As filed with the Securities and Exchange Commission on May 3, 1999.
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
FILE NUMBER 811-8852
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. __)
[X] Filed by the Registrant
[ ] 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 INSTITUTIONAL SERIES TRUST
(Name of Registrant as Specified in Its Charter)
JOHN HANCOCK INSTITUTIONAL SERIES TRUST
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c) (1) (ii), 14a-6 (i) (1), or
14a-6 (i) (2) or Item 22(a) (2) or schedule 14A (sent by wire transmission).
[ ] Fee paid previously with preliminary materials.
[X] No fee required.
<PAGE>
Dear Fellow Shareholder:
I am writing to ask for your vote on an important matter that will affect your
investment in the John Hancock Independence Growth and John Hancock Independence
Value funds.
Currently each fund has a voluntary total operating expense limitation of 0.95%.
If the voluntary expense limitation was removed, the total operating expenses
would increase to 1.98% for the Growth Fund and 1.88% for the Value Fund. This
increase is a direct result of each fund's relatively modest size.
After careful consideration, the funds' trustees have unanimously agreed that
offering the funds to retail investors could successfully increase each funds'
assets. An increase in assets could benefit current and future shareholders by
lowering anticipated operating expenses. The proposal is detailed in the
enclosed proxy statement. I suggest you read it thoroughly prior to voting.
If the proposal to offer the funds to retail investors is approved, the funds
will be renamed the John Hancock Core Growth Fund and the John Hancock Core
Value Fund. The Trustees believe the proposed name better positions each fund as
a solid foundation for investors seeking either a growth or value management
style.
This proposal will in no way change the funds' objectives or investment styles.
The Growth Fund seeks above-average total return by emphasizing investments in
companies with a potential for relatively high long-term earnings growth. The
Value Fund seeks above-average total return by emphasizing investments in
relatively undervalued securities.
Since their inception in October 1995, the Growth and Value funds have
consistently applied a disciplined investment process resulting in a consistent
investment style and risk profile. These approaches have enabled the Growth and
Value funds to compile strong long-term performance records and to earn 5-star
and 4-star ratings, respectively, from Morningstar as of March 31, 1999.
Your Vote Makes a Difference!
Your vote is critical. I urge you to review the enclosed materials and to
complete, sign and return the enclosed proxy ballot to us immediately. Your
prompt response will help avoid the need for additional mailings. For your
convenience, we have provided a postage-paid envelope.
If you have any questions or need additional information, please contact your
investment professional or call your Customer Service Representative at
1-800-544-3577, Monday through Friday between 8:00 A.M and 6:00 P.M. Eastern
Time. I thank you for your prompt vote on this matter.
Sincerely,
/s/Edward J. Boudreau, Jr.
--------------------------
Edward J. Boudreau, Jr.
Chairman and CEO
<PAGE>
Q & A
Q: Why are the John Hancock Independence Growth and John Hancock
Independence Value funds being offered to the retail marketplace?
A: Since their inception, the funds' relatively modest size has required
the use of a voluntary fee limitation to maintain operating expenses of
0.95%. Rather than removing the fee limitation and unfairly burdening
existing clients with actual operating expenses of 1.98% (Growth Fund)
and 1.88% (Value Fund), it is necessary to grow each fund's assets. An
increase in assets could benefit current and future shareholders by
lowering anticipated operating expenses. These potential lower expenses
should help keep more of your money invested, which often helps to
bolster an investment's total return over time.
Q: What steps are being taken to offer the funds to retail investors?
A: Each fund will be converted to a front-end loaded Class A retail
structure with a 0.30% 12b-1 fee. The fee covers expenses incurred in
the development of sales programs and marketing materials which should
directly contribute to increasing assets, and may ultimately lower
shareholder expenses. The 12b-1 fee is a necessary cost for
distributing shares in today's retail marketplace.
To assure they will be competitive in the marketplace, each fund will
also offer other share classes: Class B - Back-end Load, Class C -
Level Load, and Class I - Institutional.
Q: How will this change affect the funds' current operating expenses?
A: John Hancock Funds remains committed to its existing clients and will
cap the converted Class A shares operating expenses at 0.95% for the
twelve month period July 1, 1999 to June 30, 2000. However, all
existing clients will be subject to the 12b-1 fee after June 30, 2000
unless they convert to the Institutional Class I shares.
Q: Will clients be able to convert to the new Institutional Class I shares
to avoid the 12b-1 fee?
A: Yes, all existing clients are allowed to convert to the Institutional
Class I shares from July 1, 1999 to June 30, 2000 if they request the
conversion. All requests for conversion should be directed to your
client relationship officer.
Q: What will be the expense ratio of the Institutional Class I shares?
A: The Institutional Class I shares operating expenses will be 0.95%,
which exactly mirrors Independence Growth and Value's current fee
structures. No 12b-1 fee will be assessed on Institutional Class I
shares.
<PAGE>
Q: How will the conversion to A shares and transfer back to I shares
affect participant accounts?
A: The conversion from the A shares to the I shares will be a non-taxable
exchange that will be processed on our recordkeeping system.
Notification will be sent to the participants prior to the exchange and
a confirmation statement will be sent after the exchange is processed.
Q: Will the increased cash flow activity present any issues for the
portfolio management team?
A: Any increased cash flow activity should not present any issues. The
management teams have extensive experience with portfolios that
experience varying levels of contribution and withdrawal activity. We
would not expect performance results to be impacted.
Q: Have the Independence Growth and Independence Value funds' investment
objectives or investment styles changed?
A: No. The funds' objectives and their investment styles will not change.
The Growth Fund seeks above-average total return by emphasizing
investments in companies with a potential for relatively high long-term
earnings growth. The Value Fund seeks above-average total return by
emphasizing investments in relatively undervalued securities.
A: Since their inception in October 1995, the Growth and Value funds have
consistently applied a disciplined investment process resulting in a
consistent investment style and risk profile. These approaches have
enabled the Growth and Value funds to compile strong long-term
performance records and to earn 5-star and 4-star ratings,
respectively, from Morningstar as of March 31, 1999.
Q: How do I vote?
A: Please contact your client relationship officer directly or vote by
completing, signing, and returning the enclosed proxy card using the
postage-paid envelope provided. If you prefer to vote in person, you
are cordially invited to attend a meeting of shareholders of your fund,
which will be held at 9:00 A.M. on June 16, 1999 at our 101 Huntington
Avenue headquarters in Boston, Massachusetts. If you vote now, you will
help avoid further solicitations.
<PAGE>
JOHN HANCOCK INDEPENDENCE GROWTH FUND
JOHN HANCOCK INDEPENDENCE VALUE FUND
(each a series of John Hancock Institutional Series Trust)
101 Huntington Avenue
Boston, MA 02199
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 16, 1999
This is the formal agenda for each fund's special meeting. It tells you what
matters will be voted on and the time and place of the meeting, in case you want
to attend in person.
To the shareholders of John Hancock Independence Growth Fund and John Hancock
Independence Value Fund:
A special meeting of shareholders of each fund will be held at 101 Huntington
Avenue, Boston, Massachusetts on Wednesday, June 16, 1999 at 9:00 a.m., eastern
time, to consider the following:
1. For shareholders of each fund voting separately: A proposal to adopt
a distribution plan providing for payments to John Hancock Funds, Inc.
(JH Funds) to provide certain services to you and your fund and to
reimburse JH Funds for its expenses in connection with the sale of fund
shares.
Your board of trustees recommends that you vote FOR this proposal.
2. Any other business that may properly come before the meeting.
Shareholders of record as of the close of business on May 10, 1999 are entitled
to vote at the meeting and any related follow-up meetings.
Whether or not you expect to attend the meeting, please complete and return the
enclosed proxy card. Please take a few minutes to vote now.
By order of the board of trustees,
/s/Susan S. Newton
------------------
Susan S. Newton
Secretary
May 17, 1999
<PAGE>
PROXY STATEMENT OF
JOHN HANCOCK INDEPENDENCE GROWTH FUND
JOHN HANCOCK INDEPENDENCE VALUE FUND (each a series of
John Hancock Institutional Series Trust)
This proxy statement contains the information you should know before voting on
the proposals summarized below.
Each fund will furnish without charge a copy of its annual report to any
shareholder upon request. Shareholders who want to obtain a copy of a fund's
report should direct all written requests to the attention of the fund, 101
Huntington Avenue, Boston, Massachusetts 02199 or should call JH Funds
at 1-800-225-5291.
INTRODUCTION
This proxy statement is being used by the board of trustees of each fund to
solicit proxies to be voted at a special meeting of shareholders of each fund.
This meeting will be held at 101 Huntington Avenue, Boston, Massachusetts on
Wednesday, June 16, 1999 at 9:00 a.m., eastern time. The purpose of the meeting
is to consider:
1. For shareholders of each fund voting separately: A proposal to adopt
a distribution plan providing for payments to John Hancock Funds, Inc.
(JH Funds) to provide certain services to you and your fund and to
reimburse JH Funds for its expenses in connection with the sale of fund
shares.
Your board of trustees recommends that you vote FOR this proposal.
2. Any other business that may properly come before the meeting.
This proxy statement and the proxy card are being mailed to each fund's
shareholders on or about May 17, 1999.
Who is Eligible to Vote?
Shareholders of record of each fund on May 10, 1999 are entitled to attend and
vote on each proposal at the meeting or any adjourned meeting. Each share is
entitled to one vote. Shares represented by properly signed proxies, unless
revoked before or at the meeting, will be voted according to shareholders'
instructions. If you sign a proxy, but do not fill in a vote, your shares will
be voted to approve the proposals. If any other business comes before the
meeting, your shares will be voted at the discretion of the persons named as
proxies.
2
<PAGE>
Proposal 1.
To Adopt a Plan of Distribution under Rule 12b-1
General
At a meeting of your fund's board of trustees on April 27, 1999, the trustees,
including the trustees who are not interested persons of the fund and have no
financial interest in the operation of a distribution plan or any related
agreements (independent trustees), considered and approved the recommendation of
John Hancock Advisers, Inc., the fund's investment adviser (Advisers), and John
Hancock Funds, Inc., the fund's distributor (JH Funds), that the trustees adopt
a distribution plan for the fund (plan). Independence Investment Associates,
Inc. will continue to provide subinvestment services to these funds, and these
services will not be affected by the addition of a distribution plan. The
trustees' approval of the plan is subject to shareholder approval in accordance
with Rule 12b-1 under the Investment Company Act of 1940, as amended (1940 Act).
Rule 12b-1 requires that any plan permitting the use of a fund's assets to
finance sales of the fund's shares be approved by both the board of trustees and
the shareholders. You should read the form of distribution plan included in the
proxy statement as EXHIBIT A because the plan contains details not discussed in
this proposal.
Reasons for a Rule 12b-1 plan
Since the funds began operations in 1995, neither fund's assets have grown
significantly. Because assets have not grown as anticipated, your fund's
expenses have remained higher than expected. Generally, as fund assets increase,
costs for accounting, legal, transfer agency, insurance, custodial and
administrative services are spread over a larger asset base and the fund's
expense ratio decreases. Currently, each fund's expenses are capped at an annual
rate of 0.95% of the fund's average daily net assets. If these caps were
eliminated, the estimated expense ratios for Growth Fund and Value Fund would be
1.98% and 1.88%, respectively.
Advisers and JH Funds believe that assets have not grown at the expected rate
because there is no mechanism, such as a plan, that provides an economic
incentive to account representatives who sell fund shares. In addition to
helping an investor decide which fund's shares to buy, account representatives
provide services of value to shareholders. These services include responding to
inquires from shareholders about the fund and the shareholder's account,
maintaining shareholder account records, processing purchase and redemption
orders, and assisting with changes to dividend options or account registrations.
It is customary in the mutual fund industry for account representatives to be
compensated for assisting investors with fund purchases, and for providing
ongoing services (such as those described above) to investors after they become
fund shareholders. Both Advisers and JH Funds believe that the funds are at a
competitive disadvantage when competing with other funds, either for new
investor dollars or to retain fund assets, because the funds do not provide any
form of compensation for these distribution and shareholder services. If your
fund is at a competitive disadvantage, then the fund cannot grow to a size that
will provide the economies of scale that may result in decreased fund expense
ratios.
3
<PAGE>
Material terms of the Rule 12b-1 plan
Plan fee. Under the plan, your fund would pay JH Funds an annual distribution
and service fee (plan fee) of 0.30% of the fund's average daily net assets. A
portion of the plan fee will be used to reimburse JH Funds for its distribution
expenses that are intended to result in sales of shares of the fund. A portion
of the plan fee will be used to reimburse JH Funds for shareholder service
expenses, but that portion will not exceed 0.25%. The plan fee will be
calculated and accrued daily and paid monthly. If the plan fee received by JH
Funds does not fully reimburse it for payments made or other expenses incurred
under the plan, the obligation of the fund to reimburse JH Funds for those
expenses will not be carried beyond one year from the date incurred. Any plan
fee paid to JH Funds not expended or allocated during the fund's fiscal year for
actual or budgeted distribution and service expenses will be promptly returned
to the fund. The plan will not affect the allocation of expenses between the
fund and Advisers provided for in the investment management contract between the
fund and Advisers.
Distribution and service expenses. Distribution expenses include, but are not
limited to, (a) initial and ongoing sales compensation out of the plan fee that
is received by JH Funds or other broker-dealers that have entered into an
agreement with JH Funds for the sale of shares of the fund, (b) direct
out-of-pocket expenses incurred in connection with the distribution of shares of
the fund, including expenses related to printing of prospectuses and reports to
other than existing shareholders of the fund, and preparation, printing and
distribution of sales literature and advertising materials, (c) allocation of
overhead and other branch office expenses of JH Funds related to the
distribution of shares of the fund, and (d) distribution expenses incurred in
connection with the distribution of a corresponding class of any mutual fund
which sells all or substantially all of its assets to the fund or which merges
or otherwise combines with the fund.
Service expenses include, but are not limited to, payments made to, or on
account of, account representatives of selected broker-dealers (including
affiliates of JH Funds) and others who furnish personal and shareholder account
maintenance services to shareholders of the fund.
Trustee and shareholder approval. As required by Rule 12b-1, the plan provides
that it will not take effect until it has been approved by a vote of the
trustees, including a majority of the independent trustees, and the fund's
shareholders. The plan will continue in effect if it is approved at least
annually by a vote of the trustees and the independent trustees.
4
<PAGE>
Amendment and termination provisions. The plan may not be amended to increase
the maximum amount of the plan fee for the services described in the plan
without the approval of a majority of the shares of the fund subject to the
plan. No material amendment may be made to the plan unless it is approved by a
vote of a majority of the trustees and by a vote of a majority of the
independent trustees. The plan provides that it may be terminated (a) at any
time by vote of a majority of the trustees, a majority of the independent
trustees, or a majority of the shares of the fund subject to the plan, or (b) by
JH Funds on 60 days' notice in writing.
Quarterly Reports. The plan requires JH Funds to provide the fund at least
quarterly with a written report of the amounts expended under the plan and the
purpose for which the expenditures were made together with other information
that the trustees request. The trustees will review these reports on a quarterly
basis.
Multiple class structure
In addition to recommending that your fund adopt the plan, Advisers recommended
to the trustees that they approve a multiple class plan for each fund and new
names for each fund. Under the multiple class plan, your fund will designate its
existing shares as Class A shares and the Class A shares will be subject to the
plan. The fund will also offer Class B shares, Class C shares and Class I
shares. Class A, Class B and Class C shares will be offered to retail investors
and Class I shares will be offered to institutional investors. Advisers believes
that the addition of a multiple class plan will enhance your fund's ability to
attract new shareholders and increase the fund's asset size. You are not being
asked to vote to approve the implementation of the multiple class structure for
your fund.
5
<PAGE>
<TABLE>
<CAPTION>
The features of the multiple class plan are set out in the following table.
<S> <C> <C> <C> <C>
- --------------------- --------------------- --------------- ---------------- -------------
Class A Class B Class C Class I
- --------------------- --------------------- --------------- ---------------- -------------
Front-end sales Yes No No No
charge
- --------------------- --------------------- --------------- ---------------- -------------
Deferred sales Yes, but only for 1 Yes, Yes, for 1 No
charge year on purchases > declining year only
$1 million over 6 years
- --------------------- --------------------- --------------- ---------------- -------------
Rule 12b-1 Yes, 0.30% Yes, 1.00% Yes, 1.00% No
distribution and
service fees
- --------------------- --------------------- --------------- ---------------- -------------
Conversion feature Yes, existing Yes, convert No No
shareholders who to Class A
request conversion shares after
and meet Class I 8 years
minimums, until
June 30, 2000
- --------------------- --------------------- --------------- ---------------- -------------
</TABLE>
As an existing shareholder in your fund, you will become a Class A shareholder
of the fund and your Class A shares will be subject to the plan. However, JH
Funds has agreed not to impose the Class A distribution and service fee for all
Class A shareholders, regardless of when Class A shares were purchased, until
July 1, 2000. For the period from July 1, 1999 to June 30, 2000, the expense
ratio for Class A shares of each fund will be capped at 0.95%. Advisers and JH
Funds have agreed that Class A shareholders who are shareholders of a fund on
July 1, 1999 may continue to purchase additional Class A shares of that fund at
net asset value without a sales charge. At any time until June 30, 2000, Class A
shareholders who were investors in a fund on July 1, 1999 who request conversion
and meet the minimum investment requirements of Class I may convert their Class
A shares to Class I shares of that fund without any sales charges or tax
consequences.
Proposed fund name change
The trustees have approved changing the name of Growth Fund to "John Hancock
Core Growth Fund" and Value Fund to "John Hancock Core Value Fund." These names
better reflect Advisers' belief that the funds offer a solid foundation for
investors in their respective investment styles. You are not being asked to vote
to approve the change of your fund's name.
6
<PAGE>
Comparative Fee Information
Below are comparative tables showing the amount of fees and expenses paid by
each fund under the current fee structure and the amount of fees and expenses
which the fund would have paid if each plan as proposed had been in effect. The
information in the tables is an estimate based on actual expenses for each
fund's fiscal year ended February 28, 1999.
Independence Growth Fund New Fee Current Fee
(Class A Shares) Structure Structure
Shareholder transaction expenses
(paid directly from your investment)
Maximum sales charge (load) on purchases as a 5.00% None
% of purchase price
Annual operating expenses
(as a % of average net assets)
Management fee 0.80% 0.80%
Distribution and service (12b-1) fees 0.30% None
Other expenses 1.18% 1.18%
------ -----
Total fund operating expenses 2.28% 1.98%
Fee limitation and expense reimbursement 1.33%(1) 1.03%
Actual operating expenses 0.95% 0.95%
- -----------------------
(1) JH Funds has agreed not to impose the Class A Rule 12b-1 fee until July 1,
2000. Advisers has agreed to limit total fund operating expenses to 0.95% until
July 1, 2000
Example
The hypothetical example below shows what your expenses would be if you invested
$10,000 over the time frames indicated, assuming you reinvested all
distributions and that the average annual return was 5%. The example is for
comparison only, and does not represent the fund's actual expenses and returns,
either past or future.
Year 1 Year 3 Year 5 Year 10
New fee structure $592 $1,124 $1,682 $3,197
Current fee structure $97 $522 $972 $2,223
7
<PAGE>
Independence Value Fund New Fee Current Fee
(Class A Shares) Structure Structure
Shareholder transaction expenses
(paid directly from your investment)
Maximum sales charge (load) on purchases as a % of 5.00% None
purchase price
Annual operating expenses
(as a % of average net assets)
Management fee 0.80% 0.80%
Distribution and service (12b-1) fees 0.30% None
Other expenses 1.08% 1.08%
------ -----
Total fund operating expenses 2.18% 1.88%
Fee limitation and expense reimbursement 1.23%(1) 0.93%
Actual operating expenses 0.95% 0.95%
- -----------------------
(1) JH Funds has agreed not to impose the Class A Rule 12b-1 fee until July 1,
2000. Advisers has agreed to limit total fund operating expenses to 0.95% until
July 1, 2000
Example
The hypothetical example below shows what your expenses would be if you invested
$10,000 over the time frames indicated, assuming you reinvested all
distributions and that the average annual return was 5%. The example is for
comparison only, and does not represent the fund's actual expenses and returns,
either past or future.
Year 1 Year 3 Year 5 Year 10
New fee structure $592 $1,105 $1,643 $3,109
Current fee structure $97 $500 $930 $2,125
Factors considered by the trustees
Summary. Each fund's trustees reviewed and considered the terms and conditions
of the plan and other information to determine whether there is a reasonable
likelihood that adopting the plan for the fund will result in increased sales of
fund shares. The trustees also considered whether the payments to be made under
the plan are reasonable. The trustees asked for and Advisers provided a variety
of information about the fund and other similar funds in the industry with the
same investment objective. This information included (i) a review of the fund's
investment performance; (ii) an analysis of the expenses of the fund; (iii)
information comparing the expense ratio and investment performance of the fund
to other similar funds; (iv) distribution plans of other similar funds; and (v)
the level of revenues derived by the adviser from the fund.
8
<PAGE>
Likelihood of increased fund sales and decreased redemptions. The trustees
considered whether adoption of the plan is likely to increase the net assets of
your fund by stimulating JH Funds and account representatives to sell additional
shares to existing shareholders and new investors, and to provide incentives to
these persons to furnish services to shareholders.
The trustees believe that increasing your fund's asset size may be important to
shareholders for several reasons. First, the fund has substantial fixed costs,
some of which remain fairly constant regardless of their size. If these expenses
are spread over a larger asset base, then the fund's expense ratio, or the
expenses each shareholder must bear indirectly, may decline. Second, the sale of
additional shares would make additional money available for investing. This may
give the portfolio mangers greater flexibility in pursuing the fund's investment
objective. Third, a steady cash inflow resulting from increased sales may assist
in portfolio management of the funds by reducing the likelihood that attractive
investment opportunities would be missed, or that large redemption requests
would necessitate sales of the fund's securities at times that are
disadvantageous.
JH Funds informed the trustees that the likelihood of future redemptions in your
fund is greater without the adoption of the plan than if the plan is
implemented. The trustees agree that it is important that your fund take steps
to lessen the likelihood of a future drain on your fund's assets if redemption
activity exceeds the cash proceeds from the sale of new shares.
The trustees concluded that adoption of the plan can be expected to enhance the
maintenance of, and possible future growth of, the assets of your fund, which
should result in increased investment flexibility and opportunities that may
benefit your fund and its shareholders on an ongoing basis. There is no
assurance, of course, that adoption of the plan will in fact result in a
continuous net cash inflow for your fund.
Plan fee limit. The trustees considered that existing shareholders of the fund
who will be designated as Class A shareholders will not immediately bear any of
the expense of the plan. JH Funds has agreed not to impose its plan fee on these
shareholders until July 1, 2000. Also, existing shareholders will have the
option to convert to Class I shares at any time until June 30, 2000 without any
sales charge or tax consequences. Class I shares are not subject to any plan
fees.
Benefits to Advisers and JH Funds if the plan is adopted. The trustees noted
that if the plan for your fund is approved, JH Funds will derive increased
revenue as a result. However, the trustees concluded that the compensation
payable under the plan to JH Funds is reasonable in light of the services and
facilities that JH Funds will provide to the fund. They also noted the
anticipated expenses to be incurred by JH Funds in distributing fund shares and
making payments to its account representatives.
9
<PAGE>
The trustees also took note of the benefits that may be realized by Advisers if
the plan for your fund is approved. If the fund's net assets increase as a
result of JH Fund's distribution efforts under the plan, the investment advisory
fees payable to Advisers for managing your fund will also increase because the
management fee is calculated as a percentage of the fund's net assets.
Conclusion. Having considered all of the factors set forth above and having
weighed the costs against the benefits that might reasonably be expected to
result if your fund adopts the plan, the trustees concluded that there is a
reasonable likelihood that adoption of the plan would benefit your fund and its
shareholders through increased sales of shares, decreased redemptions, and
additional account maintenance services to shareholders. In recommending that
shareholders approve the plan for your fund, the trustees have carefully
considered what they believe to be the best interests of the existing
shareholders of your fund as well as those of new investors who will become
shareholders after the plan is implemented.
10
<PAGE>
BOARD EVALUATION AND RECOMMENDATION
In light of the above, the trustees, including all of the independent trustees
who were advised at all times during their deliberations by their independent
counsel, approved and voted to recommend to the shareholders that they approve
the plan for their fund. If approved by shareholders, each plan will become
effective on July 1, 1999. If the required approval is not obtained, the
trustees will consider what, if any, action should be taken next.
The trustees recommend that you vote to approve the adoption of the plan for
your fund.
VOTING RIGHTS AND REQUIRED VOTE
Each share is entitled to one vote. Approval of the proposal with respect to a
fund requires the affirmative vote of a majority of the shares of that fund
outstanding and entitled to vote. A majority of the shares of your fund
outstanding and entitled to vote means the vote of the lesser of
(1) 67% or more of the shares of your fund present at the meeting, if the
holders of more than 50% of the fund's shares are present or represented by
proxy, or
(2) more than 50% of the outstanding shares of your fund.
Shares represented in person or by proxy, including shares which abstain or do
not vote with respect to proposal 1, will be counted for purposes of determining
whether there is a quorum at the meeting. Accordingly, an abstention from voting
has the same effect as a vote against proposal 1. However, if a broker or
nominee holding shares in "street name" indicates on the proxy card that it does
not have discretionary authority to vote on proposal 1, those shares will not be
considered present and entitled to vote on the proposal. Thus, a "broker
non-vote" has the same effect as a vote against proposal 1 because shares
represented by a "broker non-vote" are considered to be outstanding shares.
INFORMATION CONCERNING THE MEETING
Solicitation of Proxies
In addition to the mailing of these proxy materials, proxies may be solicited by
telephone, by fax or in person by the trustees, officers and employees of the
funds; by personnel of Advisers, JH Funds and the funds' transfer agent, John
Hancock Signature Services, Inc. Signature Services, together with a third party
solicitation firm, has agreed to provide proxy solicitation services at a cost
of approximately $_______, which will be paid by Advisers.
11
<PAGE>
The mailing address of each fund, Advisers and JH Funds is 101 Huntington
Avenue, Boston, Massachusetts, 02199.
Revoking Proxies
A shareholder signing and returning a proxy has the power to revoke it at any
time before it is exercised:
o By filing a written notice of revocation with the fund's
transfer agent, John Hancock Signature Services, Inc., 1 John Hancock
Way, Suite 1000, Boston, Massachusetts 02217-1000,
o By returning a duly executed proxy with a later date before
the time of the meeting, or
o If a shareholder has executed a proxy but is present at the
meeting and wishes to vote in person, by notifying the secretary of the
fund (without complying with any formalities) at any time before it is
voted.
Being present at the meeting alone does not revoke a previously executed and
returned proxy.
Outstanding Shares and Quorum
As of May 10, 1999, _____________ shares of beneficial interest of Growth Fund
and ______________ shares of beneficial interest of Value Fund were outstanding.
Only shareholders of record on May 10, 1999 (record date) are entitled to notice
of and to vote at the meeting. A majority of the outstanding shares of each fund
that are entitled to vote will be considered a quorum for the transaction of the
fund's business.
Other Business
Each fund's board of trustees knows of no business to be presented for
consideration at the meeting other than proposal 1. If other business is
properly brought before the meeting, proxies will be voted according to the best
judgment of the persons named as proxies.
Adjournments
If a quorum is not present in person or by proxy at the time any session of the
meeting is called to order, the persons named as proxies may vote those proxies
that have been received to adjourn the meeting to a later date. If a quorum is
present but there are not sufficient votes in favor of proposal 1, the persons
named as proxies may propose one or more adjournments of the meeting to permit
further solicitation of proxies concerning the proposal. Any adjournment will
require the affirmative vote of a majority of each fund's shares present at the
session of the meeting to be adjourned. If an adjournment of the meeting is
proposed because there are not sufficient votes in favor of proposal 1, the
persons named as proxies will vote those proxies favoring the proposal in favor
of adjournment, and will vote those proxies against the proposal against
adjournment.
12
<PAGE>
Telephone Voting
In addition to soliciting proxies by mail, by fax or in person, each fund may
also arrange to have votes recorded by telephone by officers and employees of
the funds or by personnel of the adviser or transfer agent. The telephone voting
procedure is designed to verify 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 procedures were subject to a successful legal challenge,
these telephone votes would not be counted at the meeting. Neither fund has
obtained an opinion of counsel about telephone voting, but neither fund is
currently aware of any challenge.
o A shareholder will be called on a recorded line at the
telephone number in the fund's account records and will be asked to
provide the shareholder's social security number or other identifying
information.
o 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.
o To ensure that the shareholder's instructions have been
recorded correctly, the shareholder will also receive a confirmation of
the voting instructions by mail.
o A toll-free number will be available in case the voting
information contained in the confirmation is incorrect.
o 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.
13
<PAGE>
OWNERSHIP OF SHARES IN THE FUNDS
As of May 10, 1999 the following people held of record 5% or more of the
outstanding shares of the funds. To the knowledge of each fund, no other
persons owned of record or beneficially 5% or more of the outstanding shares
of the funds.
Name and Address of Percentage of
Shareholder Fund Total Outstanding
Shares
As of May 10, 1999, the trustees and officers of each fund owned in the
aggregate less than 1% of the outstanding shares of the fund.
14
<PAGE>
EXHIBIT A
Form of 12b-1 Plan
Class A Shares
July 1, 1999
Article I. This Plan
This Distribution Plan (the "Plan") sets forth the terms and conditions
on which [ ] Trust (the "Trust") on behalf of [ ] (the "Fund"), a series
portfolio of the Trust, on behalf of its Class A shares, will, after the
effective date hereof, pay certain amounts to John Hancock Funds, Inc. ("JH
Funds") in connection with the provision by JH Funds of certain services to the
Fund and its Class A shareholders, as set forth herein. Certain of such payments
by the Fund may, under Rule 12b-1 of the Securities and Exchange Commission, as
from time to time amended (the "Rule"), under the Investment Company Act of
1940, as amended (the "Act"), be deemed to constitute the financing of
distribution by the Fund of its shares. This Plan describes all material aspects
of such financing as contemplated by the Rule and shall be administered and
interpreted, and implemented and continued, in a manner consistent with the
Rule. The Fund and JH Funds heretofore entered into a Distribution Agreement,
dated January 30, 1995, (the "Agreement"), the terms of which, as heretofore and
from time to time continued, are incorporated herein by reference.
Article II. Distribution and Service Expenses
The Fund shall pay to JH Funds a fee in the amount specified in Article
III hereof. Such fee may be spent by JH Funds on any activities or expenses
primarily intended to result in the sale of Class A shares of the Fund,
including, but not limited to, the payment of Distribution Expenses (as defined
below) and Service Expenses (as defined below). Distribution Expenses include,
but are not limited to, (a) initial and ongoing sales compensation out of such
fee as it is received by JH Funds or other broker-dealers ("Selling Brokers")
that have entered into an agreement with JH Funds for the sale of Class A shares
of the Fund, (b) direct out-of-pocket expenses incurred in connection with the
distribution of Class A shares of the Fund, including expenses related to
printing of prospectuses and reports to other than existing Class A shareholders
of the Fund, and preparation, printing and distribution of sales literature and
advertising materials, (c) an allocation of overhead and other branch office
expenses of JH Funds related to the distribution of Class A shares of the Fund
and (d) distribution expenses incurred in connection with the distribution of a
corresponding class of any open-end, registered investment company which sells
all or substantially all of its assets to the Fund or which merges or otherwise
combines with the Fund.
15
<PAGE>
Service Expenses include payments made to, or on account of, account
executives of selected broker-dealers (including affiliates of JH Funds) and
others who furnish personal and shareholder account maintenance services to
Class A shareholders of the Fund.
Article III. Maximum Expenditures
The expenditures to be made by the Fund pursuant to this Plan, and the
basis upon which such expenditures will be made, shall be determined by the
Fund, and in no event shall such expenditures exceed 0.30% of the average daily
net asset value of the Class A shares of the Fund (determined in accordance with
the Fund's prospectus and statement of additional information ("prospectus") as
from time to time in effect) on an annual basis to cover Distribution Expenses
and Service Expenses, provided that the portion of such fee used to cover
service expenses shall not exceed an annual rate of up to 0.25% of the average
daily net asset value of the Class A shares of the Fund. Such expenditures shall
be calculated and accrued daily and paid monthly or at such other intervals as
the Trustees shall determine. In the event JH Funds is not fully reimbursed for
payments made or other expenses incurred by it under this Plan, such expenses
will not be carried beyond one year from the date such expenses were incurred.
Any fees paid to JH Funds under this Plan during any fiscal year of the Fund and
not expended or allocated by JH Funds for actual or budgeted Distribution
Expenses and Service Expenses during such fiscal year will be promptly returned
to the Fund.
Article IV. Expenses Borne by the Fund
Notwithstanding any other provision of this Plan, the Fund and its
investment adviser, John Hancock Advisers, Inc. (the "Adviser"), shall bear the
respective expenses to be borne by them under the Investment Management
Contract, dated September 27, 1995, as from time to time continued and amended
(the "Management Contract"), and under the Fund's current prospectus as it is
from time to time in effect. Except as otherwise contemplated by this Plan, the
Fund shall not, directly or indirectly, engage in financing any activity which
is primarily intended to or should reasonably result in the sale of shares of
the Fund.
Article V. Approval by Trustees, etc.
This Plan shall not take effect until it has been approved, together
with any related agreements, by votes, cast in person at a meeting called for
the purpose of voting on this Plan or such agreements, of a majority (or
whatever greater percentage may, from time to time, be required by Section 12(b)
of the Act or the rules and regulations thereunder) of (a) all of the Trustees
of the Fund; (b) those Trustees of the Fund who are not "interested persons" of
the Fund, as such term may be from time to time defined under the Act, and have
no direct or indirect financial interest in the operation of this Plan or any
agreements related to it (the "Independent Trustees"); and (c) a majority of the
fund's outstanding voting Class A securities, as such term may be from time to
time defined under the Act.
16
<PAGE>
Article VI. Continuance
This Plan and any related agreements shall continue in effect for so
long as such continuance is specifically approved at least annually in the
manner provided for the approval of this Plan in Article V (a) and (b).
Article VII. Information
JH Funds shall furnish the Fund and its Trustees quarterly, or at such
other intervals as the Fund shall specify, a written report of amounts expended
or incurred for Distribution Expenses and Service Expenses pursuant to this Plan
and the purposes for which such expenditures were made and such other
information as the Trustees may request.
Article VIII. Termination
This Plan may be terminated (a) at any time by vote of a majority of
the Trustees, a majority of the Independent Trustees, or a majority of the
Fund's outstanding voting Class A shares, or (b) by JH Funds on 60 days' notice
in writing to the Fund.
Article IX. Agreements
Each agreement with any person relating to implementation of this Plan
shall be in writing, and each agreement related to this Plan shall provide:
(a) That, with respect to the Fund, such agreement may be terminated at
any time, without payment of any penalty, by vote of a majority of the
Independent Trustees or by vote of a majority of the Fund's then
outstanding voting Class A shares.
(b) That such agreement shall terminate automatically in the event of
its assignment.
17
<PAGE>
Article X. Amendments
This Plan may not be amended to increase the maximum amount of the fees
payable by the Fund hereunder without the approval of a majority of the
outstanding voting Class A shares of the Fund. No material amendment to the Plan
shall, in any event, be effective unless it is approved in the same manner as is
provided for approval of this Plan in Article V.
Article XI. Limitation of Liability
The names "John Hancock [ ] Trust" and "John Hancock [ ] Fund" are the
designations of the Trustees under the Declaration of Trust, dated October 31,
1994, as amended from time to time. The Declaration of Trust has been filed with
the Secretary of State of The Commonwealth of Massachusetts. The obligations of
the Trust and the Fund are not personally binding upon, nor shall resort be had
to the private property of, any of the Trustees, shareholders, officers,
employees or agents of the Fund, but only the Fund's property shall be bound. No
series of the Trust shall be responsible for the obligations of any other series
of the Trust.
IN WITNESS WHEREOF, the Fund has executed this Distribution Plan
effective as of the 1st day of July, 1999 in Boston, Massachusetts.
[ ] TRUST --
JOHN HANCOCK [ ] FUND
By: /s/Anne C. Hodsdon
----------------------
Anne C. Hodsdon
President
JOHN HANCOCK FUNDS, INC.
By: James V. Bowhers
--------------------
James V. Bowhers
President
s: proxy/independence growth/value
<PAGE>
- --------------------------------------------------------------------------------
[LOGO] JOHN HANCOCK FUNDS
A Global Investment Management Firm
VOTE THIS PROXY CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE YOUR FUND
THE EXPENSE OF ADDITIONAL MAILINGS
Specify your desired action by a check mark in the appropriate space.
This proxy will be voted as specified. If no specification is made, the proxy
will be voted in favor of item 1. The persons named as proxies have
discretionary authority which they intend to exercise in favor of the proposal
referred to and according to their best judgment as to any other matters which
properly come before the meeting.
__ __
\/ Please detach at perforation before mailing \/
Item 1: To adopt a distribution plan providing for payments to John Hancock
Funds, Inc. (JH Funds) to provide certain services to you and your fund and to
reimburse JH Funds for its expenses in connection with the sale of fund shares.
For [ ] Against [ ] Abstain [ ]
<PAGE>
[LOGO] JOHN HANCOCK FUNDS
A Global Investment Management Firm
VOTE THIS PROXY CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE YOUR FUND
THE EXPENSE OF ADDITIONAL MAILINGS
__ __
\/ Please detach at perforation before mailing \/
JOHN HANCOCK INDEPENDENCE VALUE FUND
A SERIES OF JOHN HANCOCK INSTITUTIONAL SERIES TRUST
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES
The undersigned holder of shares of beneficial interest of John Hancock
Independence Value Fund hereby constitutes and appoints Anne C. Hodsdon, James
J. Stokowski and Susan S. Newton, and each of them singly, proxies and attorneys
of the undersigned, with full power of substitution to each, for and in the name
of the undersigned, to vote and act upon all matters at the special meeting of
shareholders of the fund to be held on Wednesday, June 16, 1999 at the offices
of the fund, 101 Huntington Avenue, Boston, Massachusetts, at 9:00 a.m., eastern
time, and at any and all adjournments thereof, relating to all shares of the
fund held by the undersigned or relating to all shares of the fund held by the
undersigned which the undersigned would be entitled to vote or act with all the
powers the undersigned would possess if personally present. All proxies
previously given by the undersigned relating to the meeting are hereby revoked.
o Please complete, sign, date and return this proxy in the
enclosed envelope as soon as possible.
o Please sign exactly as your name or names appear in the box
on the left. When signing as attorney, executor, administrator, trustee
or guardian, please give your full title as such.
o If a corporation, please sign in full corporate name by
president or othe authorized officer.
o If a partnership, please sign in partnership name by
authorized person.
Date ____________________________________________________, 1999
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
Signature(s)
<PAGE>
- --------------------------------------------------------------------------------
[LOGO] JOHN HANCOCK FUNDS
A Global Investment Management Firm
VOTE THIS PROXY CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE YOUR FUND
THE EXPENSE OF ADDITIONAL MAILINGS
Specify your desired action by a check mark in the appropriate space.
This proxy will be voted as specified. If no specification is made, the proxy
will be voted in favor of item 1. The persons named as proxies have
discretionary authority which they intend to exercise in favor of the proposal
referred to and according to their best judgment as to any other matters which
properly come before the meeting.
__ __
\/ Please detach at perforation before mailing \/
Item 1: To adopt a distribution plan providing for payments to John Hancock
Funds, Inc. (JH Funds) to provide certain services to you and your fund and to
reimburse JH Funds for its expenses in connection with the sale of fund shares.
For [ ] Against [ ] Abstain [ ]
<PAGE>
[LOGO] JOHN HANCOCK FUNDS
A Global Investment Management Firm
VOTE THIS PROXY CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE YOUR FUND
THE EXPENSE OF ADDITIONAL MAILINGS
__ __
\/ Please detach at perforation before mailing \/
JOHN HANCOCK INDEPENDENCE GROWTH FUND
A SERIES OF JOHN HANCOCK INSTITUTIONAL SERIES TRUST
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES
The undersigned holder of shares of beneficial interest of John Hancock
Independence Value Fund hereby constitutes and appoints Anne C. Hodsdon, James
J. Stokowski and Susan S. Newton, and each of them singly, proxies and attorneys
of the undersigned, with full power of substitution to each, for and in the name
of the undersigned, to vote and act upon all matters at the special meeting of
shareholders of the fund to be held on Wednesday, June 16, 1999 at the offices
of the fund, 101 Huntington Avenue, Boston, Massachusetts, at 9:00 a.m., eastern
time, and at any and all adjournments thereof, relating to all shares of the
fund held by the undersigned or relating to all shares of the fund held by the
undersigned which the undersigned would be entitled to vote or act with all the
powers the undersigned would possess if personally present. All proxies
previously given by the undersigned relating to the meeting are hereby revoked.
o Please complete, sign, date and return this proxy in the
enclosed envelope as soon as possible.
o Please sign exactly as your name or names appear in the box
on the left. When signing as attorney, executor, administrator, trustee
or guardian, please give your full title as such.
o If a corporation, please sign in full corporate name by
president or othe authorized officer.
o If a partnership, please sign in partnership name by
authorized person.
Date ____________________________________________________, 1999
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
Signature(s)
<PAGE>
John Hancock Independence Growth Fund
John Hancock Independence Value Fund
(each a series of John Hancock Institutional Series Trust)
101 Huntington Avenue
Boston, MA 02199
May 3, 1999
EDGAR FILING
File Desk
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, DC 20549
RE: Preliminary Proxy Materials for
John Hancock Institutional Series Trust
--John Hancock Independence Growth Fund and
--John Hancock Independence Value Fund (the "Funds")
(File Nos. 33-86102; 811-8852) (0000932683)
Ladies and Gentlemen:
Attached hereto for filing on behalf of the Funds pursuant to Rule 14a-6 of
Regulation 14A under the Securities Exchange Act of 1934, as amended (the "1934
Act"), and Rule 101(a) of Regulation S-T are preliminary proxy materials
consisting of the cover sheet required by Rule 14a-6(m), a notice of meeting, a
proxy statement, a form of proxy, Q & A and shareholder letter to be mailed to
shareholders of the Funds in connection with a meeting of shareholders (the
"Meeting") to be held on June 16, 1999.
This Meeting is for the purpose of asking the Funds' shareholders to adopt a
Class A distribution plan providing for payments to John Hancock Funds, Inc. (JH
Funds) to provide certain services and to reimburse JH Funds for its expenses in
connection with the sale of Fund shares.
Pursuant to Rule 14a-6(d) under the 1934 Act, please be advised that the Funds
intend to mail the definitive proxy materials to the Funds' shareholders of
record on or about May 17, 1999.
If you have any questions or comments concerning this filing, please contact the
undersigned at (617) 375-1672. Thank you.
Sincerely,
/s/ Avery P. Maher
------------------
Avery P. Maher
Second Vice President and
Assistant Secretary
Attachment
cc: Brion Thompson
proxy/letters/gr/value.doc
