[John Hancock Logo]
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JOHN HANCOCK FUNDS
December 30, 2003
Dear Fellow Shareholder:
I am writing to ask for your vote on an important matter that will affect your
investment in John Hancock U.S. Global Leaders Growth Fund. The attached proxy
statement contains information about a proposal to retain Sustainable Growth
Advisers, L.P. (SGA) as investment subadviser to the Fund.
Why is a sub-adviser being proposed?
John Hancock Funds believes that naming SGA as subadviser to John Hancock U.S.
Global Leaders Growth Fund is in the best interest of shareholders because it
promotes the long-term continuity of the Fund's strategy and management.
SGA was recently founded by George Fraise and Gordon Marchand who have been
associated with the fund since 2000 and 1995 (the Fund's inception),
respectively. SGA will continue the fund's investment philosophy and strategy
that Messrs. Fraise and Marchand implemented while principals of the Fund's
former sub-advisory firm Yeager, Wood & Marshall. Messrs. Fraise and Marchand
were recently joined by a third principal of SGA, Robert L. Rohn. Mr. Rohn has
been managing large-cap equity portfolios in a similar style to the U.S. Global
Leaders Growth Fund for more than ten years.
Your Fund's trustees carefully reviewed information relating to SGA's
personnel, operations and financial condition, as well as the expertise of its
principals and support team and the quality of its resources dedicated to
investment management. They also considered the historical performance record
of SGA's management team and the benefits of providing continuity of the
portfolio management team for the Fund, and determined to recommend the firm as
sub-adviser to the Fund.
No Impact on Fund Expenses
There will be no change to the Fund's management fee as a result of the
sub-investment management contract. Under the sub-investment management
contract, John Hancock Advisers will pay a percentage of its management fee to
SGA. The proxy statement includes details of the compensation agreement.
Your Vote Matters
After careful consideration, your Fund's trustees recommend you vote for this
proposal. The enclosed proxy statement contains further explanation and
important details of the sub-investment management contract, which I strongly
encourage you to read before voting. If approved by the shareholders, the
contract will become effective on February 16, 2004.
Your vote makes a difference, no matter what the size of your investment. Please
review the enclosed proxy materials and submit your vote promptly to help us
avoid the need for additional mailings at your Fund's expense. For your
convenience, you may vote one of three ways: via telephone by calling the phone
number on your proxy card; via mail by returning the enclosed voting card; or
via the Internet by visiting www.jhfunds.com and selecting the shareholder
entryway.
If you have any questions or need additional information, please contact a John
Hancock Funds Customer Service Representative at 1-800-225-5291 between
8:00A.M. and 8:00P.M. Eastern Time. I thank you for your prompt vote on this
matter.
Sincerely,
/s/ Maureen Ford Goldfarb
Maureen Ford Goldfarb
Chairman and Chief Executive Officer
260PX
JOHN HANCOCK U.S. GLOBAL LEADERS GROWTH FUND
(a series of John Hancock Capital Series)
101 Huntington Avenue
Boston, MA 02199
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 11, 2004
This is the formal agenda for your 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 U.S. Global Leaders Growth Fund (the
"Fund"):
A special meeting of shareholders of your Fund will be held at 101 Huntington
Avenue, Boston, Massachusetts on Wednesday, February 11, 2004 at 9:00 A.M.,
Eastern time, to consider the following:
1. A proposal to approve a sub-investment management contract among John
Hancock Advisers, LLC, the Fund and Sustainable Growth Advisers, LP. 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 December 17, 2003 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,
Susan S. Newton
Secretary
December 30, 2003
PROXY STATEMENT OF
JOHN HANCOCK U.S. GLOBAL LEADERS GROWTH FUND
(a series of John Hancock Capital Series)
This proxy statement contains the information you should know before
voting on the proposal summarized below.
Your Fund will furnish without charge a copy of its most recent
semi-annual and annual report to any shareholder upon request. Shareholders who
want to obtain a copy of these reports should direct all written requests to
the attention of the Fund, 101 Huntington Avenue, Boston, Massachusetts 02199
or call John Hancock Funds at 1-800-225-5291.
INTRODUCTION
This proxy statement is being used by the board of trustees of your Fund
to solicit proxies to be voted at a special meeting of shareholders of your
Fund. This meeting will be held at the principal executive offices of the
Funds, 101 Huntington Avenue, Boston, Massachusetts on Wednesday, February 11,
2004 at 9:00 A.M., Eastern time. The purpose of the meeting is to consider:
1. A proposal to approve a sub-investment management contract between John
Hancock Advisers, LLC, the Fund and Sustainable Growth Advisers LP.
2. Any other business that may properly come before the meeting.
This proxy statement and the proxy card are being mailed to Fund
shareholders on or about December 30, 2003.
Who is Eligible to Vote?
Shareholders of record on December 17, 2003 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 executed proxies, unless
revoked before or at the meeting, will be voted according to shareholder
instructions. If you sign a proxy, but do not fill in a vote, your shares will
be voted "for" the proposals. If any other business comes before the meeting,
your shares will be voted at the discretion of the persons named as proxies.
1
PROPOSAL 1
APPROVAL OF A NEW
SUB-INVESTMENT MANAGEMENT CONTRACT
John Hancock Advisers, LLC (the "Adviser") serves as your Fund's
investment adviser and is responsible for providing the Fund with a continuous
investment program under an investment management contract (a "management
contract") with the Fund.
At a meeting of your Fund's trustees held on December 16, 2003, the
trustees, including all of the independent trustees (those who are not
"interested persons" as defined in the Investment Company Act of 1940, as
amended (the "1940 Act")), unanimously approved and voted to recommend that
shareholders of the Fund approve a new subadvisory contract (a "proposed
subadvisory contract") between the adviser, the Fund and Sustainable Growth
Advisers, LP ("SGA"). The form of proposed subadvisory contract is attached to
this proxy statement as Exhibit A.
SGA was recently founded by George Fraise and Gordon Marchand who have
been associated with the Fund since 2000 and 1995 (the Fund's inception),
respectively. SGA will continue the Fund's investment philosophy and strategy
that Messrs. Fraise and Marchand implemented while principals of the Fund's
former sub-advisory firm Yeager, Wood & Marshall. Messrs. Fraise and Marchand
were recently joined by a third principal of SGA, Robert L. Rohn. Mr. Rohn has
been managing large-cap equity portfolios in a similar style to the U.S. Global
Leaders Growth Fund for more than ten years.
Prior to July 16, 2003, Yeager, Wood & Marshall, Inc. ("YWM") served as
investment adviser to the Fund. YWM was terminated as subadviser, and the
adviser conducted a due diligence review to find a suitable subadviser for the
Fund. At the completion of the due diligence process, the adviser determined
that shareholders of the Fund would be best served if the portfolio management
team that had been managing the Fund in the past continued to manage the Fund
going forward. As a result, George Fraise and Gordon Marchand, former principals
of YWM, were hired as employees of the adviser and appointed as the portfolio
managers of the Fund.
Messrs. Fraise and Marchand founded SGA and began operations in July 2003,
and will continue the Fund's investment philosophy and strategy SGA has added
resources that include the addition of a third principal to the firm, Robert L.
Rohn. Now that SGA's business has been firmly established, the adviser believes
that entering into a sub-investment management contract with SGA will offer
continuity of management and give the Fund access to SGA's full research
capabilities and management expertise. (Upon approval of the sub-advisory
agreement by the Fund's shareholders, Messrs. Fraise and Marchand will devote
their full time to SGA and will no longer be employees of the adviser.)
The subadvisory fees payable under the proposed subadvisory contract will
be borne by the adviser and not by the Fund. The adviser will be solely
responsible for paying the proposed subadvisory fee to SGA. The investment
management fees payable by the Fund to the adviser under the management
contract will not change.
For a summary of the trustees' rationale for recommending that
shareholders vote to hire SGA, see "Analysis of Proposal and Review of
Trustees" below.
2
About Sustainable Growth Advisers, LP
SGA is a Delaware limited partnership founded in 2003 to provide
investment advice to private accounts of institutional and individual clients,
private investment companies, and mutual funds. George Fraise, Gordon Marchand
and Robert L. Rohn, each owns 331/3% of SGA. Total assets under management by
SGA principals as of October 31, 2003 were approximately $706 million. SGA does
not currently manage any other domestic investment company.
SGA is located at 1285 Avenue of Americas, 35th floor, New York, New York
10019.
The principal executive officers and members of the investment policy
committee of SGA are listed below, along with their principal occupations.
Name* Principal Occupation
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Gordon M. Marchand, CFA,CIC Portfolio Manager, Principal and Director of SGA
(Investment Policy Committee Member)
George P. Fraise Portfolio Manager, Principal and Director of SGA
(Investment Policy Committee Member)
Robert L. Rohn Portfolio Manager, Principal and Director of SGA
(Investment Policy Committee Member)
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* The business address of each person listed is 1285 Avenue of the Americas,
35th Floor, New York, New York 10019.
About the Adviser
John Hancock Advisers, LLC is an indirect, wholly-owned subsidiary of John
Hancock Life Insurance Company (formerly John Hancock Mutual Life Insurance
Company)(the "Life Company"), a Massachusetts life insurance company chartered
in 1862, with national headquarters at John Hancock Place, Boston,
Massachusetts. As of September 30, 2003, the adviser had approximately $28
billion in assets under management, in its capacity as investment adviser to
the Fund and other funds and institutional accounts. The Life Company is wholly
owned by John Hancock Financial Services, Inc. ("John Hancock"), a Delaware
corporation organized in 1999. The Life Company is one of the most recognized
and respected financial institutions in the nation. With total assets under
management of approximately $140 billion as of September 30, 2003, the Life
Company is one of the ten largest life insurance companies in the United
States, and carries a high rating from Standard & Poor's and A.M. Best. Founded
in 1862, the Life Company has been serving clients for over 130 years. John
Hancock has entered into a merger agreement with Manulife Financial Corporation
("Manulife"), a Canadian financial services company. The merger is subject to
regulatory and shareholder approval. If approved, the merger, which is expected
to close by the end of the first half of 2004, will result in JHA becoming an
indirect subsidiary of Manulife. The principal executive officers of the
adviser and John Hancock Funds, LLC ("John Hancock Funds"), the Fund's
principal underwriter, are located at 101 Huntington Avenue, Boston, MA 02199.
3
The principal executive officer and the directors of the adviser are
listed below, along with their principal occupations.
Name and Address Principal Occupation
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Maureen Ford Goldfarb Executive Vice President, John Hancock Financial Services, Inc., John
Director Hancock Life Insurance Company; Chairman, Director, President and Chief
101 Huntington Avenue Executive Officer, the Adviser and The Berkeley Financial Group, Inc.;
Boston, MA 02199 Chairman, Director, President and Chief Executive Officer, John Hancock
Funds; Chairman, Director, President and Chief Executive Officer, Sovereign
Asset Management Corporation ("SAMCorp."); Director, John Hancock
Subsidiaries, Inc.; Independence Investment LLC and John Hancock
Signature Services, Inc. ("Signature Services"); Investment Company Institute
Board of Governors (since 2002); Senior Vice President, MassMutual
Insurance Co. (until 1999).
David F. D'Alessandro Chairman, Chief Executive Officer and Director of John Hancock Financial
Director Services, Inc. and the Insurance Company; Chairman, John Hancock
John Hancock Place Subsidiaries, LLC; Director, The Berkeley Group, the Adviser and John
P.O. Box 111 Hancock Funds.
Boston, MA 02117
John M. DeCiccio Executive Vice President and Chief Investment Officer, John Hancock
Director Financial Services, Inc.; Director, Executive Vice President and Chief
John Hancock Place Investment Officer, the Insurance Company; Chairman of the Committee of
P.O. Box 111 Finance of the Insurance Company; Director, John Hancock Subsidiaries,
Boston, MA 02117 LLC, Hancock Natural Resource Group, Independence Investment LLC,
Declaration Management & Research LLC, the Adviser and The Berkeley
Financial Group, Inc., John Hancock Funds, Massachusetts Business
Development Corporation; Director, John Hancock Insurance Agency, Inc.
("Insurance Agency, Inc.") (until 1999).
Mark C. Lapman Chairman, President and Chief Executive Officer of Independence Investment
Director LLC; Director of The Berkeley Group, the Adviser and John Hancock Funds.
53 State Street
Boston, MA 02109
Jeanne M. Livermore Senior Vice President of the Insurance Company; Director of The Berkeley
Director Group, the Adviser and John Hancock Funds; Director of Insurance Agency
John Hancock Place (until May 1999).
P.O. Box 111
Boston, MA 02117
4
Name and Address Principal Occupation
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Thomas E. Moloney Senior Executive Vice President and Chief Financial Officer of John Hancock
Director Financial Services, Inc. and the Insurance Company; Director of The
John Hancock Place Berkeley Group, the Adviser, John Hancock Funds, John Hancock Realty
P.O. Box 111 Services, John Hancock Canadian Holdings Limited, John Hancock
Boston, MA 02117 Reassurance Co., Ltd., and The Maritime Life Assurance Company; Director
and Chief Financial Officer of John Hancock Subsidiaries, Inc.; Director of
Signature Services, Inc. (Chairman until February 2000), Director of
Insurance Agency (until May 1999).
Robert H. Watts Senior Vice President of the Insurance Company; Executive Vice President of
Director Signator Investors, Inc.; Director and Executive Vice President of the
John Hancock Place Insurance Agency; Director of The Berkeley Group, the Adviser, John
P.O. Box 111 Hancock Funds and Signature Services.
Boston, MA 02117
The Proposed Subadvisory Contract
The following is a summary of the material terms of the proposed
subadvisory contract. In describing the proposed subadvisory contract with SGA,
this summary is qualified by the form of proposed subadvisory contract attached
to this proxy statement as Exhibit A.
Compensation. The proposed subadvisory contract (the "contract") provides
that SGA (the "subadviser") is required to pay all expenses that it incurs in
connection with the performance of its duties under the contract. The contract
also provides that the Adviser, not the Fund, will pay the subadvisory fees.
The proposed subadvisory contract requires the adviser to pay monthly to
the subadviser a subadvisory fee which is accrued daily, and on an annual basis
is equal to (i) 35% of the gross management fee received by the Adviser for
average daily net assets less than $500,000,000; (ii) 30% of the gross
management fee received by the Adviser for average daily net assets equal to
$500,000,000 and less than $1 billion; (iii) 25% of the gross management fee
received by the adviser for average daily net assets equal to $1 billion and
less than $1.5 billion; and (iv) 20% of the gross management fee received by the
Adviser for average daily net assets equal to or in excess of $1.5 billion. In
the event that, and each time that, prior to the fifth anniversary of the
effective date of the subadvisory agreement (the "Effective Date"), Messrs.
Fraise, Marchand or any person designated as a co-portfolio manager in the
Fund's prospectus (collectively, a "Co-portfolio Manager") ceases to be employed
by SGA, the monthly fee paid to SGA by the Adviser will be reduced by 20% of the
fee that SGA would otherwise earn for such monthly period under the subadvisory
agreement until SGA retains a new Co-portfolio Manager as a substitute for the
departed Co-portfolio Manager. In the event that, and each time that, prior to
the fifth anniversary of the Effective Date, SGA does not have an analyst
reasonably acceptable to the Adviser supporting the Co-portfolio Managers in the
management of the Fund, the quarterly fee paid to SGA will be reduced by 10% of
the fee that SGA would otherwise earn for such quarterly period until SGA
retains an analyst reasonably acceptable to the adviser.
Term. If approved by shareholders of the Fund, the proposed subadvisory
contract will take effect as of February 16, 2004 and will remain in effect
until June 30, 2005. Thereafter, the proposed subadvisory contract will
continue in effect from year to year subject to the annual approval of its
continuance as described below under "Provisions Contained in the subadvisory
Contract and in the Management Contract."
5
Limitation of Liability of Sub-Adviser. SGA will not be liable for any
losses, claims, damages, liabilities or litigation (including legal and other
expenses) incurred or suffered by the adviser, the Fund or any of their
affiliates as a result of any error of judgment or mistake of law by SGA with
respect to the Fund, except that nothing in the subadvisory agreement will
limit SGA's liability for any and all losses or, claim based on (a) SGA's
causing the Fund to be in violation of any applicable federal or state law,
rule or regulation or any investment policy or restriction set forth in the
Fund's Prospectus or Statement of Additional Information or any written
policies, procedures, guidelines or instructions provided in writing to SGA by
the board of trustees or the adviser, (b) SGA's causing the Fund to fail to
satisfy the requirements of Subchapter M of the Code for qualification as a
regulated investment company, or (c) SGA's willful misfeasance, bad faith or
gross negligence generally in the performance of its duties hereunder or its
reckless disregard of its obligations and duties under the subadvisory
agreement.
Provisions Contained in the Proposed Subadvisory Contract and the Management
Contract
Termination, Continuance and Amendment. Except as described above for the
proposed subadvisory contract, the contract continues from year to year subject
to annual approval of its continuance by a majority of the independent
trustees, cast in person at a meeting called for the purpose of voting on such
approval, and annual approval by either (a) your Fund's trustees, or (b) a
majority of your Fund's outstanding voting securities, as defined in the
Investment Company Act of 1940, as amended (the "1940 Act"). The contract may
be terminated at any time without penalty on 60 days' written notice by the
trustees, by a vote of a majority of the Fund's outstanding voting securities,
or by the adviser or subadvisor. The contract terminates automatically in the
event of its assignment, as defined in the 1940 Act, or in the event that the
Adviser ceases to act as the Fund's investment adviser.
Use of Name "John Hancock." Under the management contract and the proposed
subadvisory contract, if the Adviser ceases to act as the Fund's investment
manager, the Fund (to the extent that it lawfully can) must cease to use any
name derived from the name "John Hancock" or any other name indicating that the
Fund is advised by or otherwise associated with the adviser.
The Management Contract
Under the Fund's management contract, the Adviser, subject to the
direction of the trustees, provides the Fund with a continuous investment
program for the management of its assets, consistent with the Fund's investment
objective and policies. The Adviser furnishes the Fund with advice and
recommendations consistent with the investment policies of the Fund regarding
the purchase, holding and disposition of portfolio securities. The Adviser:
o advises the Fund in connection with policy decisions to be made by the
trustees;
o furnishes the Fund with research, economic and statistical data in
connection with the Fund's investments and policies;
o provides day-to-day administration;
o researches issuers of securities to be purchased by the Fund;
o provides required reports and recommendations to the trustees and
maintains the records of the Fund; and
o assists 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.
6
The Adviser provides the Fund with office space, supplies and other
facilities required for the business of the Fund. The Adviser pays the
compensation of all officers and employees of the Fund and pays the expenses of
clerical services related to the administration of the Fund. Other than
expenses specifically assumed by the adviser, all expenses incurred in the
continuing operation of the Fund are borne by the Fund, including fees of the
independent trustees and all fees of lawyers and accountants. The Fund pays an
investment management fee monthly to the adviser equivalent on an annual basis
to 0.75% of the average daily net asset value of the Fund.
The Adviser has voluntarily agreed to reduce management fees and other
expenses payable in order to limit the Fund's total operation expenses to
1.37%. This agreement may not be modified or discontinued by the adviser at
least until May 17, 2004. For the period from May 17, 2002 to December 31,
2002, the adviser received a fee of $944,765 after expense limitations.
The management contract and previous subadvisory contract were approved by
the Fund's trustees and shareholders.
Limitation of Liability. The management contract provides that the adviser
is not liable for any error of judgment or mistake of law or for any loss
suffered by the Fund in connection with the matters to which the management
contract relates, except a loss resulting from willful misfeasance, bad faith
or gross negligence on the part of the adviser in the performance of its duties
or from the reckless disregard of its obligations and duties under the
contract.
Analysis of Proposal and Review of Trustees
The trustees have determined that the terms of the proposed subadvisory
contract are fair and reasonable. In approving the proposed subadvisory
contract and recommending its approval by the shareholders of the Fund, the
trustees, including the independent trustees, considered the best interest of
the shareholders of the Fund and took into account all factors they deemed
relevant.
In evaluating the proposed subadvisory contract, the trustees carefully
reviewed materials requested by the trustees relating to SGA and its personnel,
operations and financial condition. The trustees considered the fact that in
recommending SGA, the adviser had conducted a search for a subadviser that the
adviser believed would be appropriate for the Fund. The trustees also
considered the expertise of SGA's principals and support staff team and the
quality of its resources dedicated to investment management. In addition, the
trustees considered the historical performance record of SGA's management team
in managing investment companies and other client accounts with objectives
similar to those of the Fund and the benefits of providing continuity of the
portfolio management team for the Fund. The trustees also considered SGA's
financial condition and the reputation of its principals in the financial
community. The trustees also considered the reasonableness of the subadvisory
fee and the portion of the advisory fee that the adviser would retain for its
management, supervisory and other services to the Fund. In addition, the
trustees considered such other factors as they deemed relevant, including the
possibility of other benefits that may be realized by the Fund as a result of
SGA serving as the Fund's subadviser. Throughout the review process the
independent trustees were advised by their independent legal counsel, who was
not counsel to the Fund, the adviser or SGA.
Trustees' Recommendation
The trustees, including all of the independent trustees, by a vote cast at
a meeting held on December 16, 2003 unanimously approved and voted to recommend
to the shareholders of the Fund that the Fund adopt the proposed subadvisory
contract. If the Fund's shareholders approve the proposed subadvisory contract,
that contract will take effect as of February 16, 2004.
7
If the proposed subadvisory contract is not approved for the Fund, the
trustees will consider what action, if any, should be taken to obtain
subadvisory services for the Fund.
The trustees of your Fund recommend that the shareholders of your Fund
vote "for" the proposed subadvisory contract.
VOTING RIGHTS AND REQUIRED VOTE
Each share of your Fund is entitled to one vote and each fractional share
shall be entitled to a proportionate fractional vote. A quorum is required to
conduct business at the meeting. The presence in person or by proxy of
shareholders entitled to cast a majority of the votes entitled to be cast at
the meeting will constitute a quorum. Approval of the proposal requires the
affirmative vote of a majority of the shares of your fund outstanding and
entitled to vote. For this purpose, a joajority of the outstanding shares of
your fund means with respect to the proposal the vote of the lesser of
(1) 67% or more of the shares present at the meeting, if the holders of
more than 50% of the shares of the fund are present or represented by
proxy, or (2) more than 50 of the outstanding shares of the fund.
Shares Quorum Voting
- --------------------------- -------------------------------------- -----------------------------------------
In General All shares "present" in person or by Shares "present" in person will be voted
proxy are counted toward a quorum. in person at the meeting. Shares present
by proxy will be voted in accordance
with instructions.
Broker Non-Vote (where Considered "present" at meeting for Broker non-votes do not count as a vote
the underlying holder has purposes of quorum "for" and effectively result in a vote
not voted and the broker "against."
does not have
discretionary authority to
vote the shares)
Proxy with No Voting Considered "present" at meeting for Voted "for" the proposal.
Instruction (other than purposes of quorum
Broker Non-Vote)
Vote to Abstain Considered "present" at meeting for Abstentions do not constitute a vote
purposes of quorum "for" and effectively result in a vote
"against."
If the required approval of shareholders is not obtained, the meeting may
be adjourned as more fully described in this proxy statement and prospectus.
Your Fund will continue and the board of trustees will consider what further
action may be appropriate.
8
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 your Fund; by personnel of your Fund's investment adviser, John
Hancock Advisers, LLC and its transfer agent, John Hancock Signature Services,
Inc. ("JHSS"); or by broker-dealer firms. JHSS, together with a third party
solicitation firm, has agreed to provide proxy solicitation services to the
Fund at a cost of approximately $47,000, to be paid by the adviser.
Revoking Proxies
A Fund 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 John Hancock Signature
Services, Inc., 1 John Hancock Way, Suite 1000, Boston, MA 02217-1000,
or
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 your 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 December 17, 2003 (the "record date"), _________ shares of
beneficial interest of your Fund were outstanding.
Only shareholders of record on the record date are entitled to notice of
and to vote at the meeting. A majority of the outstanding shares of your Fund
that are entitled to vote will be considered a quorum.
Other Business
The Fund's board of trustees knows of no business to be presented for
consideration at the meeting other than the proposal. 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, by the time scheduled for the meeting, a quorum of shareholders is not
present or if a quorum is present but sufficient votes "for" the proposal have
not been received, the persons named as proxies may propose one or more
adjournments of the meeting to another date and time, and the meeting may be
held as adjourned within a reasonable time after the date set for the original
meeting without further notice. Any such adjournment will require the
affirmative vote of a majority of the votes cast on the question in person or
by proxy at the session of the meeting to be adjourned. The persons named as
proxies will vote all proxies in favor of the adjournment that voted in favor
of the proposal or that abstained. They will vote against such adjournment
those proxies required to be voted against the proposal. Broker non-votes will
be disregarded in the vote for adjournment. If the adjournment requires setting
a new record date or the adjournment is for more than 60 days from the original
meeting (in which case the board of trustees of your Fund will set a new record
date), your Fund will give notice of the adjourned meeting to its shareholders.
9
Telephone Voting
In addition to soliciting proxies by mail, by fax or in person, your
Fund(s) may also arrange to have votes recorded by telephone by officers and
employees of your Fund(s) or by personnel of the adviser or transfer agent or a
third party solicitation firm. 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.
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 with a toll-free number to call if 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.
Internet Voting
You will also have the opportunity to submit your voting instructions via
the Internet by utilizing a program provided through a vendor. Voting via the
Internet will not affect your right to vote in person if you decide to attend
the meting. Do not mail the proxy card if you are voting via the Internet. To
vote via the Internet, you will need the "control number" that appears on your
proxy card. These Internet voting procedures are designed to authenticate
shareholder identities, to allow shareholders give their voting instructions,
and to confirm that shareholders instructions have been recorded properly. If
you are voting via the Internet you should understand that there may be costs
associated with electronic access, such as usage charges from Internet access
providers and telephone companies, that must be borne to you.
o Read the proxy statement and have your proxy card at hand.
o Go to the Web site on the proxy card.
o Enter the control number found on your proxy card.
o Follow the instructions on the Web site. Please call us at
1-800-225-5291 if you have any problems.
o To insure that your instructions have been recorded correctly, you
will receive a confirmation of your voting instructions immediately
after your submission and also by e-mail if chosen.
Shareholder's Proposals
Your Fund 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 must submit the proposal in writing, so that
it is received by your fund at 101 Huntington Avenue, Boston, Massachusetts
02199 within a reasonable time before any meeting.
10
OWNERSHIP OF SHARES IN THE FUNDS
To the knowledge of your Fund, as of December 5, 2003, the following persons
owned of record or beneficially 5% or more of the Fund's outstanding shares:
Name and Address Number of Shares Owned
- ------------------ -----------------------
- ---------------------------------------------- ------------ ------------ ----------- ------------- -----------
Class A Class B Class C Class I Class R
- ---------------------------------------------- ------------ ------------ ----------- ------------- -----------
MLPF&S For The 13.12% 17.87% 32.80% -- --
Sole Benefit Of Its Customers
Attn: Fund Administration 97C55
4800 Deerlake Drive East 2nd Floor
Jacksonville FL 32246-6484
- ---------------------------------------------- ------------ ------------ ----------- ------------- -----------
Charles Schwab & Co. 7.08% -- -- -- --
101 Montgomery Street
San Francisco CA
- ---------------------------------------------- ------------ ------------ ----------- ------------- -----------
Citigroup Global Markets Inc -- 6.68% 10.43% -- --
333 West 34th Street
New York, New York 10001-2402
- ---------------------------------------------- ------------ ------------ ----------- ------------- -----------
Canal Securities Company -- -- -- 61.23% --
One Chemung Canal Plaza
Elmira NY 14901
- ---------------------------------------------- ------------ ------------ ----------- ------------- -----------
MCB Trust Services Custodian FBO -- -- -- 27.16% --
The Investment Incentive Plan
700 17th St Ste 150
Denver CO 80202-3531
- ---------------------------------------------- ------------ ------------ ----------- ------------- -----------
John Hancock Advisers LLC 100.0%
101 Huntington Avenue
Boston, MA 02199
- ---------------------------------------------- ------------ ------------ ----------- ------------- -----------
As of December 5, 2003, the trustees and officers of your Fund owned in the
aggregate less than 1% of the outstanding shares of your Fund.
AVAILABLE INFORMATION
Your Fund is subject to the informational requirements of the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 and files reports,
proxy statements and other information with the SEC. These reports, proxy
statements and other information filed by your Fund can be inspected and copied
(for a duplication fee) at the public reference facilities of the SEC at 450
Fifth Street, N.W., Washington, D.C., and at the Midwest Regional Office (500
West Madison Street, Suite 1400, Chicago, Illinois). Copies of these materials
can also be obtained by mail from the Public Reference Section of the SEC at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. In
addition, copies of these documents may be viewed on-screen or downloaded from
the SEC's Internet site at http://www.sec.gov.
11
Exhibit A
JOHN HANCOCK CAPITAL SERIES
John Hancock U.S. Global Leaders Growth Fund
Sub-Investment Management Contract
Dated February 16, 2004
12
JOHN HANCOCK ADVISERS, LLC
101 Huntington Avenue
Boston, Massachusetts 02199
JOHN HANCOCK CAPITAL SERIES
John Hancock U.S. Global Leaders Growth Fund
101 Huntington Avenue
Boston, Massachusetts 02199
Sustainable Growth Advisers, LP
1285 Avenue of the Americas, 35th Floor
New York, NY 10019
Sub-Investment Management Contract
Ladies and Gentlemen:
John Hancock Capital Series (the "Trust") has been organized as a business
trust under the laws of The Commonwealth of Massachusetts to engage in the
business of an investment company. The Trust's shares of beneficial interest
may be classified into series, each series representing the entire undivided
interest in a separate portfolio of assets. Series may be established or
terminated from time to time by action of the Board of Trustees of the Trust.
The Board of Trustees has established several series of the Trust, including
John Hancock U.S. Global Leaders Growth Fund (the "Fund").
The Trustees have selected John Hancock Advisers LLC (the "Adviser") to
provide overall investment advice and management for the Fund, and to provide
certain other services, under the terms and conditions provided in the
Investment Management Contract, dated as of the date hereof, between the Trust,
the Fund and the Adviser (the "Investment Management Contract").
The Adviser and the Trustees have selected Sustainable Growth Advisers, LP
(the "Sub-Adviser") to provide the Adviser and the Fund with the advice and
services set forth below, and the Sub-Adviser is willing to provide such advice
and services, subject to the review of the Trustees and overall supervision of
the Adviser, under the terms and conditions set forth in this agreement (the
"Agreement"). The Sub-Adviser hereby represents and warrants that it is
registered as an investment adviser under the Investment Advisers Act of 1940,
as amended (the "Advisers Act"). Accordingly, the Trust, on behalf of the Fund,
and the Adviser agree with the Sub-Adviser as follows:
1. Investment Services. The Sub-Adviser will use its best efforts to
provide to the Fund continuing and suitable investment advice with respect to
investments, consistent with the investment policies, objectives and
restrictions of the Fund as set forth in the Fund's Prospectus and Statement of
Additional Information. In the performance of the Sub-Adviser's duties
hereunder, subject always to the Trust's and the Fund's organizational
documents as amended from time to time and the limitations set forth in the
Registration Statement of the Trust, on behalf of the Fund, as in effect from
time to time under the Securities Act of 1933, as amended (the "1933 Act"), and
the Investment Company Act of 1940, as amended (the "1940 Act"), the
Sub-Adviser will, have investment discretion with respect to the Fund. In
performing the Sub-Adviser's obligations hereunder, the Sub-Adviser shall
comply with the provisions of the Declaration of Trust and By-laws, all laws
applicable to the Trust, the Fund or the Sub-Adviser's business, including, but
not limited to, the 1940 Act, Advisers Act, the 1933 Act, the Securities
Exchange Act of 1934, as amended (the "1934 Act"), the Commodity Exchange Act
and the rules and
13
regulations promulgated under such statutes and the investment objective,
policies and restrictions of the Fund, as each of the same shall be from time
to time in effect as set forth in the Fund's then current Prospectus and
Statement of Additional Information. The Sub-Adviser shall use its best efforts
to cause the Fund to comply with the requirements of Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code"), for qualification as a
regulated investment company. The Sub-Adviser shall also comply with such
policies, guidelines, procedures and instructions as the Adviser or the
Trustees may from time to time establish and deliver to the Sub-Adviser. No
supervisory activity undertaken by the Adviser shall limit the Sub-Adviser's
responsibility for the foregoing. No reference in this Agreement to the
Sub-Adviser's discretionary authority over the Fund's investments shall in any
way limit the right of the Adviser, in its sole discretion, to establish and
revise policies in connection with the management of the Fund's assets or
otherwise exercise its right to control the overall management of the Fund's
assets.
The Sub-Adviser will, at its own expense:
a. furnish the Adviser and the Fund with advice and recommendations,
consistent with the investment policies, objectives and restrictions
of the Fund as set forth in the Fund's Prospectus and Statement of
Additional Information, with respect to the purchase, holding and
disposition of portfolio securities;
b. furnish the Adviser and the Fund with advice as to the manner in which
voting rights, subscription rights, rights to consent to corporate
action and any other rights pertaining to the Fund's assets shall be
exercised, the Fund having the responsibility to exercise such voting
and other rights;
c. furnish the Adviser and the Fund with research, economic and
statistical data in connection with the Fund's investments and
investment policies, which are consistent with the past practices of
the Sub-Advisor with respect to the Fund regarding research, economics
and statistical data;
d. submit such reports relating to the valuation of the Fund's securities
as the Trustees or the Fund's Valuation Committee may reasonably
request and to monitor daily the value of all securities held by the
Fund and in particular the value of any security that is priced at
fair value in accordance with the Fund's valuation procedures and
immediately report to the Adviser any change in such fair value;
e. from time to time or at any time as reasonably requested by the
Adviser or the Trustees, make reports to the Adviser or the Trust of
the Sub-Adviser's performance of the foregoing services and the
compliance by the Fund with applicable statutory and regulatory
requirements relating to the management of the Fund's assets and the
Fund's investment objectives, policies and restrictions and upon
request, which may be without notice, to make the Sub-Adviser's
records (relating to the services hereunder or otherwise), employees
and premises available for compliance audits (relating to any
applicable laws, rules regulations, procedures and/or policies) or
interviews relating to all of any portion of SGA's advisory business,
including its subadvisory relationship with JHA, by the Adviser or the
Fund's accountants or counsel;
f. subject to the supervision of the Adviser, maintain all books and
records with respect to the Fund's securities transactions required by
the 1940 Act, and preserve such records for the periods prescribed
therefor by the 1940 Act (the Sub-Adviser agrees that such records are
the property of the Trust and copies will be surrendered to the Trust
promptly upon request therefor);
g. cooperate with and provide reasonable assistance to the Adviser, the
Fund, the Fund's custodian and foreign sub-custodians, the Fund's
pricing agents and all other agents and representatives of the Fund
and the Adviser, furnish such information with respect to the Fund as
they may reasonably request from time
14
to time in the performance of their obligations, provide prompt
responses to reasonable requests made by such persons and establish
appropriate interfaces with each so as to promote the efficient
exchange of information and compliance with applicable laws and
regulations; and
h. cooperate generally with the Fund and the Adviser to provide
information reasonably requested by the Adviser which is necessary for
the preparation of registration statements and periodic reports to be
filed with the Securities and Exchange Commission ("SEC"), including
Form N-1A, periodic statements, shareholder communications and proxy
materials furnished to holders of shares of the Fund, filings with
state "blue sky" authorities and with United States agencies
responsible for tax matters, and other reports and filings of like
nature.
2. Expenses Paid by the Sub-Adviser. The Sub-Adviser will pay the cost of
maintaining the staff and personnel necessary for it to perform its obligations
under this Agreement, the expenses of office rent, telephone,
telecommunications and other facilities it is obligated to provide in order to
perform the services specified in Section 1, and any other expenses incurred by
it in connection with the performance of its duties hereunder.
3. Expenses of the Fund Not Paid by the Sub-Adviser. The Sub-Adviser will
not be required to pay any expenses of the Fund which this Agreement does not
expressly make payable by the Sub-Adviser. In particular, and without limiting
the generality of the foregoing but subject to the provisions of Section 2, the
Sub-Adviser will not be required to pay under this Agreement:
a. the compensation and expenses of Trustees and of independent advisers,
independent contractors, consultants, managers and other agents
employed by the Trust or the Fund other than through the Sub-Adviser;
b. legal, accounting and auditing fees and expenses of the Trust or the
Fund;
c. the fees and disbursements of custodians and depositories of the Trust
or the Fund's assets, transfer agents, disbursing agents, plan agents
and registrars;
d. taxes and governmental fees assessed against the Trust or the Fund's
assets and payable by the Trust or the Fund;
e. the cost of preparing and mailing dividends, distributions, reports,
notices and proxy materials to shareholders of the Trust or the Fund,
except that the Sub-Adviser shall bear the costs of providing the
information referred to in Section 1(h) to the Adviser;
f. brokers' commissions and underwriting fees; and
g. the expense of periodic calculations of the net asset value of the
shares of the Fund.
4. Compensation of the Sub-Adviser. Subject to Sections 4(b) and (c), for
all services to be rendered, facilities furnished and expenses paid or assumed
by the Sub-Adviser as herein provided for the Fund, the Adviser will pay the
Sub-Adviser monthly, in arrears, a fee equal on an annual basis to the
following percentages of the gross management fee received by the Adviser from
the Fund, which percentages are based on the Fund's average daily net assets:
(a) 35% of the gross management fee received by the Adviser for average daily
net assets less than $500 million; (b) 30% of the gross management fee received
by the Adviser for average daily net assets equal to $500 million and less than
$1 billion; (c) 25% of the gross management fee received by the Adviser for
average daily net assets equal to $1 billion and less than $1.5 billion; and
(d) 20% of the gross management fee received by the Adviser for average daily
net assets equal to or in excess of $1.5 billion. 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
15
1940 Act and the regulations promulgated thereunder. The Sub-Adviser will
receive a pro rata portion of such fee for any periods in which the Sub-Adviser
advises the Fund less than a full month. The Fund shall not be liable to the
Sub-Adviser for the Sub-Adviser's compensation hereunder. Calculations of the
Sub-Adviser's fee will be based on average net asset values as provided by the
Adviser.
In the event that, and each time that, prior to the fifth anniversary of
the effective date of this Agreement (the "Effective Date"), George P. Fraise,
Gordon M. Marchand or any person designated as a co-portfolio Manager in the
Fund's prospectus (collectively, a "Co-portfolio Manager") ceases employment
with the Sub-Adviser, the month fee paid to the Sub-Adviser shall be reduced by
20% of the fee that the Sub-Adviser would otherwise earn for such monthly
period under this Agreement until the Sub-Adviser retains a new Co-portfolio
Manager as a substitute for the departed portfolio manager. In the event that,
and each time that, prior to the fifth anniversary of the Effective Date, the
Sub-Adviser does not have an analyst reasonably acceptable to the Adviser,
supporting the Co-portfolio Managers in the management of the Fund, the monthly
fee paid to the Sub-Adviser shall be reduced by 10% of the fee that the
Sub-Adviser would otherwise earn for such monthly period under this Agreement
until the Sub-Adviser retains an analyst reasonably acceptable to the Adviser.
No such substitute Co-portfolio Manager shall be selected without the written
consent of the Adviser, which consent shall not be unreasonably withheld. A pro
rata adjustment shall be made with respect to any month during which such
condition existed only for a portion of such month.
5. Other Activities of the Sub-Adviser and Its Affiliates. Nothing herein
contained shall prevent the Sub-Adviser or any associate of the Sub-Adviser
from engaging in any other business or from acting as investment adviser or
investment manager for any other person or entity. It is understood that
officers, directors and employees of the Sub-Adviser or its affiliates may
continue to engage in providing portfolio management services and advice to
other investment companies, whether or not registered, to other investment
advisory clients of the Sub-Adviser or its affiliates and to said affiliates
themselves.
6. Avoidance of Inconsistent Position. In connection with purchases or
sales of portfolio securities for the account of the Fund, neither the
Sub-Adviser nor any of its investment management subsidiaries nor any of such
investment management subsidiaries' directors, officers or employees will act
as principal or agent or receive any commission, except as may be permitted by
the 1940 Act and rules and regulations promulgated thereunder. The Sub-Adviser
shall not knowingly recommend that the Fund purchase, sell or retain securities
of any issuer in which the Sub-Adviser has a financial interest without
obtaining prior approval of the Adviser prior to the execution of any such
transaction.
Nothing herein contained shall limit or restrict the Sub-Adviser or any of
its officers, affiliates or employees from buying, selling or trading in any
securities for its or their own account or accounts. The Trust and Fund
acknowledge the Sub-Adviser and its officers, affiliates, and employees, and
its other clients may at any time have, acquire, increase, decrease or dispose
of positions in investments which are at the same time being acquired or
disposed of hereunder. The Sub-Adviser shall have no obligation to acquire with
respect to the Fund, a position in any investment which the Sub-Adviser, its
officers, affiliates or employees may acquire for its or their own accounts or
for the account of another client, if in the sole discretion of the
Sub-Adviser, it is not feasible or desirable to acquire a position in such
investment on behalf of the Fund. Nothing herein contained shall prevent the
Sub-Adviser from purchasing or recommending the purchase of a particular
security for one or more funds or clients while other funds or clients may be
selling the same security.
7. No Partnership or Joint Venture. The Trust, the Fund, the Adviser and
the Sub-Adviser are not partners of or joint venturers with each other and
nothing herein shall be construed so as to make them such partners or
16
joint venturers or impose any liability as such on any of them. The Sub-Adviser
is an independent contractor and is not an agent of either the Adviser or the
Fund.
8. 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, LLC." or "John Hancock Life Insurance Company" only for so
long as the Investment Management Contract remains in effect. At such time as
such 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 U.S. Global
Leaders Growth Fund through permission of John Hancock Life Insurance Company,
a Massachusetts insurance company, and agrees that John Hancock 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 Life Insurance Company or any
subsidiary or affiliate thereof shall be the investment adviser.
9. Limitation of Liability of Sub-Adviser. The Sub-Adviser shall not be
liable for any losses, claims, damages, liabilities or litigation (including
legal and other expenses) incurred or suffered by the Adviser, the Trust, the
Fund or any of their affiliates as a result of any error of judgment or mistake
of law by the Sub-Adviser with respect to the Fund, except that nothing in this
Agreement shall operate or purport to operate in any way to exculpate, waive or
limit the liability of the Sub-Adviser for, and the Sub-Adviser shall indemnify
and hold harmless the Adviser, the Trust, the Fund and all affiliated persons
thereof (within the meaning of Section 2(a)(3) of the 1940 Act) and all
controlling persons (as described in Section 15 of the 1933 Act) (collectively,
the "Adviser Indemnitees") against any and all losses, claims, damages,
liabilities or litigation (including reasonable legal and other expenses) to
which any of the Adviser Indemnities may become subject under the 1933 Act, the
1940 Act, the Advisers Act, or under any other statute, at common law or
otherwise arising out of or based on (a) the Sub-Adviser's causing the Fund to
be in violation of any applicable federal or state law, rule or regulation or
any investment policy or restriction set forth in the Fund's Prospectus or
Statement of Additional Information or any written policies, procedures,
guidelines or instructions provided in writing to the Sub-Adviser by the
Trustees or the Adviser, (b) the Sub-Adviser's causing the Fund to fail to
satisfy the requirements of Subchapter M of the Code for qualification as a
regulated investment company, or (c) the Sub-Adviser's willful misfeasance, bad
faith or gross negligence generally in the performance of its duties hereunder
or its reckless disregard of its obligations and duties under this Agreement.
10. Duration and Termination of this Agreement. This Agreement shall
remain in force until June 30, 2005; provided that this Agreement shall
terminate unless its continuance is approved prior to June 30, 2005 and
annually thereafter in the manner required by the 1940 Act or the rules and
interpretive positions of the SEC under the 1940 Act. This Agreement may, on 30
days' written notice, be terminated at any time without the payment of any
penalty by the Trust or the Fund by vote of a majority of the outstanding
voting securities of the Fund, by the Trustees or the Adviser and may be
terminated upon 90 days written notice by the Sub-Adviser. Termination of this
Agreement with respect to the Fund shall not be deemed to terminate or
otherwise invalidate any provisions of any contract between the Sub-Adviser and
any other series of the Trust. This Agreement shall automatically terminate in
the event of its assignment or upon termination of the Investment Management
Contract. In interpreting the provisions of this Section 10, the definitions
contained in Section 2(a) of the 1940 Act (particularly the definitions of
"assignment," "interested person" or "voting security"), shall be applied.
11. 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
17
change, waiver, discharge or termination is sought, and no amendment, transfer,
assignment, sale, hypothecation or pledge of this Agreement shall be effective
until approved in the manner required by the 1940 Act or the rules and
interpretive positions of the SEC under the 1940 Act.
12. Provision of Certain Information by the Sub-Adviser. The Sub-Adviser
will promptly notify the Adviser in writing of the occurrence of any of the
following events:
a. the Sub-Adviser fails to be registered as an investment adviser under
the Advisers Act or under the laws of any jurisdiction in which the
Sub-Adviser is required to be registered as an investment adviser in
order to perform its obligations under this Agreement;
b. the Sub-Adviser is served or otherwise receives notice of any action,
suit, proceeding, inquiry or investigation, at law or in equity,
before or by any court, public board, or body, involving the affairs
of the Fund (excluding class action suits in which the Fund is a
member of the plaintiff class by reason of the Fund's ownership of
shares in the defendant) or the compliance by the Sub-Adviser with the
federal or state securities laws (including, but not limited to,
promptly notifying the Adviser in writing of any SEC examinations of
the Sub-Adviser and the Sub-Adviser promptly providing to the Adviser
a copy of any and all SEC exam findings together with a copy of the
Sub-Adviser's responses thereto);
c. the controlling stockholder or senior management of the Sub-Adviser
changes, there is otherwise an actual change in control (whether
through sale of all or substantially all the assets of the Sub-Adviser
or a material change in management of the Sub-Adviser) or an
"assignment" (as defined in the 1940 Act) has or is proposed to occur;
d. any occurrence of any event that would disqualify the Sub-Adviser from
serving as a Sub-Adviser with respect to the Fund; or
e. any representation of the Sub-Adviser under this Agreement is no
longer true in all material respects.
13. Representations and Acknowledgements of Sub-Adviser. The Sub-Adviser
hereby warrants and represents to the Adviser that (i) it has obtained all
applicable licenses, permits, registrations and approvals that may be required
in order to serve in its designated capacities with respect to the Fund,
including, but not limited to registration under the Advisers Act, and shall
continue to keep current such license, permits, registrations and approvals for
so long as this Agreement is in effect and shall comply in all material
respects with all laws applicable to its operations during the term of this
Agreement; (ii) it is not prohibited by the Advisers Act or other applicable
laws and regulations from performing the services contemplated by this
Agreement; and (iii) this Agreement has been duly and validly authorized,
executed and delivered on behalf of the Sub-Adviser and is a valid and binding
agreement of the Sub-Adviser enforceable against it in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights generally
and limitations on the availability of equitable remedies.
The Sub-Adviser represents that it has provided the Adviser with a
complete copy of its Form ADV as currently in effect and will promptly provide
the Adviser with copies of all amendments and supplements thereto. Such ADV, as
amended and supplemented from time to time, does not and shall not contain a
material misstatement of the information required to be stated therein.
The Sub-Adviser has reviewed the Registration Statement, and any
amendments or supplements thereto, of the Fund as filed with the SEC and
represents and warrants that with respect to disclosure about the Sub-Adviser
or information relating directly or indirectly to the Sub-Adviser, such
Registration Statement, amendment and/or supplement contain, as of the date
thereof, no untrue statement of any material fact and does not omit any state-
18
ment of material fact that was required to be stated therein or necessary to
make the statements contained therein not misleading.
14. Representations and Acknowledgements of Adviser. The Adviser hereby
warrants and represents to the Sub-Adviser that (i) it has obtained all
applicable licenses, permits, registrations and approvals that may be required
in order to serve in its designated capacities with respect to the Fund,
including, but not limited to registration under the Advisers Act, and shall
continue to keep current such license, permits, registrations and approvals for
so long as this Agreement is in effect; and (ii) this Agreement has been duly
and validly authorized, executed and delivered on behalf of the Adviser and is
a valid and binding agreement of the Adviser enforceable against it in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and limitations on the availability of equitable
remedies.
The Adviser represents that it has provided the Sub-Adviser with a
complete copy of its Form ADV as currently in effect and will promptly provide
the Sub-Adviser with copies of all amendments and supplements thereto. Such
ADV, as amended and supplemented from time to time, does not and shall not
contain a material misstatement of the information required to be stated
therein.
The Adviser has reviewed the Registration Statement, and any amendments or
supplements thereto, of the Fund as filed with the SEC and represents and
warrants that with respect to disclosure about the Adviser or information
relating directly or indirectly to the Adviser, such Registration Statement,
amendment and/or supplement contain, as of the date thereof, no untrue
statement of any material fact and does not omit any statement of material fact
that was required to be stated therein or necessary to make the statements
contained therein not misleading.
15. Insurance. The Sub-Adviser will maintain at all times insurance
coverage for errors and omissions from a nationally recognized insurance
company with a claims paying rating of at least AA (or equivalent) in an amount
of coverage not less than $1 million (including a deductible not in excess of
$100,000) and other terms to which the Adviser shall not reasonably object. JHA
shall have the right to require SGA to increase the amount of such insurance
coverage (and to specify the amount of such increase) and/or to add JHA and/or
the Fund as co-insureds under the policy, and SGA shall effect such changes in
insurance coverage requested by JHA within 90 days of receiving notice of the
request from JHA. Upon execution of the Subadvisory Agreement, SGA shall
deliver to JHA an insurance binder which contains an endorsement providing at
least 30 days advance notice of amendment or cancellation of such insurance.
Such notice shall be provided directly from the insurance company to JHA.
16. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the Commonwealth of Massachusetts.
17. 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.
18. 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 Capital Series is the
designation of the Trustees under the Amended and Restated Declaration of Trust
dated February 28, 1992, as amended from time to time. The Declaration of Trust
has been filed with the Secretary of The Commonwealth of
19
Massachusetts. The obligations of the Trust and the Fund are not personally
binding upon, nor shall resort be had to the private property of, any of the
Trustees, shareholders, officers, employees or agents of the Fund, but only the
Fund's property shall be bound. The Trust or the Fund shall not be liable for
the obligations of any other series of the Trust.
Any information supplied by the Sub-Adviser, which is not otherwise in the
public domain, in connection with the performance of its duties hereunder is to
be regarded as confidential and for use only by the Fund and/or its agents, and
only in connection with the Fund and its investments. Any information supplied
by the Trust or the Advisor, which is not otherwise in the public domain, in
connection with the Fund or the Adviser is to be regarded as confidential and
for use only by the Sub-Adviser and/or its agents, and only in connection with
the Sub-Adviser's services under this Agreement. Any party in receipt of
confidential information shall use reasonable precautions (substantially
identical to those used in safeguarding of its own confidential information)
that its directors/trustees, officers, employees and advisors abide by these
confidentiality provisions. Each of the Trust, the Adviser and the Sub-Adviser
acknowledge that the restrictions contained in this Section 17(b) are necessary
for the protection of the business of the other parties hereto and are
considered to be reasonable for such purpose. Each of the Trust, the Adviser
and Sub-Adviser agree that any breach of this Section 17(b) is likely to cause
the other parties hereto substantial and irrevocable damage and therefore, in
the event of such breach, in addition to any other remedies it may have at law
or in equity, the non-breach party shall be entitled to specific performance
and other injunctive relief. The provisions of this Section 18(b) shall survive
any termination of this Agreement.
This Agreement represents the entire agreement between the parties hereto
with respect to the subject matter hereof and supercedes all prior oral and
written negotiations, commitments and understandings between the parties;
provided that this Agreement shall not supercede or modify the obligations of
the Adviser and the Sub-Adviser under the Master Agreement, which obligations
shall remain in full force and effect.
Yours very truly,
JOHN HANCOCK CAPITAL SERIES on behalf
of John Hancock U.S. Global Leaders
Growth Fund
By: ------------------------
The foregoing contract
is hereby agreed to as
of the date hereof.
SUSTAINABLE GROWTH ADVISERS, LP JOHN HANCOCK ADVISERS, LLC
By: ------------------------ By: ------------------------
Name Name:
By: ------------------------
Name:
By: ------------------------
Name
20
VOTE THIS PROXY CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE YOUR FUND
THE EXPENSE OF ADDITIONAL MAILINGS
JOHN HANCOCK US GLOBAL LEADERS GROWTH FUND
SPECIAL MEETING OF SHAREHOLDERS -FEBRUARY 11, 2004
PROXY SOLICITATION BY THE BOARD OF TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Maureen Ford
Goldfarb, William H. King and Susan S. Newton, with full power of substitution
in each, to vote all the shares of beneficial interest of John Hancock U.S.
Global Leaders Growth Fund ("U.S. Global Leaders Growth Fund") which the
undersigned is (are) entitled to vote at the Special Meeting of Shareholders
(the "Meeting") of U.S. Global Leaders Growth Fund to be held at 101 Huntington
Avenue, Boston, Massachusetts 02199, on February 11, 2004 at 9:00 a.m., Eastern
time, and any adjournment(s) of the Meeting. All powers may be exercised by a
majority of all proxy holders or substitutes voting or acting, or, if only one
votes and acts, then by that one. Receipt of the Proxy Statement dated December
30, 2003 is hereby acknowledged. If not revoked, this proxy shall be voted for
the proposal.
Date________________________________, 2004
PLEASE SIGN, DATE AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
-------------------------------------------
-------------------------------------------
Signature(s)
NOTE: Signature(s) should agree with
the name(s) printed herein. When signing as
attorney, executor, administrator,
trustee or guardian, please give
your full name 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.
VOTE THIS PROXY CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE YOUR FUND
THE EXPENSE OF ADDITIONAL MAILINGS
THIS PROXY WILL BE VOTED IN FAVOR OR (FOR) PROPOSAL 1 IF NO SPECIFICATION IS
MADE BELOW. AS TO ANY OTHER MATTER, THE PROXY OR PROXIES WILL VOTE IN ACCORDANCE
WITH THEIR BEST JUDGEMENT.
PLEASE VOTE BY FILLING IN THE APPROPRIATE BOX BELOW.
(1): To approve a new sub-investment management contract among John Hancock
Advisers, LLC., U.S. Global Leaders Growth Fund and Sustainable Growth
Advisers, LP.
FOR |_| AGAINST |_| ABSTAIN |_|
PLEASE DO NOT FORGET TO SIGN THE REVERSE SIDE OF THIS CARD.
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John Hancock U.S. Global Leaders Growth Fund
THE TRUSTEES RECOMMEND A VOTE "FOR" THE FOLLOWING PROPOSAL.
Proposal 1. To approve a new sub-investment management oFOR oAGAINST oABSTAIN
contract among John Hancock Advisers, LLC.,
U.S. Global Leaders Growth Fund and
Sustainable Growth Advisers, LP.
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voting.
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John Hancock
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JOHN HANCOCK FUNDS
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John Hancock Funds
John Hancock U.S. Global Leaders Growth Fund
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THE TRUSTEES RECOMMEND A VOTE "FOR" THE FOLLOWING PROPOSAL.
Proposal 1. To approve a new sub-investment management oFOR
contract among John Hancock Advisers, LLC.,
U.S. Global Leaders Growth Fund and
Sustainable Growth Advisers, LP.
Please refer to the proxy statement for discussion of each of these matters.
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