTS AND PLANS
If shareholders of each Fund approve the Fund's Reorganization
Agreement, the corresponding Successor Funds will enter into contracts which are
substantially identical to the Funds' currently effective contracts. These
contracts will include investment management contracts with the Adviser (See
Proposal 4 below) and transfer agency agreements with Investor Services. Custody
and distribution services will continue to be provided to each Successor Fund by
Investors Bank & Trust Company and John Hancock Funds, respectively, pursuant to
the corresponding Successor Trust's custodian agreement and distribution
contract. The terms of these agreements are substantially similar to those
contained in the Funds' current custodian agreements and distribution contracts.
Price Waterhouse LLP, the current independent auditors for each of the Funds
except for Growth Fund, and Ernst & Young LLP, the current independent auditors
for Growth Fund, will continue to serve as the independent auditors to the
respective Successor Funds as well as the Existing Funds of the Successor
Trusts. In addition, the Trustees of each of the Successor Trusts have adopted a
distribution plan (a "Distribution Plan") for each class of shares of each
Successor Fund which is substantially identical to the Fund's current
distribution plans.
The fee schedules for services provided to the Successor Funds under
the agreements described above will be identical to those in effect for the
corresponding Funds before the Reorganizations. On the appropriate Closing Date,
before distributing Successor Fund Shares to its shareholders, each Fund, as the
sole shareholder of its corresponding Successor Fund, will vote to approve the
Successor Fund's investment management contract and its distribution plans.
TRUSTEES' RECOMMENDATION
Based on the considerations discussed above, at a meeting held on March
5, 1996, the Trustees approved the adoption of the Reorganization Agreements for
the Funds and determined that the Reorganization of each Fund (i) is in the best
interest of the Fund and (ii) will not result in dilution of the interest of the
shareholders of the Fund. In addition, the Trustees voted to recommend to the
shareholders of the Funds that they approve the Reorganization Agreement for
their Fund and the transactions contemplated thereunder. If the shareholders of
a Fund do not approve the Reorganization Agreement for their Fund, the Fund will
retain its present status, and the Trustees will consider other arrangements for
restructuring and reducing the expenses of the Fund.
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<PAGE>
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS OF EACH FUND APPROVE THE
AGREEMENT AND PLAN OF REORGANIZATION FOR THEIR FUND PROVIDING FOR THE
REORGANIZATION OF THEIR FUND TO BECOME A SERIES OF THE CORRESPONDING SUCCESSOR
TRUST.
VOTE REQUIRED
Approval of Proposals 3(a), 3(b), 3(c), 3(d), and 3(e) requires the
affirmative 1940 Act Majority Shareholder Vote of the Tax-Exempt Fund, U.S.
Government Fund, Core Equity Fund, Utilities Fund and Growth Fund, respectively.
PROPOSALS 4(a) AND 4(b)
TO APPROVE THE TERMS OF NEW INVESTMENT
MANAGEMENT CONTRACTS
GENERAL
The investment portfolios of Tax-Exempt Fund and U.S. Government Fund
are managed by the Adviser pursuant to an Advisory Agreement dated November 6,
1986, as restated January 1, 1994 (the "Existing Agreement"). The Existing
Agreement was approved by shareholders of each Fund at meetings held on October
28, 1993.
At the meeting on March 5, 1996, the Trustees of Tax-Exempt Fund and
U.S. Government Fund, including the Independent Trustees, voted to approve, and
to recommend that the shareholders of Tax-Exempt Fund and U.S. Government Fund
approve, the adoption of a new investment management contract for each Fund in
the form attached to this Proxy Statement as Exhibit C (the "New Agreements").
The New Agreements would replace the Existing Agreement. The terms of the New
Agreements are substantially identical, but would reflect: (1) greater
flexibility to allocate certain legal and accounting expenses to each Fund, (2)
differences in expense limitation provisions and (3) additional changes noted
below to conform the Funds' investment management contracts to those of most
other funds in the John Hancock fund complex. Material similarities and
differences between the Existing Agreement and the New Agreements are set forth
below.
MATERIAL SIMILARITIES BETWEEN THE EXISTING AGREEMENT AND THE NEW AGREEMENTS
Under both the Existing Agreement and the New Agreements, the Adviser
provides the Funds with a continuous investment program for the management of
their assets. The Adviser provides investment advice and management of the
Funds, subject to supervision and review by the Board of Trustees and subject to
conformity with the Funds' investment objectives, restrictions and policies, as
described in the Funds' Prospectuses and Statements of Additional Information.
The rate and terms of payment of the advisory fee paid to the Adviser
by the Funds are identical under both the Existing Agreement and the New
Agreements. The advisory fee paid by the Tax-Exempt Fund is paid monthly at an
annual rate equal to (i) 0.60% of the average daily net asset value of the Fund
for the calendar month up to $250,000,000 of average daily net assets, (ii)
0.50% on the next $500,000,000, and (iii) 0.45% on amounts in excess of
$750,000,000. The Fund paid the Adviser $1,247,519 (0.55% of average daily net
assets) in advisory fees for the fiscal year of the Fund ending October 31,
1995.
-24-
<PAGE>
The advisory fee paid by the U.S. Government Fund is paid monthly at an
annual rate equal to (i) 0.50% of the first $500,000,000 of the average daily
net asset value of the Fund for such calendar month, and (ii) 0.45% on amounts
in excess of $500,000,000. The Fund paid the Adviser $2,514,147 (0.50% of
average daily net assets) in advisory fees for the fiscal year of the Fund ended
October 31, 1995.
Under each Agreement, the Adviser pays all expenses it incurs with
respect to the performance of its duties thereunder, including expenses
associated with office space and related equipment. The Fund bears all other
material expenses as described in the Agreements (see Subsection A below). Each
Agreement provides that it shall be effective for a period of up to two years
after its adoption and then for one year periods thereafter so long as it is
annually approved by (i) a majority of the Independent Trustees of the Funds and
(ii) either (a) the Trustees or (b) a 1940 Act Majority Shareholder Vote (as
defined in the "Vote Required" section of Proposal 2 above). Each Agreement also
provides that it may be terminated on 60 days written notice without penalty by
either a 1940 Act Majority Shareholder Vote, the Trustees or the Adviser. Each
Agreement automatically terminates upon assignment as defined by the 1940 Act.
Each Agreement provides that the obligations of the Fund under the Agreement are
not binding on the Trustees, shareholders, officers, employees, agents or
nominees of Freedom Trust or the Fund as individuals but bind only Freedom Trust
(under the Existing Agreement) or the Fund (under each of the New Agreements)
and its property.
MATERIAL DIFFERENCES BETWEEN THE EXISTING AGREEMENT AND THE NEW AGREEMENTS
A. ACCOUNTING EXPENSES
Under the Existing Agreement, the Adviser furnishes and bears the cost
of personnel and related costs to perform financial and accounting functions for
the benefit of the Funds. The Adviser compensates all personnel who are
employees of the Adviser or an affiliate of the Adviser. The Funds are
responsible for paying expenses associated with any independent accountants and
custodians retained by the Funds. This allocation of expenses creates an
incentive to have accounting services provided by outside vendors at a higher
cost than would be charged by the Adviser for performing the same service
internally.
The New Agreements provide that each Fund will be responsible for
paying all fees and expenses associated with financial, accounting and tax
services provided to the Funds by the Adviser's personnel. Including this
provision in the New Agreements will bring the Funds' expense allocation
procedures into conformity with those of other John Hancock mutual funds. The
new provision will allow the Funds the flexibility to approve the payment of
compensation to the Adviser for providing day-to-day financial, accounting, tax,
bookkeeping and legal services to the Funds. Although no proposal to compensate
the Adviser for accounting or legal services has been approved by the Funds'
Trustees, the Adviser expects to present a proposal in the fall of 1996.
As stated below, the Funds' expense ratios and the fees received by the
Adviser will be slightly higher than they are now if the Trustees approve a
proposal to compensate the Adviser for performing accounting services. However,
in response to the increased complexity of fund accounting and taxation, the
Adviser must employ additional financial and tax professionals with a higher
level of expertise than required in the past, and must provide increasingly
complex technological resources for financial and risk analyses. These costs
were not envisioned as recently as ten years ago, when the current contracts
were written. As a result, the Adviser has been absorbing costs that normally
would be billed directly to the Funds by an outside vendor at a higher cost. The
comparative fee analyses presented to the Trustees showed that the Adviser could
continue to provide these services to the Funds at a significantly lower cost
than an outside vendor, if the Adviser were reimbursed by the Funds for the
expenses associated with maintaining the Adviser's existing high level of
service to the Funds.
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<PAGE>
Under the Existing Agreement, the annual operating expenses paid by
Tax-Exempt Fund with respect to its Class A and Class B shares for its fiscal
year ended October 31, 1995, were 1.06% and 1.73%, respectively, on average net
assets of $27,792,950 and $199,028,645, respectively. The annual operating
expenses paid by U.S. Government Fund with respect to its Class A and Class B
shares for its fiscal year ended October 31, 1995, were 1.17% and 1.72%,
respectively, on average net assets of $334,932,570 and $168,279,601,
respectively.
Under the New Agreements, the annual operating expenses paid by
Tax-Exempt Fund with respect to its Class A and Class B shares for its fiscal
year ended October 31, 1995 would have been 1.08% and 1.75%, respectively,
representing an increase of 0.02% and 0.02%, respectively. The annual operating
expenses paid by U.S. Government Fund with respect to its Class A and Class B
shares for its fiscal year ended October 31, 1995 would have been 1.19% and
1.74%, respectively, representing an increase of 0.02% and 0.02%, respectively.
Set forth below is a comparative fee table showing the amount of fees
and expenses paid by each Fund under the Existing Agreement as a percentage of
average net assets and the amount of fees and expenses shareholders would have
paid indirectly if the New Agreements had been in effect and the Trustees had
approved the compensation of the Adviser for its accounting services. The
information in the table is an estimate based on actual expenses for the Funds'
fiscal year ended October 31, 1995.
COMPARATIVE FEE TABLE
<TABLE>
<CAPTION>
Tax-Exempt Fund Existing Agreement New Agreement
- --------------- ------------------ -------------
Class A Class B Class A Class B
------- ------- ------- -------
<S> <C> <C> <C> <C>
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET
ASSETS)
Management fee (net of waiver
by Adviser)......................................... 0.55% 0.55% 0.55% 0.55%
12b-1 fee............................................. 0.30% 1.00% 0.30% 1.00%
Other expenses........................................ 0.16% 0.16% 0.18% 0.18%
Total Fund Operating Expenses......................... 1.01% 1.71% 1.03% 1.73%
</TABLE>
EXAMPLE
The following table illustrates the expenses on a $1,000 investment you
would pay under the Existing Agreement and the New Agreement, assuming a 5%
annual return:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
-------------------- -------------------- -------------------- --------------------
New Existing New Existing New Existing New Existing
Agreement Agreement Agreement Agreement Agreement Agreement Agreement Agreement
--------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A Shares........ $55 $55 $76 $76 $99 $98 $165 $163
Class B Shares
-Assuming complete
redemption at end
of period........... $67 $67 $84 $84 $114 $113 $186 $183
-Assuming no
redemption.......... $17 $17 $54 $54 $94 $93 $186 $183
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
U.S. Government Fund Existing Agreement New Agreement
- -------------------- ------------------ -------------
Class A Class B Class A Class B
------- ------- ------- -------
<S> <C> <C> <C> <C>
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET
ASSETS)
Management fee .............................................. 0.50% 0.50% 0.50% 0.50%
12b-1 fee.................................................... 0.30% 1.00% 0.30% 1.00%
Other expenses............................................... 0.32% 0.32% 0.34% 0.34%
Total Fund Operating Expenses................................ 1.12% 1.82% 1.14% 1.84%
</TABLE>
EXAMPLE
The following table illustrates the expenses on a $1,000 investment you
would pay under the Existing Agreement and the New Agreement, assuming a 5%
annual return:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
-------------------- -------------------- -------------------- --------------------
New Existing New Existing New Existing New Existing
Agreement Agreement Agreement Agreement Agreement Agreement Agreement Agreement
--------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A Shares............ $56 $56 $80 $79 $105 $104 $177 $175
Class B Shares
-Assuming complete
redemption at end
of period............... $68 $68 $88 $87 $120 $119 $198 $195
-Assuming no redemption.. $18 $18 $58 $57 $100 $99 $198 $195
</TABLE>
The purpose of the preceding examples and tables is to assist investors
in understanding the various costs and expenses of investing in shares of each
Fund. These examples should not be considered representations of past or future
expenses of the Funds. Actual expenses may be higher or lower than those shown
above.
B. ADVISORY FEE LIMITATIONS
Under the Existing Agreement, if the total expenses of each Fund
(exclusive of interest, taxes, brokerage expenses and extraordinary items) for
any fiscal year exceed the lowest expense limitation imposed by any state in
which shares of the Fund are qualified for sale, the Adviser will pay or
reimburse the Fund for that excess up to the amount of the advisory fees payable
by the Fund during that fiscal year. The amount of the monthly advisory fee
payable by the Fund will be reduced to the extent that the monthly expenses of
the Fund, on an annualized basis, exceed these limitations. If at the end of the
fiscal year, the expenses of the Fund are within the limitation, any excess
amount previously withheld from the monthly advisory fee during that fiscal year
will be paid to the Adviser.
Under the New Agreements, this provision has been modified to state
simply that the Adviser will adhere to applicable state law. It requires the
Adviser to reduce its fee and make additional arrangements only as required in
order to comply with that state's law. This language reflects the minimum
requirements of state laws currently in effect and eliminates the need to revise
the agreement if a state changes its law. The Adviser may, however, make
additional arrangements at its discretion to reduce expenses of the Funds beyond
those required by state law. The New Agreements contain an additional provision
permitting
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<PAGE>
the Adviser to refrain from imposing all or a portion of its fee (in advance of
the time its fee would otherwise accrue) and/or undertake to make any other
payments or arrangements necessary to limit the Funds' expenses to any level the
Adviser may specify. Any fee reduction or undertaking will constitute a binding
modification of the applicable New Agreement while it is in effect but may be
discontinued or modified prospectively by the Adviser at any time. NEITHER OF
THESE REVISED PROVISIONS WILL HAVE ANY IMMEDIATE EFFECT ON THE ADVISORY FEE
RATES PAYABLE BY THE FUNDS OR THE EXPENSE RATIOS OF THE FUNDS.
C. OTHER DIFFERENCES BETWEEN THE EXISTING AGREEMENT AND THE NEW
AGREEMENTS
The New Agreements provide that the Funds will bear the allocable cost
of the Adviser's employees who render legal services to the Funds. Although the
Adviser reserves the right to do so, the Adviser has no current intention of
allocating these costs to the Funds and will not do so until the Trustees of the
Funds, including the Independent Trustees, approve the allocation. Accordingly,
there will be no immediate increase in the Funds' expenses as a result of the
inclusion of this provision in the New Agreements. The New Agreements also
provide that the Funds will be responsible for the expense of periodic
calculations of the net asset value of the shares of the Funds.
With respect to the calculation of the advisory fees to be paid under
each of the New Agreements, the New Agreements provide that the "average daily
net assets" of the Funds will be calculated on the basis set forth in the Funds'
Prospectuses or otherwise consistent with the 1940 Act. The Existing Agreement
provides no description of how the Funds' "average daily net assets" will be
calculated.
Each Agreement provides that the Adviser may provide investment
advisory services to other clients; however, the New Agreements further provide
that the Adviser may provide services to other investment companies and that the
officers, directors and employees of the Adviser and its parent may continue to
engage in providing portfolio management services to other investment companies.
The New Agreements also provide that the Adviser is under no obligation to
acquire any particular investment on behalf of the Funds if, in the Adviser's
sole discretion, it is not feasible or desirable to acquire a position in that
investment on behalf of the Funds.
The New Agreements provide that, in connection with the purchase or
sale of securities for the account of the Funds, neither the Adviser nor any of
its subsidiaries, directors, officers or employees will act as principal or
agent or receive any commission except as the 1940 Act permits. If the Adviser
advises persons concerning shares of the Funds, the Adviser will be acting
solely on its own behalf and not on behalf of the Funds. The New Agreements
further state that the Adviser and its affiliates can buy, sell and trade
securities for their own accounts.
The New Agreements provide that Freedom Trust and the Funds may use the
name "John Hancock" or similar names to those of John Hancock Advisers, Inc. or
John Hancock Mutual Life Insurance Company only while the Agreements are in
effect. John Hancock Mutual Life Insurance Company reserves the right to grant
nonexclusive rights to use of the name "John Hancock" to other investment
companies and entities.
Each Agreement limits the liability of the Adviser for any error of
judgment, mistake of law or loss to the Funds unless such liability arises out
of willful misfeasance, bad faith, gross negligence or reckless disregard by the
Adviser of its obligations under the Agreement. The Existing Agreement further
provides that nothing in the Agreement protects any Trustee or officer of the
Funds against any liability to which that person might be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of that
person's obligations under the Agreement. The New Agreements contain no such
exception
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<PAGE>
because it serves no purpose; Trustees and officers are not parties to, and do
not assume any liabilities under, the New Agreements. The New Agreements clarify
that individuals who are employees of either the Funds or the Adviser will be
deemed to be acting solely for the applicable Fund when acting within the scope
of their employment for the Fund and not as employees or agents of the Adviser.
The Existing Agreement provides that the Agreement may be amended as to
any series of the Trust by a 1940 Act Majority Shareholder Vote of that series.
The New Agreements specifically require that the Adviser agree to the amendment
and also require that any amendment be in writing. The New Agreements further
provide that no amendment, transfer, assignment, sale, hypothecation or pledge
of the Agreements will be effective until approved by (i) the Trustees of the
Funds, including a majority of the Trustees who are not interested persons of
the Adviser, and (ii) a 1940 Act Majority Shareholder Vote of the applicable
Fund.
The New Agreements clarify that the Funds are not liable for
obligations of any other series of Freedom Trust and no other series of the
Trust is liable for the Funds' obligations under the Agreements.
The New Agreements contain miscellaneous provisions including a
provision that the obligations of the Funds are not personally binding on
shareholders, and provisions establishing governing law and the severability of
provisions. The Existing Agreement does not contain any similar provisions.
The form and style of the New Agreements is substantially different
from the form and style of the Existing Agreement.
Each of the changes described under this subsection C reflect an effort
to provide the Funds with an up-to-date investment management contract which
conforms substantially to the contracts of the other John Hancock funds.
If approved, the New Agreements will each become effective on July 1,
1996. If the Reorganizations described in Proposal 3 are also approved, the
agreements adopted by the Successor Funds will be identical to those described
in this Proposal 4.
For text of the New Agreements, see Exhibit C attached to this Proxy
Statement. This description of the New Agreements and comparison to the Existing
Agreement are qualified in their entirety by reference to Exhibit C.
TRUSTEES' EVALUATION AND RECOMMENDATION
At the meeting of the Trustees of Tax-Exempt Fund and U.S. Government
Fund on March 5, 1996, the Trustees, including the Independent Trustees,
approved the New Agreements. In making this determination, the Trustees
considered several factors, including the increase in expenses to be borne by
the Funds; the greater flexibility accorded to the Funds with respect to
accounting services; the scope and quality of accounting services the Funds can
obtain from the Adviser and outside vendors; provisions of the contracts of
other funds in the John Hancock fund complex; and the benefits to the Adviser of
its relationship with the Funds. The Trustees believe the New Agreements to be
reasonable, fair and in the best interests of the Funds' shareholders.
THE TRUSTEES OF TAX-EXEMPT FUND AND U.S. GOVERNMENT FUND RECOMMEND THAT
SHAREHOLDERS OF TAX-EXEMPT FUND AND U.S. GOVERNMENT FUND VOTE FOR THE PROPOSAL
ADOPTING THE NEW AGREEMENTS FOR THEIR RESPECTIVE FUNDS.
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<PAGE>
VOTE REQUIRED
Approval of Proposals 4(a) and 4(b) requires a 1940 Act Majority
Shareholder Vote of Tax-Exempt Fund and U.S. Government Fund, respectively.
THE INVESTMENT ADVISER
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. John Hancock Asset Management 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
Adviser is 101 Huntington Avenue, Boston, Massachusetts 02199. The address of
the other entities is John Hancock Place, Boston, Massachusetts 02117. The
directors of the Adviser and their principal occupations or employment are set
forth under the caption, "Directors of the Adviser." The Adviser provides
investment advisory services to other mutual funds with investment objectives
substantially identical to those of the Funds. See Exhibit D for a list of those
funds and the advisory fee rates paid by those funds.
BROKERAGE COMMISSIONS ON PORTFOLIO TRANSACTIONS
During the fiscal year ended October 31, 1995 of Tax-Exempt Fund and
U.S. Government Fund, neither Fund paid brokerage commissions to affiliated
brokers.
OTHER MATERIAL PAYMENTS BY THE FUNDS TO THE ADVISER AND AFFILIATES OF THE
ADVISER
For the fiscal year ended October 31, 1995, the Tax-Exempt Fund paid
$96,495 and $308,083 to John Hancock Funds for distribution related services on
behalf of Class A and Class B shares, respectively, and U.S. Government Fund
paid $318,650 and $401,486 to John Hancock Funds for distribution related
services on behalf of Class A and Class B shares, respectively. It is expected
that John Hancock Funds will continue to provide these services to the Funds.
DIRECTORS OF THE ADVISER
Edward J. Boudreau, Jr., Chairman of the Funds, the principal executive
officer of the Adviser. Mr. Boudreau's principal occupations and address, as
well as those of the other Directors of the Adviser, are set forth below.
<TABLE>
<S> <C>
Edward J. Boudreau, Jr. Chairman and Chief Executive Officer, the
101 Huntington Avenue Adviser and The Berkeley Group;
Boston, MA 02199 Chairman and Managing Director, John Hancock Advisers International Ltd.; Chairman, John
Hancock Funds and Investor Services (collectively, the "Affiliated Companies"); Chairman,
NM Capital Management, Inc.; Chairman, Sovereign Asset Management Corporation; and
Chairman, First Signature Bank & Trust.
Stephen L. Brown Chairman and Chief Executive Officer, the
John Hancock Place Life Company; Director, the Adviser
Boston, MA 02117 and the Affiliated Companies; Trustee, The Berkeley Group and John Hancock Asset
Management.
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
Foster L. Aborn Vice Chairman, Director and President,
John Hancock Place Investment and Pension Sector, the
Boston, MA 02117 Life Company; Director, the Adviser, Independence Investment Associates, Inc., John
Hancock Funds, Investor Services, and John Hancock Subsidiaries, Inc.; Trustee, The
Berkeley Group and John Hancock Asset Management; Director, Hancock Venture Partners,
Inc.; Director, John Hancock Capital Growth Management, Inc.; and Director, John Hancock
Capital Corp. and John Hancock Freedom Securities Corp.
David F. D'Alessandro Senior Executive Vice President, Retail
John Hancock Place Sector, the Life Company; Director, the
Boston, MA 02117 Adviser and the Affiliated Companies;
Trustee, the Berkeley Group.
Richard S. Scipione Director, the Adviser, NM Capital
John Hancock Place Management, Inc., Sovereign Asset
Boston, MA 02117 Management Corporation and Investor Services; General Counsel, the Life Company; and
Trustee, The Berkeley Group.
Thomas E. Moloney Chief Financial Officer, the Life
John Hancock Place Company; Director, the Adviser and the
Boston, MA 02117 Affiliated Companies; and Trustee, The
Berkeley Group.
John M. DeCiccio Senior Vice President, Investment
John Hancock Place Technology and Financial Management, the
Boston, MA 02117 Life Company; Director, the Adviser and
the Affiliated Companies; and Trustee, The Berkeley Group.
Jeanne M. Livermore Senior Vice President, Group Pension
John Hancock Place Guaranteed and Stable Value Products, the
Boston, MA 02117 Life Company; Director, the Adviser, the Affiliated Companies and John Hancock Advisers
International Ltd.; and Trustee, The Berkeley Group.
John Goldsmith Chairman and Chief Executive Officer,
One Beacon Street John Hancock Freedom Securities Corp.;
Boston, MA 02108 Director, the Adviser and the Affiliated Companies; and Trustee, The Berkeley
Group.
Richard O. Hansen Vice President, Managerial Department,
John Hancock Place the Life Company; Director, the Adviser
Boston, MA 02117 and the Affiliated Companies; and Trustee, The Berkeley Group.
William C. Fletcher Director, the Adviser, John Hancock Funds,
53 State Street Investor Services; President and Director,
Boston, MA 02109 Independence Investment Associates, Inc.; Trustee, The Berkeley Group; Trustee, President
and Chief Executive Officer, John
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
Hancock Asset Management; and Director, Hancock Natural
Resource Group, Inc. and John Hancock Energy Resources Management, Inc.
Robert G. Freedman Vice Chairman and Chief Investment
101 Huntington Avenue Director, the Adviser; Director, the
Boston, MA 02199 Adviser, NM Capital Management, Inc.,
Sovereign Asset Management Corporation and the Affiliated Companies;
Senior Vice President, The Berkeley Group; and Director, John Hancock
Advisers International Ltd.
Robert H. Watts President, Chief Executive Officer and
John Hancock Place Director, John Hancock Distributors,
Boston, MA 02117 Inc.; and Director, the Adviser and the Affiliated Companies.
David A. King President, Chief Executive Officer and
101 Huntington Avenue Director, Investor Services; Director,
Boston, MA 02199 the Adviser and the Affiliated Companies.
</TABLE>
In addition to Messrs. Boudreau and Freedman, the following persons are
officers, trustees and/or directors of the Funds and the Adviser: Anne C.
Hodsdon, President of the Funds and President and Chief Operating Officer of the
Adviser; Thomas H. Drohan, Senior Vice President and Secretary of the Funds and
the Adviser; James B. Little, Senior Vice President and Chief Financial Officer
of the Funds and Senior Vice President of the Adviser; John A. Morin, Vice
President of the Funds and Executive Vice President of the Adviser; Susan S.
Newton, Vice President, Assistant Secretary and Compliance Officer of the Funds
and Vice President and Assistant Secretary of the Adviser; and James J.
Stokowski, Vice President and Treasurer of the Funds and Vice President of the
Adviser.
PROPOSAL 5
ELIMINATION OF FUNDAMENTAL INVESTMENT RESTRICTION
REGARDING INVESTING IN A SINGLE CLASS OF
SECURITIES OF AN ISSUER
(FOR SHAREHOLDERS OF U.S. GOVERNMENT FUND)
The U.S. Government Fund's existing fundamental investment restriction
regarding investing in a single class of securities of an issuer states that the
Fund may not:
Acquire more than 5% of any class of securities of an issuer, except
securities issued or guaranteed by the U.S. Government or its agencies
or instrumentalities. For this purpose, all outstanding bonds and other
evidences of indebtedness shall be deemed a single class regardless of
maturities, priorities, coupon rates, series, designations, conversion
rights, security or other differences . . .
At the meeting of the Trustees of U.S. Government Fund on March 5, 1996,
the Trustees voted to approve, and to recommend to shareholders of the U.S.
Government Fund that they approve, the
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<PAGE>
elimination of the Fund's fundamental investment restriction regarding investing
in a single class of securities of an issuer.
Neither the 1940 Act nor state "blue sky" laws currently require that
the Fund have the above investment restriction. This change is being proposed to
permit the Fund to acquire more than 5% of the securities of a single class of
an issuer (subject to 1940 Act and tax diversification policies) to the extent
that the Adviser believes that such an investment would be beneficial to the
Fund. The Trustees believe that the Fund would benefit from more flexible
restrictions on investments in one class of one single issuer and from
conforming its diversification restrictions to those of other John Hancock
funds.
TRUSTEES' RECOMMENDATION
THE TRUSTEES OF U.S. GOVERNMENT FUND RECOMMEND THAT THE SHAREHOLDERS OF
U.S. GOVERNMENT FUND APPROVE THIS PROPOSAL TO ELIMINATE THE FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION LIMITING THE AMOUNT OF INVESTMENTS IN A SINGLE CLASS OF
SECURITIES OF AN ISSUER.
REQUIRED VOTE
Approval of Proposal 5 requires a 1940 Act Majority Shareholder Vote of
U.S. Government Fund.
PROPOSAL 6
REDESIGNATION AS NONFUNDAMENTAL OF FUNDAMENTAL INVESTMENT
RESTRICTION REGARDING INVESTING IN OTHER INVESTMENT COMPANIES
(FOR SHAREHOLDERS OF U.S. GOVERNMENT FUND)
The U.S. Government Fund's existing fundamental investment
restriction regarding investing in other investment companies states
that the Fund may not:
Purchase securities of other open-end investment companies,
except in connection with a merger, consolidation, acquisition
or reorganization; or purchase more than 3% of the total
outstanding voting stock of any closed-end investment company
if more than 5% of a Fund's total assets would be invested in
securities of any closed-end investment company, or more than
10% of the Fund's total assets would be invested in securities
of any closed-end investment companies in general. In
addition, a Fund may not invest in the securities of
closed-end investment companies except by purchase in the open
market involving only customary broker's commissions.
References in the above investment restriction to "a Fund" include the
U.S. Government Fund.
At the meeting of the Trustees of U.S. Government Fund on March 5, 1996,
the Trustees voted to approve, and to recommend to shareholders of U.S.
Government Fund that they approve, the redesignation as nonfundamental of the
above fundamental investment restriction. If redesignated as proposed, the
Trustees would then amend the nonfundamental restriction to provide that the
Fund may not:
Purchase a security if, as a result, (i) more than 10% of the Fund's
total assets would be invested in the securities of other investment
companies, (ii) the Fund would hold more than 3% of the total
outstanding voting securities of any one investment company, or (iii)
more than 5% of the Fund's
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<PAGE>
total assets would be invested in the securities of any one investment
company. These limitations do not apply to (a) the investment of cash
collateral, received by the Fund in connection with lending the Fund's
portfolio securities, in the securities of open-end investment
companies or (b) the purchase of shares of any investment company in
connection with a merger, consolidation, reorganization or purchase of
substantially all of the assets of another investment company. Subject
to the above percentage limitations, the Fund may, in connection with
the John Hancock Group of Funds Deferred Compensation Plan for
Independent Trustees/Directors, purchase securities of other investment
companies within the John Hancock Group of Funds. The Fund may not
purchase the shares of any closed-end investment company except in the
open market where no commission or profit to a sponsor or dealer
results from the purchase, other than customary brokerage fees.
This change is being proposed to provide the U.S. Government Fund with
additional investment and administrative flexibility. Currently, the Fund may
only invest in securities of other open-end investment companies in connection
with a merger, consolidation, acquisition or reorganization. The Fund may invest
in the securities of closed-end investment companies subject to certain
percentage and other limitations. The change set forth in this Proposal would
permit investment by the Fund in securities of open-end and closed-end
investment companies subject to the percentage limitations set forth in the
nonfundamental restriction. The percentage limitations would not apply in cases
of a merger, consolidation, acquisition or reorganization or with respect to
investment by the Fund of any cash collateral in open-end investment companies
set up specifically for the investment of cash collateral held in connection
with securities lending. If this Proposal is approved, the Fund will have more
flexibility to invest in securities of other investment companies and will be
better able to take advantage of potential investment opportunities. In
addition, by making this investment restriction nonfundamental, the Trustees
will be able to amend the restriction without incurring the delay and cost of
obtaining prior shareholder approval. The Trustees believe that approval of this
Proposal would be beneficial to shareholders of the Fund.
TRUSTEES' RECOMMENDATION
THE TRUSTEES OF U.S. GOVERNMENT FUND RECOMMEND THAT THE SHAREHOLDERS OF
U.S. GOVERNMENT FUND APPROVE THIS PROPOSAL TO REDESIGNATE AS NONFUNDAMENTAL AND
THEN AMEND THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION REGARDING INVESTING IN
OTHER INVESTMENT COMPANIES.
REQUIRED VOTE
Approval of Proposal 6 requires a 1940 Act Majority Shareholder Vote of
U.S. Government Fund.
OTHER MATTERS
The Funds' management knows of no business to be brought before the
Meeting except as described above. However, if any other matters properly come
before the Meeting, the persons named in the enclosed form of proxy intend to
vote on these matters in accordance with their best judgment. If shareholders
would like additional information about the matters proposed for action, the
Funds' management will be glad to hear from them and to provide further
information.
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<PAGE>
PROXIES AND VOTING AT THE 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 applicable Fund. In addition, although
mere attendance at the Meeting will not revoke a proxy, a Fund shareholder
present at the Meeting may withdraw his or her proxy 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 of the
Fund represented thereby in favor of the matters set forth in Proposals 2, 3, 4,
5 and 6 and for the Nominees in Proposal 1, and will use their best judgment in
connection with the transaction of other business that may properly come before
the Meeting or any adjournment thereof.
In addition, the Life Company will vote shares of any of the Funds held
in individual retirement accounts or tax shelter accounts for which the Life
Company acts as custodian and with respect to which no proxies have been
received by the Life Company. The Life Company will vote such shares in the same
proportion as it has been instructed to vote Fund shares held by all such
accounts for which proxies have been received. The Fund shares voted by the Life
Company will be counted as present at the Meeting for purposes of establishing a
quorum.
In the event that, at the time any session of the Meeting is called to
order, a quorum is not present in person or by proxy for any Fund, the persons
named as proxies with respect to the Fund may vote those proxies that have been
received to adjourn the Fund's Meeting to a later date. In the event that a
quorum is present but sufficient votes by a Fund's shareholders in favor of
Proposals 2, 3, 4, 5 and 6 and for the Nominees in Proposal 1 have not been
received, the persons named as proxies with respect to the Fund will vote those
proxies which they are entitled to vote in favor of the relevant Proposal for
such an adjournment, and will vote those proxies required to be voted against
the Proposal against any adjournment. A shareholder vote for a Fund may be taken
on one or more of the Proposals in the Proxy Statement prior to the adjournment
if sufficient votes for its approval have been received and it is otherwise
appropriate.
Shares of beneficial interest of each Fund represented in person or by
proxy (including shares which 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 with respect to each Fund at
the 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 a Proposal.
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, with respect to Proposals requiring
approval by a 1940 Act Majority Shareholder Vote, a "broker non-vote" has no
effect on the voting in determining whether a Proposal has been adopted under
subsection (i) of the 1940 Act Majority Shareholder Vote definition. In
addition, a "broker non-vote" has no effect on the voting in determining whether
a Nominee has been elected as a Trustee of a Fund pursuant to Proposal 1. In
determining whether a Proposal has been adopted pursuant to subsection (ii) of
the 1940 Act Majority Shareholder Vote definition, a "broker non-vote" will have
the same effect as a vote against the Proposal because shares represented by a
"broker non-vote" are considered outstanding shares.
In addition to the solicitation of proxies by mail or in person, each
Fund may also arrange to have votes recorded by telephone by officers and
employees of the Fund or by personnel of the Adviser, John Hancock Funds or
Investor Services. The telephone voting procedure is designed to authenticate a
shareholder's identity, to allow a shareholder to authorize the voting of shares
in accordance with the shareholder's instructions and to confirm that the voting
instructions have been properly recorded. If these
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<PAGE>
procedures were subject to a successful legal challenge, these telephone votes
would not be counted at the Meeting. None of the Funds has sought an opinion of
counsel on this matter and is unaware of any such challenge at this time.
A shareholder will be called on a recorded line at the telephone number
appearing in the shareholder's account records and will be asked to provide the
shareholder's Social Security number or other identifying information. The
shareholder will then be given an opportunity to authorize proxies to vote his
or her shares at the Meeting in accordance with the shareholder's instructions.
To ensure that the shareholder's instructions have been recorded correctly, the
shareholder will also receive a confirmation of the voting instructions in the
mail. A special toll-free number will be available in case the voting
information contained in the confirmation is incorrect. If the shareholder
decides after voting by telephone to attend the Meeting, the shareholder can
revoke the proxy at that time and vote the shares at the Meeting.
SHAREHOLDERS' PROPOSALS
The Funds are not required, and do not intend, to hold meetings of
shareholders each year. Instead, meetings will be held only when and if
required. Any shareholders desiring to present a proposal for consideration at
the next meeting for shareholders of their respective Funds must submit the
proposal in writing, so that it is received by the appropriate Fund at 101
Huntington Avenue, Boston, Massachusetts 02199 within a reasonable time before
any meeting.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY
Boston, Massachusetts
May 17, 1996 JOHN HANCOCK MANAGED TAX-EXEMPT FUND
JOHN HANCOCK SOVEREIGN U.S. GOVERNMENT
INCOME FUND
JOHN HANCOCK INDEPENDENCE DIVERSIFIED
CORE EQUITY FUND
JOHN HANCOCK UTILITIES FUND
JOHN HANCOCK GROWTH FUND
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<PAGE>
EXHIBIT C
[NAME OF FUND]
(a series of Freedom Investment Trust)
101 Huntington Avenue
Boston, Massachusetts 02199
July 1, 1996
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199
Investment Management Contract
------------------------------
Ladies and Gentlemen:
Freedom Investment Trust (the "Trust"), of which [Name of Fund] (the "Fund")
is a series, 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, no par value, may be divided
into series, each series representing the entire undivided interest in a
separate portfolio of assets. This Agreement relates solely to the 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 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 Adviser and the Trust, on behalf of the Fund, 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:
(a) Master Trust Agreement as Amended and Restated, dated September 10,
1991, as amended from time to time (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) 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; and
<PAGE>
(e) The Trust's Code of Ethics.
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 objectives, policies 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 Fund's
then-current Prospectus and Statement of Additional Information included in the
registration statement of the Trust 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 objectives, policies and restrictions of the Fund, with
respect to the purchase, holding and disposition of portfolio securities,
alone or in consultation with any subadviser or subadvisers appointed
pursuant to this Agreement and subject to the provisions of any
sub-investment management contract respecting the responsibilities of such
subadviser or subadvisers;
(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;
(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;
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<PAGE>
(h) from time to time or at any time requested by the Trustees, make
reports to the Fund 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 subparagraphs (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
Fund and will be surrendered to the Fund 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 Fund;
(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
(m) appoint and employ one or more sub-advisors 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
Trust;
(b) the expenses of office rent, telephone and other utilities, office
furniture, equipment, supplies and other expenses of the Fund; and
(c) any other expenses incurred by the Adviser in connection with the
performance of its duties hereunder.
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) any and all expenses, taxes and governmental fees incurred by the
Trust or the Fund prior to the effective date of this Agreement;
(b) without limiting the generality of the foregoing clause (a), the
expenses of organizing the Trust and the Fund (including without limitation,
legal, accounting and auditing fees and expenses incurred in connection with
the matters referred to in this clause (b)),
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<PAGE>
of initially registering shares of the Trust 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;
(c) 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;
(d) legal, accounting, financial management, tax and auditing fees and
expenses of the Fund (including an allocable portion of the cost of its
employees rendering such services to the Fund);
(e) the fees and disbursements of custodians and depositories of the
Fund's assets, transfer agents, disbursing agents, plan agents and
registrars;
(f) taxes and governmental fees assessed against the Fund's assets and
payable by the Fund;
(g) the cost of preparing and mailing dividends, distributions, reports,
notices and proxy materials to shareholders of the Fund;
(h) brokers' commissions and underwriting fees;
(i) the expense of periodic calculations of the net asset value of the
shares of the Fund; and
(j) insurance premiums on fidelity, errors and omissions and other
coverages.
5. COMPENSATION OF THE ADVISER. [FOR TAX-EXEMPT FUND: For all services to be
rendered, facilities furnished and expenses paid or assumed by the Adviser as
herein provided, the Adviser shall be entitled to a fee, paid monthly in
arrears, at an annual rate equal to (i) 0.60% of the average daily net asset
value of the Fund up to $250,000,000 of average daily net assets, (ii) 0.50% of
the next $500,000,000 of the average daily net asset value of the Fund and (iii)
0.45% of the average daily net asset value of the Fund in excess of
$750,000,000.]
[FOR U.S. GOVERNMENT FUND: For all services to be rendered, facilities
furnished and expenses paid or assumed by the Adviser as herein provided, the
Adviser shall be entitled to a fee, paid monthly in arrears, at an annual rate
equal to (i) 0.50% of the first $500,000,000 of the average daily net asset
value of the Fund and (ii) 0.45% of the average daily net asset value of the
Fund in excess of $500,000,000.]
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. On any day that the
net asset value calculation is suspended as specified in the Fund's Prospectus,
the net asset
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<PAGE>
value for purposes of calculating the advisory fee shall be calculated as of the
date last determined.
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 has registered its 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, the Adviser may agree not to impose all or a portion of its fee
(in advance of the time its fee would otherwise accrue) and/or undertake to make
any other payments or arrangements necessary to limit the Fund's expenses to any
level the Adviser may specify. Any fee reduction or undertaking shall constitute
a binding modification of this Agreement while it is in effect but may be
discontinued or modified prospectively 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.
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.
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
Fund, the Adviser will act solely on its own behalf and not in any way on behalf
of 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.
8. NO PARTNERSHIP OR JOINT VENTURE. Neither the Trust, the Fund nor the
Adviser are 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.
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<PAGE>
9. NAME OF THE TRUST AND THE FUND. The Trust and the Fund may use the name
"John Hancock" or any name or names derived from or similar to the names "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 a name or any other name indicating that
the Fund is advised by or otherwise connected with the Adviser. The Fund
acknowledges that it has adopted the name ["Name of Fund"] through permission of
John Hancock Mutual Life Insurance Company, a Massachusetts 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 nonexclusive right to
use the name "John Hancock" or any similar name or names 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 in connection with the matters to which this Agreement 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 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 shall be deemed, when acting within the scope of his
employment by the Fund, to be acting in such employment solely for the Trust and
not as the Adviser's employee or agent.
11. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement shall remain
in force until June 30, 1998, 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 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 vote of a majority of the outstanding voting securities of the
Fund, by the Trustees or by the Adviser. Termination of this Agreement 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" and
"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 Trustees) of 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.
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<PAGE>
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 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 [Name of Fund] is a series designation of
the Trustees under the Trust's Declaration of Trust. The Declaration of Trust
has been filed with the Secretary of State of The Commonwealth of Massachusetts.
The obligations of 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 Trust, but only upon the Fund and its property. The
Fund shall not be liable for the obligations of any other series of the Trust
and no other series shall be liable for the Fund's obligations hereunder.
Yours very truly,
FREEDOM INVESTMENT TRUST
on behalf of [Name of Fund]
By:__________________________________
Title:__________________________
The foregoing contract
is hereby agreed to as
of the date hereof.
JOHN HANCOCK ADVISERS, INC.
By:__________________________________
Title:__________________________
-7-
<PAGE>
JOHN HANCOCK INDEPENDENCE DIVERSIFIED CORE EQUITY FUND
SPECIAL MEETING OF THE SHAREHOLDERS - JUNE 26, 1996
PROXY SOLICITATION BY THE BOARD OF TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward J.
Boudreau, Jr., Susan S. Newton and James B. Little, with full power of
substitution in each, to vote all the shares of beneficial interest of the
above-referenced Fund 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 June 26, 1996 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 May 17,
1996 is hereby acknowledged. If not revoked, this proxy shall be voted:
PLEASE SIGN, DATE AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
Date __________________, 1996
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.
-----------------------
Signature(s)
<PAGE>
VOTE THIS PROXY CARD TODAY! YOUR PROMPT RESPONSE WILL SAVE YOUR FUND THE EXPENSE
OF ADDITIONAL MAILINGS.
THIS PROXY SHALL BE VOTED IN FAVOR OF (FOR) PROPOSAL 3 AND FOR THE NOMINEES IN
PROPOSAL 1 IF NO SPECIFICATION IS MADE BELOW. AS TO ANY OTHER MATTER, SAID PROXY
OR PROXIES SHALL VOTE IN ACCORDANCE WITH THEIR BEST JUDGEMENT. Please vote by
filling in the appropriate boxes below, as shown, using blue or black ink or
dark pencil. Do not use red ink.
(1) To elect sixteen Trustees to hold office until their respective
successors have been duly elected and qualified.
Dennis S. Aronowitz William F. Glavin
Edward J. Boudreau, Jr. Bayard Henry
Richard P. Chapman, Jr. Anne C. Hodsdon
William J. Cosgrove Dr. John A. Moore
Douglas M. Costle Patti McGill Peterson
Leland O. Erdahl John W. Pratt
Richard A. Farrell Richard S. Scipione
Gail D. Fosler Edward J. Spellman
YOU MAY WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE BY LINING THROUGH OR
OTHERWISE STRIKING OUT THE NAME OF ANY NOMINEE.
(2) Proposal 2 as set forth in the Proxy Statement is not applicable to
your Fund.
(3) To approve an Agreement and Plan of Reorganization for the Fund which
will reorganize the Fund as a series of John Hancock Capital Series.
---- ---- ----
FOR |____| AGAINST |____| ABSTAIN |____|
(4) Proposal 4 as set forth in the Proxy Statement is not applicable to
your Fund.
(5) Proposal 5 as set forth in the Proxy Statement is not applicable to
your Fund.
(6) Proposal 6 as set forth in the Proxy Statement is not applicable to
your Fund.
PLEASE DO NOT FORGET TO SIGN THE REVERSE SIDE OF THIS CARD.
<PAGE>
JOHN HANCOCK UTILITIES FUND
SPECIAL MEETING OF THE SHAREHOLDERS - JUNE 26, 1996
PROXY SOLICITATION BY THE BOARD OF TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward J.
Boudreau, Jr., Susan S. Newton and James B. Little, with full power of
substitution in each, to vote all the shares of beneficial interest of the
above-referenced Fund 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 June 26, 1996 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 May 17,
1996 is hereby acknowledged. If not revoked, this proxy shall be voted:
PLEASE SIGN, DATE AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
Date __________________, 1996
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.
-----------------------
Signature(s)
<PAGE>
VOTE THIS PROXY CARD TODAY! YOUR PROMPT RESPONSE WILL SAVE YOUR FUND THE EXPENSE
OF ADDITIONAL MAILINGS.
THIS PROXY SHALL BE VOTED IN FAVOR OF (FOR) PROPOSAL 3 AND FOR THE NOMINEES IN
PROPOSAL 1 IF NO SPECIFICATION IS MADE BELOW. AS TO ANY OTHER MATTER, SAID PROXY
OR PROXIES SHALL VOTE IN ACCORDANCE WITH THEIR BEST JUDGEMENT. Please vote by
filling in the appropriate boxes below, as shown, using blue or black ink or
dark pencil. Do not use red ink.
(1) To elect sixteen Trustees to hold office until their respective
successors have been duly elected and qualified.
Dennis S. Aronowitz William F. Glavin
Edward J. Boudreau, Jr. Bayard Henry
Richard P. Chapman, Jr. Anne C. Hodsdon
William J. Cosgrove Dr. John A. Moore
Douglas M. Costle Patti McGill Peterson
Leland O. Erdahl John W. Pratt
Richard A. Farrell Richard S. Scipione
Gail D. Fosler Edward J. Spellman
YOU MAY WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE BY LINING THROUGH OR
OTHERWISE STRIKING OUT THE NAME OF ANY NOMINEE.
(2) Proposal 2 as set forth in the Proxy Statement is not applicable to
your Fund.
(3) To approve an Agreement and Plan of Reorganization for the Fund which
will reorganize the Fund as a series of John Hancock Capital Series.
---- ---- ----
FOR |____| AGAINST |____| ABSTAIN |____|
(4) Proposal 4 as set forth in the Proxy Statement is not applicable to
your Fund.
(5) Proposal 5 as set forth in the Proxy Statement is not applicable to
your Fund.
(6) Proposal 6 as set forth in the Proxy Statement is not applicable to
your Fund.
PLEASE DO NOT FORGET TO SIGN THE REVERSE SIDE OF THIS CARD.
