As filed with the Securities and Exchange Commission on September 29, 1995.
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. ___)
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Filed by the registrant |X|
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Filed by a party other than the registrant | |
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Check the appropriate box:
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| | Preliminary proxy statement
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|X| Definitive proxy statement
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| | Definitive additional materials
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| | Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
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FREEDOM INVESTMENT TRUST III
(Name of Registrant as Specified in Its Charter)
FREEDOM INVESTMENT TRUST III
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (check the appropriate box):
|X| Fee paid previously with preliminary materials.
Dear Fellow Discovery Fund Shareholder:
A special meeting of shareholders will be held for your Fund on November 15,
1995 at 9:00 A.M. at the location noted on your enclosed proxy statement. You
will be asked to approve certain changes to your Fund. Your Board of Trustees
has already unanimously approved each of the proposals, which are more fully
described in the proxy statement.
To help you review the proxy statement, we would like to explain some of the
proposed changes.
CHANGE TO INVESTMENT OBJECTIVE
Discovery Fund's current investment objective is to seek long-term growth of
capital through investment primarily in common stocks of small- to medium-sized
companies that are believed to offer superior prospects for growth. If approved,
Discovery Fund will also be able to invest in large capitalization stocks. This
proposed change is designed to broaden the Fund's investment opportunities.
Large companies have more resources and are generally able to withstand economic
uncertainties better than small- or medium-sized companies. For this reason,
your Trustees believe that this change can help reduce the amount of investment
risk assumed by the Fund.
REDUCTION IN MANAGEMENT FEE
The Trustees of the Discovery Fund are recommending a reduction in management
fees charged to the Fund. This proposed reduction will reduce the total
operating expenses of the Fund, which are ultimately borne by the shareholders.
The reduction will not result in any decrease in services provided to the Fund;
management will continue to provide the same high level of services to the Fund.
ELECTION OF THE BOARD OF TRUSTEES
The Board of Trustees is responsible for protecting your interests as a
shareholder of the Fund. A list of nominees and a brief description of the
background of each is included in the enclosed proxy statement.
INCREASED INVESTMENT FLEXIBILITY
The remaining proposals relate to amendments to certain investment restrictions.
Under the proposals, the Fund will gain the flexibility to engage in certain
transactions if management determines that they would be in the best interest of
the Fund.
YOUR VOTE COUNTS!
No matter how large or small your investment may be, your vote is important. We
urge you to consider these proposals and vote by completing, signing and
returning the enclosed proxy ballot form to us immediately. YOUR PROMPT RESPONSE
WILL HELP YOUR FUND AVOID THE COST OF ADDITIONAL MAILINGS. FOR YOUR CONVENIENCE,
WE HAVE PROVIDED A POSTAGE-PAID ENVELOPE.
If you have questions regarding the proposed changes, please call your Customer
Service Representative at 1-800-225-5291, Monday through Friday between 8:00
A.M. and 8:00 P.M. Eastern Time.
Sincerely,
Edward J. Boudreau, Jr.
Chairman and CEO
JOHN HANCOCK DISCOVERY FUND
101 HUNTINGTON AVENUE
BOSTON, MASSACHUSETTS 02199
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 15, 1995
A Special Meeting of Shareholders (the "Meeting") of John Hancock
Discovery Fund (the "Fund"), a series of Freedom Investment Trust III (the
"Trust") (telephone 1-800-225-5291), will be held at the offices of the Trust
located at 101 Huntington Avenue, Boston, Massachusetts 02199, at 9:00 a.m.,
Eastern time, on Wednesday, November 15, 1995. The purpose of the Meeting is to
consider and act upon the following proposals:
(1) To approve the terms of a new investment management contract (the
"New Agreement") between the Trust, on behalf of the Fund, and John Hancock
Advisers, Inc. (the "Adviser"). THE ADVISORY FEES PAID BY THE FUND TO THE
ADVISER WILL BE REDUCED UNDER THE NEW AGREEMENT.
(2) To approve an amendment to the Fund's fundamental investment
objective to permit the Fund to invest in common stocks of companies with all
levels of capitalization and to redesignate the Fund's investment objective as
non-fundamental.
(3) To approve an amendment to the Fund's fundamental investment
restriction to permit short sales of securities.
(4) To approve an amendment to the Fund's fundamental investment
restriction to permit the Fund to loan portfolio securities.
(5) To elect eighteen Trustees to hold office until their respective
successors have been duly elected and qualified.
(6) To transact other business that may properly come before the
Meeting or any adjournment of the Meeting.
YOUR BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE IN FAVOR OF ALL
PROPOSALS
Shareholders of record of the Fund as of the close of business on
September 22, 1995 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 September 29, 1995.
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
September 29, 1995
340PX 9/95
JOHN HANCOCK DISCOVERY FUND
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 Freedom Investment Trust
III (the "Trust"), on behalf of John Hancock Discovery Fund (the "Fund"). The
proxies will be used at the special meeting (the "Meeting") of the Fund's
shareholders to be held at the offices of the Trust located on the 2nd floor at
101 Huntington Avenue, Boston, Massachusetts on Wednesday, November 15, 1995 at
9:00 a.m., Boston time. Proxies will be solicited by mail and may also be
solicited in person or by telephone by officers, directors and/or registered
representatives of the Trust's principal distributor, John Hancock Funds, Inc.
("John Hancock Funds"), and by employees, officers and/or directors of John
Hancock Advisers, Inc. (the "Adviser"). In addition, the Trust's transfer agent,
John Hancock Investor Services Corporation ("Investor Services") will solicit
proxies in person and/or by telephone at a cost to the Fund of between $2,000
and $3,000.
The cost of preparing and mailing this Proxy Statement and the
accompanying Notice and proxy card will be borne by the Fund. The mailing
address of the Trust, the Adviser, John Hancock Funds and Investor Services is
101 Huntington Avenue, Boston, Massachusetts 02199. This Proxy Statement and
proxy card are being mailed to shareholders on or about September 29, 1995. The
Fund's annual report for the July 31, 1995 fiscal year is included with this
Proxy Statement.
OUTSTANDING SHARES AND VOTING REQUIREMENTS
The Board of Trustees has fixed the close of business on September
22, 1995 as the record date (the "Record Date") for determination of
shareholders of the Fund entitled to notice of and to vote at the Meeting.
Shareholders of record of the Fund on the Record Date are entitled to one vote
per share at the Meeting or any adjournment of the Meeting.
On August 31, 1995, 536,432 Class A shares of beneficial interest
of the Fund and 2,538,762 Class B shares of beneficial interest of the Fund
were outstanding.
On August 31, 1995, the following persons owned beneficially or of
record more than 5% of the outstanding Class A shares of the Fund: J.C. Bradford
& Co., custodian f/b/o RCIP Limited Partners II, 330 Commerce Street, Nashville,
Tennessee 37201-1805 (24.31%). On August 31, 1995, no person owned beneficially
or of record more than 5% of the outstanding Class B shares of the Fund.
PROPOSAL 1
APPROVAL OF THE TERMS OF A NEW INVESTMENT
MANAGEMENT CONTRACT BETWEEN THE
TRUST, ON BEHALF OF THE FUND,
AND JOHN HANCOCK ADVISERS, INC.
GENERAL
The Fund's investments are managed by the Adviser pursuant to an
Advisory Agreement dated August 29, 1989, as restated July 1, 1992 (the
"Existing Agreement"). The Existing Agreement was approved by shareholders at a
meeting held on December 10, 1992
At a meeting of the Board of Trustees on August 28, 1995, the
Trustees, including the Trustees who are not "interested persons" of the Trust
("Independent Trustees"), as that term is defined in the Investment Company Act
of 1940, as amended (the "1940 Act"), voted to approve, and voted to recommend
that the Fund's shareholders approve, the adoption of a new investment
management contract (the "New Agreement") in place of the Existing Agreement.
The terms of the New Agreement would reflect: (1) a decrease in the fee paid to
the Adviser with respect to investment management services, (2) differences in
expense limitation provisions and (3) additional changes noted below to conform
the Fund's investment management contract to those of most other funds in the
John Hancock fund complex. Material similarities and material differences
between the Agreements are set forth below.
MATERIAL SIMILARITIES BETWEEN THE EXISTING AGREEMENT AND THE NEW AGREEMENT
Under both the Existing Agreement and the New Agreement, the Adviser
provides the Fund with a continuous investment program for the management of its
assets. The Adviser provides overall investment advice and management of the
Fund, subject to the overall supervision and review of the Board of Trustees of
the Trust and to the Fund's investment objective, restrictions and policies, as
described in the Fund's Prospectus and Statement of Additional Information.
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 (except as noted in the first paragraph of subsection C of
this Proposal 1). Each Agreement provides that such Agreement 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 and (ii) either (a) the Trustees or (b) a Majority
Shareholder Vote (as defined below in the "Vote Required" section of this
Proposal 1). Each Agreement also provides that the Agreement may be terminated
on 60 days written notice without penalty by either a 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 the Trust or the Fund
as individuals but bind only the Trust (under the Existing Agreement) or the
Fund (under the New Agreement) and its property.
MATERIAL DIFFERENCES BETWEEN THE EXISTING AGREEMENT AND THE NEW AGREEMENT
A. THE INVESTMENT MANAGEMENT FEE
Under the Existing Agreement, for all services and facilities provided
by the Adviser, the Fund pays monthly an advisory fee to the Adviser equivalent
on an annual basis to a stated percentage of the average daily net assets of the
Fund as set forth below:
Net Asset Value Annual Rate
--------------- -----------
First $250,000,000................................... 1.00%
Next $250,000,000.................................... 0.80%
Amount Over $500,000,000............................. 0.75%
As of July 31, 1995, the Fund's net asset value totaled $36,720,317.
The advisory fee paid by the Fund for the fiscal year ended July 31, 1995 (shown
in total dollar amount and as a percentage of net assets) was $294,993 (1.00%).
The Fund's total annual operating expenses for such period were 2.10% and 2.70%
of the Fund's average daily net assets with respect to Class A shares and Class
B shares, respectively.
The Existing Agreement provides no description of how the "average
daily net assets" of the Fund will be calculated.
Under the New Agreement, the advisory fee will decrease. The Fund will
pay monthly an advisory fee to the Adviser equivalent on an annual basis to
0.75% of the average daily net assets of the Fund up to $750,000,000 and 0.70%
for all amounts over $750,000,000.
If the proposed fee had been in effect for the fiscal year ended July
31, 1995, the advisory fee paid by the Fund (expressed as a total dollar amount
and as a percentage of net assets) would have been $221,245 (0.75%). This
represents a decrease of 0.25% from the fee actually paid under the Existing
Agreement. The Fund's total annual operating expenses for such period would have
been 1.85% and 2.45% of the Fund's average daily net assets with respect to
Class A shares and Class B shares, respectively.
The New Agreement provides that the "average daily net assets" of the
Fund will be calculated on the basis set forth in the Fund's Prospectus or
otherwise consistent with the 1940 Act.
The reduction in advisory fees owed to the Adviser by the Fund will
reduce the total operating expenses of the Fund ultimately borne by its
shareholders. The reduction in the advisory fee will not result in a decrease in
services provided by the Adviser to the Fund. The Adviser will continue to
provide the same level and quality of services to the Fund that it currently
provides.
B. ADVISORY FEE LIMITATIONS
Under the Existing Agreement, if the total expenses of the 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, would exceed the foregoing limitations. If at
the end of the fiscal year, the expenses of the Fund are within the foregoing
limitation, any excess amount previously withheld from the monthly advisory fee
during such fiscal year will be paid to the Adviser.
Under the New Agreement, this language has been modified to provide
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 both as currently in effect and as they may
be enacted or amended in the future. The Adviser may, however, make additional
arrangements at its discretion to reduce Fund expenses beyond those required by
state law. The New Agreement contains an additional provision permitting 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 Fund's expenses to any level the Adviser
may specify. Any fee reduction or undertaking will constitute a binding
modification of the New Agreement while it is in effect but may be discontinued
or modified prospectively by the Adviser at any time.
C. OTHER DIFFERENCES BETWEEN THE EXISTING AGREEMENT AND THE NEW
AGREEMENT
The New Agreement provides that the Fund will bear the allocable cost
of the Adviser's employees rendering legal services to the Fund. Although the
Adviser reserves the right to do so, the Adviser has no current intention to
allocate these costs to the Fund and will not do so until the Trustees,
including the Independent Trustees, approve the allocation. Accordingly, there
will be no immediate increase in the Fund's expenses as a result of the
inclusion of this provision in the New Agreement. The New Agreement also
provides that the Fund will be responsible for the expense of periodic
calculations of the net asset value of the shares of the Fund.
Each Agreement provides that the Adviser may provide investment
advisory services to other clients; however, the New Agreement further provides
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 Agreement also provides that the Adviser is under no obligation to
acquire any particular investment on behalf of the Fund if, in the Adviser's
sole discretion, it is not feasible or desirable to acquire a position in that
investment on behalf of the Fund.
The New Agreement provides that in connection with the purchase or sale
of securities for the account of the Fund, 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 Fund, the Adviser will be acting solely on its
own behalf and not on behalf of the Fund. The Agreement further states that the
Adviser and its affiliates can buy, sell and trade securities for their own
accounts.
Each Agreement provides that the Adviser may subcontract some of its
work for the Fund to other investment advisers. The New Agreement, however,
specifically provides that the subcontract must be signed by the Trust and the
Adviser, approved by the vote of a majority of the Trustees of the Trust who are
not interested persons of the Adviser, the subadviser or of the Trust and by a
Majority Shareholder Vote. The Agreement further provides that any fee,
compensation or expense to be paid to a subadviser will be paid by the Adviser
(not by the Fund).
The New Agreement provides that the Trust and the Fund 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 Agreement is 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 Fund unless such liability is as a
result 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 Trust against any liability to which such person might be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of such person's obligations under the Agreement. The New Agreement contains no
such exception because it serves no purpose; such Trustees and officers are not
parties to, and do not assume any liabilities under, the New Agreement. The New
Agreement clarifies that individuals who are employees of both the Fund and
Adviser will be deemed to be acting solely for the 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 by
the Adviser and a Majority Shareholder Vote. The New Agreement also requires
that any amendment be in writing. The New Agreement further provides that no
amendment, transfer, assignment, sale, hypothecation or pledge of the Agreement
will be effective until it is approved by (i) the Trustees, including a majority
of the Trustees who are not interested persons of the Adviser and (ii) a
Majority Shareholder Vote.
The New Agreement clarifies that the Fund is not liable for obligations
of any other series of the Trust and no other series of the Trust is liable for
the Fund's obligations under the Agreement.
The form and style of the New Agreement is substantially different from
the form and style of the Existing Agreement.
Each of the changes described under this subsection C results from an
effort to provide the Fund with an up-to-date investment management contract
which conforms substantially to the contracts of the other funds in the John
Hancock fund complex.
For text of the New Agreement, see EXHIBIT A attached to this Proxy
Statement. This description of the New Agreement and comparison to the Existing
Agreement are qualified in their entirety by reference to EXHIBIT A.
TRUSTEES' EVALUATION AND RECOMMENDATION
At the meeting of the Board of Trustees on August 28, 1995, the
Trustees, including the Independent Trustees, approved the New Agreement and the
management fee provided in the Agreement. In making this determination, the
Trustees considered several factors, including the reduction in expenses to be
borne by the Fund and its shareholders; provisions of the contracts of other
funds in the John Hancock fund complex; the nature, quality and scope of the
services to be provided to the Fund; the investment record of the Adviser in
managing the Fund; comparative information concerning similar investment
companies with respect to investment performance, the levels of investment
management fees and expense ratios in the industry generally; the various risks
assumed by the Adviser; and the benefits to the Adviser of its relationship with
the Fund. The Trustees believe the New Agreement and the management fee to be
reasonable, fair and in the best interests of the Fund's shareholders.
THE TRUSTEES RECOMMEND THAT FUND SHAREHOLDERS VOTE FOR THE PROPOSAL
ADOPTING THE NEW AGREEMENT.
VOTE REQUIRED
Approval of Proposal 1 requires the affirmative vote of a majority of
the outstanding voting securities of the Fund, as defined in the 1940 Act, which
means the lesser of (i) 67% or more of the shares of the Fund that are
represented at the Meeting if at least 50% of all outstanding shares of the Fund
are represented at the Meeting or (ii) 50% or more of the outstanding shares of
the Fund entitled to vote at the Meeting (a "Majority Shareholder Vote").
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 that of the Fund. See EXHIBIT B for a list of those funds and the
rates of the advisory fees paid by those funds.
BROKERAGE COMMISSIONS ON PORTFOLIO TRANSACTIONS
During the Fund's fiscal year ended July 31, 1995, the Fund paid no
brokerage commissions to affiliated brokers.
OTHER MATERIAL PAYMENTS BY THE FUND TO THE ADVISER AND AFFILIATES OF THE ADVISER
For the fiscal year ended July 31, 1995, the Fund paid $11,042 and
$249,491 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 Fund.
DIRECTORS OF THE ADVISER
Edward J. Boudreau, Jr., Chairman of the Trust, is 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.
Edward J. Boudreau, Jr. Chairman and Chief Executive Officer, the Adviser and
101 Huntington Avenue The Berkeley Group; Chairman and Managing Director,
Boston, MA 02199 John Hancock Advisers International Ltd., John Hancock
Funds and Investor Services (collectively, the
"Affiliated Companies"); Chairman and Managing
Director, NM Capital Management, Inc.; Chairman,
Sovereign Asset Management Corporation; and Chairman,
First Signature Bank & Trust.
Stephen L. Brown Chairman and Chief Executive Officer, the Life
John Hancock Place Company; Director, the Adviser and the Affiliated
Boston, MA 02117 Companies; Trustee, The Berkeley Group and John
Hancock Asset Management.
Foster L. Aborn Vice Chairman, Director and President, Investment and
John Hancock Place Pension Sector, the Life Company; Director, the
Boston, MA 02117 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.
Richard S. Scipione Director, the Adviser, NM Capital Management, Inc.,
John Hancock Place Sovereign Asset Management Corporation and Investor
Boston, MA 02117 Services; General Counsel, the Life Company; and
Trustee, The Berkeley Group.
Thomas E. Moloney Chief Financial Officer, the Life Company; Director,
John Hancock Place the Adviser and the Affiliated Companies; and
Boston, MA 02117 Trustee, The Berkeley Group.
John M. DeCiccio Senior Vice President, Investment Technology and
John Hancock Place Financial Management, the Life Company; Director, the
Boston, MA 02117 Adviser and the Affiliated Companies; and Trustee,
The Berkeley Group.
Jeanne M. Livermore Senior Vice President, Group Pension Guaranteed and
John Hancock Place Stable Value Products, the Life Company; Director,
Boston, MA 02117 the Adviser, the Affiliated Companies and John
Hancock Advisers International Ltd.; and Trustee, The
Berkeley Group.
John Goldsmith Chairman and Chief Executive Officer, John Hancock
One Beacon Street Freedom Securities Corp.; Director, the Adviser and
Boston, MA 02108 the Affiliated Companies; and Trustee, The Berkeley
Group.
Richard O. Hansen Vice President, Managerial Department, the Life
John Hancock Place Company; Director, the Adviser and the Affiliated
Boston, MA 02117 Companies; and Trustee, The Berkeley Group.
William C. Fletcher Director, the Adviser, John Hancock Funds, Investor
53 State Street Services; President and Director, Independence
Boston, MA 02109 Investment Associates, Inc.; Trustee, The Berkeley
Group; Trustee, President and Chief Executive Officer,
John 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 Director, the
101 Huntington Avenue Adviser; Director, the Adviser, NM Capital Management,
Boston, MA 02199 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 Director,
John Hancock Place John Hancock Distributors, Inc.; and Director, the
Boston, MA 02117 Adviser and the Affiliated Companies.
C. Troy Shaver, Jr. President, Chief Executive Officer and Director, John
101 Huntington Avenue Hancock Funds; Director, the Adviser, NM Management,
Boston, MA 02199 Inc., Sovereign Asset Management Corporation and
the Affiliated Companies.
David A. King President, Chief Executive Officer and Director,
101 Huntington Avenue Investor Services; Director, the Adviser and the
Boston, MA 02199 Affiliated Companies.
In addition to Messrs. Boudreau and Freedman, the following persons are
officers, trustees and/or directors of both the Trust and the Adviser: Anne C.
Hodsdon, President of the Trust and President and Chief Operating Officer of the
Adviser; Thomas H. Drohan, Senior Vice President and Secretary of both the Trust
and the Adviser; James B. Little, Senior Vice President and Chief Financial
Officer of the Trust and Senior Vice President of the Adviser; James K. Ho,
Senior Vice President of the Trust and Executive Vice President of the Adviser;
Michael P. DiCarlo, Senior Vice President of the Trust and Executive Vice
President of the Adviser; John A. Morin, Vice President of the Trust and
Executive Vice President of the Adviser; Susan S. Newton, Vice President,
Assistant Secretary and Compliance Officer of the Trust and Vice President and
Assistant Secretary of the Adviser; James J. Stokowski, Vice President and
Treasurer of the Trust and Vice President of the Adviser; and David S. Beckwith,
Vice President of both the Trust and the Adviser.
PROPOSAL 2
APPROVAL OF AMENDMENT TO THE FUND'S FUNDAMENTAL
INVESTMENT OBJECTIVE AND REDESIGNATION OF THE
FUND'S INVESTMENT OBJECTIVE AS NON-FUNDAMENTAL
GENERAL
At a meeting of the Board of Trustees on August 28, 1995, the Trustees,
including the Independent Trustees, voted to approve, and voted to recommend to
the Fund's shareholders that they approve, a proposal to amend the Fund's
investment objective and to redesignate the investment objective as
non-fundamental.
PROPOSED AMENDED INVESTMENT OBJECTIVE
The Fund's current investment objective (as set forth in the Fund's
Prospectus) is to "achieve long-term growth of capital through investment
primarily in common stocks of small to medium-sized companies, which are
believed by the Fund's managers to offer superior prospects for growth" (the
"Current Objective"). The Fund's proposed investment objective would be to
"achieve long-term growth of capital" (the "Proposed Objective"). The Fund will
seek to achieve this objective by investing primarily in common stocks that are
believed by the Fund's manager to offer superior prospects for growth. As
currently managed, the Fund seeks to achieve long-term growth of capital by
investing at least 65% of its total assets in equity securities primarily of
small to medium-sized companies. Small to medium-sized companies include
companies with a market capitalization of between $50 million and $1.5 billion.
The Proposed Objective, if adopted, will allow the Fund to also invest in large
capitalization companies (those with a market capitalization in excess of $1.5
billion).
In making their determination to recommend this Proposal, the Trustees
considered the fact that allowing the Fund to also invest in large
capitalization companies may reduce the amount of investment risk assumed by the
Fund. Large capitalization companies have more resources and are generally able
to withstand economic uncertainties better than small or medium-sized companies.
In addition, the Trustees expect that the Proposed Objective will give the Fund
greater flexibility to take advantage of a broader range of investment prospects
among large capitalization companies, while maintaining the proven investment
selection process and focused portfolio management style currently used by the
Fund. Although there can be no certainty, the Trustees believe that the Fund
will be in a better position to capture a greater share of the equity fund
market and to increase its asset size if this Proposal is adopted. An increase
in asset size of the Fund may enable the Fund to take advantage of economies of
scale and thereby reduce its costs.
The Proposed Objective will be non-fundamental, which means that the
investment objective may be changed at the discretion of the Trustees without a
shareholder vote. The Trustees believe that the ability to change the Fund's
investment objective will enable the Fund to better respond to changing economic
and market conditions without incurring the expense and delay associated with
holding a shareholders' meeting. If the Trustees were to decide at some future
date to amend the Fund's investment objective, no change would become effective
until the Fund's Prospectus and Statement of Additional Information had been
amended or supplemented to disclose the change.
In connection with their approval of the Proposed Objective and its
designation as non-fundamental, the Trustees have also approved changes to the
Fund's (i) non-fundamental investment restriction with respect to illiquid
investments and (ii) fundamental investment restrictions with respect to short
sales of securities and lending of portfolio securities. See Proposals 3 and 4
for a discussion of the changes to the fundamental investment restrictions.
The Fund's existing liquidity restriction limits its investments in
illiquid securities to 10% of its net assets. Under policies of the SEC, a
security is considered illiquid if it cannot be sold within seven days at the
price at which the Fund values the security. In 1992, the SEC concluded that the
10% limit was overly restrictive for open-end mutual funds that are not money
market funds. Accordingly, it increased the limit for these funds to 15% of the
funds' net assets. All but a few states' securities commissions also permit a
15% limit on illiquid securities. Because this restriction is non-fundamental,
no shareholder vote is required to adopt the amendment.
TRUSTEES' RECOMMENDATION
THE TRUSTEES OF THE TRUST RECOMMEND THAT THE FUND'S SHAREHOLDERS VOTE
FOR THE PROPOSAL TO AMEND THE INVESTMENT OBJECTIVE OF THE FUND AND REDESIGNATE
IT AS NON-FUNDAMENTAL.
VOTE REQUIRED
Approval of Proposal 2 requires a Majority Shareholder Vote.
PROPOSAL 3
PROPOSED AMENDMENT TO THE FUND'S
FUNDAMENTAL INVESTMENT RESTRICTION REGARDING SHORT SALES
On August 28, 1995, the Trustees of the Trust, including the
Independent Trustees, voted to approve, and voted to recommend to the Fund's
shareholders that they approve, a proposal to amend the Fund's fundamental
investment restriction with respect to short sales of securities. Approval of
this Proposal 3 will permit the Fund to make short sales of securities if, by
virtue of its ownership of other securities, the Fund has the right to obtain
securities equivalent to the securities sold. If such right is conditional, the
sale will be made upon the same conditions. These short sales are known as short
sales "against the box." The Proposal would also allow the Fund to make short
sales in connection with arbitrage transactions, for hedging purposes and to
profit from anticipated declines in the value of a security. The restriction on
the right of the Fund to purchase securities on margin, which is part of the
same investment restriction, will not change under this Proposal.
The Fund's existing restriction prohibits the Fund from making short
sales. Short sales are designed to take advantage of anticipated declines in the
value of the security sold short or to hedge against declines in other of its
securities with characteristics similar to those of the securities sold short.
Short sales are sales of borrowed securities, which securities must be replaced
at a later date by purchasing the security at its market price at the time of
replacement. Until the security is replaced, the seller is required to pay the
lender any accrued interest and may be required to pay a premium. If the
securities sold short decline in price between the date of the short sale and
the date on which the seller replaces the borrowed security, the seller will
realize a gain. The seller will incur a loss, however, if the securities sold
short increase in price between the date of sale and the date of replacement.
The amount of any gain will be decreased and the amount of any loss will be
increased by the amount of any premium or interest or dividends the seller may
be required to pay to the lender in connection with a short sale. It should be
noted that the use of short sales as a hedge may be adversely affected by
imperfect correlation between movements in the price of the securities sold
short and the securities being hedged.
Under applicable guidelines of the staff of the SEC, if the Fund
engages in short sales, it must deposit and maintain in a segregated account
(not with the broker) an amount of cash or U.S. Government securities equal to
the difference between (a) the market value of the securities sold short at the
time they were sold short and (b) any cash or U.S. Government securities
required to be deposited as collateral with the broker in connection with the
short sale (not including the proceeds from the short sale). In addition, until
the Fund replaces the borrowed security, it must daily maintain the segregated
account at such a level that (1) the amount deposited in it plus the amount
deposited with the broker as collateral will equal the current market value of
the securities sold short, and (2) the amount deposited in it plus the amount
deposited with the broker as collateral will not be less than the market value
of the securities at the time they were sold short.
Short selling may produce higher than normal portfolio turnover, which
may result in increased transaction costs to the Fund. Increased turnover, as
well as the effect of holding period reductions or eliminations that may result
from the tax rules applicable to short sales, may result in the Fund's
realization of more gains from the sale of securities deemed to have been held
for less than three months. These short-term gains must be less than 30% of the
Fund's gross income for any taxable year in order for the Fund to qualify as a
regulated investment company for that year under the Internal Revenue Code of
1986, as amended.
While there are risks involved in short sales, the Trustees have
considered such risks and believe that the Fund should have the opportunity to
engage in short sales in order to take advantage of the potential gains from
these sales. In reaching this conclusion, the Trustees also considered the
Fund's investment objective (to seek long-term capital growth) and determined
that short sales are consistent with pursuing this objective. The Trustees also
determined that the increased flexibility provided by this Proposal may improve
the Fund's competitiveness. In addition, the Trustees considered the fact that
this Proposal would conform the Fund's investment restrictions to those of most
other John Hancock funds.
The Fund's current fundamental investment restriction regarding short
sales states that:
"The Fund may not:
(1) Purchase securities on margin or sell short, except that the Fund
may obtain such short term credits as are necessary for the
clearance of securities transactions. The deposit or payment by
the Fund of initial or maintenance margin in connection with
futures contracts or related options transactions is not
considered the purchase of a security on margin."
The Trustees recommend that the shareholders vote to replace this
restriction with the following new fundamental investment restriction:
"The Fund may not:
(1) Purchase securities on margin or make short sales, unless, by
virtue of its ownership of other securities, the Fund has the
right to obtain securities equivalent in kind and amount to the
securities sold and, if the right is conditional, the sale is
made upon the same conditions, except (i) in connection with
arbitrage transactions, (ii) for hedging the Fund's exposure to
an actual or anticipated market decline in the value of its
securities, (iii) to profit from an anticipated decline in the
value of a security, and (iv) for obtaining such short-term
credits as may be necessary for the clearance of purchases and
sales of securities. The deposit or payment by the Fund of
initial or maintenance margin in connection with futures
contracts or related options transactions is not considered the
purchase of a security on margin."
The Fund's investment restriction with respect to short sales will
remain fundamental, which means that it can be changed in the future only by a
Majority Shareholder Vote.
TRUSTEES' RECOMMENDATION
THE TRUSTEES RECOMMEND THAT THE FUND'S SHAREHOLDERS ADOPT THE PROPOSED
CHANGE TO THE FUND'S INVESTMENT RESTRICTION WITH RESPECT TO SHORT SALES.
REQUIRED VOTE
Approval of the proposed change to the Fund's investment restriction
requires a Majority Shareholder Vote.
PROPOSAL 4
PROPOSED AMENDMENT TO THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION REGARDING LOANS BY THE FUND
On August 28, 1995, the Trustees of the Trust, including the
Independent Trustees, voted to approve, and voted to recommend to the Fund's
shareholders that they approve, a proposal to amend the Fund's fundamental
investment restriction with respect to the ability of the Fund to make loans
(the "Existing Restriction"). The Proposal would permit the Fund to make loans
of its portfolio securities in amounts up to 33 1/3% of the Fund's total assets.
The Existing Restriction does not permit the Fund to make loans of any
kind except to the extent that purchasing debt instruments and entering into
repurchase agreements are considered to be loans. Under current regulatory
policies, however, a mutual fund is permitted to lend portfolio securities in
accordance with its investment policies in an amount up to 33 1/3% of the fund's
total assets. Therefore, in order to give the Fund the greatest flexibility
permitted under current regulatory policies about securities lending, the
Trustees recommend that the Existing Restriction regarding securities lending be
amended to allow the Fund to lend its portfolio securities in an amount up to 33
1/3% of the Fund's total assets.
The Fund would lend its portfolio securities in order to increase the
return on its investments. Under a securities loan, the Fund would transfer
certain of its portfolio securities to a third party in exchange for the right
to the return of such assets and an agreed upon payment. The Fund may experience
a loss or delay in the recovery of its securities if the borrowing institution
breaches its agreement with the Fund. To minimize the risk of loss, the Fund may
lend its securities only to qualified institutions or broker-dealers. In
addition, the Fund must continuously secure its loans by collateral in cash,
cash equivalents or U.S. Government securities maintained on a current basis in
an amount at least equal to the market value of the securities loaned. Having
considered these risks and the required safeguards against potential losses from
securities lending, the Trustees believe that the Fund may benefit from having
the opportunity to increase its income by lending portfolio securities, as
permitted by current regulatory policies.
The Fund's current fundamental investment restriction regarding loans
states that:
"The Fund may not: . . .
(10) Make loans, except that the Fund may purchase or hold debt
instruments and may enter into repurchase agreements (subject to
Restriction 14) in accordance with its investment objectives and
policies."
The Trustees recommend that the shareholders vote to replace this
restriction with the following new fundamental investment restriction:
"The Fund may not: . . .
(10) Make loans, except that the Fund may (1) lend portfolio
securities in accordance with the Fund's investment policies up
to 33 1/3% of the Fund's total assets taken at market value, (2)
enter into repurchase agreements, and (3) purchase all or a
portion of an issue of debt securities, bank loan participation
interests, bank certificates of deposit, bankers' acceptances,
debentures or other securities, whether or not the purchase is
made upon the original issuance of the securities."
The Fund's investment restriction with respect to loans will remain
fundamental, which means that it can be changed in the future only by a Majority
Shareholder Vote.
TRUSTEES' RECOMMENDATION
THE TRUSTEES RECOMMEND THAT THE FUND'S SHAREHOLDERS ADOPT THE PROPOSED
CHANGE TO THE FUND'S INVESTMENT RESTRICTION WITH RESPECT TO MAKING LOANS.
REQUIRED VOTE
Approval of the proposed change to the Fund's investment restriction
requires a Majority Shareholder Vote.
PROPOSAL 5
ELECTION OF TRUSTEES
On August 28, 1995, the Trustees of the Trust, including the
Independent Trustees, voted to approve, and voted to recommend to the Fund's
shareholders that they approve, a proposal to elect eighteen Trustees to the
Board of Trustees of the Trust (the "Nominees"). Seven of the eighteen Nominees
are additional Trustees and eleven of the Nominees currently serve as Trustees.
Information concerning the Nominees and other relevant factors is discussed in
this Proposal 5.
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 be able to serve as a Trustee, the proxies will exercise their voting power
in favor of such substitute nominee, if any, as the Trusts' Trustees may
designate. The Trust has no 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 and the number of Class A shares of
beneficial interest of the Fund beneficially owned by him or her, directly or
indirectly, on August 31, 1995. With respect to the Nominees who currently serve
as Trustees, the table sets forth the date he or she first became a Trustee. The
eleven Nominees currently serving as Trustees are listed first.
Number of
Name and Principal Occupation Shares
Position With or Employment First Became Owned (1)(2)
the Trust During Last Five Years A Trustee (Class A Only)
- ------------- ---------------------- ------------ --------------
Edward J. Boudreau, Jr.* Chairman and Chief Executive Officer 1992 76
(age 50) of the Adviser and The Berkeley
Chairman, Nominee Group; Chairman and Managing Director, John
Hancock Advisers International Ltd.
("Advisers International"), NM Capital
Management, Inc. ("NM Capital"), John Hancock
Funds, Investor Services; Chairman of 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 Securities Council;
Member, Investment Company Institute Board of
Governors; Director, Asia Strategic Growth
Fund, Inc.; Trustee, Museum of Science;
President, the Adviser (until July 1992);
Chairman, John Hancock Distributors, Inc.
(until April 1994); Trustee or Director and
Chairman of fifty-three investment companies
managed by the Adviser.
Douglas M. Costle Director, Chairman of the Board and 1989 109.44
(age 56) Distinguished Senior Fellow,
Trustee, Nominee Institute for Sustainable Communities,
Vermont Law School (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 eleven investment
companies managed by the Adviser.
William A. Barron, III Trustee, H.M. Payson & Company (since 1991 100
(age 73) 1991); Trustee or Director of eleven
Trustee, Nominee investment companies managed by the Adviser.
Leland O. Erdahl President and Director of Nature Quality 1991 650.20
(age 66) Ingredients Company, Inc. and Santa Fe
Trustee, Nominee 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 Mines, Inc. (from 1984 to 1987
and 1991) (management consultant); Trustee or
Director of eleven investment companies managed
by the Adviser.
Richard A. Farrell President of Farrell, Healer & Co., 1991 109.44
(age 62) (venture capital management firm) (since 1980);
Trustee, Nominee Prior to 1980, headed the venture capital group
at Bank of Boston Corporation; Trustee or
Director of eleven investment companies managed
by the Adviser.
William F. Glavin President, Babson College; Vice Chairman, 1992 0
(age 72) Xerox Corporation (until June 1989);
Trustee, Nominee Director, Caldor Inc. and Inco. Ltd;
Trustee or Director of eleven investment
companies managed by the Adviser.
Patrick Grant President, Financial Management Incorporated 1989 2,672.187
(age 72) (professional treasurer) (since 1978); Prior
Trustee, Nominee to 1978, Treasurer of Endowment Management &
Research Corp. (investment advisory firm) and
Omega Fund, Inc. (open-end investment
company); Trustee or Director of eleven
investment companies managed by the Adviser.
Ralph Lowell, Jr. Director, Lowell Blake and Associates 1989 238.937
(age 72) (registered investment adviser) (since 1978);
Trustee, Nominee Vice President of Lowell Blake and Associates
(from 1978 to 1985); Trustee or Director of
eleven investment companies managed by the
Adviser.
Dr. John A. Moore President and Chief Executive Officer, 1990 668.813
(age 56) Institute for Evaluating Health Risks
Trustee, Nominee (nonprofit institution) (since September 1989);
Assistant Administrator of the Office of
Pesticides and Toxic Substances at the
Environmental Protection Agency (from December
1983 to July 1989); Trustee or Director of
eleven investment companies managed by the
Adviser.
Patti McGill Peterson President, St. Lawrence University; 1993 315.253
(age 52) Director, Niagara Mohawk Power
Trustee, Nominee Corporation and Director, Security Mutual
Life; Trustee or Director of eleven investment
companies managed by the Adviser.
John W. Pratt Professor of Business Administration at 1991 346.137
(age 64) Harvard University Graduate School of
Trustee, Nominee Business Administration (since 1961);
Trustee or Director of eleven investment
companies managed by the Adviser.
Dennis S. Aronowitz Professor of Law, Boston University 0
(age 64) School of Law; Trustee or Director
Nominee of seventeen investment companies managed
by the Adviser.
Richard P. Chapman, Jr. President, Brookline Savings Bank; 0
(age 60) Trustee or Director of seventeen investment
Nominee companies managed by the Adviser.
William J. Cosgrove Vice President, Senior Banker and 0
(age 62) Senior Credit Officer, Citibank,
Nominee N.A. (retired September, 1991);
Executive Vice President, Citadel Group
Representative Inc.; Director, the Hudson City
Savings Bank; Trustee or Director of seventeen
investment companies managed by the Adviser.
Gail D. Fosler Vice President and Chief Economist, 0
(age 47) The Conference Board (nonprofit economic
Nominee organization); Deputy Staff Director and Chief
Economist, Minority Staff of U.S. Senate
Committee on the Budget (until September 1989);
Trustee or Director of seventeen investment
companies managed by the Adviser.
Bayard Henry Corporate Advisor; Director, Fiduciary Trust 103.813
(age 64) Company (trust company); Director, Groundwater
Nominee Technology, Inc. (remediation); Trustee or
Director of seventeen investment companies
managed by the Adviser.
Richard S. Scipione* General Counsel, the Life Company; 0
(age 58) Director, the Adviser, John Hancock
Nominee Broker Distribution Services, Inc.,
Investor 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.,
John Hancock Home Mortgage Corporation and John
Hancock Financial Access, Inc. (until July
1990); Trustee or Director of seventeen investment
companies managed by the Adviser.
Edward J. Spellman Partner, KPMG Peat Marwick (retired 0
(age 62) June, 1990); Trustee or Director of seventeen
Nominee investment companies managed by the Adviser.
- ---------------
* "Interested person," as defined in the 1940 Act of the Fund and the Adviser.
(1) The information as to beneficial ownership is based on statements furnished to the Trust by the Nominees.
Each has all voting and investment powers with respect to the shares indicated.
(2) None of the Nominees beneficially owned individually, and the Nominees and executive officers of the Fund
as a group did not beneficially own, in excess of one percent of the outstanding shares of the Fund on
the Record Date. Because Trustees are eligible to purchase Class A shares of the Fund at net asset value,
no Trustee owns Class B shares of the Fund.
It is anticipated that Messrs. Lowell, Grant and Barron will resign
from the Board of Trustees of the Trust in 1996.
The Board of Trustees held five meetings during the fiscal year ended
July 31, 1995. With respect to the Trust, no Trustee attended fewer than 75% of
the aggregate of (1) the total number of meetings of the Trustees of the Trust;
and (2) the total number of meetings held by all committees of the Trustees on
which he or she served.
The Trust has an Audit Committee of the Trustees. The Committee members
are Messrs. Barron, Costle, Erdahl, Farrell, Glavin, Grant, Lowell, Moore, Pratt
and Ms. Peterson. Each of the members of the Audit Committee is an Independent
Trustee. The Audit Committee held two meetings during the fiscal year ended July
31, 1995.
The functions performed by the Audit Committee are to recommend
annually to the Trustees a firm of independent certified public accountants to
audit the books and records of each series of the Trust 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 the Trust on matters concerning the
Fund's 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 by the Trust 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 Trust's officers or Trustees, a resolution of any potential
or actual conflict of interest, and to facilitate communication between the firm
and the Trust's officers and Trustees.
The Trust has a Special Nominating Committee of the Trustees known as
the Committee on Administration. The Committee members are Messrs. Barron,
Costle, Erdahl, Farrell, Glavin, Grant, Lowell, Moore, Pratt and Ms. Peterson.
All of the members of the Committee on Administration are Independent Trustees.
The Committee on Administration held five meetings during the fiscal year ended
July 31, 1995.
Included among the functions of the Committee on Administration 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. The
Committee on Administration also coordinates with Trustees who are interested
persons in the selection and election of Trust officers. The 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
In addition to the Chairman (Mr. Boudreau), the table below lists the
Trust's executive officers. The listed individuals became officers of the Trust
on June 25, 1992.
NAME, AGE AND POSITION PRINCIPAL OCCUPATION
WITH THE TRUST DURING THE PAST FIVE YEARS
- ---------------------- -------------------------------
Anne C. Hodsdon President and Chief Operating Officer, the Adviser
(age 42) and John Hancock open-end funds; Executive Vice
President President, John Hancock closed-end funds.
James B. Little Senior Vice President, the Adviser, The Berkeley
(age 60) Group, John Hancock Funds, and Investor Services;
Senior Vice President Senior Vice President and Chief Financial Officer,
and Chief Financial Officer each of the John Hancock funds.
Thomas H. Drohan Senior Vice President and Secretary, the Adviser,
(age 58) The Berkeley Group and each of the John Hancock
Senior Vice President funds; Senior Vice President, Investor Services
and Secretary and John Hancock Funds; Director, Advisers
International; Secretary, NM Capital.
Robert G. Freedman Vice Chairman and Chief Investment Officer, the
(age 57) Adviser and certain John Hancock funds; Director,
Senior Vice President and the Adviser, Advisers International, Investor
Chief Investment Officer Services, SAMCorp and NM Capital; Senior Vice
President, The Berkeley Group.
James K. Ho Executive Vice President, the Adviser; Senior
(age 43) Vice President of the John Hancock funds.
Senior Vice President
Michael P. DiCarlo Executive Vice President, the Adviser; Senior
(age 39) Vice President of certain John Hancock funds.
Senior Vice President
John A. Morin Executive Vice President, the Adviser; Vice President,
(age 45) Investor Services and John Hancock Funds; Vice
Vice President President and Compliance Officer, certain John Hancock
funds; Counsel, the Life Company; Vice President
and Assistant Secretary, The Berkeley Group.
Susan S. Newton Vice President and Assistant Secretary, the
(age 45) Adviser; Vice President, Assistant Secretary and
Vice President, Compliance Officer, certain John Hancock funds;
Assistant Secretary Secretary, John Hancock Funds, Investor Services
and Compliance Officer and SAMCorp; Vice President, The Berkeley Group.
James J. Stokowski Vice President, the Adviser; Vice President and
(age 48) Treasurer, each of the John Hancock funds.
Vice President and Treasurer
David S. Beckwith Vice President, the Adviser and certain John
(age 38) Hancock funds.
Vice President
REMUNERATION OF OFFICERS AND TRUSTEES
The following table provides information regarding the compensation
paid by the Fund and the other investment companies in the John Hancock fund
complex to the current Independent Trustees for their services for the year
ended July 31, 1995. Mr. Boudreau, Mr. Scipione and each of the officers of the
Trust are interested persons of the Adviser. They are compensated by the Adviser
and receive no compensation from the Trust for their services.
Total Compensation*
Aggregate Pension or Retirement From the Fund and
Compensation Benefits Accrued Other Funds in the
from the as Part of John Hancock Fund
Independent Trustee Fund the Fund's Expenses Complex
- ------------------- ------------ --------------------- -------------------
William A. Barron, III $ 551 $0 $ 42,000
Douglas M. Costle 551 0 42,000
Leland O. Erdahl 551 0 42,000
Richard A. Farrell 571 0 43,500
William F. Glavin 551 0 41,750
Patrick Grant 578 0 44,000
Ralph Lowell, Jr. 551 0 42,000
Dr. John A. Moore 551 0 41,750
Patti McGill Peterson 551 0 42,000
John W. Pratt 551 0 42,000
------ -- --------
Total $5,557 $0 $423,000
- ----------
* Total compensation from the Fund and other funds is as of December 31, 1994.
TRUSTEES' RECOMMENDATION
THE TRUSTEES RECOMMEND THAT THE FUND'S SHAREHOLDERS ELECT EACH OF THE
NOMINEES TO SERVE AS A TRUSTEE OF THE TRUST.
REQUIRED VOTE
Election of each Nominee requires a plurality of votes of the
shareholders present at the Meeting, provided there is a quorum present.
OTHER MATTERS
The Trust's 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
Trust's management will be glad to hear from them and to provide further
information.
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 Trust. 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 1, 2, 3, 4 and for the
Nominees in Proposal 5, 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 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, the persons named as
proxies may vote those proxies that have been received to adjourn the Meeting to
a later date. In the event that a quorum is present but sufficient votes by Fund
shareholders in favor of Proposals 1, 2, 3, 4 and for the Nominees in Proposal 5
have not been received, the persons named as proxies 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 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 the 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 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 the Proposal.
Accordingly, an abstention from voting on a Proposal has the same effect as a
vote against the Proposal. As noted above, the adoption by the Fund's
shareholders of Proposals 1, 2, 3 and 4 requires the affirmative vote of the
lesser of (i) 67 percent or more of the Fund's outstanding voting securities
present at the Meeting, if the holders of more than 50 percent of the Fund's
shares of beneficial interest are present or represented by proxy; or (ii) 50
percent or more of the Fund's outstanding shares of beneficial interest. As
noted above, the election of each Nominee listed in Proposal 5 requires a
plurality of votes of the shareholders present in person or by proxy at the
Meeting, provided there is a quorum present.
If a broker or nominee holding shares in "street name" indicates on the
proxy that it does not have discretionary authority to vote as to a particular
Proposal, those shares will not be considered as present and entitled to vote
with respect to the Proposal. Accordingly, a "broker non-vote" has no effect on
the voting in determining whether a Proposal has been adopted or a Nominee
elected pursuant to item (i) above and Proposal 5, respectively. However, in
determining whether a Proposal has been adopted pursuant to item (ii) above,
because shares represented by a "broker non-vote" are considered outstanding
shares, a "broker non-vote" will have the same effect as a vote against the
Proposal.
In addition to the solicitation of proxies by mail or in person, the
Trust may also arrange to have votes recorded by telephone by officers and
employees of the Trust 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 procedures were subject to a
successful legal challenge, such votes would not be counted at the Meeting. The
Trust has not 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 Fund's account records for the account and will be asked the
shareholder's Social Security number or other identifying information. The
shareholder will then be given an opportunity to authorize proxies to vote his
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 Trust is not required, and does not intend, to hold meetings of
shareholders each year. Instead, meetings will be held only when and if
required. Any shareholders desiring to present a proposal for consideration at
the next meeting for shareholders of the Trust must submit the proposal in
writing, so that it is received by the Trust at 101 Huntington Avenue, Boston,
Massachusetts 02199 within a reasonable time before any meeting.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY
Boston, Massachusetts
September 29, 1995 JOHN HANCOCK DISCOVERY FUND
EXHIBIT A
JOHN HANCOCK DISCOVERY FUND
(a series of Freedom Investment Trust III )
101 Huntington Avenue
Boston, Massachusetts 02199
December 1, 1995
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199
Investment Management Contract
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Ladies and Gentlemen:
Freedom Investment Trust III (the "Trust"), of which John Hancock
Discovery 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) Declaration of Trust of the Trust, dated May 14, 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
(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;
(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 subadvisers 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)), 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 (including an allocable portion of the cost of its employees
rendering legal services to the Fund), accounting and auditing fees
and expenses of 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 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
the annual rate of 0.75% of the average daily net assets of the Fund for the
preceding month up to $750,000,000 and 0.70% for all amounts over $750,000,000.
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 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.
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 "John Hancock Discovery 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, 1997, 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.
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 John Hancock Discovery 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 III
on behalf of John Hancock Discovery Fund
By: ___________________________________
Title: ________________________________
The foregoing contract is hereby
agreed to as of the date hereof.
JOHN HANCOCK ADVISERS, INC.
By: __________________________________
Title: _______________________________
EXHIBIT B
The Adviser provides investment advisory services to the following John
Hancock funds with investment objectives substantially identical to that of the
Fund:
NAME OF FUND ASSET SIZE ADVISORY FEE
(as of 6/30/95)
John Hancock Emerging $490,903,516.83 0.75% of the Fund's average
Growth Fund daily net assets.
John Hancock $170,343,981.44 0.80% of the first
Growth Fund $250,000,000 of the Fund's
average daily net assets; 0.75%
of the next $250,000,000; and
0.70% in excess of
$500,000,000.
John Hancock $118,055,338.08 0.75% of the Fund's
Sovereign average daily net
Achievers Fund assets.
John Hancock $729,080,808.29 0.85% of the first $250,000,000
Special Equities of the Fund's average daily
Fund net assets; and 0.80% in excess
of $250,000,000.
John Hancock $235,569,187.02 0.80% of the first
Special Opportunities $500,000,000 of the
Fund Fund's average daily net
assets; 0.75% of the next
$500,000,000; and 0.70% in
excess of $1,000,000,000.
JOHN HANCOCK DISCOVERY FUND
101 HUNTINGTON AVENUE, BOSTON, MASSACHUSETTS 02199
SPECIAL MEETING OF THE SHAREHOLDERS - NOVEMBER 15, 1995
PROXY SOLICITATION BY THE BOARD OF TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward J.
Boudreau, Jr., Thomas H. Drohan and James B. Little, with full power of
substitution in each, to vote all the shares of beneficial interest of John
Hancock Discovery Fund (the "Fund"), a series of Freedom Investment Trust III
(the "Trust"), which the undersigned is (are) entitled to vote at the Special
Meeting of Shareholders (the "Meeting") of the Fund to be held at 101 Huntington
Avenue, Boston, Massachusetts, on November 15, 1995 at 9:00 a.m., Boston time,
and at any adjournment of the Meeting. All powers may be exercised by a majority
of said proxy holders or substitutes voting or acting, or, if only one votes and
acts, then by that one. Receipt of the Proxy Statement dated September 29, 1995
is hereby acknowledged. If not revoked, this proxy shall be voted:
PLEASE SIGN, DATE AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
Date __________________, 1995
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)
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) PROPOSALS 1, 2, 3, 4 AND FOR THE
NOMINEES IN PROPOSAL 5 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 approve the terms of a new investment management contract (the
"New Agreement") between the Trust, on behalf of the Fund, and
John Hancock Advisers, Inc. (the "Adviser"). THE ADVISORY FEES
PAID BY THE FUND TO THE ADVISER WILL BE REDUCED UNDER THE NEW
AGREEMENT.
------ ------ ------
FOR | | AGAINST | | ABSTAIN | |
------ ------ ------
(2) To approve an amendment to the Fund's fundamental investment
objective to permit the Fund to invest in common stocks of
companies with all levels of capitalization and to redesignate the
Fund's investment objective as non-fundamental.
------ ------ ------
FOR | | AGAINST | | ABSTAIN | |
------ ------ ------
(3) To approve an amendment to the Fund's fundamental investment
restriction to permit short sales of securities.
------ ------ ------
FOR | | AGAINST | | ABSTAIN | |
------ ------ ------
(4) To approve an amendment to the Fund's fundamental investment
restriction to permit the Fund to loan portfolio securities.
------ ------ ------
FOR | | AGAINST | | ABSTAIN | |
------ ------ ------
(5) To elect eighteen Trustees to hold office until their respective
successors have been duly elected and qualified.
Dennis S. Aronowitz William F. Glavin
William A. Barron III Patrick Grant
Edward J. Boudreau, Jr. Bayard Henry
Richard P. Chapman, Jr. Ralph Lowell, Jr.
William J. Cosgrove Patti McGill Peterson
Douglas M. Costle Dr. John A. Moore
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.
PLEASE DO NOT FORGET TO SIGN THE REVERSE SIDE OF THIS CARD.