SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. ___)
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
JOHN HANCOCK TAX-EXEMPT SERIES FUND
(Name of Registrant as Specified in Its Charter)
JOHN HANCOCK TAX-EXEMPT SERIES FUND
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (check the appropriate box):
[X] Fee paid previously with preliminary materials.
JOHN HANCOCK TAX-EXEMPT SERIES FUND
Massachusetts Portfolio
New York Portfolio
May , 1996
Dear Fellow Shareholder:
You are cordially invited to a special shareholder meeting on Wednesday, June
26, 1996, to be held at 9:00 A.M. in your Fund's offices at the location shown
on the enclosed proxy statement. At this meeting, you will be asked to consider
and approve several proposals pertaining to the John Hancock Tax-Exempt Series
Fund. These are highlighted below, and are discussed in more detail in your
proxy statement.
o Election of your Fund's Board of Trustees. The Board of Trustees is
responsible for protecting your interests as a shareholder of the Fund. You will
find a list of nominees and a brief description of their backgrounds in your
proxy statement.
o Changes to your Fund's Declaration of Trust. You are being asked to approve a
new Declaration of Trust that will allow your Fund to issue different classes of
shares, each with a different fee structure to suit investors' varying needs.
This change will have no effect on the way you now invest in your Fund; you can
continue to make purchases in the same manner as you have in the past. Multiple
classes of shares can enhance your Fund's competitive advantage in the mutual
fund marketplace, resulting in a broader shareholder base which may ultimately
help to lower the Fund's per share expenses.
The new Declaration of Trust also contains certain provisions to help expand the
capabilities of your Trustees. These provisions should be beneficial to you, as
they give your Trustees more flexibility to respond to changes in the mutual
fund industry.
o A new investment management contract to bring the administration of your Fund
into conformity with that of the other John Hancock funds. Under this proposal,
your Fund would pay its investment management fee to John Hancock Advisers
monthly instead of quarterly.
o Increased investment flexibility. The remaining proposals relate to amendments
to certain investment restrictions, and are clarified in your proxy statement.
Your Fund's Trustees believe that relaxing these restrictions will be beneficial
to you, as your Fund will have more flexibility to take advantage of potential
investment opportunities.
ALL OF THE PROPOSALS HAVE BEEN REVIEWED AND UNANIMOUSLY APPROVED
BY YOUR FUND'S BOARD OF TRUSTEES, WHO BELIEVE THAT THE
CHANGES WILL BE BENEFICIAL TO YOU AND YOUR FUND.
YOUR VOTE IS IMPORTANT!
No matter how large or small your investment may be, your vote makes a
difference. We urge you to review the enclosed proxy statement carefully, and to
vote by completing, signing and returning the enclosed proxy ballot form to us
immediately. Your prompt response will help avoid the cost of additional
mailings. For your convenience, we have enclosed a postage-paid envelope.
If you have any questions, please call your Customer Service Representative at
1-800-225-5291, Monday through Friday between 8:00 A.M. and 8:00 P.M. Eastern
time.
Sincerely,
/s/ Edward J. Boudreau, Jr.
Edward J. Boudreau, Jr.
Chairman and CEO
JOHN HANCOCK TAX-EXEMPT SERIES FUND -
MASSACHUSETTS PORTFOLIO
JOHN HANCOCK TAX-EXEMPT SERIES FUND -
NEW YORK PORTFOLIO
(collectively, the "Portfolios")
101 Huntington Avenue
Boston, Massachusetts 02199
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 26, 1996
A Special Meeting of Shareholders of each Portfolio will be held at the
Portfolios' offices located on the 2nd floor at 101 Huntington Avenue, Boston,
Massachusetts 02199, at 9:00 a.m., Eastern time, on Wednesday, June 26, 1996.
The telephone number of each Portfolio is 1-800-225-5291. The Special Meetings
of the Portfolios are expected to be held concurrently and are referred to
collectively as the "Meeting." The purpose of the Meeting is to consider and act
upon the following proposals:
(1) To elect fifteen Trustees to hold office until their respective successors
have been duly elected and qualified. FOR MASSACHUSETTS PORTFOLIO AND NEW
YORK PORTFOLIO VOTING TOGETHER.
(2) To approve an Amended and Restated Declaration of Trust of John Hancock
Tax-Exempt Series Fund (the "Fund"). FOR MASSACHUSETTS PORTFOLIO AND NEW
YORK PORTFOLIO VOTING TOGETHER.
(3) To approve a new investment management contract between John Hancock
Advisers, Inc. and
(a) the Massachusetts Portfolio. FOR MASSACHUSETTS PORTFOLIO VOTING
SEPARATELY.
(b) the New York Portfolio. FOR NEW YORK PORTFOLIO VOTING SEPARATELY.
(4) To redesignate as nonfundamental (a) the investment objective of each
Portfolio, (b) certain investment policies of the Portfolios and (c)
certain investment restrictions of the Portfolios. FOR MASSACHUSETTS
PORTFOLIO AND NEW YORK PORTFOLIO VOTING SEPARATELY.
(5) To amend the Portfolios' fundamental investment restriction regarding
senior securities. FOR MASSACHUSETTS PORTFOLIO AND NEW YORK PORTFOLIO
VOTING SEPARATELY.
(6) To amend the Portfolios' fundamental investment restriction regarding
borrowing. FOR MASSACHUSETTS PORTFOLIO AND NEW YORK PORTFOLIO VOTING
SEPARATELY.
(7) To amend the Portfolios' fundamental investment restriction regarding the
making of loans. FOR MASSACHUSETTS PORTFOLIO AND NEW YORK PORTFOLIO VOTING
SEPARATELY.
(8) To amend the Portfolios' fundamental investment restriction regarding
transactions in commodities and commodity contracts. FOR MASSACHUSETTS
PORTFOLIO AND NEW YORK PORTFOLIO VOTING SEPARATELY.
(9) To transact other business that may properly come before the Meeting or
any adjournment of the Meeting.
YOUR BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE IN FAVOR OF THE PROPOSALS.
Shareholders of record of each Portfolio as of the close of business on
May 1, 1996 are entitled to notice of and to vote at the Meeting or any
adjournment of the Meeting. The proxy statement and proxy card are being mailed
to shareholders on or about May 17, 1996.
THOMAS H. DROHAN
Senior Vice President and
Secretary
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE COMPLETE AND
RETURN THE ENCLOSED PROXY CARD. YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE
MEETING.
Boston, Massachusetts
May 17, 1996
-2-
JOHN HANCOCK TAX-EXEMPT SERIES FUND -
MASSACHUSETTS PORTFOLIO
JOHN HANCOCK TAX-EXEMPT SERIES FUND -
NEW YORK PORTFOLIO
(collectively, the "Portfolios")
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 John Hancock Tax-Exempt Series Fund
(the "Fund") on behalf of its series, the Massachusetts Portfolio (the
"Massachusetts Portfolio") and the New York Portfolio (the "New York
Portfolio"). For purposes of this Proxy Statement, the term "Portfolios" shall
also include the Fund where appropriate. The proxies will be used at the special
meeting of each Portfolio's shareholders to be held concurrently (collectively,
the "Meeting") at the Portfolios' offices located on the 2nd floor at 101
Huntington Avenue, Boston, Massachusetts 02199, at 9:00 a.m., Eastern time, on
Wednesday, June 26, 1996.
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
Portfolios' 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 Portfolios' transfer agent, John Hancock
Investor Services Corporation ("Investor Services") will solicit proxies in
person and/or by telephone at a cost to each Portfolio of between $3,000 and
$5,000. Investor Services may engage an independent proxy solicitation firm to
assist in soliciting proxies.
The cost of preparing and mailing this Proxy Statement and the accompanying
Notice and proxy card will be borne by each Portfolio. The mailing address of
each Portfolio, the Adviser, John Hancock Funds and Investor Services is 101
Huntington Avenue, Boston, Massachusetts 02199. This Proxy Statement and the
proxy card are being mailed to shareholders of each Portfolio on or about May
17, 1996.
Each Portfolio will furnish without charge a copy of its Annual Report and most
recent Semi-Annual Report succeeding the Annual Report to any shareholder upon
request. Shareholders desiring to obtain a copy of their Portfolio's reports
should direct all written requests to the attention of their Portfolio, 101
Huntington Avenue, Boston, Massachusetts 02199 or should call John Hancock Funds
at 1-800-225-5291.
1
OUTSTANDING SHARES AND VOTING REQUIREMENTS
The Trustees have fixed the close of business on May 1, 1996, as the record date
(the "Record Date") for determination of shareholders of each Portfolio entitled
to notice of and to vote at the Meeting. Shareholders of record of each
Portfolio on the Record Date are entitled to one vote per share at the Meeting
or any adjournment of the Meeting relating to their Portfolio. As of April 22,
1996, the Massachusetts Portfolio had 4,757,810.205 shares of beneficial
interest outstanding and the New York Portfolio had 4,717,351.455 shares of
beneficial interest outstanding.
As of April 22, 1996, no persons or entities owned beneficially or of record
more than 5% of the outstanding shares of beneficial interest of either
Portfolio.
SUMMARY OF VOTING ON PROPOSALS
Although each Portfolio is participating separately in the Meeting, proxies are
being solicited through the use of this combined Proxy Statement. Shareholders
of each Portfolio will vote together on Proposals 1 and 2 and will vote
separately on Proposals 3(a), 3(b), 4, 5, 6, 7 and 8. Voting by shareholders of
one Portfolio will not affect voting by shareholders of the other Portfolio.
PROPOSAL 1
ELECTION OF TRUSTEES
(For Shareholders of Each Portfolio Voting Together)
The Portfolios are currently governed by a Board of Trustees which, for purposes
of this Proxy Statement, will be known as the Panel A Trustees. Other funds in
the John Hancock fund complex (the "Panel C Funds") are governed by a different
Board of Trustees (the "Panel C Trustees"). On March 5, 1996, the Panel A
Trustees and the Panel C Trustees, including the Trustees who are not
"interested persons" (as defined by the Investment Company Act of 1940 (the
"1940 Act")) of the Portfolios (the "Independent Trustees") on each Panel, voted
to approve, and to recommend to the shareholders of the Portfolios that they
approve, a proposal to consolidate the Panel A Trustees and the Panel C Trustees
so that each Portfolio and the Panel C Funds will be governed by the same Board
of Trustees. The Panel A Trustees hereby recommend to shareholders of each of
the Portfolios that they re-elect their current Trustees and elect the Panel C
Trustees (collectively, the "Nominees").
Eight of the fifteen Nominees currently serve as Panel A Trustees and eight of
the fifteen Nominees currently serve as Panel C Trustees (Mr. Boudreau serves on
both Panels). Information concerning the Nominees and other relevant factors is
discussed below.
Using the enclosed form of proxy, a shareholder may authorize the proxies to
vote his or her shares for the Nominees or may withhold from the proxies
authority to vote his or her shares for one or more of the Nominees. If no
contrary instructions are given, the proxies will vote FOR the Nominees. Each of
the Nominees has consented to his or her nomination and has agreed to serve if
2
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 Trustees may designate. The
Portfolios have 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. The table also sets forth the Panel on which each
Nominee currently serves and, with respect to Nominees currently serving as
Panel A Trustees, the date he or she first became a Trustee of the Portfolios.
Name, Age and Principal Occupation
Position With or Employment First Became
the Portfolios During Last Five Years A Trustee
-------------- ---------------------- ---------
Edward J. Boudreau, Jr.* Chairman and Chief Executive 1988
(age 51) Officer of the Adviser and The
Chairman and Chief Executive Berkeley Financial Group ("The
Officer, Portfolios and Panel A Berkeley Group"); Chairman, John
and Panel C Funds; Nominee Hancock Advisers International Ltd.
("Advisers International"), NM
Capital Management, Inc. ("NM
Capital"); Chairman, Chief
Executive Officer and President,
John Hancock Funds, Investor
Services, First Signature Bank and
Trust Company and Sovereign Asset
Management Corporation ("SAMCorp");
Director, John Hancock Capital
Corp., John Hancock Freedom
Securities Corp. and New
England/Canada Business Council;
Member, Investment Company
Institute Board of Governors;
Director, Asia Strategic Growth
Fund, Inc.; Trustee, Museum of
Science; Vice Chairman and
President, the Adviser (until July
1992); Chairman, John Hancock
Distributors, Inc. (until April
1994); Trustee or Director and
Chairman of 61 funds managed by the
Adviser.
Dennis S. Aronowitz Professor of Law, Boston University 1987
(age 64) School of Law; Trustee, Brookline
Panel A Trustee; Nominee Savings Bank; Trustee or Director
of 16 funds managed by the Adviser.
Richard P. Chapman, Jr. President, Brookline Savings Bank; 1987
(age 61) Director, Federal Home Loan Bank
Panel A Trustee; Nominee of Boston (lending); Director,
Lumber Insurance Companies (fire
and casualty insurer); Trustee,
Northeastern University; Director,
Depositors Insurance Fund, Inc.
(insurer); Trustee or Director of 16
funds managed by the Adviser.
3
Name, Age and Principal Occupation
Position With or Employment First Became
the Portfolios During Last Five Years A Trustee
-------------- ---------------------- ---------
William J. Cosgrove Vice President, Senior Banker and 1991
(age 63) Senior Credit Officer, Citibank, N.A.
Panel A Trustee; Nominee (retired September, 1991);
Executive Vice President, Citadel
Group Representative Inc.; EVP
Resource Evaluations Inc.
(consulting) (until October 1993);
Trustee, the Hudson City Savings
Bank (until October 1993); Trustee
or Director of 16 funds managed by
the Adviser.
Gail D. Fosler Vice President and Chief 1994
(age 48) Economist, The Conference Board
Panel A Trustee; Nominee (nonprofit economic and business
research); Trustee or Director of 16
funds managed by the Adviser.
Anne C. Hodsdon* President and Chief Operating 1996
(age 42) Officer, the Adviser and John
President, Panel A and Hancock funds; Director,
Panel C Funds; Nominee Advisers International; Executive
Vice President, the Adviser (until
December 1994); Senior Vice
President, the Adviser (until
December 1993); Vice President, the
Adviser (until 1991); Trustee or
Director of 56 funds managed by the
Adviser.
Richard S. Scipione* General Counsel, John Hancock 1987
(age 58) Mutual Life Insurance Company;
Panel A Trustee; Nominee Director, the Adviser, John
Hancock Funds, 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.; Trustee or
Director of 44 funds managed by the
Adviser.
Edward J. Spellman Partner, KPMG Peat Marwick LLP 1990
(age 63) (retired June, 1990); Trustee or
Panel A Trustee; Nominee Director of 16 funds managed by
the Adviser.
4
Name, Age and Principal Occupation
Position With or Employment First Became
the Portfolios During Last Five Years A Trustee
-------------- ---------------------- ---------
Douglas M. Costle Director, Chairman of the Board
(age 56) and Distinguished Senior Fellow,
Panel C Trustee; Nominee Institute for Sustainable
Communities, Montpelier, Vermont
(since 1991); Dean, Vermont Law
School (until 1991); Director, Air
and Water Technologies Corporation
(environmental services and
equipment), Niagara Mohawk Power
Company (electric services) and
Mitretek Systems (governmental
consulting services); Trustee or
Director of 12 funds managed by the
Adviser.
Leland O. Erdahl Director of Santa Fe Ingredients
(age 67) Company of California, Inc. and
Panel C Trustee; Nominee Santa Fe Ingredients Company,
Inc. (private food processing
companies); Director of Uranium
Resources, Inc.; President of
Stolar, Inc. (from 1987 to 1991)
and President of Albuquerque
Uranium Corporation (from 1985 to
1992); Director of Freeport-McMoRan
Copper & Gold Company, Inc., Hecla
Mining Company, Canyon Resources
Corporation and Original Sixteen
to One Mine, Inc. (from 1984 to
1987 and from 1991 to 1995)
(management consultant); Trustee
or Director of 12 funds managed
by the Adviser.
Richard A. Farrell President of Farrell, Healer & Co.,
(age 63) (venture capital management firm)
Panel C Trustee; Nominee (since 1980); Prior to 1980, headed
the venture capital group at Bank
of Boston Corporation; Trustee or
Director of 12 funds managed by
the Adviser.
William F. Glavin President, Babson College; Vice
(age 65) Chairman, Xerox Corporation (until
Panel C Trustee; Nominee June 1989); Director, Caldor Inc.,
Reebok, Ltd. (since 1994) and
Inco. Ltd; Trustee or Director of
12 funds managed by the Adviser.
Dr. John A. Moore President and Chief Executive
(age 57) Officer, Institute for Evaluating
Panel C Trustee; Nominee Health Risks (nonprofit institution)
(since September 1989); Trustee or
Director of 12 funds managed by
the Adviser.
Patti McGill Peterson President, St. Lawrence University;
(age 52) Director, Niagara Mohawk Power
Panel C Trustee; Nominee Corporation (electric utility) and
Security Mutual Life (insurance);
Trustee or Director of 12 funds
managed by the Adviser.
5
John W. Pratt Professor of Business
(age 64) Administration at Harvard
Panel C Trustee; Nominee University Graduate School of
Business Administration (since
1961); Trustee or Director of 12
funds managed by the Adviser.
- - ----------------------
* "Interested person," as defined in the 1940 Act, of the Portfolios or the
Adviser.
The number of shares of beneficial interest of the Portfolios beneficially owned
by each of the Nominees, directly or indirectly, as of April 22, 1996, is as
follows:
Massachusetts New York
Portfolio Portfolio
--------- ---------
[S] [C] [C]
Edward J. Boudreau, Jr. 1,142 --
Dennis S. Aronowitz 169 --
Richard P. Chapman, Jr. 87 --
William J. Cosgrove 96 --
Gail D. Fosler -- --
Anne C. Hodsdon -- --
Richard S. Scipione -- --
Edward J. Spellman 331 --
Douglas M. Costle -- --
Leland O. Erdahl -- --
Richard A. Farrell 83 --
William F. Glavin -- --
Dr. John A. Moore -- --
Patti McGill Peterson -- 465
John W. Pratt 3,433 --
The information as to beneficial ownership set forth in the above chart is based
on statements furnished to the Portfolios by the Nominees. Each has all voting
and investment powers with respect to the shares indicated.
None of the Nominees beneficially owned individually, and the Nominees and
executive officers of the Portfolios as a group did not beneficially own, in
excess of one percent of the outstanding shares of either of the Portfolios on
the Record Date.
The Board of Trustees held four meetings during the last completed fiscal year
of the Portfolios. No Trustee with the exception of Mr. Scipione attended fewer
than 75% of the aggregate of (1) the total number of meetings of the Trustees;
and (2) the total number of meetings held by all committees of the Trustees on
which he or she served. Mr. Bayard Henry retired from his position as a Trustee
of the Portfolios effective April 26, 1996.
The Trustees have an Audit Committee. The Committee members are: Messrs.
Aronowitz, Chapman, Cosgrove and Spellman and Ms. Fosler. Each of the members of
the Audit Committee is an Independent Trustee. The Audit Committee held two
meetings during the last completed fiscal year of the Portfolios.
6
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 Portfolio 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 Portfolios on matters concerning the Portfolios'
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 Portfolios 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 a Portfolio's officers or Trustees, a resolution of
any potential or actual conflict of interest, and to facilitate communication
between the firm and the Portfolio's officers and Trustees.
The Trustees have a Special Nominating Committee known as the Administration
Committee (the "Committee"). The Committee members are: Messrs. Aronowitz,
Chapman, Cosgrove and Spellman and Ms. Fosler. Each of the members of the
Committee is an Independent Trustee. The Committee held four meetings during the
last completed fiscal year of the Portfolios.
Included among the functions of the Committee is the selection and nomination
for appointment and election of candidates to serve as Trustees who are not
"interested persons," as defined in the 1940 Act. The Committee also coordinates
with Trustees who are interested persons in the selection of Portfolio 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
The table below lists the executive officers of the Portfolios except for the
Chairman (Mr. Boudreau) and the President (Ms. Hodsdon). Information about Mr.
Boudreau and Ms. Hodsdon is provided under "Information Concerning Nominees."
Name, Age and Position Principal Occupation During
With the Portfolios the Past Five Years First Became an Officer
- - ---------------------- --------------------------- -----------------------
Robert G. Freedman Vice Chairman and Chief 1987
(age 57) Investment Officer, the Adviser and
Vice Chairman and Chief Investment each of the John Hancock funds;
Officer President, the Adviser (until
December 1994); Director, the
Adviser, Advisers International,
John Hancock Funds, Investor
Services, SAMCorp and NM Capital;
Senior Vice President, The Berkeley
Group.
James B. Little Senior Vice President, the Adviser, 1987
(age 61) The Berkeley Group, John
Senior Vice President Hancock Funds, and Investor
and Chief Financial Officer Services; Senior Vice President
and Chief Financial Officer, each of
the John Hancock funds.
7
Name, Age and Position Principal Occupation During
With the Portfolios the Past Five Years First Became an Officer
- - ---------------------- --------------------------- -----------------------
Thomas H. Drohan Senior Vice President and 1987
(age 59) Secretary, the Adviser, The
Senior Vice President Berkeley Group and each of the
and Secretary John Hancock funds; Senior Vice
President, Investor Services, John
Hancock Funds and John Hancock
Distributors (until 1994);
Director, Advisers International;
Secretary, NM Capital.
John A. Morin Vice President, the Adviser, 1991
(age 45) Investor Services, John Hancock
Vice President Funds and each of the John Hancock
funds; Compliance Officer, certain
John Hancock funds; Counsel, John
Hancock Mutual Life Insurance Company;
Vice President and Assistant Secretary,
The Berkeley Group.
Susan S. Newton Vice President and Assistant 1989
(age 46) Secretary, the Adviser; Vice
Vice President, President, Assistant Secretary and
Assistant Secretary Compliance Officer, certain John
and Compliance Officer Hancock funds; Vice President and
Secretary, John Hancock Funds,
Investor Services and John Hancock
Distributors (until 1994);
Secretary, SAMCorp; Vice President,
The Berkeley Group.
James J. Stokowski Vice President, the Adviser; Vice 1991
(age 49) President and Treasurer, each of
Vice President and Treasurer the John Hancock funds.
Renumeration of Officers and Trustees
The following tables provide information regarding the compensation paid by each
Portfolio and the other investment companies in the John Hancock fund complex to
the current Independent Trustees for their services for the latest fiscal year
of each such Portfolio ending August 31, 1995. Mr. Boudreau, Ms. Hodsdon, Mr.
Scipione and each officer of the Portfolios are interested persons of the
Adviser who are compensated by the Adviser and affiliates and receive no
compensation from the Portfolios.
8
Aggregate Compensation From Each Portfolio
For Each Portfolio's Last Fiscal Year
Total Compensation*
From Each Portfolio and
Other Funds in the
New York Massachusetts John Hancock Fund
Portfolio Portfolio Complex
--------- --------- -----------------------
Dennis S. Aronowitz $ 832 $ 819 $ 61,050
Richard P. Chapman, Jr.+ 858 843 $ 62,800
William J. Cosgrove+ 889 874 $ 61,050
Gail D. Fosler 845 832 $ 60,800
Bayard Henry** 804 791 $ 58,850
Edward J. Spellman 871 857 $ 61,050
------ ------ --------
Total $5,099 $5,016 $365,600
====== ====== ========
- - ------------
* Total compensation from each Portfolio and other funds in the John Hancock
fund complex is as of December 31, 1995. As of this date there were 61
funds in the John Hancock fund complex, of which each of the Independent
Trustees served 16.
** Mr. Henry retired from his position as Trustee effective April 26, 1996.
+ As of December 31, 1995 the value of the aggregate accrued deferred
compensation amount from all funds in the John Hancock fund complex for Mr.
Chapman was $54,681 and for Mr. Cosgrove was $54,243 under the John Hancock
Deferred Compensation Plan for Independent Trustees (the "Plan).
Under the Plan, the Independent Trustees may elect to defer the receipt of all
or a portion of their Trustees' fees payable by each fund in the John Hancock
fund complex. The value of an Independent Trustee's Plan account is determined
by a hypothetical investment of the deferred Trustees' fees in certain John
Hancock funds selected by the Independent Trustee from a list of designated
funds. The Independent Trustees do not beneficially own shares of any John
Hancock fund under the Plan and a fund's obligation to make payments of amounts
deferred under the Plan is an unsecured liability, payable solely from that
fund's general assets. If the value of the Independent Trustees' Plan accounts
in all the John Hancock funds were actually received and invested on December
31, 1995 by the Independent Trustees in shares of the John Hancock funds against
which the Plan accounts are valued, the Independent Trustees participating in
the Plan would own shares of the John Hancock funds as set forth below:
9
Shares Assuming Hypothetical Investment of Deferred Trustees' Fees
Special Sovereign Sovereign
Growth International Value Bond Investors
Independent Trustee Fund Fund Fund Fund Fund
- - ------------------- ---- ---- ---- ---- ----
Panel A Trustees:
Dennis S. Aronowitz -- -- -- -- --
Richard P. Chapman, Jr. 1,192 2,490 1,041
William J. Cosgrove -- -- 995 675 1,875
Gail D. Fosler -- -- -- -- --
Bayard Henry -- -- -- -- --
Edward J. Spellman -- -- -- -- --
Trustees' Recommendation
THE TRUSTEES RECOMMEND THAT THE SHAREHOLDERS OF THE PORTFOLIOS ELECT EACH OF THE
NOMINEES TO SERVE AS A TRUSTEE.
Required Vote
Because your Portfolio is part of the Fund, your vote will be counted on a
Fund-wide basis. Election of each Nominee requires a plurality of votes of the
shareholders of both the Fund present at the Meeting provided that there is a
quorum.
PROPOSAL 2
TO APPROVE AN AMENDED AND
RESTATED DECLARATION OF TRUST
(For Shareholders of Each Portfolio Voting Together)
GENERAL
The Portfolios' Declaration of Trust (the "Declaration") has not changed
significantly since the Portfolios' inception in 1987. Since that time, there
have been changes in federal and state securities laws affecting investment
companies. To reflect those changes, the Declaration is proposed to be amended
and restated to permit each Portfolio, upon authorization by the Trustees, to
issue and sell one or more classes of shares of beneficial interest and to
change certain other provisions of the Declaration. Multiple classes of shares
allow prospective investors, whether individual or institutional, to choose
among different sales charge and fee alternatives as is appropriate to their
needs. The amended and restated Declaration will also include all changes that
are appropriate to allow the issuance of multiple classes of shares.
In addition, the amendment and restatement will confer upon the Trustees the
authority to amend the Declaration at any time to conform it to applicable
federal or state laws, and to make any other changes in the Declaration that the
Trustees deem necessary or desirable. This will allow the Trustees the
flexibility to respond to changes in the mutual fund industry or market
10
conditions without a costly shareholder vote. The amendment and restatement of
the Declaration will also modernize the provisions of the Declaration,
substantially conforming them to the governing documents of other funds in the
John Hancock fund complex, and change the name of each of the Portfolios.
Effective March 6, 1996 the Trustees amended and restated the Portfolios'
By-Laws to conform them to those of other John Hancock funds. The amended and
restated Declaration, substantially in the form attached to this proxy statement
as Exhibit A, will become effective on July 1, 1996, if approved by the
shareholders. Concurrently or soon thereafter, the Portfolios will amend their
registration statement concerning the offering of additional classes of shares
(the "Implementation Date").
The description of the amendment and restatement of the Declaration is qualified
in its entirety by the full text of the proposed amended and restated
Declaration set forth as Exhibit A to this Proxy Statement.
A. CHANGES TO PERMIT A MULTIPLE CLASS DISTRIBUTION SYSTEM
As amended and restated, the Declaration will specifically authorize the
Trustees to designate and issue an unlimited number of classes of shares of each
Portfolio (or any future series of the Fund) (the "Multiple Class System").
Under the Multiple Class System, the Adviser and John Hancock Funds can tailor
their marketing and distribution activities on behalf of the Portfolios to a
broader segment of the investing public. They can also maintain and expand their
sales activities and services to smaller individual customers, while
simultaneously expanding their marketing and sales activities to attract
substantial institutional investors.
Rather than continue to have the Portfolios offer only one distribution
method, or to organize separate portfolios to employ alternative distribution
methods, the Trustees believe that shareholders will benefit from the
availability of more than one distribution option for each Portfolio. Unless
they can make multiple distribution arrangements available, the Portfolios will
be at a competitive disadvantage relative to other mutual funds which feature
multi-class distribution arrangements. The Trustees believe that shareholders
will benefit from the Multiple Class System because it may help each Portfolio
expand its current shareholder and asset base and thereby lower its per share
operation expenses. If this Proposal is approved, currently issued and
outstanding shares of each Portfolio would be designated as Class A shares.
Class A shares would continue to be offered for sale subject to a front-end
sales charge (except for purchases of $1 million or more) and a Rule 12b-1
distribution fee. Purchases of Class A shares in amounts involving $1 million or
more would be sold without a front-end sales charge, but a contingent deferred
sales charge ("CDSC") would be imposed on shares redeemed within twelve months
after the end of the calendar month in which the purchase was made. However, the
sales charges applicable to future purchases of Class A shares may be changed at
any time.
Class A shares of each Portfolio (or any future series portfolio of the
Fund), and any subsequently created class of shares, would each represent
interests in the same Portfolio and investments. They would be identical in all
11
respects, except that the Trustees would be authorized to differentiate among
the classes in the following respects: any class (a) could be subject to a Rule
12b-1 distribution plan or a non-Rule 12b-1 shareholder services plan (each a
"Plan") and could make different payments pursuant to that Plan (and for any
other costs relating to obtaining shareholder approval of a Rule 12b-1
distribution plan for that class or an amendment to that Plan); (b) would have
exclusive voting rights with respect to any Rule 12b-1 distribution plan adopted
exclusively with respect to that class; (c) could bear any of certain expenses
attributable to the shares of that class, including without limitation (i)
transfer agency fees (including the incremental costs of monitoring a CDSC or a
CDSC and conversion feature applicable to a specific class of shares), (ii)
printing and postage expenses related to preparing and distributing materials
such as shareholder reports, prospectuses and proxy statements to current
shareholders of a specific class, (iii) Securities and Exchange Commission
("Commission") registration fees incurred by a specific class of shares, (iv)
the expense of administrative personnel and services required to support the
shareholders of a specific class of shares and (v) legal, accounting or
Trustees' fees and expenses; (d) may be subject to different sales charge,
conversion, and/or exchange arrangements; and (e) could have its own name or
designation. Except for its class designation and the allocation of certain
costs, fees and voting rights as described above, Class A shares issued by a
Portfolio after the Implementation Date would be identical in all other respects
to the currently issued and outstanding shares of the Portfolio.
B. Changes to Permit the Trustees to Amend the Declaration of Trust
If this Proposal is approved, the Declaration will permit the Trustees to
amend the Declaration to conform it to applicable federal and state laws and to
make any other changes in the Declaration the Trustees deem necessary or
desirable. For example, state and federal regulatory and legislative bodies may
make rules or enact statues which require changes to the Declaration.
Furthermore, the Portfolios may not be able to take advantage of future
innovations in the mutual fund industry without costly and time-consuming
shareholder meetings to approve amendments to the Declaration. The ability of
the Trustees to conform the Declaration to changes in law, or to amend the
Declaration for future operating flexibility, preserves the Portfolios' assets
by eliminating the need for a proxy solicitation and a shareholders' meeting.
Also, changing market conditions and the need to keep the Portfolios up to date
and competitive with other mutual funds require that the Trustees be able to
amend the Declaration without delay. Currently, such an amendment to the
Declaration can be made only when authorized by a 1940 Act Majority Shareholder
Vote (as defined below -- see "Vote Required") of the Portfolios or the affected
Portfolio.
If this Proposal is approved, the Declaration may be amended by a vote of a
majority of the Trustees, without approval of the shareholders, except that the
Trustees will not be able to make any amendment that would impair any voting or
other rights of shareholders in a manner or to an extent prohibited by the 1940
Act or other applicable federal or state laws. In addition, no amendment of the
Declaration to impair the exemption from personal liability of the shareholders,
12
Trustees, officers, employees and agents of the Fund or any Portfolio thereof or
to permit assessments upon shareholders will be permitted.
C. Other Changes to Declaration of Trust
If Proposal 2 is approved, the Declaration will also be amended to include
the following new provisions. The amended and restated Declaration would
authorize the Trustees at their discretion to enter into administration, service
and transfer agent agreements on behalf of the Portfolios (or any future
portfolio of the Fund). There are no similar provisions in the current
Declaration. Although the Trustees have the general power to enter into all
types of contracts on behalf of the Portfolios, including contracts with
affiliated persons, they believe it advisable to amend the Declaration to make
this authority explicit.
The amended and restated Declaration would permit termination of the
Portfolios or any class of shares thereof (a) by a two-thirds vote of the
shareholders of the affected Portfolio or class; (b) by an instrument in writing
without a meeting, consented to by two-thirds of the shareholders of the
affected Portfolio or class or, if a majority of the Trustees has recommended
termination, consented to by a majority of the shareholders; or (c) under
certain conditions, by written notice to the shareholders of the affected
Portfolio or class by a majority of the Trustees. Termination by written notice
to shareholders by a majority of the Trustees could occur when a majority of the
Trustees has determined that the continuation of the Portfolio or class was not
in the best interests of its shareholders as a result of factors or events
adversely affecting its ability to conduct its business and operations in an
economically viable manner. These factors and events may include (a) the
inability of the Portfolio or class to maintain its assets at an appropriate
size; (b) changes in laws or regulations governing it or affecting assets of the
type in which its invests; or (c) economic developments or trends having a
significant adverse impact on its business or operations. This change to the
Declaration, authorizing a more streamlined procedure for termination of the
Portfolios or classes thereof will allow the Trustees to act quickly and arrange
for a disposition of assets which will provide the best financial results for
shareholders when the entity is not economically viable. Also, the Portfolios or
classes thereof will be spared the expense of a proxy solicitation and a
shareholders' meeting, thereby preserving assets for ultimate distribution to
the shareholders. Currently, the Portfolios may be terminated only by the
affirmative vote of two-thirds of the shares outstanding or, when authorized by
a 1940 Act Majority Shareholder Vote, by an instrument in writing signed by a
majority of the Trustees.
Under the amended and restated Declaration, a Portfolio would be able to
merge, consolidate or sell all or substantially all of its assets if so
authorized by the holders of two-thirds of the outstanding shares of the
Portfolio present at a meeting called for the purpose or by written consent of
the holders of two-thirds of the outstanding shares of the Portfolio. However,
if such merger, consolidation or sale of assets were recommended by the
Trustees, then the vote or written consent of the holders of a majority of the
outstanding shares of the Portfolio would be sufficient authorization. Under the
existing Declaration, no provision is made for a Portfolio of the Fund to
participate in a merger, consolidation or asset sale and the Fund itself cannot
13
participate in any merger, consolidation or asset sale without first obtaining
an affirmative 1940 Act Majority Shareholder Vote. This change is being proposed
to clarify the ability of a Portfolio to participate in a merger, consolidation
or asset sale.
The amended and restated Declaration would give the Trustees the authority
to organize another legal entity and convey all or a portion of the property of
a Portfolio to that entity in exchange for the entity's shares. The existing
Declaration provides that the Trustees may take such actions only when
authorized by a 1940 Act Majority Shareholder Vote. In addition, the existing
Declaration does not expressly permit the Trustees to take such actions with
respect to a Portfolio of the Fund. The change is being proposed to (i) allow
the Trustees to restructure a Portfolio without having the Portfolio incur the
cost of a shareholder meeting when they deem such a change to be advisable and
(ii) clarify the ability of the Trustees to take such actions with respect to a
Portfolio.
The amended and restated Declaration would explicitly vest title of the
Portfolios' property in the Trustees as joint tenants. The existing Declaration
provides only that legal title to all the Portfolios' property will be vested in
the Trustees only in their capacity as Trustees. The proposed change will
clarify the legal capacity in which the Trustees hold the Portfolios' property.
The amended and restated Declaration would require the Trustees to call a
shareholder meeting of a Portfolio upon a written request by the holders of 10%
or more of the shares of the Portfolio. There is no similar provision in the
existing Declaration. This change is being proposed in order to comply with a
requirement imposed by the staff of the Commission.
The amended and restated Declaration would change the name of the
Massachusetts Portfolio and the New York Portfolio to "John Hancock
Massachusetts Tax-Free Income Fund" and "John Hancock New York Tax-Free Income
Fund," respectively, upon filing of the Declaration.
Trustees' Evaluation and Recommendation
At a meeting of the Trustees held on March 5, 1996, the Trustees, including the
Independent Trustees, approved, and voted to recommend to shareholders that they
approve, a proposal to amend and restate the Declaration to permit the
Portfolios (and any future series of the Fund), upon authorization by the
Trustees, to issue and sell multiple classes of shares and to change certain
other provisions of the Declaration as set forth in the form of Declaration
attached to this Proxy Statement as Exhibit A. In taking this action and making
this recommendation, the Trustees considered the fact that the proposed Multiple
Class System can reasonably be expected to improve the distribution of the
Portfolios' shares and will benefit the shareholders to the extent that the
Portfolios can maintain and expand their current shareholder and asset base.
This may result in greater investment opportunities for the Portfolios and may
lower their operating expenses per share. The Trustees believe that the ability
of the Portfolios to implement multiple distribution arrangements will be
beneficial to shareholders as well as potential investors. The Trustees also
considered the likelihood that the amended and restated Declaration will result
14
in more efficient and economical operation of the Portfolios by giving the
Trustees more flexibility to manage the Portfolios and adapt the Declaration to
changes in applicable law, industry developments and other changes. This greater
flexibility should reduce the need for costly and time-consuming proxy
solicitations and shareholders' meetings.
Except as described in this Proxy Statement, approval of the proposed amended
and restated Declaration will not result in changes in the Trustees, officers,
investment programs and services or any operations and services of the
Portfolios.
If the proposed changes are not approved by the shareholders, the Portfolios
will continue to adhere to their present practice of issuing a single class of
shares and the Declaration will retain its existing form. Alternatively, the
Trustees may consider submitting to shareholders at a future meeting other
proposals to amend and restate the Declaration to authorize the Portfolios to
issue multiple classes of shares or to change the other provisions of the
Declaration.
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS OF THE PORTFOLIOS APPROVE THE ADOPTION
OF THE AMENDED AND RESTATED DECLARATION OF TRUST.
Vote Required
Because your Portfolio is part of the Fund, your vote will be counted on a
Fund-wide basis. Approval of Proposal 2 requires the approval of a majority of
the aggregate outstanding shares of the Portfolios, which is defined to mean the
affirmative vote of the lesser of (1) 67 percent or more of the aggregate shares
of the Fund represented at the Meeting, if at least 50 percent of the Fund's
outstanding shares are represented at the Meeting, or (2) more than 50 percent
of the aggregate of the Fund's outstanding shares ("1940 Act Majority
Shareholder Vote").
PROPOSALS 3(a) AND 3(b)
TO APPROVE NEW INVESTMENT
MANAGEMENT CONTRACTS BETWEEN THE
ADVISER AND THE PORTFOLIOS
(For Shareholders of Each Portfolio Voting Separately)
GENERAL
The investment portfolios of each Portfolio are managed by the Adviser pursuant
to an Investment Management Contract dated May 5, 1987, and amended on December
19, 1989 (the "Existing Agreement"). The Existing Agreement was approved by
shareholders of each Portfolio at meetings held on December 19, 1989.
At the meeting of Trustees on March 5, 1996, the Trustees, including the
Independent Trustees, voted to approve, and to recommend that the shareholders
of each Portfolio approve, the adoption of a new investment management contract
for each Portfolio (the "New Agreements") in the form attached to this Proxy
Statement as Exhibit B, in place of the Existing Agreement. The terms of the New
15
Agreements are substantially identical to those of the Existing Agreement, but
the New Agreements would: (1) cause the advisory fee payable to the Adviser by
the Portfolios to be paid monthly rather than quarterly, (2) modernize certain
expense limitation provisions and (3) make additional changes noted below to
conform the Portfolios' investment management contracts to those of most other
funds in the John Hancock fund complex. Material similarities and differences
between the Existing Agreement and the New Agreements are set forth below.
MATERIAL SIMILARITIES BETWEEN THE EXISTING AGREEMENT
AND THE NEW AGREEMENTS
Under the Existing Agreement and the New Agreements, the Adviser provides the
Portfolios with a continuous investment program for the management of their
assets. The Adviser provides overall investment advice to and management of the
Portfolios, subject to the overall supervision and review by the Trustees and to
the Portfolios' investment objectives, restrictions and policies, as described
in the Portfolios' prospectus and statement of additional information. The
Adviser provides the Portfolios with office space, supplies and other facilities
and pays the compensation of all officers and employees of the Portfolios. The
Adviser also pays the expenses of clerical services relating to the
administration of the Portfolios. The Portfolios bear all expenses not
specifically paid by the Adviser which are incurred in the operation of the
Portfolios and the continuous offering of the shares of the Portfolios. The
Adviser is not liable to the Portfolios or the shareholders of the Portfolios
for any error of judgment or mistake of law or for any losses suffered in
connection with matters to which the Agreements relate, except a loss resulting
from willful misfeasance, bad faith, gross negligence or reckless disregard on
the part of the Adviser.
The advisory fee rate paid by the Portfolios under the Existing Agreement and
the New Agreements is identical, although the payment schedule is different as
described under "Material Differences Between the Existing Agreement and the New
Agreements". The advisory fee rate under each Agreement is an annual rate equal
to (i) 0.50% of the average daily net assets of each Portfolio up to
$250,000,000, (ii) 0.45% of the next $250,000,000, (iii) 0.425% of the next
$500,000,000, (iv) 0.40% of the next $250,000,000 and (v) 0.30% of amounts over
$1,250,000,000. The Massachusetts Portfolio and the New York Portfolio paid to
the Adviser a management fee of $62,994 (0.12% of average daily net assets) and
$57,450 (0.10% of average daily net assets), respectively, as of their latest
fiscal year ended August 31, 1995.
MATERIAL DIFFERENCES BETWEEN THE EXISTING AGREEMENT
AND THE NEW AGREEMENTS
A. Payment Schedule
Under the Existing Agreement, the Portfolios pay the investment management
fee to the Adviser on a quarterly basis. If the New Agreements are adopted, the
16
Portfolios would pay the investment management fee to the Adviser on a monthly
basis.
As a result of receiving its fee monthly rather than quarterly, the Adviser
would receive a slight benefit due to the income that may be earned on earlier
fee payments. Conversely, the Portfolios would lose the benefit of any income
that might have been earned on the same funds. The monthly payment schedule,
however, is similar to that of other John Hancock funds. The Trustees have
determined that this change in frequency of payment is appropriate in view of
existing practices in the mutual fund industry.
B. Advisory Fee Limitations
Under the Existing Agreement, if the total ordinary business expenses of a
Portfolio (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 Portfolio are qualified for sale, the Adviser will
waive its fee to the extent of such excess and reimburse the Portfolio for any
amount by which such excess exceeds the advisory fee. The amount of the
quarterly advisory fee payable by the Portfolio will be reduced and any
reimbursement amounts to be paid by the Adviser will be paid to the extent that
the quarterly expenses of the Portfolio, on an annualized basis, exceeds the
foregoing limitations. If at the end of the fiscal year, the expenses of the
Portfolio are within the foregoing limitation, any excess amount previously
withheld from the quarterly advisory fee or reimbursed to the Portfolio by the
Adviser during such fiscal year will be paid to the Adviser.
The New Agreements, if approved, would change this provision 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 state law. This language incorporates 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 expenses of the Portfolios beyond those
required by state law. The New Agreements contain 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 Portfolios' expenses to
any level the Adviser may specify. Any fee reduction or undertaking will
constitute a binding modification of the applicable New Agreement while it is in
effect but may be discontinued or modified prospectively by the Adviser at any
time. Neither of these revised provisions will have any immediate effect on the
advisory fee rates payable by the Portfolios or the expense ratios of the
Portfolios.
The change described in this subsection B reflects an effort to modernize
the Portfolios' investment management contracts and bring them into conformity
with the investment management contracts of other funds in the John Hancock fund
complex.
17
C. Other Differences Between the Existing Agreement and the New Agreements
The New Agreements provide that the Portfolios will bear the allocable cost
of the Adviser's employees who render legal services to the Portfolios. Although
the Adviser reserves the right to do so, the Adviser has no current intention to
allocate these costs to the Portfolios and will not do so until the Trustees,
including the Independent Trustees, approve the allocation. Accordingly, there
will be no immediate increase in the Portfolios' expenses as a result of the
inclusion of this provision in the New Agreements. The New Agreements also
provide that the Portfolios will be responsible for the expense of maintaining
insurance. Under the Existing Agreement, the Adviser is responsible for such
expenses.
With respect to the calculation of the advisory fees to be paid under each
of the New Agreements, the New Agreements provide that the "average daily net
assets" of the Portfolios will be calculated on the basis set forth in the
Portfolios' prospectus or otherwise consistent with the 1940 Act. The Existing
Agreement provides no description of how the Portfolios' "average daily net
assets" will be calculated.
The New Agreements specifically provide that the Adviser may place orders
for the purchase and sale of portfolio securities for the Portfolios with
brokers within certain guidelines. The Adviser is also specifically authorized
to give instructions to the Portfolios' custodian. The Existing Agreement does
not contain comparable provisions. The New Agreements provide that the Adviser
is under no obligation to acquire any particular investment on behalf of a
Portfolio, if, in the Adviser's sole discretion, it is not feasible or desirable
to acquire a position in that investment on behalf of the Portfolio. The
Existing Agreements have no comparable provision.
The New Agreements provide that, in connection with the purchase or sale of
securities for the account of the Portfolios, 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. The Existing Agreement
contains a similar provision but does not contain an exception for permitted
transactions under the 1940 Act. The New Agreements further state that the
Adviser and its affiliates can buy, sell and trade securities for their own
accounts.
The New Agreements provide that the Adviser may subcontract some of its
work for the Portfolios to other investment advisers. The New Agreements also
specifically provide that the subcontract must be signed by the Fund and the
Adviser, approved by the vote of a majority of the Trustees who are not
interested persons of the Adviser, the subadviser or the Fund and by a 1940 Act
Majority Shareholder Vote of the affected Portfolio. 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 Portfolios). The Existing Agreement does not
contain any provision regarding subcontracting or sub-advisers.
Each Agreement limits the liability of the Adviser for any error of
judgment, mistake of law or loss to the Portfolios unless such liability arises
18
out of willful misfeasance, bad faith, gross negligence or reckless disregard by
the Adviser of its obligations under the Agreement. The New Agreements clarify
that the Portfolios are not liable for obligations of any other series of the
Fund and no other series of the Fund is liable for the Portfolios' obligations
under the Agreements.
The New Agreements contain miscellaneous provisions including provisions
establishing governing law and the severability of provisions. The Existing
Agreement does not contain any similar provisions.
Each of these changes will provide the Portfolios with an up-to-date
investment management contract which conforms substantially to the contracts of
the other John Hancock funds.
If approved, the New Agreements will each become effective on July 1, 1996.
For text of the New Agreements, see Exhibit B attached to this Proxy
Statement. This description of the New Agreements and comparison to the Existing
Agreement are qualified in their entirety by reference to Exhibit B.
Trustees' Recommendation
The Trustees believe the New Agreements will provide the Portfolios with
modernized investment management contracts which are in conformity with
investment management contracts of other funds in the John Hancock fund complex.
The Trustees believe the New Agreements to be reasonable, fair and in the best
interests of the Portfolios' shareholders.
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS OF EACH PORTFOLIO VOTE FOR THE PROPOSAL
ADOPTING THE NEW AGREEMENTS FOR THEIR RESPECTIVE PORTFOLIOS.
Vote Required
The Portfolios will vote separately on Proposals 3(a) and 3(b). Adoption of
Proposals 3(a) and 3(b) requires a 1940 Act Majority Shareholder Vote of the
Massachusetts Portfolio and the New York Portfolio, respectively.
THE INVESTMENT ADVISER
The Adviser is a wholly owned subsidiary of The Berkeley Financial Group ("The
Berkeley Group"), which is a wholly owned subsidiary of John Hancock Asset
Management. John Hancock Asset Management is a wholly owned subsidiary of John
Hancock Subsidiaries, Inc., which is a wholly owned subsidiary of John Hancock
Mutual Life Insurance Company (the "Life Company"). The address of the Adviser
is 101 Huntington Avenue, Boston, Massachusetts 02199. The address of the other
entities is John Hancock Place, Boston, Massachusetts 02117. The directors of
the Adviser and their principal occupations or employment are set forth under
the caption, "Directors of the Adviser." The Adviser provides investment
advisory services to other mutual funds with investment objectives substantially
19
identical to those of the Portfolios. See Exhibit C for a list of those funds
and the advisory fee rates paid by those funds.
BROKERAGE COMMISSIONS ON PORTFOLIO TRANSACTIONS
During the Portfolios' fiscal years ended August 31, 1995, neither Portfolio
paid brokerage commissions to affiliated brokers.
OTHER MATERIAL PAYMENTS BY THE PORTFOLIOS
TO THE ADVISER AND AFFILIATES OF THE ADVISER
For the fiscal year ended August 31, 1995, the Massachusetts Portfolio and New
York Portfolio paid $159,535 and $162,250, respectively, to John Hancock Funds
for distribution related services. It is expected that John Hancock Funds will
continue to provide these services to the Portfolios.
DIRECTORS OF THE ADVISER
Edward J. Boudreau, Jr., Chairman of the Portfolios, 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
101 Huntington Avenue Adviser and The Berkeley Group;
Boston, MA 02199 Chairman and Managing Director, John Hancock
Advisers International Ltd.; Chairman, John
Hancock Funds and Investor Services
(collectively, the "Affiliated Companies");
Chairman, NM Capital Management, Inc.;
Chairman, Sovereign Asset
Management Corporation; and Chairman, First
Signature Bank & Trust.
Stephen L. Brown Chairman and Chief Executive Officer, the
John Hancock Place Life Company; Director, the Adviser
Boston, MA 02117 and the Affiliated Companies; Trustee, The
Berkeley Group and John Hancock Asset
Management.
20
Foster L. Aborn Vice Chairman, Director and President,
John Hancock Place Investment and Pension Sector, the
Boston, MA 02117 Life Company; Director, the Adviser,
Independence Investment Associates, Inc., John
Hancock Funds, Investor Services, and John
Hancock Subsidiaries, Inc.; Trustee, The
Berkeley Group and John Hancock Asset
Management; Director, Hancock Venture
Partners, Inc.; Director, John Hancock Capital
Growth Management, Inc.; and Director, John
Hancock Capital Corp. and John Hancock Freedom
Securities Corp.
David F. D'Alessandro Director and Senior Executive Vice President,
John Hancock Place Retail Sector, the Life Company; Director, the
Boston, MA 02117 Adviser and the Affiliated Companies;
Trustee, the Berkeley Group.
Richard S. Scipione Director, the Adviser, NM Capital Management,
John Hancock Place Inc., Sovereign Asset Management Corporation
Boston, MA 02117 and Investor Services; General Counsel, the
Life Company; and Trustee, The Berkeley Group.
Thomas E. Moloney Chief Financial Officer, the Life Company;
John Hancock Place Director, the Adviser and the Affiliated
Boston, MA 02117 Companies; Chairman, John Hancock Property &
Casualty, Inc.; Director Maritime Life
Insurance Company; and Trustee, The Berkeley
Group.
John M. DeCiccio Senior Vice President, Investment and Pension
John Hancock Place Group , 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
John Hancock Place Guaranteed and Stable Value Products, the
Boston, MA 02117 Life Company; Director, the Adviser, the
Affiliated Companies and John Hancock Advisers
International Ltd.; and Trustee, The Berkeley
Group.
John Goldsmith Chairman and Chief Executive Officer,
One Beacon Street John Hancock Freedom Securities Corp.;
Boston, MA 02108 Director, the Adviser and the Affiliated
Companies; and Trustee, The Berkeley Group.
21
Richard O. Hansen Vice President, Managerial Department,
John Hancock Place the Life Company; Director, the Adviser
Boston, MA 02117 and the Affiliated Companies; and Trustee, The
Berkeley Group.
William C. Fletcher Director, the Adviser, John Hancock Funds,
53 State Street Investor Services; President and Director,
Boston, MA 02109 Independence Investment Associates, Inc.;
Trustee, The Berkeley Group; Trustee,
President and Chief Executive Officer, John
Hancock Asset Management; and Director,
Hancock Natural Resource Group, Inc. and John
Hancock Energy Resources Management, Inc.
Robert G. Freedman Vice Chairman and Chief Investment
101 Huntington Avenue Director, the Adviser; Director, the
Boston, MA 02199 Adviser, NM Capital Management, Inc.,
Sovereign Asset Management Corporation and the
Affiliated Companies; Senior Vice President,
The Berkeley Group; and Director, John Hancock
Advisers International Ltd.
Robert H. Watts President, Chief Executive Officer and
John Hancock Place Director, John Hancock Distributors, Inc.;
Boston, MA 02117 Director, the Adviser and the Affiliated
Companies and Senior Vice President, the
Life Company.
David A. King President, Chief Executive Officer and
101 Huntington Avenue Director, Investor Services; Director,
Boston, MA 02199 the Adviser and the Affiliated Companies.
In addition to Messrs. Boudreau and Freedman, the following persons are
officers, trustees and/or directors of the Portfolios and the Adviser: Anne C.
Hodsdon, President of the Portfolios and President and Chief Operating Officer
of the Adviser; Thomas H. Drohan, Senior Vice President and Secretary of the
Portfolios and the Adviser; James B. Little, Senior Vice President and Chief
Financial Officer of the Portfolios and Senior Vice President of the Adviser;
John A. Morin, Vice President of the Portfolios and Executive Vice President of
the Adviser; Susan S. Newton, Vice President, Assistant Secretary and Compliance
Officer of the Portfolios and Vice President and Assistant Secretary of the
Adviser; and James J. Stokowski, Vice President and Treasurer of the Portfolios
and Vice President of the Adviser.
22
PROPOSAL 4
TO REDESIGNATE AS NONFUNDAMENTAL
(A) THE INVESTMENT OBJECTIVE OF EACH PORTFOLIO,
(B) CERTAIN INVESTMENT POLICIES OF THE PORTFOLIOS AND
(C) CERTAIN INVESTMENT RESTRICTIONS OF THE PORTFOLIOS
(For Shareholders of Each Portfolio Voting Separately)
At the meeting on March 5, 1996, the Trustees voted to approve, and to recommend
to the shareholders of the Portfolios that they approve, a proposal to give the
Trustees more discretion over the Portfolios' investment policies by
redesignating the investment objective of each Portfolio and certain of the
Portfolios' investment policies and investment restrictions from fundamental
(changeable only by shareholder vote) to nonfundamental. At present, the
investment objective of each Portfolio and several of their investment policies
and investment restrictions are fundamental, which means that they can be
changed with respect to a Portfolio only by a vote of its shareholders. As a
result, the Trustees have not been able to adjust the Portfolios' investment
objectives, policies and restrictions in response to changing economic and
market conditions without incurring the expense and delay associated with
holding a shareholders' meeting.
If this Proposal is approved, the Portfolios' investment objectives and certain
policies and restrictions could be changed at the discretion of the Trustees.
However, no such change would become effective until the Portfolios' prospectus
and statement of additional information have been amended or supplemented as
necessary to reflect the change.
A. Investment Objective
The investment objective of each Portfolio is to provide its shareholders
with current income that is excludable from gross income for federal income tax
purposes and, for the Massachusetts and New York Portfolios, respectively, is
exempt from the personal income tax of Massachusetts and New York and from New
York City personal income taxes. The Portfolios seek to provide the maximum
level of tax exempt income that is consistent with preservation of capital.
The investment objectives of the Portfolios are not required to be
fundamental under federal or state law. The Trustees have no current intention
to modify or amend either of the objectives, but redesignation of each objective
as nonfundamental would allow them to do so in the future should changing
economic or market conditions warrant a change.
B. Investment Policies
The existing fundamental investment policies of each Portfolio are set
forth in Exhibit D (Part I) to this Proxy Statement. These policies specify in
detail (i) the types of tax-exempt and taxable instruments in which the
Portfolios may invest; (ii) the percentage of each Portfolio's total assets that
23
must be invested in tax-exempt obligations; and (iii) the credit quality
criteria that apply to each investment.
The Commission requires that a mutual fund using the term "tax-exempt" in
its name, such as each of the Portfolios, must have a fundamental policy that,
under normal circumstances, at least 80% of its net assets be invested in
obligations the interest on which is exempt from federal income tax. The policy
of each Portfolio requiring 80% of its total assets to be so invested satisfies
this requirement. Neither of the Portfolios' other policies, however, are
required to be fundamental, and it is proposed that these other policies be
redesignated as nonfundamental.
C. Investment Restrictions
All except one of each Portfolio's current investment restrictions are
fundamental. Some of these are not required by federal or state law to be
fundamental and are proposed to be redesignated as nonfundamental restrictions.
Several of these restrictions are the result of differing state securities
commission rules and regulations which are amended from time to time and which
are not uniformly applied from year to year or state to state. As the Portfolios
register their shares with the Commission and the various states each year,
their officers and Trustees must attempt to reconcile the Portfolios' investment
restrictions with the current rules, regulations and interpretive positions of
the Commission and each state. For example, occasionally the Commission or a
state will modify a prior position or eliminate a requirement in response to
changing regulatory policies or the availability of new investment techniques.
Because all except one of each Portfolio's restrictions are fundamental, the
Trustees currently may only modify the one nonfundamental investment restriction
and may not modify any of the remaining fourteen restrictions to take advantage
of these changes without incurring the expense and delay of seeking shareholder
approval.
Accordingly, it is proposed that fundamental investment restrictions Nos.
7, 9, 11(b), 12, 13 and 14, as set forth in Exhibit D (Part I) to this Proxy
Statement, be redesignated as nonfundamental. The restrictions proposed to be
redesignated as nonfundamental are summarized below, as well as changes that the
Trustees intend to make to certain of these restrictions if their redesignation
is approved by shareholders. These changes, as further described below, will
clarify or modernize and liberalize the Portfolios' existing investment
restrictions, and will also give the Portfolios the flexibility at some future
date to engage in certain transactions in which the Portfolios do not currently
engage, if the Trustees determine that engaging in such transactions is
advisable.
i. Restriction on Participation in Joint Securities Trading Accounts
Existing fundamental investment restriction No. 7 prohibits the Portfolios
from participating in any securities trading account on a joint or
joint-and-several basis. The restriction does not prohibit the "bunching" of a
Portfolio's orders for the sale or purchase of marketable securities with orders
of other accounts under the Adviser's management. If shareholders approve this
Proposal, this restriction will be redesignated as nonfundamental.
24
ii. Restriction on Short Sales and Margin Purchases
Existing fundamental investment restriction No. 9 prohibits the Portfolios
from (1) making short sales of securities and (2) purchasing securities on
margin, except as necessary for the clearance of the purchase or sales of
securities. If shareholders approve this Proposal, this restriction will be
redesignated as nonfundamental. In addition, after such shareholder approval is
obtained, the Trustees intend to clarify the part of this restriction that
addresses short sales by changing it to permit each Portfolio to make short
sales in circumstances where, by virtue of its ownership of other securities,
the Portfolio has the right to obtain securities equivalent in kind and amount
to the securities sold short.
iii. Restriction on Investments in Companies of Which Officers, Trustees or
Directors of the Fund or the Adviser are Shareholders
Existing fundamental investment restriction No. 11(b) prohibits the
Portfolios from knowingly purchasing or retaining securities of an issuer if (1)
any one officer, Trustee or director of the Portfolios, or of any investment
adviser to the Portfolios or any investment management subsidiary of the Adviser
individually beneficially owns more than one-half of 1% of the issuer's
securities and (2) such officers, Trustees and directors together own 5% or more
of the issuer's securities. If shareholders approve this Proposal, this
restriction will be redesignated as nonfundamental.
iv. Restriction on Investments in Other Companies
Existing fundamental investment restriction No. 12 prohibits the Portfolios
from purchasing securities of other investment companies, without exception. If
shareholders approve this Proposal, this restriction will be redesignated as
nonfundamental.
In addition, if such shareholder approval is obtained, the Trustees will
amend this restriction to permit the Portfolios to purchase securities of other
investment companies to the extent permitted by the 1940 Act. As so amended, the
restriction would prohibit each Portfolio from purchasing securities if, as a
result of such a purchase (1) more than 10% of the Portfolio's total assets
would be invested in the securities of other investment companies, (2) the
Portfolio would hold more than 3% of the total outstanding voting securities of
any one investment company, or (3) more than 5% of the Portfolio's total assets
would be invested in the securities of any one investment company. These
restrictions would not apply to the investment of cash collateral being held by
the Portfolio or the purchase of investment company shares in connection with a
merger, consolidation, reorganization or purchase of all or substantially all of
the assets of the investment company. The restriction would also prohibit the
purchase of securities of closed-end investment companies except under certain
circumstances. Finally, the Portfolios' only current nonfundamental investment
restriction, which is set forth in Exhibit D (Part I) to this Proxy Statement,
would be included in this new restriction. Even though the purchase of other
investment companies by the Portfolios may involve the duplication of some fees
and expenses, the Trustees believe that other investment companies can provide
25
attractive investment opportunities that, except for the restriction referenced
above, would be consistent with the Portfolios' investment objectives and
policies.
v. Restriction on Investments in Unseasoned Issuers
Existing fundamental investment restriction No. 13 provides that each
Portfolio may invest no more than 5% of its total assets in securities of
issuers having, at the time of investment, a record of less than three years'
continuous operations. If shareholders approve this Proposal, this restriction
will be redesignated as nonfundamental.
In addition, if such shareholder approval is obtained, the Trustees intend to
change this restriction to clarify that the record of an issuer's predecessors
may be considered in determining whether the three years' continuous operations
requirement has been met.
vi. Restriction on Investments in Restricted Securities
Existing fundamental investment restriction No. 14 prohibits each
Portfolio from knowingly purchasing any security that is subject to legal or
contractual delays in, or restrictions on, resale, or which is not readily
marketable, if more than 10% of the net assets of the Portfolio would be
invested in such securities. If shareholders approve this Proposal, this
restriction will be redesignated as nonfundamental.
In addition, if such shareholder approval is obtained, the Trustees intend to
modify this restriction to increase the percentage of each Portfolio's net
assets that may be invested in such securities from 10% to 15%. While investing
in restricted securities may involve risks with respect to resale and valuation
of the securities, the Trustees believe that restricted securities can provide
attractive investment opportunities and that increasing the percentage of net
assets which the Portfolios may invest in these securities will allow the
Portfolios to take advantage of more investment opportunities.
Trustees' Evaluation and Recommendation
In approving this Proposal, the Trustees considered the fact that the proposed
redesignations will provide flexibility to adjust to changing regulations and
markets, and new investment techniques, without continually incurring the
significant expense involved in soliciting proxies. The Trustees believe that
this increased flexibility will be beneficial to present shareholders of the
Portfolios as well as potential investors.
Except as described in this Proxy Statement, approval of the proposed
redesignations will not result in changes in the Portfolios' Trustees, officers,
investment programs and services or any of their operations and services that
are described in the Portfolios' current prospectus.
If this Proposal is not approved by the shareholders, the Portfolios will
continue to treat as fundamental their respective investment objectives and
those policies and restrictions that are currently designated as fundamental.
Alternatively, the Trustees may consider submitting to shareholders at a future
meeting separate proposals to redesignate the investment objectives and
26
individual investment policies and restrictions of the Portfolios as
nonfundamental.
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS OF EACH PORTFOLIO VOTE TO REDESIGNATE
THE INVESTMENT OBJECTIVE OF THEIR RESPECTIVE PORTFOLIO AND CERTAIN OF THEIR
PORTFOLIOS' INVESTMENT POLICIES AND RESTRICTIONS AS NONFUNDAMENTAL.
Vote Required
The Portfolios will vote separately on Proposal 4. Adoption of this Proposal for
each Portfolio requires a 1940 Act Majority Shareholder Vote of the Portfolio.
PROPOSAL 5
PROPOSED AMENDMENT TO THE PORTFOLIOS' FUNDAMENTAL
INVESTMENT RESTRICTION REGARDING SENIOR SECURITIES
(For Shareholders of Each Portfolio Voting Separately)
At the meeting on March 5, 1996, the Trustees, including the Independent
Trustees, voted to approve and to recommend to the shareholders of the
Portfolios that they approve, a proposal to amend the Portfolios' fundamental
investment restriction regarding senior securities.
At present, the Portfolios' fundamental investment restriction No. 1 prohibits
the Portfolios from issuing senior securities, except as necessary to make
permitted borrowings. The restriction also states that financial futures
contracts and repurchase agreements are not considered to be "senior securities"
for purposes of the restriction. The current restriction fails to except from
this prohibition the issuance of multiple classes of shares (see Proposal 2) and
transactions in options on financial futures contracts, which are permitted
investments that may involve the issuance of "senior securities." In addition,
the current restriction fails to except other options and forward commitments
from the prohibition. While other options and forward commitments are not
currently permitted investments, the Trustees may, in the future, decide to
authorize transactions in such options and forward commitments. Therefore, the
Trustees recommend that the shareholders vote to clarify the Portfolios'
existing fundamental investment restriction No. 1 by replacing it with the
following new fundamental investment restriction:
"Each Portfolio may not:
(1) Issue senior securities, except as permitted by paragraphs (2) and (7)
below. For purposes of this restriction, the issuance of shares of beneficial
interest in multiple classes or series, the purchase or sale of options, futures
contracts and options on futures contracts, forward commitments, and repurchase
agreements entered into in accordance with the Portfolio's investment policies,
and the pledge, mortgage or hypothecation of the Portfolio's assets within the
meaning of paragraph (3) below are not deemed to be senior securities."
27
The Portfolios' fundamental investment restrictions, both as they currently
exist and as proposed to be redesignated and amended in Proposals 4, 5, 6, 7 and
8 are set forth in Exhibit D to this Proxy Statement. The above description is
qualified in its entirety by the full text of Exhibit D.
Trustees' Evaluation and Recommendation
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS OF EACH PORTFOLIO ADOPT THE PROPOSED
AMENDMENT TO THEIR PORTFOLIO'S FUNDAMENTAL INVESTMENT RESTRICTION REGARDING
SENIOR SECURITIES.
Required Vote
The Portfolios will vote separately on Proposal 5. Adoption of this Proposal for
each Portfolio requires a 1940 Act Majority Shareholder Vote of the Portfolio.
PROPOSAL 6
PROPOSED AMENDMENT TO THE FUNDAMENTAL INVESTMENT
RESTRICTION REGARDING BORROWING
(For Shareholders of Each Portfolio Voting Separately)
At the meeting held on March 5, 1996, the Trustees, including the Independent
Trustees, voted to approve, and to recommend to shareholders of each Portfolio
that they approve, a proposal to amend the Portfolios' fundamental investment
restriction regarding borrowing. At present, the Portfolios are subject to the
following investment restriction regarding the making of loans:
"The Portfolios may not . .
(2) Borrow money, except from banks as a temporary measure for
extraordinary emergency purposes in amounts not to exceed 5% of the Portfolio's
total assets (including the amount borrowed) taken at market value. The
Portfolio will not leverage to attempt to increase income. The Portfolio will
not purchase securities while borrowings are outstanding."
If amended as proposed, the fundamental investment restriction would provide
that:
"Each Portfolio may not . . .
(2) Borrow money, except from banks as a temporary measure for
extraordinary emergency purposes in amounts not to exceed 33 1/3% of the
Portfolio's total assets (including the amount borrowed) taken at market value.
The Portfolio will not purchase securities while borrowings are outstanding."
The 1940 Act requires that each Portfolio state a fundamental policy
regarding borrowing. The amendment is being proposed with respect to each
Portfolio (i) to raise the percentage limit on borrowings to 33 1/3% of the
Portfolio's total assets, which percentage limit is the maximum permitted by the
1940 Act, and (ii) to eliminate the prohibition on leveraging to increase
income. The prohibition on leveraging to increase income will be adopted by the
28
Trustees as a nonfundamental investment restriction if this Proposal is approved
by the shareholders.
Although the change in percentage limitation is significant, there is no
expectation that the Portfolios will engage in borrowing beyond their current
practices. The Trustees also believe that the Portfolios will benefit from
having the flexibility to borrow more money then they are currently allowed in
the event of an emergency. In addition, by redesignating as nonfundamental the
prohibition on leveraging to increase income, the Trustees will be able to amend
this restriction to respond to changing economic and market conditions without
incurring the delay and expense of obtaining prior shareholder approval. The
Trustees do not currently contemplate making any modifications to this
restriction.
The Portfolios' fundamental investment restrictions, both as they currently
exist and as proposed to be redesignated and amended in Proposals 4, 5, 6, 7 and
8, are set forth in Exhibit D to this Proxy Statement. The above description is
qualified in its entirety by the full text of Exhibit D.
Trustees' Evaluation and Recommendation
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS OF EACH PORTFOLIO ADOPT THE PROPOSED
AMENDMENT TO THEIR PORTFOLIO'S FUNDAMENTAL INVESTMENT RESTRICTION REGARDING
BORROWING.
Required Vote
The Portfolios will vote separately on Proposal 6. Adoption of this Proposal for
each Portfolio requires a 1940 Act Majority Shareholder Vote of the Portfolio.
PROPOSAL 7
PROPOSED AMENDMENT TO THE
FUNDAMENTAL INVESTMENT RESTRICTION
REGARDING THE MAKING OF LOANS
(For Shareholders of Each Portfolio Voting Separately)
At the meeting held on March 5, 1996, the Trustees, including the Independent
Trustees, voted to approve, and to recommend to shareholders of each Portfolio
that they approve, a proposal to amend the Portfolios' fundamental investment
restriction regarding the making of loans. At present, the Portfolios are
subject to the following investment restriction regarding the making of loans:
"The Portfolios shall not . . .
(6) Make loans, except for the purchase of a portion of an issue of
Tax-Exempt Bonds or short-term taxable investment, whether or not the purchase
is made upon the original issuance of such securities, and repurchase agreements
entered into in accord with a Portfolio's investment policy."
29
The above restriction does not permit the Portfolio to lend portfolio
securities. Therefore, the Trustees recommend that shareholders of each
Portfolio approve an amendment to the restriction by replacing it with the
following new fundamental investment restriction:
"Each Portfolio may not . . .
(6) Make loans, except that the Portfolio (1) may lend portfolio securities
in accordance with the Portfolio's investment policies up to 33 1/3% of the
Portfolio'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 new fundamental investment restriction would permit each portfolio to
lend portfolio securities in an amount up to 33 1/3% of its total assets. By
lending portfolio securities, a Portfolio will subject itself to the risk of a
loss or delay in the recovery of its securities if a party with which it has
engaged in a loan transaction breaches its agreement. The Trustees nevertheless
believe that the Portfolios will benefit from having the opportunity to increase
their income by lending portfolio securities.
The Portfolios' fundamental investment restrictions, both as they currently
exist and as proposed to be redesignated and amended in Proposals 4, 5, 6, 7 and
8, are set forth in Exhibit D to this Proxy Statement. The above description is
qualified in its entirety by the full text of Exhibit D.
Trustees' Evaluation and Recommendation
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS OF EACH PORTFOLIO ADOPT THE PROPOSED
AMENDMENT TO THEIR PORTFOLIO'S FUNDAMENTAL INVESTMENT RESTRICTION REGARDING THE
MAKING OF LOANS.
Required Vote
The Portfolios will vote separately on Proposal 7. Adoption of his Proposal for
each Portfolio requires a 1940 Act Majority Shareholder Vote of the Portfolio.
PROPOSAL 8
PROPOSED AMENDMENT TO THE PORTFOLIOS' FUNDAMENTAL
INVESTMENT RESTRICTION REGARDING
TRANSACTIONS IN COMMODITIES AND
COMMODITY CONTRACTS
(For Shareholders of Each Portfolio Voting Separately)
At the meeting held on March 5, 1996, the Trustees, including the Independent
Trustees, voted to approve and recommend to shareholders of each Portfolio that
30
they approve, a proposal to amend the Portfolios' fundamental investment
restriction regarding investment in commodities and commodity contracts. At
present, the Portfolios are subject to the following investment restriction
regarding commodities and commodity contracts:
"The Portfolios shall not . . .
(8) Buy or sell commodity contracts, except financial futures contracts as
described in the Prospectus under the caption 'Investment Objective and
Policies.'"
The above restriction fails to except from the prohibition several permitted
investment practices and investment practices that may be permitted in the
future that may be considered to involve investments in "commodity contracts."
Specifically, the above restriction does not expressly except (1) options on
futures, securities and other financial instruments (2) forward commitment
transactions, (3) interest rate swaps, caps and floors, (4) securities index put
and call warrants and (5) repurchase agreements. For this reason, the Trustees
recommend that the shareholders of each Portfolio vote to clarify the above
restriction by replacing it with the following new fundamental investment
restriction:
"Each Portfolio may not . . .
(7) Purchase or sell commodities or commodity contracts or puts, calls or
combinations of both, except options on securities, securities indices, currency
and other financial instruments, futures contracts on securities, securities
indices, currency and other financial instruments and options on such futures
contracts, forward commitments, interest rate swaps, caps and floors, securities
index put or call warrants and repurchase agreements entered into in accordance
with the Portfolio's investment policies."
Even though the Portfolios do not currently engage in all of the investment
practices described in the proposed investment restriction, they will not be
required to incur the expense of obtaining shareholder approval to amend this
restriction in the future if they do engage in such practices.
The Portfolios' fundamental investment restrictions, both as they currently
exist and as proposed to be redesignated and amended in Proposals 4, 5, 6, 7 and
8, are set forth in Exhibit D to this Proxy Statement. The above description is
qualified in its entirety by the full text of Exhibit D.
Trustees' Evaluation and Recommendation
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS OF EACH PORTFOLIO ADOPT THE PROPOSED
AMENDMENT TO THEIR PORTFOLIO'S FUNDAMENTAL INVESTMENT RESTRICTION REGARDING
TRANSACTIONS IN COMMODITIES AND COMMODITY CONTRACTS.
Required Vote
The Portfolios will vote separately on Proposal 8. Adoption of this Proposal for
each Portfolio requires a 1940 Act Majority Shareholder Vote of the Portfolio.
31
OTHER MATTERS
The Portfolios' 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 Portfolios'
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 their Portfolio. In addition, although mere
attendance at the Meeting will not revoke a proxy, a Portfolio 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
Portfolio represented thereby in favor of the matters set forth in Proposals 2,
3(a), 3(b), 4, 5, 6, 7 and 8 and for the Nominees in Proposal 1, and will use
their best judgment in connection with the transaction of other business that
may properly come before the Meeting or any adjournment thereof.
In addition, John Hancock Mutual Life Insurance Company (the "Life Company")
will vote shares of either of the Portfolios held in individual retirement
accounts or tax shelter accounts for which the Life Company acts as custodian
and with respect to which no proxies have been received by the Life Company. The
Life Company will vote such shares in the same proportion as it has been
instructed to vote Portfolio shares held by all such accounts for which proxies
have been received. The Portfolio shares voted by the Life Company will be
counted as present at the Meeting for purposes of establishing a quorum.
In the event that, at the time any session of the Meeting is called to order, a
quorum is not present in person or by proxy for either Portfolio, the persons
named as proxies with respect to the Portfolio may vote those proxies that have
been received to adjourn the Portfolio's Meeting to a later date. In the event
that a quorum is present but sufficient votes by a Portfolio's shareholders in
favor of Proposals 2, 3(a), 3(b), 4, 5, 6, 7 and 8 and for the Nominees in
Proposal 1 have not been received, the persons named as proxies with respect to
the Portfolio will vote those proxies which they are entitled to vote in favor
of the relevant Proposal for such an adjournment, and will vote those proxies
required to be voted against the Proposal against any adjournment. A shareholder
vote for a Portfolio may be taken on one or more of the Proposals in the Proxy
Statement prior to the adjournment if sufficient votes for its approval have
been received and it is otherwise appropriate.
Shares of beneficial interest of each Portfolio 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
32
purposes of determining whether a quorum is present with respect to each
Portfolio at the Meeting. Abstentions will be treated as shares that are present
and entitled to vote with respect to each Proposal, but will not be counted as a
vote in favor of a Proposal. Accordingly, an abstention from voting on a
Proposal has the same effect as a vote against the Proposal.
If a broker or nominee holding shares in "street name" indicates on the proxy
that it does not have discretionary authority to vote as to a particular
Proposal, those shares will not be considered as present and entitled to vote
with respect to the Proposal. Accordingly, a "broker non-vote" has no effect on
the voting in determining whether a Proposal has been adopted pursuant to
subsection (i) of the 1940 Act Majority Shareholder Vote definition. In
addition, a "broker non-vote" has no effect on the voting in determining whether
a Nominee has been elected a Trustee of a Portfolio pursuant to Proposal 1.
However, in determining whether a Proposal has been adopted pursuant to
subsection (ii) of the 1940 Act Majority Shareholder Vote definition, a "broker
non-vote" will have the same effect as a vote against the Proposal because
shares represented by a "broker non-vote" are considered outstanding shares.
In addition to the solicitation of proxies by mail or in person, each Portfolio
may also arrange to have votes recorded by telephone by officers and employees
of the Portfolio 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, these telephone votes would not be counted at the
Meeting. Neither Portfolio has sought an opinion of counsel on this matter and
is unaware of any such challenge at this time.
A shareholder will be called on a recorded line at the telephone number
appearing in the shareholder's account records and will be asked to provide the
shareholder's Social Security number or other identifying information. The
shareholder will then be given an opportunity to authorize proxies to vote his
or her shares at the Meeting in accordance with the shareholder's instructions.
To ensure that the shareholder's instructions have been recorded correctly, the
shareholder will also receive a confirmation of the voting instructions in the
mail. A special toll-free number will be available in case the voting
information contained in the confirmation is incorrect. If the shareholder
decides after voting by telephone to attend the Meeting, the shareholder can
revoke the proxy at that time and vote the shares at the Meeting.
SHAREHOLDERS' PROPOSALS
The Portfolios are not required, and do not intend, to hold meetings of
shareholders each year. Instead, meetings will be held only when and if
required. Any shareholders desiring to present a proposal for consideration at
the next meeting for shareholders of their respective Portfolio must submit the
proposal in writing, so that it is received by the appropriate Portfolio at 101
Huntington Avenue, Boston, Massachusetts 02199 within a reasonable time before
any meeting.
33
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY
Boston, Massachusetts
May 17, 1996
JOHN HANCOCK TAX-EXEMPT SERIES FUND
-MASSACHUSETTS PORTFOLIO
JOHN HANCOCK TAX-EXEMPT SERIES FUND
-NEW YORK PORTFOLIO
34
EXHIBIT A
AMENDED AND RESTATED DECLARATION OF TRUST
OF JOHN HANCOCK TAX-EXEMPT SERIES FUND
101 Huntington Avenue
Boston, Massachusetts 02199
Dated _______ , 1996
DECLARATION OF TRUST made this __day of ___________, 1996 by the undersigned
(together with all other persons from time to time duly elected, qualified and
serving as Trustees in accordance with the provisions of Article II hereof, the
"Trustees");
WHEREAS, pursuant to a declaration of trust executed and delivered on _________
(the "Original Declaration"), the Trustees established a trust for the
investment and reinvestment of funds contributed thereto;
WHEREAS, the Trustees divided the beneficial interest in the trust assets into
transferable shares of beneficial interest, as provided therein;
WHEREAS, the Trustees declared that all money and property contributed to the
trust established thereunder be held and managed in trust for the benefit of the
holders, from time to time, of the shares of beneficial interest issued
thereunder and subject to the provisions thereof;
WHEREAS, the Trustees desire to amend and restate the Original Declaration;
NOW, THEREFORE, in consideration of the foregoing premises and the agreements
contained herein, the undersigned, being all of the Trustees of the trust,
hereby amend and restate the Original Declaration as follows:
ARTICLE I
NAME AND DEFINITIONS
Section 1.1. Name. The name of the trust created hereby is "John Hancock
Tax-Exempt Series Fund " (the "Trust").
Section 1.2. Definitions. Wherever they are used herein, the following terms
have the following respective meanings:
(a) "Administrator" means the party, other than the Trust, to the contract
described in Section 3.3 hereof.
(b) "By-laws" means the By-laws referred to in Section 2.8 hereof, as
amended from time to time.
(c) "Class" means any division of shares within a Series in accordance
with the provisions of Article V.
(d) The terms "Commission" and "Interested Person" have the meanings given
them in the 1940 Act. Except as such term may be otherwise defined by
A-1
the Trustees in conjunction with the establishment of any Series, the
term "vote of a majority of the Outstanding Shares entitled to vote"
shall have the same meaning as is assigned to the term "vote of a
majority of the outstanding voting securities" in the 1940 Act.
(e) "Custodian" means any Person other than the Trust who has custody of
any Trust Property as required by Section 17(f) of the 1940 Act, but
does not include a system for the central handling of securities
described in said Section 17(f).
(f) "Declaration" means this Declaration of Trust as amended from time to
time. Reference in this Declaration of Trust to "Declaration,"
"hereof," "herein," and "hereunder" shall be deemed to refer to this
Declaration rather than exclusively to the article or section in which
such words appear.
(g) "Distributor" means the party, other than the Trust, to the contract
described in Section 3.1 hereof.
(h) "Fund" or "Funds" individually or collectively, means the separate
Series of the Trust, together with the assets and liabilities assigned
thereto.
(i) "Fundamental Restrictions" means the investment restrictions set forth
in the Prospectus and Statement of Additional Information for any
Series and designated as fundamental restrictions therein with respect
to such Series.
(j) "His" shall include the feminine and neuter, as well as the masculine,
genders.
(k) "Investment Adviser" means the party, other than the Trust, to the
contract described in Section 3.2 hereof.
(l) The "1940 Act" means the Investment Company Act of 1940, as amended
from time to time.
(m) "Person" means and includes individuals, corporations, partnerships,
trusts, associations, joint ventures and other entities, whether or
not legal entities, and governments and agencies and political
subdivisions thereof.
(n) "Prospectus" means the Prospectuses and Statements of Additional
Information included in the Registration Statement of the Trust under
the Securities Act of 1933, as amended, as such Prospectuses and
Statements of Additional Information may be amended or supplemented
and filed with the Commission from time to time.
(o) "Series" individually or collectively means the separately managed
component(s) of the Trust (or, if the Trust shall have only one such
component, then that one) as may be established and designated from
time to time by the Trustees pursuant to Section 5.11 hereof.
(p) "Shareholder" means a record owner of Outstanding Shares.
(q) "Shares" means the equal proportionate units of interest into which
the beneficial interest in the Trust shall be divided from time to
time, including the Shares of any and all Series or of any Class
within any Series (as the context may require) which may be
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established by the Trustees, and includes fractions of Shares as well
as whole Shares. "Outstanding" Shares means those Shares shown from
time to time on the books of the Trust or its Transfer Agent as then
issued and outstanding, but shall not include Shares which have been
redeemed or repurchased by the Trust and which are at the time held in
the treasury of the Trust.
(r) "Transfer Agent" means any Person other than the Trust who maintains
the Shareholder records of the Trust, such as the list of
Shareholders, the number of Shares credited to each account, and the
like.
(s) "Trust" means John Hancock Tax-Exempt Series Fund.
(t) "Trustees" means the persons who have signed this Declaration, so long
as they shall continue in office in accordance with the terms hereof,
and all other persons who now serve or may from time to time be duly
elected, qualified and serving as Trustees in accordance with the
provisions of Article II hereof, and reference herein to a Trustee or
the Trustees shall refer to such person or persons in this capacity or
their capacities as trustees hereunder.
(u) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account
of the Trust or the Trustees, including any and all assets of or
allocated to any Series or Class, as the context may require.
ARTICLE II
TRUSTEES
Section 2.1. General Powers. The Trustees shall have exclusive and absolute
control over the Trust Property and over the business of the Trust to the same
extent as if the Trustees were the sole owners of the Trust Property and
business in their own right, but with such powers of delegation as may be
permitted by this Declaration. The Trustees shall have power to conduct the
business of the Trust and carry on its operations in any and all of its branches
and maintain offices both within and without The Commonwealth of Massachusetts,
in any and all states of the United States of America, in the District of
Columbia, and in any and all commonwealths, territories, dependencies, colonies,
possessions, agencies or instrumentalities of the United States of America and
of foreign governments, and to do all such other things and execute all such
instruments as they deem necessary, proper or desirable in order to promote the
interests of the Trust although such things are not herein specifically
mentioned. Any determination as to what is in the interests of the Trust made by
the Trustees in good faith shall be conclusive. In construing the provisions of
this Declaration, the presumption shall be in favor of a grant of power to the
Trustees.
The enumeration of any specific power herein shall not be construed as limiting
the aforesaid powers. Such powers of the Trustees may be exercised without order
of or resort to any court.
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Section 2.2. Investments. The Trustees shall have the power:
(a) To operate as and carry on the business of an investment company, and
exercise all the powers necessary and appropriate to the conduct of
such operations.
(b) To invest in, hold for investment, or reinvest in, cash; securities,
including common, preferred and preference stocks; warrants;
subscription rights; profit-sharing interests or participations and
all other contracts for or evidence of equity interests; bonds,
debentures, bills, time notes and all other evidences of indebtedness;
negotiable or non-negotiable instruments; government securities,
including securities of any state, municipality or other political
subdivision thereof, or any governmental or quasi-governmental agency
or instrumentality; and money market instruments including bank
certificates of deposit, finance paper, commercial paper, bankers'
acceptances and all kinds of repurchase agreements, of any
corporation, company, trust, association, firm or other business
organization however established, and of any country, state,
municipality or other political subdivision, or any governmental or
quasi-governmental agency or instrumentality; any other security,
instrument or contract the acquisition or execution of which is not
prohibited by any Fundamental Restriction; and the Trustees shall be
deemed to have the foregoing powers with respect to any additional
securities in which the Trust may invest should the Fundamental
Restrictions be amended.
(c) To acquire (by purchase, subscription or otherwise), to hold, to trade
in and deal in, to acquire any rights or options to purchase or sell,
to sell or otherwise dispose of, to lend and to pledge any such
securities, to enter into repurchase agreements, reverse repurchase
agreements, firm commitment agreements, forward foreign currency
exchange contracts, interest rate, mortgage or currency swaps, and
interest rate caps, floors and collars, to purchase and sell options
on securities, indices, currency, swaps or other financial assets,
futures contracts and options on futures contracts of all descriptions
and to engage in all types of hedging, risk management or income
enhancement transactions.
(d) To exercise all rights, powers and privileges of ownership or interest
in all securities and repurchase agreements included in the Trust
Property, including the right to vote thereon and otherwise act with
respect thereto and to do all acts for the preservation, protection,
improvement and enhancement in value of all such securities and
repurchase agreements.
(e) To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, develop and dispose of (by sale or otherwise) any property,
real or personal, including cash or foreign currency, and any interest
therein.
(f) To borrow money and in this connection issue notes or other evidence
of indebtedness; to secure borrowings by mortgaging, pledging or
otherwise subjecting as security the Trust Property; and to endorse,
guarantee, or undertake the performance of any obligation or
engagement of any other Person and to lend Trust Property.
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(g) To aid by further investment any corporation, company, trust,
association or firm, any obligation of or interest in which is
included in the Trust Property or in the affairs of which the Trustees
have any direct or indirect interest; to do all acts and things
designed to protect, preserve, improve or enhance the value of such
obligation or interest; and to guarantee or become surety on any or
all of the contracts, stocks, bonds, notes, debentures and other
obligations of any such corporation, company, trust, association or
firm.
(h) To enter into a plan of distribution and any related agreements
whereby the Trust may finance directly or indirectly any activity
which is primarily intended to result in the distribution and/or
servicing of Shares.
(i) To adopt on behalf of the Trust or any Series thereof an alternative
purchase plan providing for the issuance of multiple Classes of Shares
(as authorized herein at Section 5.11).
(j) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary,
suitable or proper for the accomplishment of any purpose or the
attainment of any object or the furtherance of any power hereinbefore
set forth, either alone or in association with others, and to do every
other act or thing incidental or appurtenant to or arising out of or
connected with the aforesaid business or purposes, objects or powers.
The foregoing clauses shall be construed both as objects and powers, and the
foregoing enumeration of specific powers shall not be held to limit or restrict
in any manner the general powers of the Trustees.
Notwithstanding any other provision herein, the Trustees shall have full power
in their discretion as contemplated in Section 8.5, without any requirement of
approval by Shareholders, to invest part or all of the Trust Property (or part
or all of the assets of any Series), or to dispose of part or all of the Trust
Property (or part or all of the assets of any Series) and invest the proceeds of
such disposition, in securities issued by one or more other investment companies
registered under the 1940 Act. Any such other investment company may (but need
not) be a trust (formed under the laws of any state) which is classified as a
partnership or corporation for federal income tax purposes.
The Trustees shall not be limited to investing in obligations maturing before
the possible termination of the Trust, nor shall the Trustees be limited by any
law limiting the investments which may be made by fiduciaries.
Section 2.3. Legal Title. Legal title to all the Trust Property shall be vested
in the Trustees as joint tenants except that the Trustees shall have power to
cause legal title to any Trust Property to be held by or in the name of one or
more of the Trustees, or in the name of the Trust or any Series of the Trust, or
in the name of any other Person as nominee, on such terms as the Trustees may
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determine, provided that the interest of the Trust therein is deemed
appropriately protected. The right, title and interest of the Trustees in the
Trust Property and the Property of each Series of the Trust shall vest
automatically in each Person who may hereafter become a Trustee. Upon the
termination of the term of office, resignation, removal or death of a Trustee he
shall automatically cease to have any right, title or interest in any of the
Trust Property, and the right, title and interest of such Trustee in the Trust
Property shall vest automatically in the remaining Trustees. Such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered.
Section 2.4. Issuance and Repurchase of Shares. The Trustees shall have the
power to issue, sell, repurchase, redeem, retire, cancel, acquire, hold, resell,
reissue, dispose of, transfer, and otherwise deal in Shares and, subject to the
provisions set forth in Articles VI and VII and Section 5.11 hereof, to apply to
any such repurchase, redemption, retirement, cancellation or acquisition of
Shares any funds or property of the Trust or of the particular Series with
respect to which such Shares are issued, whether capital or surplus or
otherwise, to the full extent now or hereafter permitted by the laws of The
Commonwealth of Massachusetts governing business corporations.
Section 2.5. Delegation; Committees. The Trustees shall have power, consistent
with their continuing exclusive authority over the management of the Trust and
the Trust Property, to delegate from time to time to such of their number or to
officers, employees or agents of the Trust the doing of such things and the
execution of such instruments either in the name of the Trust or any Series of
the Trust or the names of the Trustees or otherwise as the Trustees may deem
expedient, to the same extent as such delegation is permitted by the 1940 Act.
Section 2.6. Collection and Payment. The Trustees shall have power to collect
all property due to the Trust; to pay all claims, including taxes, against the
Trust Property; to prosecute, defend, compromise or abandon any claims relating
to the Trust Property; to foreclose any security interest securing any
obligations, by virtue of which any property is owed to the Trust; and to enter
into releases, agreements and other instruments.
Section 2.7. Expenses. The Trustees shall have the power to incur and pay any
expenses which in the opinion of the Trustees are necessary or incidental to
carry out any of the purposes of this Declaration, and to pay reasonable
compensation from the funds of the Trust to themselves as Trustees. The Trustees
shall fix the compensation of all officers, employees and Trustees.
Section 2.8. Manner of Acting; By-laws. Except as otherwise provided herein or
in the By-laws, any action to be taken by the Trustees may be taken by a
majority of the Trustees present at a meeting of Trustees, including any meeting
held by means of a conference telephone circuit or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, or by written consents of a majority of Trustees then in office. The
Trustees may adopt By-laws not inconsistent with this Declaration to provide for
the conduct of the business of the Trust and may amend or repeal such By-laws to
the extent such power is not reserved to the Shareholders.
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Notwithstanding the foregoing provisions of this Section 2.8 and in addition to
such provisions or any other provision of this Declaration or of the By-laws,
the Trustees may by resolution appoint a committee consisting of less than the
whole number of Trustees then in office, which committee may be empowered to act
for and bind the Trustees and the Trust, as if the acts of such committee were
the acts of all the Trustees then in office, with respect to the institution,
prosecution, dismissal, settlement, review or investigation of any action, suit
or proceeding which shall be pending or threatened to be brought before any
court, administrative agency or other adjudicatory body.
Section 2.9. Miscellaneous Powers. The Trustees shall have the power to: (a)
employ or contract with such Persons as the Trustees may deem desirable for the
transaction of the business of the Trust or any Series thereof; (b) enter into
joint ventures, partnerships and any other combinations or associations; (c)
remove Trustees, fill vacancies in, add to or subtract from their number, elect
and remove such officers and appoint and terminate such agents or employees as
they consider appropriate, and appoint from their own number, and terminate, any
one or more committees which may exercise some or all of the power and authority
of the Trustees as the Trustees may determine; (d) purchase, and pay for out of
Trust Property or the property of the appropriate Series of the Trust, insurance
policies insuring the Shareholders, Trustees, officers, employees, agents,
investment advisers, administrators, distributors, selected dealers or
independent contractors of the Trust against all claims arising by reason of
holding any such position or by reason of any action taken or omitted by any
such Person in such capacity, whether or not constituting negligence, or whether
or not the Trust would have the power to indemnify such Person against such
liability; (e) establish pension, profit-sharing, share purchase, and other
retirement, incentive and benefit plans for any Trustees, officers, employees
and agents of the Trust; (f) to the extent permitted by law, indemnify any
person with whom the Trust or any Series thereof has dealings, including the
Investment Adviser, Administrator, Distributor, Transfer Agent and selected
dealers, to such extent as the Trustees shall determine; (g) guarantee
indebtedness or contractual obligations of others; (h) determine and change the
fiscal year and taxable year of the Trust or any Series thereof and the method
by which its or their accounts shall be kept; and (i) adopt a seal for the
Trust, but the absence of such seal shall not impair the validity of any
instrument executed on behalf of the Trust.
Section 2.10. Principal Transactions. Except for transactions not permitted by
the 1940 Act or rules and regulations adopted, or orders issued, by the
Commission thereunder, the Trustees may, on behalf of the Trust, buy any
securities from or sell any securities to, or lend any assets of the Trust or
any Series thereof to any Trustee or officer of the Trust or any firm of which
any such Trustee or officer is a member acting as principal, or have any such
dealings with the Investment Adviser, Distributor or Transfer Agent or with any
Interested Person of such Person; and the Trust or a Series thereof may employ
any such Person, or firm or company in which such Person is an Interested
Person, as broker, legal counsel, registrar, transfer agent, dividend disbursing
agent or custodian upon customary terms.
Section 2.11. Litigation. The Trustees shall have the power to engage in and to
prosecute, defend, compromise, abandon, or adjust by arbitration, or otherwise,
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any actions, suits, proceedings, disputes, claims, and demands relating to the
Trust, and out of the assets of the Trust or any Series thereof to pay or to
satisfy any debts, claims or expenses incurred in connection therewith,
including those of litigation, and such power shall include without limitation
the power of the Trustees or any appropriate committee thereof, in the exercise
of their or its good faith business judgment, to dismiss any action, suit,
proceeding, dispute, claim, or demand, derivative or otherwise, brought by any
person, including a Shareholder in its own name or the name of the Trust,
whether or not the Trust or any of the Trustees may be named individually
therein or the subject matter arises by reason of business for or on behalf of
the Trust.
Section 2.12. Number of Trustees. The initial Trustees shall be the persons
initially signing the Original Declaration. The number of Trustees (other than
the initial Trustees) shall be such number as shall be fixed from time to time
by vote of a majority of the Trustees, provided, however, that the number of
Trustees shall in no event be less than one (1).
Section 2.13. Election and Term. Except for the Trustees named herein or
appointed to fill vacancies pursuant to Section 2.15 hereof, the Trustees may
succeed themselves and shall be elected by the Shareholders owning of record a
plurality of the Shares voting at a meeting of Shareholders on a date fixed by
the Trustees. Except in the event of resignations or removals pursuant to
Section 2.14 hereof, each Trustee shall hold office until such time as less than
a majority of the Trustees holding office has been elected by Shareholders. In
such event the Trustees then in office shall call a Shareholders' meeting for
the election of Trustees. Except for the foregoing circumstances, the Trustees
shall continue to hold office and may appoint successor Trustees.
Section 2.14. Resignation and Removal. Any Trustee may resign his trust (without
the need for any prior or subsequent accounting) by an instrument in writing
signed by him and delivered to the other Trustees and such resignation shall be
effective upon such delivery, or at a later date according to the terms of the
instrument. Any of the Trustees may be removed (provided the aggregate number of
Trustees after such removal shall not be less than one) with cause, by the
action of two-thirds of the remaining Trustees or by action of two-thirds of the
outstanding Shares of the Trust (for purposes of determining the circumstances
and procedures under which any such removal by the Shareholders may take place,
the provisions of Section 16(c) of the 1940 Act (or any successor provisions)
shall be applicable to the same extent as if the Trust were subject to the
provisions of that Section). Upon the resignation or removal of a Trustee, or
his otherwise ceasing to be a Trustee, he shall execute and deliver such
documents as the remaining Trustees shall require for the purpose of conveying
to the Trust or the remaining Trustees any Trust Property held in the name of
the resigning or removed Trustee. Upon the incapacity or death of any Trustee,
his legal representative shall execute and deliver on his behalf such documents
as the remaining Trustees shall require as provided in the preceding sentence.
Section 2.15. Vacancies. The term of office of a Trustee shall terminate and a
vacancy shall occur in the event of his death, retirement, resignation, removal,
bankruptcy, adjudicated incompetence or other incapacity to perform the duties
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of the office of a Trustee. No such vacancy shall operate to annul the
Declaration or to revoke any existing agency created pursuant to the terms of
the Declaration. In the case of an existing vacancy, including a vacancy
existing by reason of an increase in the number of Trustees, subject to the
provisions of Section 16(a) of the 1940 Act, the remaining Trustees shall fill
such vacancy by the appointment of such other person as they in their discretion
shall see fit, made by vote of a majority of the Trustees then in office. Any
such appointment shall not become effective, however, until the person named in
the vote approving the appointment shall have accepted in writing such
appointment and agreed in writing to be bound by the terms of the Declaration.
An appointment of a Trustee may be made in anticipation of a vacancy to occur at
a later date by reason of retirement, resignation or increase in the number of
Trustees, provided that such appointment shall not become effective prior to
such retirement, resignation or increase in the number of Trustees. Whenever a
vacancy in the number of Trustees shall occur, until such vacancy is filled as
provided in this Section 2.15, the Trustees in office, regardless of their
number, shall have all the powers granted to the Trustees and shall discharge
all the duties imposed upon the Trustees by the Declaration. The vote by a
majority of the Trustees in office, fixing the number of Trustees shall be
conclusive evidence of the existence of such vacancy.
Section 2.16. Delegation of Power to Other Trustees. Any Trustee may, by power
of attorney, delegate his power for a period not exceeding six (6) months at any
one time to any other Trustee or Trustees; provided that in no case shall fewer
than two (2) Trustees personally exercise the powers granted to the Trustees
under this Declaration except as herein otherwise expressly provided.
ARTICLE III
CONTRACTS
Section 3.1. Distribution Contract. The Trustees may in their discretion from
time to time enter into an exclusive or non-exclusive distribution contract or
contracts providing for the sale of the Shares to net the Trust or the
applicable Series of the Trust not less than the amount provided for in Section
7.1 of Article VII hereof, whereby the Trustees may either agree to sell the
Shares to the other party to the contract or appoint such other party as their
sales agent for the Shares, and in either case on such terms and conditions, if
any, as may be prescribed in the By-laws, and such further terms and conditions
as the Trustees may in their discretion determine not inconsistent with the
provisions of this Article III or of the By-laws; and such contract may also
provide for the repurchase of the Shares by such other party as agent of the
Trustees.
Section 3.2. Advisory or Management Contract. The Trustees may in their
discretion from time to time enter into one or more investment advisory or
management contracts or, if the Trustees establish multiple Series, separate
investment advisory or management contracts with respect to one or more Series
whereby the other party or parties to any such contracts shall undertake to
furnish the Trust or such Series management, investment advisory,
administration, accounting, legal, statistical and research facilities and
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services, promotional or marketing activities, and such other facilities and
services, if any, as the Trustees shall from time to time consider desirable and
all upon such terms and conditions as the Trustees may in their discretion
determine. Notwithstanding any provisions of the Declaration, the Trustees may
authorize the Investment Advisers, or any of them, under any such contracts
(subject to such general or specific instructions as the Trustees may from time
to time adopt) to effect purchases, sales, loans or exchanges of portfolio
securities and other investments of the Trust on behalf of the Trustees or may
authorize any officer, employee or Trustee to effect such purchases, sales,
loans or exchanges pursuant to recommendations of such Investment Advisers, or
any of them (and all without further action by the Trustees). Any such
purchases, sales, loans and exchanges shall be deemed to have been authorized by
all of the Trustees. The Trustees may, in their sole discretion, call a meeting
of Shareholders in order to submit to a vote of Shareholders at such meeting the
approval or continuance of any such investment advisory or management contract.
If the Shareholders of any one or more of the Series of the Trust should fail to
approve any such investment advisory or management contract, the Investment
Adviser may nonetheless serve as Investment Adviser with respect to any Series
whose Shareholders approve such contract.
Section 3.3. Administration Agreement. The Trustees may in their discretion from
time to time enter into an administration agreement or, if the Trustees
establish multiple Series or Classes, separate administration agreements with
respect to each Series or Class, whereby the other party to such agreement shall
undertake to manage the business affairs of the Trust or of a Series or Class
thereof and furnish the Trust or a Series or a Class thereof with office
facilities, and shall be responsible for the ordinary clerical, bookkeeping and
recordkeeping services at such office facilities, and other facilities and
services, if any, and all upon such terms and conditions as the Trustees may in
their discretion determine.
Section 3.4. Service Agreement. The Trustees may in their discretion from time
to time enter into Service Agreements with respect to one or more Series or
Classes thereof whereby the other parties to such Service Agreements will
provide administration and/or support services pursuant to administration plans
and service plans, and all upon such terms and conditions as the Trustees in
their discretion may determine.
Section 3.5. Transfer Agent. The Trustees may in their discretion from time to
time enter into a transfer agency and shareholder service contract whereby the
other party to such contract shall undertake to furnish transfer agency and
shareholder services to the Trust. The contract shall have such terms and
conditions as the Trustees may in their discretion determine not inconsistent
with the Declaration. Such services may be provided by one or more Persons.
Section 3.6. Custodian. The Trustees may appoint or otherwise engage one or more
banks or trust companies, each having an aggregate capital, surplus and
undivided profits (as shown in its last published report) of at least two
million dollars ($2,000,000) to serve as Custodian with authority as its agent,
but subject to such restrictions, limitations and other requirements, if any, as
may be contained in the By-laws of the Trust. The Trustees may also authorize
the Custodian to employ one or more sub-custodians, including such foreign banks
and securities depositories as meet the requirements of applicable provisions of
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the 1940 Act, and upon such terms and conditions as may be agreed upon between
the Custodian and such sub-custodian, to hold securities and other assets of the
Trust and to perform the acts and services of the Custodian, subject to
applicable provisions of law and resolutions adopted by the Trustees.
Section 3.7. Affiliations of Trustees or Officers, Etc. The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust or any
Series thereof is a shareholder, director, officer, partner, trustee,
employee, manager, adviser or distributor of or for any partnership,
corporation, trust, association or other organization or of or for any
parent or affiliate of any organization, with which a contract of the
character described in Sections 3.1, 3.2, 3.3 or 3.4 above or for
services as Custodian, Transfer Agent or disbursing agent or for
providing accounting, legal and printing services or for related
services may have been or may hereafter be made, or that any such
organization, or any parent or affiliate thereof, is a Shareholder of
or has an interest in the Trust, or that
(ii) any partnership, corporation, trust, association or other organization
with which a contract of the character described in Sections 3.1, 3.2,
3.3 or 3.4 above or for services as Custodian, Transfer Agent or
disbursing agent or for related services may have been or may
hereafter be made also has any one or more of such contracts with one
or more other partnerships, corporations, trusts, associations or
other organizations, or has other business or interests,
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same or create any liability or accountability to the Trust or its Shareholders.
Section 3.8. Compliance with 1940 Act. Any contract entered into pursuant to
Sections 3.1 or 3.2 shall be consistent with and subject to the requirements of
Section 15 of the 1940 Act (including any amendment thereof or other applicable
Act of Congress hereafter enacted), as modified by any applicable order or
orders of the Commission, with respect to its continuance in effect, its
termination and the method of authorization and approval of such contract or
renewal thereof.
ARTICLE IV
LIMITATIONS OF LIABILITY OF SHAREHOLDERS,
TRUSTEES AND OTHERS
Section 4.1. No Personal Liability of Shareholders, Trustees, Etc. No
Shareholder shall be subject to any personal liability whatsoever to any Person
in connection with Trust Property or the acts, obligations or affairs of the
Trust or any Series thereof. No Trustee, officer, employee or agent of the Trust
or any Series thereof shall be subject to any personal liability whatsoever to
any Person, other than to the Trust or its Shareholders, in connection with
Trust Property or the affairs of the Trust, except to the extent arising from
bad faith, willful misfeasance, gross negligence or reckless disregard of his
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duties with respect to such Person; and all such Persons shall look solely to
the Trust Property, or to the Property of one or more specific Series of the
Trust if the claim arises from the conduct of such Trustee, officer, employee or
agent with respect to only such Series, for satisfaction of claims of any nature
arising in connection with the affairs of the Trust. If any Shareholder,
Trustee, officer, employee, or agent, as such, of the Trust or any Series
thereof, is made a party to any suit or proceeding to enforce any such liability
of the Trust or any Series thereof, he shall not, on account thereof, be held to
any personal liability. The Trust shall indemnify and hold each Shareholder
harmless from and against all claims and liabilities, to which such Shareholder
may become subject by reason of his being or having been a Shareholder, and
shall reimburse such Shareholder or former Shareholder (or his or her heirs,
executors, administrators or other legal representatives or in the case of a
corporation or other entity, its corporate or other general successor) out of
the Trust Property for all legal and other expenses reasonably incurred by him
in connection with any such claim or liability. The indemnification and
reimbursement required by the preceding sentence shall be made only out of
assets of the one or more Series whose Shares were held by said Shareholder at
the time the act or event occurred which gave rise to the claim against or
liability of said Shareholder. The rights accruing to a Shareholder under this
Section 4.1 shall not impair any other right to which such Shareholder may be
lawfully entitled, nor shall anything herein contained restrict the right of the
Trust or any Series thereof to indemnify or reimburse a Shareholder in any
appropriate situation even though not specifically provided herein.
Section 4.2. Non-Liability of Trustees, Etc. No Trustee, officer, employee or
agent of the Trust or any Series thereof shall be liable to the Trust, its
Shareholders, or to any Shareholder, Trustee, officer, employee, or agent
thereof for any action or failure to act (including without limitation the
failure to compel in any way any former or acting Trustee to redress any breach
of trust) except for his own bad faith, willful misfeasance, gross negligence or
reckless disregard of the duties involved in the conduct of his office.
Section 4.3. Mandatory Indemnification.
(a) Subject to the exceptions and limitations contained in paragraph (b) below:
(i) every person who is, or has been, a Trustee, officer, employee or
agent of the Trust (including any individual who serves at its request
as director, officer, partner, trustee or the like of another
organization in which it has any interest as a shareholder, creditor
or otherwise) shall be indemnified by the Trust, or by one or more
Series thereof if the claim arises from his or her conduct with
respect to only such Series, to the fullest extent permitted by law
against all liability and against all expenses reasonably incurred or
paid by him in connection with any claim, action, suit or proceeding
in which he becomes involved as a party or otherwise by virtue of his
being or having been a Trustee or officer and against amounts paid or
incurred by him in the settlement thereof;
(ii) the words "claim," "action," "suit," or "proceeding" shall apply to
all claims, actions, suits or proceedings (civil, criminal, or other,
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including appeals), actual or threatened; and the words "liability"
and "expenses" shall include, without limitation, attorneys' fees,
costs, judgments, amounts paid in settlement, fines, penalties and
other liabilities.
(b) No indemnification shall be provided hereunder to a Trustee or officer:
(i) against any liability to the Trust, a Series thereof or the
Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of his office;
(ii) with respect to any matter as to which he shall have been finally
adjudicated not to have acted in good faith in the reasonable belief
that his action was in the best interest of the Trust or a Series
thereof;
(iii)in the event of a settlement or other disposition not involving a
final adjudication as provided in paragraph (b)(ii) resulting in a
payment by a Trustee or officer, unless there has been a determination
that such Trustee or officer did not engage in willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office:
(A) by the court or other body approving the settlement or other
disposition;
(B) based upon a review of readily available facts (as opposed to a
full trial-type inquiry) by (x) vote of a majority of the
Non-interested Trustees acting on the matter (provided that a
majority of the Non-interested Trustees then in office act on the
matter) or (y) written opinion of independent legal counsel; or
(C) by a vote of a majority of the Shares outstanding and entitled to
vote (excluding Shares owned of record or beneficially by such
individual).
(c) The rights of indemnification herein provided may be insured against by
policies maintained by the Trust, shall be severable, shall not affect any
other rights to which any Trustee or officer may now or hereafter be
entitled, shall continue as to a person who has ceased to be such Trustee
or officer and shall inure to the benefit of the heirs, executors,
administrators and assigns of such a person. Nothing contained herein shall
affect any rights to indemnification to which personnel of the Trust or any
Series thereof other than Trustees and officers may be entitled by contract
or otherwise under law.
(d) Expenses of preparation and presentation of a defense to any claim, action,
suit or proceeding of the character described in paragraph (a) of this
Section 4.3 may be advanced by the Trust or a Series thereof prior to final
disposition thereof upon receipt of an undertaking by or on behalf of the
recipient to repay such amount if it is ultimately determined that he is
not entitled to indemnification under this Section 4.3, provided that
either:
(i) such undertaking is secured by a surety bond or some other appropriate
security provided by the recipient, or the Trust or Series thereof
shall be insured against losses arising out of any such advances; or
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(ii) a majority of the Non-interested Trustees acting on the matter
(provided that a majority of the Non-interested Trustees act on the
matter) or an independent legal counsel in a written opinion shall
determine, based upon a review of readily available facts (as opposed
to a full trial-type inquiry), that there is reason to believe that
the recipient ultimately will be found entitled to indemnification.
As used in this Section 4.3, a "Non-interested Trustee" is one who (i) is not an
"Interested Person" of the Trust (including anyone who has been exempted from
being an "Interested Person" by any rule, regulation or order of the
Commission), and (ii) is not involved in the claim, action, suit or proceeding.
Section 4.4. No Bond Required of Trustees. No Trustee shall be obligated to give
any bond or other security for the performance of any of his duties hereunder.
Section 4.5. No Duty of Investigation; Notice in Trust Instruments, Etc. No
purchaser, lender, transfer agent or other Person dealing with the Trustees or
any officer, employee or agent of the Trust or a Series thereof shall be bound
to make any inquiry concerning the validity of any transaction purporting to be
made by the Trustees or by said officer, employee or agent or be liable for the
application of money or property paid, loaned, or delivered to or on the order
of the Trustees or of said officer, employee or agent. Every obligation,
contract, instrument, certificate, Share, other security of the Trust or a
Series thereof or undertaking, and every other act or thing whatsoever executed
in connection with the Trust shall be conclusively presumed to have been
executed or done by the executors thereof only in their capacity as Trustees
under this Declaration or in their capacity as officers, employees or agents of
the Trust or a Series thereof. Every written obligation, contract, instrument,
certificate, Share, other security of the Trust or a Series thereof or
undertaking made or issued by the Trustees may recite that the same is executed
or made by them not individually, but as Trustees under the Declaration, and
that the obligations of the Trust or a Series thereof under any such instrument
are not binding upon any of the Trustees or Shareholders individually, but bind
only the Trust Property or the Trust Property of the applicable Series, and may
contain any further recital which they may deem appropriate, but the omission of
such recital shall not operate to bind the Trustees individually. The Trustees
shall at all times maintain insurance for the protection of the Trust Property
or the Trust Property of the applicable Series, its Shareholders, Trustees,
officers, employees and agents in such amount as the Trustees shall deem
adequate to cover possible tort liability, and such other insurance as the
Trustees in their sole judgment shall deem advisable.
Section 4.6. Reliance on Experts, Etc. Each Trustee, officer or employee of the
Trust or a Series thereof shall, in the performance of his duties, be fully and
completely justified and protected with regard to any act or any failure to act
resulting from reliance in good faith upon the books of account or other records
of the Trust or a Series thereof, upon an opinion of counsel, or upon reports
made to the Trust or a Series thereof by any of its officers or employees or by
the Investment Adviser, the Administrator, the Distributor, Transfer Agent,
selected dealers, accountants, appraisers or other experts or consultants
selected with reasonable care by the Trustees, officers or employees of the
Trust, regardless of whether such counsel or expert may also be a Trustee.
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ARTICLE V
SHARES OF BENEFICIAL INTEREST
Section 5.1. Beneficial Interest. The interest of the beneficiaries hereunder
shall be divided into transferable Shares of beneficial interest without par
value. The number of such Shares of beneficial interest authorized hereunder is
unlimited. The Trustees shall have the exclusive authority without the
requirement of Shareholder approval to establish and designate one or more
Series of shares and one or more Classes thereof as the Trustees deem necessary
or desirable. Each Share of any Series shall represent an equal proportionate
Share in the assets of that Series with each other Share in that Series. Subject
to the provisions of Section 5.11 hereof, the Trustees may also authorize the
creation of additional Series of Shares (the proceeds of which may be invested
in separate, independently managed portfolios) and additional Classes of Shares
within any Series. All Shares issued hereunder including, without limitation,
Shares issued in connection with a dividend in Shares or a split in Shares,
shall be fully paid and nonassessable.
Section 5.2. Rights of Shareholders. The ownership of the Trust Property of
every description and the right to conduct any business hereinbefore described
are vested exclusively in the Trustees, and the Shareholders shall have no
interest therein other than the beneficial interest conferred by their Shares,
and they shall have no right to call for any partition or division of any
property, profits, rights or interests of the Trust nor can they be called upon
to share or assume any losses of the Trust or suffer an assessment of any kind
by virtue of their ownership of Shares. The Shares shall be personal property
giving only the rights specifically set forth in this Declaration. The Shares
shall not entitle the holder to preference, preemptive, appraisal, conversion or
exchange rights, except as the Trustees may determine with respect to any Series
or Class of Shares.
Section 5.3. Trust Only. It is the intention of the Trustees to create only the
relationship of Trustee and beneficiary between the Trustees and each
Shareholder from time to time. It is not the intention of the Trustees to create
a general partnership, limited partnership, joint stock association,
corporation, bailment or any form of legal relationship other than a trust.
Nothing in this Declaration of Trust shall be construed to make the
Shareholders, either by themselves or with the Trustees, partners or members of
a joint stock association.
Section 5.4. Issuance of Shares. The Trustees in their discretion may, from time
to time without a vote of the Shareholders, issue Shares, in addition to the
then issued and outstanding Shares and Shares held in the treasury, to such
party or parties and for such amount and type of consideration, including cash
or property, at such time or times and on such terms as the Trustees may deem
best, except that only Shares previously contracted to be sold may be issued
during any period when the right of redemption is suspended pursuant to Section
6.9 hereof, and may in such manner acquire other assets (including the
acquisition of assets subject to, and in connection with the assumption of,
liabilities) and businesses. In connection with any issuance of Shares, the
Trustees may issue fractional Shares and Shares held in the treasury. The
Trustees may from time to time divide or combine the Shares of the Trust or, if
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the Shares be divided into Series or Classes, of any Series or any Class thereof
of the Trust, into a greater or lesser number without thereby changing the
proportionate beneficial interests in the Trust or in the Trust Property
allocated or belonging to such Series or Class. Contributions to the Trust or
Series thereof may be accepted for, and Shares shall be redeemed as, whole
Shares and/or 1/1000ths of a Share or integral multiples thereof.
Section 5.5. Register of Shares. A register shall be kept at the principal
office of the Trust or an office of the Transfer Agent which shall contain the
names and addresses of the Shareholders and the number of Shares held by them
respectively and a record of all transfers thereof. Such register shall be
conclusive as to who are the holders of the Shares and who shall be entitled to
receive dividends or distributions or otherwise to exercise or enjoy the rights
of Shareholders. No Shareholder shall be entitled to receive payment of any
dividend or distribution, nor to have notice given to him as provided herein or
in the By-laws, until he has given his address to the Transfer Agent or such
other officer or agent of the Trustees as shall keep the said register for entry
thereon. It is not contemplated that certificates will be issued for the Shares;
however, the Trustees, in their discretion, may authorize the issuance of share
certificates and promulgate appropriate rules and regulations as to their use.
Section 5.6. Transfer of Shares. Shares shall be transferable on the records of
the Trust only by the record holder thereof or by his agent thereunto duly
authorized in writing, upon delivery to the Trustees or the Transfer Agent of a
duly executed instrument of transfer, together with such evidence of the
genuineness of each such execution and authorization and of other matters as may
reasonably be required. Upon such delivery the transfer shall be recorded on the
register of the Trust. Until such record is made, the Shareholder of record
shall be deemed to be the holder of such Shares for all purposes hereunder and
neither the Trustees nor any transfer agent or registrar nor any officer,
employee or agent of the Trust shall be affected by any notice of the proposed
transfer.
Any person becoming entitled to any Shares in consequence of the death,
bankruptcy, or incompetence of any Shareholder, or otherwise by operation of
law, shall be recorded on the register of Shares as the holder of such Shares
upon production of the proper evidence thereof to the Trustees or the Transfer
Agent, but until such record is made, the Shareholder of record shall be deemed
to be the holder of such Shares for all purposes hereunder and neither the
Trustees nor any Transfer Agent or registrar nor any officer or agent of the
Trust shall be affected by any notice of such death, bankruptcy or incompetence,
or other operation of law.
Section 5.7. Notices. Any and all notices to which any Shareholder may be
entitled and any and all communications shall be deemed duly served or given if
mailed, postage prepaid, addressed to any Shareholder of record at his last
known address as recorded on the register of the Trust.
Section 5.8. Treasury Shares. Shares held in the treasury shall, until resold
pursuant to Section 5.4, not confer any voting rights on the Trustees, nor shall
such Shares be entitled to any dividends or other distributions declared with
respect to the Shares.
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Section 5.9. Voting Powers. The Shareholders shall have power to vote only (i)
for the election of Trustees as provided in Section 2.13; (ii) with respect to
any investment advisory contract entered into pursuant to Section 3.2; (iii)
with respect to termination of the Trust or a Series or Class thereof as
provided in Section 8.2; (iv) with respect to any amendment of this Declaration
to the limited extent and as provided in Section 8.3; (v) with respect to a
merger, consolidation or sale of assets as provided in Section 8.4; (vi) with
respect to incorporation of the Trust to the extent and as provided in Section
8.5; (vii) to the same extent as the stockholders of a Massachusetts business
corporation as to whether or not a court action, proceeding or claim should or
should not be brought or maintained derivatively or as a class action on behalf
of the Trust or a Series thereof or the Shareholders of either; (viii) with
respect to any plan adopted pursuant to Rule 12b-1 (or any successor rule) under
the 1940 Act, and related matters; and (ix) with respect to such additional
matters relating to the Trust as may be required by this Declaration, the
By-laws or any registration of the Trust as an investment company under the 1940
Act with the Commission (or any successor agency) or as the Trustees may
consider necessary or desirable. As determined by the Trustees without the vote
or consent of shareholders, on any matter submitted to a vote of Shareholders
either (i) each whole Share shall be entitled to one vote as to any matter on
which it is entitled to vote and each fractional Share shall be entitled to a
proportionate fractional vote or (ii) each dollar of net asset value (number of
Shares owned times net asset value per share of such Series or Class, as
applicable) shall be entitled to one vote on any matter on which such Shares are
entitled to vote and each fractional dollar amount shall be entitled to a
proportionate fractional vote. The Trustees may, in conjunction with the
establishment of any further Series or any Classes of Shares, establish
conditions under which the several Series or Classes of Shares shall have
separate voting rights or no voting rights. There shall be no cumulative voting
in the election of Trustees. Until Shares are issued, the Trustees may exercise
all rights of Shareholders and may take any action required by law, this
Declaration or the By-laws to be taken by Shareholders. The By-laws may include
further provisions for Shareholders' votes and meetings and related matters.
Section 5.10. Meetings of Shareholders. No annual or regular meetings of
Shareholders are required. Special meetings of the Shareholders, including
meetings involving only the holders of Shares of one or more but less than all
Series or Classes thereof, may be called at any time by the Chairman of the
Board, President, or any Vice-President of the Trust, and shall be called by the
President or the Secretary at the request, in writing or by resolution, of a
majority of the Trustees, or at the written request of the holder or holders of
ten percent (10%) or more of the total number of Outstanding Shares of the Trust
entitled to vote at such meeting. Meetings of the Shareholders of any Series
shall be called by the President or the Secretary at the written request of the
holder or holders of ten percent (10%) or more of the total number of
Outstanding Shares of such Series of the Trust entitled to vote at such meeting.
Any such request shall state the purpose of the proposed meeting.
Section 5.11. Series or Class Designation. (a) Without limiting the authority of
the Trustees set forth in Section 5.1 to establish and designate any further
Series or Classes, the Trustees hereby establish the following Series, each of
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which consists of two Classes of Shares: John Hancock Massachusetts Tax-Free
Income Fund and John Hancock New York Tax-Free Income Fund (the "Existing
Series").
(b) The Shares of the Existing Series and Class thereof herein established and
designated and any Shares of any further Series and Classes thereof that
may from time to time be established and designated by the Trustees shall
be established and designated, and the variations in the relative rights
and preferences as between the different Series shall be fixed and
determined, by the Trustees (unless the Trustees otherwise determine with
respect to further Series or Classes at the time of establishing and
designating the same); provided, that all Shares shall be identical except
that there may be variations so fixed and determined between different
Series or Classes thereof as to investment objective, policies and
restrictions, purchase price, payment obligations, distribution expenses,
right of redemption, special and relative rights as to dividends and on
liquidation, conversion rights, exchange rights, and conditions under which
the several Series or Classes shall have separate voting rights, all of
which are subject to the limitations set forth below. All references to
Shares in this Declaration shall be deemed to be Shares of any or all
Series or Classes as the context may require.
(c) As to any Existing Series and Classes herein established and designated and
any further division of Shares of the Trust into additional Series or
Classes, the following provisions shall be applicable:
(i) The number of authorized Shares and the number of Shares of each
Series or Class thereof that may be issued shall be unlimited. The
Trustees may classify or reclassify any unissued Shares or any Shares
previously issued and reacquired of any Series or Class into one or
more Series or one or more Classes that may be established and
designated from time to time. The Trustees may hold as treasury shares
(of the same or some other Series or Class), reissue for such
consideration and on such terms as they may determine, or cancel any
Shares of any Series or Class reacquired by the Trust at their
discretion from time to time.
(ii) All consideration received by the Trust for the issue or sale of
Shares of a particular Series or Class, together with all assets in
which such consideration is invested or reinvested, all income,
earnings, profits, and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably belong to that Series
for all purposes, subject only to the rights of creditors of such
Series and except as may otherwise be required by applicable tax laws,
and shall be so recorded upon the books of account of the Trust. In
the event that there are any assets, income, earnings, profits, and
proceeds thereof, funds, or payments which are not readily
identifiable as belonging to any particular Series, the Trustees shall
allocate them among any one or more of the Series established and
designated from time to time in such manner and on such basis as they,
in their sole discretion, deem fair and equitable. Each such
allocation by the Trustees shall be conclusive and binding upon the
Shareholders of all Series for all purposes. No holder of Shares of
any Series shall have any claim on or right to any assets allocated or
belonging to any other Series.
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(iii)The assets belonging to each particular Series shall be charged with
the liabilities of the Trust in respect of that Series or the
appropriate Class or Classes thereof and all expenses, costs, charges
and reserves attributable to that Series or Class or Classes thereof,
and any general liabilities, expenses, costs, charges or reserves of
the Trust which are not readily identifiable as belonging to any
particular Series shall be allocated and charged by the Trustees to
and among any one or more of the Series established and designated
from time to time in such manner and on such basis as the Trustees in
their sole discretion deem fair and equitable. Each allocation of
liabilities, expenses, costs, charges and reserves by the Trustees
shall be conclusive and binding upon the Shareholders of all Series
and Classes for all purposes. The Trustees shall have full discretion,
to the extent not inconsistent with the 1940 Act, to determine which
items are capital; and each such determination and allocation shall be
conclusive and binding upon the Shareholders. The assets of a
particular Series of the Trust shall under no circumstances be charged
with liabilities attributable to any other Series or Class thereof of
the Trust. All persons extending credit to, or contracting with or
having any claim against a particular Series or Class of the Trust
shall look only to the assets of that particular Series for payment of
such credit, contract or claim.
(iv) The power of the Trustees to pay dividends and make distributions
shall be governed by Section 7.2 of this Declaration. With respect to
any Series or Class, dividends and distributions on Shares of a
particular Series or Class may be paid with such frequency as the
Trustees may determine, which may be daily or otherwise, pursuant to a
standing resolution or resolutions adopted only once or with such
frequency as the Trustees may determine, to the holders of Shares of
that Series or Class, from such of the income and capital gains,
accrued or realized, from the assets belonging to that Series, as the
Trustees may determine, after providing for actual and accrued
liabilities belonging to that Series or Class. All dividends and
distributions on Shares of a particular Series or Class shall be
distributed pro rata to the Shareholders of that Series or Class in
proportion to the number of Shares of that Series or Class held by
such Shareholders at the time of record established for the payment of
such dividends or distribution.
(v) Each Share of a Series of the Trust shall represent a beneficial
interest in the net assets of such Series. Each holder of Shares of a
Series or Class thereof shall be entitled to receive his pro rata
share of distributions of income and capital gains made with respect
to such Series or Class net of expenses. Upon redemption of his Shares
or indemnification for liabilities incurred by reason of his being or
having been a Shareholder of a Series or Class, such Shareholder shall
be paid solely out of the funds and property of such Series of the
Trust. Upon liquidation or termination of a Series or Class thereof of
the Trust, Shareholders of such Series or Class thereof shall be
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entitled to receive a pro rata share of the net assets of such Series.
A Shareholder of a particular Series of the Trust shall not be
entitled to participate in a derivative or class action on behalf of
any other Series or the Shareholders of any other Series of the Trust.
(vi) On each matter submitted to a vote of Shareholders, all Shares of all
Series and Classes shall vote as a single class; provided, however,
that (1) as to any matter with respect to which a separate vote of any
Series or Class is required by the 1940 Act or is required by
attributes applicable to any Series or Class or is required by any
Rule 12b-1 plan, such requirements as to a separate vote by that
Series or Class shall apply, (2) to the extent that a matter referred
to in clause (1) above, affects more than one Class or Series and the
interests of each such Class or Series in the matter are identical,
then, subject to clause (3) below, the Shares of all such affected
Classes or Series shall vote as a single Class; (3) as to any matter
which does not affect the interests of a particular Series or Class,
only the holders of Shares of the one or more affected Series or
Classes shall be entitled to vote; and (4) the provisions of the
following sentence shall apply. On any matter that pertains to any
particular Class of a particular Series or to any Class expenses with
respect to any Series which matter may be submitted to a vote of
Shareholders, only Shares of the affected Class or that Series, as the
case may be, shall be entitled to vote except that: (i) to the extent
said matter affects Shares of another Class or Series, such other
Shares shall also be entitled to vote, and in such cases Shares of the
affected Class, as the case may be, of such Series shall be voted in
the aggregate together with such other Shares; and (ii) to the extent
that said matter does not affect Shares of a particular Class of such
Series, said Shares shall not be entitled to vote (except where
otherwise required by law or permitted by the Trustees acting in their
sole discretion) even though the matter is submitted to a vote of the
Shareholders of any other Class or Series.
(vii)Except as otherwise provided in this Article V, the Trustees shall
have the power to determine the designations, preferences, privileges,
payment obligations, limitations and rights, including voting and
dividend rights, of each Class and Series of Shares. Subject to
compliance with the requirements of the 1940 Act, the Trustees shall
have the authority to provide that the holders of Shares of any Series
or Class shall have the right to convert or exchange said Shares into
Shares of one or more Series or Classes of Shares in accordance with
such requirements, conditions and procedures as may be established by
the Trustees.
(viii) The establishment and designation of any Series or Classes of Shares
shall be effective upon the execution by a majority of the then
Trustees of an instrument setting forth such establishment and
designation and the relative rights and preferences of such Series or
Classes, or as otherwise provided in such instrument. At any time that
there are no Shares outstanding of any particular Series or Class
previously established and designated, the Trustees may by an
instrument executed by a majority of their number abolish that Series
or Class and the establishment and designation thereof. Each
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instrument referred to in this section shall have the status of an
amendment to this Declaration.
Section 5.12. Assent to Declaration of Trust. Every Shareholder, by virtue of
having become a Shareholder, shall be held to have expressly assented and agreed
to the terms hereof and to have become a party hereto.
ARTICLE VI
REDEMPTION AND REPURCHASE OF SHARES
Section 6.1. Redemption of Shares. (a) All Shares of the Trust shall be
redeemable, at the redemption price determined in the manner set out in this
Declaration. Redeemed or repurchased Shares may be resold by the Trust. The
Trust may require any Shareholder to pay a sales charge to the Trust, the
underwriter, or any other person designated by the Trustees upon redemption or
repurchase of Shares in such amount and upon such conditions as shall be
determined from time to time by the Trustees.
(b) The Trust shall redeem the Shares of the Trust or any Series or Class
thereof at the price determined as hereinafter set forth, upon the
appropriately verified written application of the record holder thereof (or
upon such other form of request as the Trustees may determine) at such
office or agency as may be designated from time to time for that purpose by
the Trustees. The Trustees may from time to time specify additional
conditions, not inconsistent with the 1940 Act, regarding the redemption of
Shares in the Trust's then effective Prospectus.
Section 6.2. Price. Shares shall be redeemed at a price based on their net asset
value determined as set forth in Section 7.1 hereof as of such time as the
Trustees shall have theretofore prescribed by resolution. In the absence of such
resolution, the redemption price of Shares deposited shall be based on the net
asset value of such Shares next determined as set forth in Section 7.1 hereof
after receipt of such application. The amount of any contingent deferred sales
charge or redemption fee payable upon redemption of Shares may be deducted from
the proceeds of such redemption.
Section 6.3. Payment. Payment of the redemption price of Shares of the Trust or
any Series or Class thereof shall be made in cash or in property to the
Shareholder at such time and in the manner, not inconsistent with the 1940 Act
or other applicable laws, as may be specified from time to time in the Trust's
then effective Prospectus(es), subject to the provisions of Section 6.4 hereof.
Notwithstanding the foregoing, the Trustees may withhold from such redemption
proceeds any amount arising (i) from a liability of the redeeming Shareholder to
the Trust or (ii) in connection with any Federal or state tax withholding
requirements.
Section 6.4. Effect of Suspension of Determination of Net Asset Value. If,
pursuant to Section 6.9 hereof, the Trustees shall declare a suspension of the
determination of net asset value with respect to Shares of the Trust or of any
Series or Class thereof, the rights of Shareholders (including those who shall
have applied for redemption pursuant to Section 6.1 hereof but who shall not yet
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have received payment) to have Shares redeemed and paid for by the Trust or a
Series or Class thereof shall be suspended until the termination of such
suspension is declared. Any record holder who shall have his redemption right so
suspended may, during the period of such suspension, by appropriate written
notice of revocation at the office or agency where application was made, revoke
any application for redemption not honored and withdraw any Share certificates
on deposit. The redemption price of Shares for which redemption applications
have not been revoked shall be based on the net asset value of such Shares next
determined as set forth in Section 7.1 after the termination of such suspension,
and payment shall be made within seven (7) days after the date upon which the
application was made plus the period after such application during which the
determination of net asset value was suspended.
Section 6.5. Repurchase by Agreement. The Trust may repurchase Shares directly,
or through the Distributor or another agent designated for the purpose, by
agreement with the owner thereof at a price not exceeding the net asset value
per share determined as of the time when the purchase or contract of purchase is
made or the net asset value as of any time which may be later determined
pursuant to Section 7.1 hereof, provided payment is not made for the Shares
prior to the time as of which such net asset value is determined.
Section 6.6. Redemption of Shareholder's Interest. The Trustees, in their sole
discretion, may cause the Trust to redeem all of the Shares of one or more
Series or Class thereof held by any Shareholder if the value of such Shares held
by such Shareholder is less than the minimum amount established from time to
time by the Trustees.
Section 6.7. Redemption of Shares in Order to Qualify as Regulated Investment
Company; Disclosure of Holding. (a) If the Trustees shall, at any time and in
good faith, be of the opinion that direct or indirect ownership of Shares or
other securities of the Trust has or may become concentrated in any Person to an
extent which would disqualify the Trust or any Series of the Trust as a
regulated investment company under the Internal Revenue Code of 1986, then the
Trustees shall have the power by lot or other means deemed equitable by them (i)
to call for redemption by any such Person a number, or principal amount, of
Shares or other securities of the Trust or any Series of the Trust sufficient to
maintain or bring the direct or indirect ownership of Shares or other securities
of the Trust or any Series of the Trust into conformity with the requirements
for such qualification and (ii) to refuse to transfer or issue Shares or other
securities of the Trust or any Series of the Trust to any Person whose
acquisition of the Shares or other securities of the Trust or any Series of the
Trust in question would result in such disqualification. The redemption shall be
effected at the redemption price and in the manner provided in Section 6.1.
(b) The holders of Shares or other securities of the Trust or any Series of the
Trust shall upon demand disclose to the Trustees in writing such
information with respect to direct and indirect ownership of Shares or
other securities of the Trust or any Series of the Trust as the Trustees
deem necessary to comply with the provisions of the Internal Revenue Code
of 1986, as amended, or to comply with the requirements of any other taxing
authority.
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Section 6.8. Reductions in Number of Outstanding Shares Pursuant to Net Asset
Value Formula. The Trust may also reduce the number of outstanding Shares of the
Trust or of any Series of the Trust pursuant to the provisions of Section 7.3.
Section 6.9. Suspension of Right of Redemption. The Trust may declare a
suspension of the right of redemption or postpone the date of payment or
redemption for the whole or any part of any period (i) during which the New York
Stock Exchange is closed other than customary weekend and holiday closings, (ii)
during which trading on the New York Stock Exchange is restricted, (iii) during
which an emergency exists as a result of which disposal by the Trust or a Series
thereof of securities owned by it is not reasonably practicable or it is not
reasonably practicable for the Trust or a Series thereof fairly to determine the
value of its net assets, or (iv) during any other period when the Commission may
for the protection of Shareholders of the Trust by order permit suspension of
the right of redemption or postponement of the date of payment or redemption;
provided that applicable rules and regulations of the Commission shall govern as
to whether the conditions prescribed in clauses (ii), (iii), or (iv) exist. Such
suspension shall take effect at such time as the Trust shall specify but not
later than the close of business on the business day next following the
declaration of suspension, and thereafter there shall be no right of redemption
or payment on redemption until the Trust shall declare the suspension at an end,
except that the suspension shall terminate in any event on the first day on
which said stock exchange shall have reopened or the period specified in (ii) or
(iii) shall have expired (as to which in the absence of an official ruling by
the Commission, the determination of the Trust shall be conclusive). In the case
of a suspension of the right of redemption, a Shareholder may either withdraw
his request for redemption or receive payment based on the net asset value
existing after the termination of the suspension.
ARTICLE VII
DETERMINATION OF NET ASSET VALUE,
NET INCOME AND DISTRIBUTIONS
Section 7.1. Net Asset Value. The net asset value of each outstanding Share of
the Trust or of each Series or Class thereof shall be determined on such days
and at such time or times as the Trustees may determine. The value of the assets
of the Trust or any Series thereof may be determined (i) by a pricing service
which utilizes electronic pricing techniques based on general institutional
trading, (ii) by appraisal of the securities owned by the Trust or any Series of
the Trust, (iii) in certain cases, at amortized cost, or (iv) by such other
method as shall be deemed to reflect the fair value thereof, determined in good
faith by or under the direction of the Trustees. From the total value of said
assets, there shall be deducted all indebtedness, interest, taxes, payable or
accrued, including estimated taxes on unrealized book profits, expenses and
management charges accrued to the appraisal date, net income determined and
declared as a distribution and all other items in the nature of liabilities
which shall be deemed appropriate, as incurred by or allocated to the Trust or
any Series or Class of the Trust. The resulting amount which shall represent the
total net assets of the Trust or Series or Class thereof shall be divided by the
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number of Shares of the Trust or Series or Class thereof outstanding at the time
and the quotient so obtained shall be deemed to be the net asset value of the
Shares of the Trust or Series or Class thereof. The net asset value of the
Shares shall be determined at least once on each business day, as of the close
of regular trading on the New York Stock Exchange or as of such other time or
times as the Trustees shall determine. The power and duty to make the daily
calculations may be delegated by the Trustees to the Investment Adviser, the
Administrator, the Custodian, the Transfer Agent or such other Person as the
Trustees by resolution may determine. The Trustees may suspend the daily
determination of net asset value to the extent permitted by the 1940 Act. It
shall not be a violation of any provision of this Declaration if Shares are
sold, redeemed or repurchased by the Trust at a price other than one based on
net asset value if the net asset value is affected by one or more errors
inadvertently made in the pricing of portfolio securities or in accruing income,
expenses or liabilities.
Section 7.2. Distributions to Shareholders. (a) The Trustees shall from time to
time distribute ratably among the Shareholders of the Trust or of a Series or
Class thereof such proportion of the net profits, surplus (including paid-in
surplus), capital, or assets of the Trust or such Series held by the Trustees as
they may deem proper. Such distributions may be made in cash or property
(including without limitation any type of obligations of the Trust or Series or
Class or any assets thereof), and the Trustees may distribute ratably among the
Shareholders of the Trust or Series or Class thereof additional Shares of the
Trust or Series or Class thereof issuable hereunder in such manner, at such
times, and on such terms as the Trustees may deem proper. Such distributions may
be among the Shareholders of the Trust or Series or Class thereof at the time of
declaring a distribution or among the Shareholders of the Trust or Series or
Class thereof at such other date or time or dates or times as the Trustees shall
determine. The Trustees may in their discretion determine that, solely for the
purposes of such distributions, Outstanding Shares shall exclude Shares for
which orders have been placed subsequent to a specified time on the date the
distribution is declared or on the next preceding day if the distribution is
declared as of a day on which Boston banks are not open for business, all as
described in the then effective Prospectus under the Securities Act of 1933. The
Trustees may always retain from the net profits such amount as they may deem
necessary to pay the debts or expenses of the Trust or a Series or Class thereof
or to meet obligations of the Trust or a Series or Class thereof, or as they may
deem desirable to use in the conduct of its affairs or to retain for future
requirements or extensions of the business. The Trustees may adopt and offer to
Shareholders such dividend reinvestment plans, cash dividend payout plans or
related plans as the Trustees shall deem appropriate. The Trustees may in their
discretion determine that an account administration fee or other similar charge
may be deducted directly from the income and other distributions paid on Shares
to a Shareholder's account in each Series or Class.
(b) Inasmuch as the computation of net income and gains for Federal income tax
purposes may vary from the computation thereof on the books, the above
provisions shall be interpreted to give the Trustees the power in their
discretion to distribute for any fiscal year as ordinary dividends and as
capital gains distributions, respectively, additional amounts sufficient to
enable the Trust or a Series or Class thereof to avoid or reduce liability
for taxes.
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Section 7.3. Determination of Net Income; Constant Net Asset Value; Reduction of
Outstanding Shares. Subject to Section 5.11 hereof, the net income of the Series
and Classes thereof of the Trust shall be determined in such manner as the
Trustees shall provide by resolution. Expenses of the Trust or of a Series or
Class thereof, including the advisory or management fee, shall be accrued each
day. Each Class shall bear only expenses relating to its Shares and an allocable
share of Series expenses in accordance with such policies as may be established
by the Trustees from time to time and as are not inconsistent with the
provisions of this Declaration or of any applicable document filed by the Trust
with the Commission or of the Internal Revenue Code of 1986, as amended. Such
net income may be determined by or under the direction of the Trustees as of the
close of regular trading on the New York Stock Exchange on each day on which
such market is open or as of such other time or times as the Trustees shall
determine, and, except as provided herein, all the net income of any Series or
Class, as so determined, may be declared as a dividend on the Outstanding Shares
of such Series or Class. If, for any reason, the net income of any Series or
Class determined at any time is a negative amount, or for any other reason, the
Trustees shall have the power with respect to such Series or Class (i) to offset
each Shareholder's pro rata share of such negative amount from the accrued
dividend account of such Shareholder, or (ii) to reduce the number of
Outstanding Shares of such Series or Class by reducing the number of Shares in
the account of such Shareholder by that number of full and fractional Shares
which represents the amount of such excess negative net income, or (iii) to
cause to be recorded on the books of the Trust an asset account in the amount of
such negative net income, which account may be reduced by the amount, provided
that the same shall thereupon become the property of the Trust with respect to
such Series or Class and shall not be paid to any Shareholder, of dividends
declared thereafter upon the Outstanding Shares of such Series or Class on the
day such negative net income is experienced, until such asset account is reduced
to zero. The Trustees shall have full discretion to determine whether any cash
or property received shall be treated as income or as principal and whether any
item of expense shall be charged to the income or the principal account, and
their determination made in good faith shall be conclusive upon the
Shareholders. In the case of stock dividends received, the Trustees shall have
full discretion to determine, in the light of the particular circumstances, how
much if any of the value thereof shall be treated as income, the balance, if
any, to be treated as principal.
Section 7.4. Power to Modify Foregoing Procedures. Notwithstanding any of the
foregoing provisions of this Article VII, but subject to Section 5.11 hereof,
the Trustees may prescribe, in their absolute discretion, such other bases and
times for determining the per Share net asset value of the Shares of the Trust
or a Series or Class thereof or net income of the Trust or a Series or Class
thereof, or the declaration and payment of dividends and distributions as they
may deem necessary or desirable. Without limiting the generality of the
foregoing, the Trustees may establish several Series or Classes of Shares in
accordance with Section 5.11, and declare dividends thereon in accordance with
Section 5.11(d)(iv).
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ARTICLE VIII
DURATION; TERMINATION OF TRUST OR A SERIES OR CLASS;
AMENDMENT; MERGERS, ETC.
Section 8.1. Duration. The Trust shall continue without limitation of time
but subject to the provisions of this Article VIII.
Section 8.2. Termination of the Trust or a Series or a Class. The Trust or any
Series or Class thereof may be terminated by (i) the affirmative vote of the
holders of not less than two-thirds of the Outstanding Shares entitled to vote
and present in person or by proxy at any meeting of Shareholders of the Trust or
the appropriate Series or Class thereof, (ii) by an instrument or instruments in
writing without a meeting, consented to by the holders of two-thirds of the
Outstanding Shares of the Trust or a Series or Class thereof; provided, however,
that, if such termination as described in clauses (i) and (ii) is recommended by
the Trustees, the vote or written consent of the holders of a majority of the
Outstanding Shares of the Trust or a Series or Class thereof entitled to vote
shall be sufficient authorization, or (iii) notice to Shareholders by means of
an instrument in writing signed by a majority of the Trustees, stating that a
majority of the Trustees has determined that the continuation of the Trust or a
Series or a Class thereof is not in the best interest of such Series or a Class,
the Trust or their respective shareholders as a result of factors or events
adversely affecting the ability of such Series or a Class or the Trust to
conduct its business and operations in an economically viable manner. Such
factors and events may include (but are not limited to) the inability of a
Series or Class or the Trust to maintain its assets at an appropriate size,
changes in laws or regulations governing the Series or Class or the Trust or
affecting assets of the type in which such Series or Class or the Trust invests
or economic developments or trends having a significant adverse impact on the
business or operations of such Series or Class or the Trust. Upon the
termination of the Trust or the Series or Class,
(i) The Trust, Series or Class shall carry on no business except for the
purpose of winding up its affairs.
(ii) The Trustees shall proceed to wind up the affairs of the Trust, Series
or Class and all of the powers of the Trustees under this Declaration
shall continue until the affairs of the Trust, Series or Class shall
have been wound up, including the power to fulfill or discharge the
contracts of the Trust, Series or Class, collect its assets, sell,
convey, assign, exchange, transfer or otherwise dispose of all or any
part of the remaining Trust Property or Trust Property allocated or
belonging to such Series or Class to one or more persons at public or
private sale for consideration which may consist in whole or in part
of cash, securities or other property of any kind, discharge or pay
its liabilities, and do all other acts appropriate to liquidate its
business; provided that any sale, conveyance, assignment, exchange,
transfer or other disposition of all or substantially all the Trust
Property or Trust Property allocated or belonging to such Series or
Class that requires Shareholder approval in accordance with Section
8.4 hereof shall receive the approval so required.
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(iii)After paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities and
refunding agreements as they deem necessary for their protection, the
Trustees may distribute the remaining Trust Property or the remaining
property of the terminated Series or Class, in cash or in kind or
partly each, among the Shareholders of the Trust or the Series or
Class according to their respective rights.
(b) After termination of the Trust, Series or Class and distribution to the
Shareholders as herein provided, a majority of the Trustees shall execute
and lodge among the records of the Trust and file with the Office of the
Secretary of The Commonwealth of Massachusetts an instrument in writing
setting forth the fact of such termination, and the Trustees shall
thereupon be discharged from all further liabilities and duties with
respect to the Trust or the terminated Series or Class, and the rights and
interests of all Shareholders of the Trust or the terminated Series or
Class shall thereupon cease.
Section 8.3. Amendment Procedure. (a) This Declaration may be amended by a vote
of the holders of a majority of the Shares outstanding and entitled to vote or
by any instrument in writing, without a meeting, signed by a majority of the
Trustees and consented to by the holders of a majority of the Shares outstanding
and entitled to vote.
(b) This Declaration may be amended by a vote of a majority of Trustees,
without approval or consent of the Shareholders, except that no amendment
can be made by the Trustees to impair any voting or other rights of
shareholders prescribed by Federal or state law. Without limiting the
foregoing, the Trustees may amend this Declaration without the approval or
consent of Shareholders (i) to change the name of the Trust or any Series,
(ii) to add to their duties or obligations or surrender any rights or
powers granted to them herein; (iii) to cure any ambiguity, to correct or
supplement any provision herein which may be inconsistent with any other
provision herein or to make any other provisions with respect to matters or
questions arising under this Declaration which will not be inconsistent
with the provisions of this Declaration; and (iv) to eliminate or modify
any provision of this Declaration which (a) incorporates, memorializes or
sets forth an existing requirement imposed by or under any Federal or state
statute or any rule, regulation or interpretation thereof or thereunder or
(b) any rule, regulation, interpretation or guideline of any Federal or
state agency, now or hereafter in effect, including without limitation,
requirements set forth in the 1940 Act and the rules and regulations
thereunder (and interpretations thereof), to the extent any change in
applicable law liberalizes, eliminates or modifies any such requirements,
but the Trustees shall not be liable for failure to do so.
(c) The Trustees may also amend this Declaration without the approval or
consent of Shareholders if they deem it necessary to conform this
Declaration to the requirements of applicable Federal or state laws or
regulations or the requirements of the regulated investment company
provisions of the Internal Revenue Code of 1986, as amended, or if
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requested or required to do so by any Federal agency or by a state Blue Sky
commissioner or similar official, but the Trustees shall not be liable for
failing so to do.
(d) Nothing contained in this Declaration shall permit the amendment of this
Declaration to impair the exemption from personal liability of the
Shareholders, Trustees, officers, employees and agents of the Trust or to
permit assessments upon Shareholders.
(e) A certificate signed by a majority of the Trustees setting forth an
amendment and reciting that it was duly adopted by the Trustees or by the
Shareholders as aforesaid or a copy of the Declaration, as amended, and
executed by a majority of the Trustees, shall be conclusive evidence of
such amendment when lodged among the records of the Trust.
Section 8.4. Merger, Consolidation and Sale of Assets. The Trust or any Series
may merge or consolidate into any other corporation, association, trust or other
organization or may sell, lease or exchange all or substantially all of the
Trust Property or Trust Property allocated or belonging to such Series,
including its good will, upon such terms and conditions and for such
consideration when and as authorized at any meeting of Shareholders called for
the purpose by the affirmative vote of the holders of two-thirds of the Shares
of the Trust or such Series outstanding and entitled to vote and present in
person or by proxy at a meeting of Shareholders, or by an instrument or
instruments in writing without a meeting, consented to by the holders of
two-thirds of the Shares of the Trust or such Series; provided, however, that,
if such merger, consolidation, sale, lease or exchange is recommended by the
Trustees, the vote or written consent of the holders of a majority of the
Outstanding Shares of the Trust or such Series entitled to vote shall be
sufficient authorization; and any such merger, consolidation, sale, lease or
exchange shall be deemed for all purposes to have been accomplished under and
pursuant to Massachusetts law.
Section 8.5. Incorporation. The Trustees may cause to be organized or assist in
organizing a corporation or corporations under the laws of any jurisdiction or
any other trust, partnership, association or other organization to take over all
or any portion of the Trust Property or the Trust Property allocated or
belonging to such Series or to carry on any business in which the Trust shall
directly or indirectly have any interest, and to sell, convey and transfer all
or any portion of the Trust Property or the Trust Property allocated or
belonging to such Series to any such corporation, trust, association or
organization in exchange for the shares or securities thereof or otherwise, and
to lend money to, subscribe for the shares or securities of, and enter into any
contracts with any such corporation, trust, partnership, association or
organization, or any corporation, partnership, trust, association or
organization in which the Trust or such Series holds or is about to acquire
shares or any other interest. The Trustees may also cause a merger or
consolidation between the Trust or any successor thereto and any such
corporation, trust, partnership, association or other organization if and to the
extent permitted by law, as provided under the law then in effect. Nothing
contained herein shall be construed as requiring approval of Shareholders for
the Trustees to organize or assist in organizing one or more corporations,
trusts, partnerships, associations or other organizations and selling, conveying
or transferring all or a portion of the Trust Property to such organization or
entities.
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ARTICLE IX
REPORTS TO SHAREHOLDERS
The Trustees shall at least semi-annually submit to the Shareholders of each
Series a written financial report of the transactions of the Trust and Series
thereof, including financial statements which shall at least annually be
certified by independent public accountants.
ARTICLE X
MISCELLANEOUS
Section 10.1. Execution and Filing. This Declaration and any amendment hereto
shall be filed in the office of the Secretary of The Commonwealth of
Massachusetts and in such other places as may be required under the laws of
Massachusetts and may also be filed or recorded in such other places as the
Trustees deem appropriate. Each amendment so filed shall be accompanied by a
certificate signed and acknowledged by a Trustee stating that such action was
duly taken in a manner provided herein, and unless such amendment or such
certificate sets forth some later time for the effectiveness of such amendment,
such amendment shall be effective upon its execution. A restated Declaration,
integrating into a single instrument all of the provisions of the Declaration
which are then in effect and operative, may be executed from time to time by a
majority of the Trustees and filed with the Secretary of The Commonwealth of
Massachusetts. A restated Declaration shall, upon execution, be conclusive
evidence of all amendments contained therein and may thereafter be referred to
in lieu of the original Declaration and the various amendments thereto.
Section 10.2. Governing Law. This Declaration is executed by the Trustees and
delivered in The Commonwealth of Massachusetts and with reference to the laws
thereof, and the rights of all parties and the validity and construction of
every provision hereof shall be subject to and construed according to the laws
of said Commonwealth.
Section 10.3. Counterparts. This Declaration may be simultaneously executed in
several counterparts, each of which shall be deemed to be an original, and such
counterparts, together, shall constitute one and the same instrument, which
shall be sufficiently evidenced by any such original counterpart.
Section 10.4. Reliance by Third Parties. Any certificate executed by an
individual who, according to the records of the Trust appears to be a Trustee
hereunder, certifying (a) the number or identity of Trustees or Shareholders,
(b) the due authorization of the execution of any instrument or writing, (c) the
form of any vote passed at a meeting of Trustees or Shareholders, (d) the fact
that the number of Trustees or Shareholders present at any meeting or executing
any written instrument satisfies the requirements of this Declaration, (e) the
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form of any By-laws adopted by or the identity of any officers elected by the
Trustees, or (f) the existence of any fact or facts which in any manner relate
to the affairs of the Trust, shall be conclusive evidence as to the matters so
certified in favor of any Person dealing with the Trustees and their successors.
Section 10.5. Provisions in Conflict with Law or Regulations. (a) The provisions
of this Declaration are severable, and if the Trustees shall determine, with the
advice of counsel, that any of such provisions is in conflict with the 1940 Act,
the regulated investment company provisions of the Internal Revenue Code of 1986
or with other applicable laws and regulations, the conflicting provision shall
be deemed never to have constituted a part of this Declaration; provided,
however, that such determination shall not affect any of the remaining
provisions of this Declaration or render invalid or improper any action taken or
omitted prior to such determination.
(b) If any provision of this Declaration shall be held invalid or unenforceable
in any jurisdiction, such invalidity or unenforceability shall attach only
to such provision in such jurisdiction and shall not in any manner affect
such provision in any other jurisdiction or any other provision of this
Declaration in any jurisdiction.
IN WITNESS WHEREOF, the undersigned have executed this instrument as of the ___
of __________, 1996.
[Trustees to execute here]
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THE COMMONWEALTH OF MASSACHUSETTS
SUFFOLK COUNTY, MASSACHUSETTS
_______________, 1996
Then personally appeared the above-named persons, Edward J. Boudreau, Jr.,
Dennis S. Aronowitz, Richard P. Chapman, Jr., William J. Cosgrove, Gail D.
Fosler, Bayard Henry, Anne C. Hodsdon, Richard S. Scipione, Edward J. Spellman,
Douglas M. Costle, Leland O. Erdahl, Richard A. Farrell, William Glavin, Dr.
John A. Moore, Patti McGill Peterson and John W. Pratt, who acknowledged the
foregoing instrument to be his free act and deed.
Before me,
-----------------------------------
Notary Public
My commission expires:
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EXHIBIT B
[NAME OF PORTFOLIO]
(a series of John Hancock Tax-Exempt Series Fund)
101 Huntington Avenue
Boston, Massachusetts 02199
July 1, 1996
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199
Investment Management Contract
Ladies and Gentlemen:
John Hancock Tax-Exempt Series Fund (the "Fund"), of which [Name of Portfolio]
(the "Portfolio") 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 Fund'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
Portfolio.
The Board of Trustees of the Fund (the "Trustees") has selected John Hancock
Advisers, Inc. (the "Adviser") to provide overall investment advice and
management for the Portfolio, 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 Fund, on behalf of the Portfolio, agree as
follows:
1. DELIVERY OF DOCUMENTS. The Fund has furnished the Adviser with copies,
properly certified or otherwise authenticated, of each of the following:
(a) Declaration of Trust, dated March 24, 1987, as amended from time to
time (the "Declaration of Trust");
(b) By-Laws of the Fund as in effect on the date hereof;
(c) Resolutions of the Trustees selecting the Adviser as investment
adviser for the Portfolio and approving the form of this Agreement;
(d) Commitments, limitations and undertakings made by the Portfolio to
state securities or "blue sky" authorities for the purpose of
qualifying shares of the Portfolio for sale in such states; and
(e) The Fund's Code of Ethics.
The Fund 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 Portfolio continuing and suitable investment programs
B-1
with respect to investments, consistent with the investment objectives,
policies and restrictions of the Portfolio. 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 Portfolio's then-current Prospectus and
Statement of Additional Information included in the registration statement
of the Fund as in effect from time to time under the Securities Act of
1933, as amended, and the Investment Company Act of 1940, as amended (the
"1940 Act"), the Adviser will, at its own expense:
(a) furnish the Portfolio with advice and recommendations, consistent with
the investment objectives, policies and restrictions of the Portfolio,
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 Portfolio in connection with policy decisions to be made by
the Trustees or any committee thereof with respect to the Portfolio's
investments and, as requested, furnish the Portfolio with research,
economic and statistical data in connection with the Portfolio's
investments and investment policies;
(c) provide administration of the day-to-day investment operations of the
Portfolio;
(d) submit such reports relating to the valuation of the Portfolio's
securities as the Trustees may reasonably request;
(e) assist the Portfolio in any negotiations relating to the Portfolio'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 Portfolio 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
Portfolio;
(h) from time to time or at any time requested by the Trustees, make
reports to the Portfolio 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 Portfolio;
B-2
(i) maintain all books and records with respect to the Portfolio'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
Portfolio'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 Portfolio and
will be surrendered to the Portfolio 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 Portfolio;
(l) give instructions to the Portfolio's custodian as to deliveries of
securities to and from such custodian and transfer of payment of cash
for the account of the Portfolio; and
(m) appoint and employ one or more sub-advisors satisfactory to the
Portfolio under sub-investment management agreements.
3. EXPENSES PAID BY THE ADVISER. The Adviser will pay:
(a) the compensation and expenses of all officers and employees of the
Fund ;
(b) the expenses of office rent, telephone and other utilities, office
furniture, equipment, supplies and other expenses of the Portfolio;
and
(c) any other expenses incurred by the Adviser in connection with the
performance of its duties hereunder.
4. EXPENSES OF THE PORTFOLIO 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 Fund
or the Portfolio prior to the effective date of this Agreement;
(b) without limiting the generality of the foregoing clause (a), the
expenses of organizing the Fund and the Portfolio (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 Fund under the Securities Act of
1933, as amended, and of qualifying the shares for sale under state
securities laws for the initial offering and sale of shares;
B-3
(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 Portfolio other than through the Adviser;
(d) legal, accounting, financial, management, tax and auditing fees and
expenses of the Portfolio (including an allocable portion of the cost
of its employees rendering such services to the Portfolio);
(e) the fees and disbursements of custodians and depositories of the
Portfolio's assets, transfer agents, disbursing agents, plan agents
and registrars;
(f) taxes and governmental fees assessed against the Portfolio's assets
and payable by the Portfolio;
(g) the cost of preparing and mailing dividends, distributions, reports,
notices and proxy materials to shareholders of the Portfolio;
(h) brokers' commissions and underwriting fees;
(i) the expense of periodic calculations of the net asset value of the
shares of the Portfolio; 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 an
annual rate equal to (i) 0.50% of the average daily net asset value of the
Portfolio up to $250,000,000 of average daily net assets, (ii) 0.45% of the
next $250,000,000 of average daily net assets, (iii) 0.425% of the next
$500,000,000 of average daily net assets, (iv) 0.40% of the next
$250,000,000 of average daily net assets and (v) 0.30% of the average daily
net assets of the Portfolio in excess of $1,250,000,000.
The "average daily net assets" of the Portfolio shall be determined on the
basis set forth in the Portfolio'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 Portfolio for less than a full
month. On any day that the net asset value calculation is suspended as
specified in the Portfolio'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 Portfolio, exclusive of
certain expenses prescribed by state law, are in excess of any limitation
imposed by the law of a state where the Portfolio 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.
B-4
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
Portfolio'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 Portfolio'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
Portfolio 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 Portfolio. 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 Portfolio, 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 Portfolio, the Adviser will
act solely on its own behalf and not in any way on behalf of the Portfolio.
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 Fund , the Portfolio 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 FUND AND THE PORTFOLIO. The Fund and the Portfolio 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
B-5
as this Agreement shall no longer be in effect, the Fund and the Portfolio
will (to the extent that they lawfully can) cease to use such a name or any
other name indicating that the Portfolio is advised by or otherwise
connected with the Adviser. The Portfolio acknowledges that it has adopted
the name ["Name of Portfolio"] 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
Fund 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 Fund shall be deemed, when acting within the
scope of his employment by the Fund, to be acting in such employment solely
for the Fund and not as the Adviser's employee or agent.
11. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement shall remain in
force until June 30, 1998, and from year to year thereafter, but only so
long as such continuance is specifically approved at least annually by (a)
a majority of the Trustees who are not interested persons of the Adviser or
(other than as Board members) of the Portfolio, 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
Portfolio. 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 Portfolio, 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 Fund. 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 Portfolio, 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 Portfolio, as defined in the 1940 Act.
B-6
13. GOVERNING LAW. This Agreement shall be governed and construed in accordance
with the laws of The Commonwealth of Massachusetts.
14. SEVERABILITY. The provisions of this Agreement are independent of and
separable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any
other or others of them may be deemed invalid or unenforceable in whole or
in part.
15. MISCELLANEOUS. The captions in this Agreement are included for convenience
of reference only and in no way define or limit any of the provisions
hereof or otherwise affect their construction or effect. This Agreement may
be executed simultaneously in two or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and
the same instrument. The name [Name of Portfolio] is a series designation
of the Trustees under the Fund'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 Portfolio 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 Portfolio and its property. The Portfolio shall not be liable
for the obligations of any other series of the Fund and no other series
shall be liable for the Portfolio's obligations hereunder.
Yours very truly,
JOHN HANCOCK TAX-EXEMPT SERIES FUND
on behalf of [Name of Portfolio]
By: _______________________________
Title:_____________________________
The foregoing contract is hereby
agreed to as of the date hereof.
JOHN HANCOCK ADVISERS, INC.
By: ______________________________
Title:
B-7
EXHIBIT C
The Adviser provides investment advisory services to the following John Hancock
funds with investment objectives substantially identical to those of the
Portfolios:
ASSET SIZE
(as of 4/22/96)
NAME OF FUND (in millions) ADVISORY FEE
John Hancock Tax- $476.0 0.55% of the first $500,000,000
Exempt Income Fund of the Fund's average daily net
assets; 0.50% of the next
$500,000,000; and 0.45% in
excess of $1,000,000,000.
John Hancock Tax- $181.9 0.55% of the Fund's average
Free Bond Fund daily net assets.
John Hancock Managed $203.1 0.60% of the first $250,000,000
Tax-Exempt Fund of the Fund's average daily net
assets; 0.50% of the next
$500,000,000; and 0.45% in
excess of $750,000,000.
C-1
EXHIBIT D
PART I
EXISTING INVESTMENT POLICIES
AND RESTRICTIONS
1. EXISTING INVESTMENT POLICIES
The investment objective of the Portfolios is to provide current income that is
excludable from gross income for Federal income tax purposes and, for the
Massachusetts and New York Portfolios, respectively, is exempt from the personal
income tax of Massachusetts and New York, and from New York City personal income
taxes. The Portfolios seek to provide the maximum level of tax exempt income
that is consistent with preservation of capital. There is no assurance that the
Portfolios will achieve their investment objective.
As a fundamental policy, at least 80% of each Portfolio's net assets (taken at
market value) will consist of municipal bonds and notes and other debt
instruments, whose interest is excludable from Federal gross income and exempt
from the personal income tax of Massachusetts or New York State and New York
City, as the case may be ("Tax-Exempt Bonds").
From time to time, however, limited availability of these obligations may result
from market conditions. As a temporary defensive posture, a Portfolio may seek
to invest its assets in debt securities whose interest is excludable for Federal
income tax purposes during these periods, but not necessarily exempt from the
personal income tax of the applicable State and New York City, and subject to
the possible application of alternative minimum taxes.
When the Adviser determines that unfavorable investment conditions warrant a
temporary defensive posture, each Portfolio may invest up to 50% of its net
assets in cash or in short-term obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities, or in commercial paper and bank
obligations (as limited below). Dividends derived from interest earned on these
obligations generally are taxable to shareholders for Federal purposes. They may
also be taxable for state and local purposes unless treated as derived from
interest on direct obligations of the U.S. Government under the laws of certain
states, including Massachusetts.
Municipal bonds generally are classified as either general obligation bonds or
revenue bonds. General obligation bonds are backed by the credit of an issuer
having taxing power and are payable from the issuer's general unrestricted
revenues. Their payment may depend on an appropriation of the issuer's
legislative body. Revenue bonds, by contrast, are payable only from the revenues
derived from a particular project, facility or a specific revenue source. They
are not generally payable from the unrestricted revenues of the issuer.
Municipal notes include tax anticipation notes, bond anticipation notes, revenue
anticipation notes, and project notes.
D-1
Municipal commercial paper obligations are unsecured promissory notes issued by
municipalities to meet short-term credit needs.
All of the investments of each Portfolio will be made in:
(1) Tax-exempt bonds which are rated A or better by Standard & Poor's
Ratings Group ("Standard & Poor's"), Moody's Investors Service, Inc.
("Moody's") or Fitch Investors Services, Inc. ("Fitch").
Alternatively, the bonds may be unrated but considered by the Adviser
to be of comparable quality, and issued by issuers which have other
securities rated not lower than A by Standard & Poor's, Moody's or
Fitch.
(2) Tax-exempt bonds which are rated BBB or BB by Standard & Poor's, Baa
or Ba by Moody's or BBB or BB by Fitch, or which are unrated but are
considered by the Adviser to be of comparable quality. Not more than
one-third of the Portfolio's total assets will be invested in such
tax-exempt bonds rated lower than A or determined to be of comparable
quality.
(3) Notes of issuers having an issue of outstanding tax-exempt bonds rated
not lower than A by Standard & Poor's, Moody's or by Fitch, or notes
which are guaranteed by the U.S. Government or rated MIG-1 or MIG-2 by
Moody's or unrated notes which are determined to be of comparable
quality by the Adviser.
(4) Obligations issued or guaranteed by the U.S. Government, its agencies
or instrumentalities. Some obligations issued by an agency or
instrumentality may be supported by the full faith and credit of the
U.S. Treasury while others may be supported only by the credit of the
particular Federal agency or instrumentality.
(5) Commercial paper which is rated A-1 or A-2 by Standard & Poor's, P-1
or P-2 by Moody's, or at least F-1 by Fitch, or which is not rated,
but is considered by the Adviser to be of comparable quality;
obligations of banks with $1 billion of assets and cash equivalents,
including certificates of deposit, bankers acceptances and repurchase
agreements. Ratings of A-2 or P-2 on commercial paper indicate a
strong capacity for timely payment, although the relative degree of
safety is not as high as for issues designated A-1 or P-1.
The Portfolios may invest in certain types of tax-exempt bonds whose interest
income may be treated as a tax preference item under the Federal alternative
minimum tax. The Portfolios will not include tax-exempt bonds generating this
income for purposes of measuring compliance with the 80% fundamental investment
policy described above.
A Portfolio may purchase securities on a when-issued basis and engage in
short-term trading. A Portfolio may also invest in variable rate and floating
rate obligations, whose interest payments may fluctuate based on changes in
market rates.
D-2
2. EXISTING FUNDAMENTAL INVESTMENT RESTRICTIONS
The Portfolios observe the following fundamental restrictions. The Portfolios
may not:
(1) Issue senior securities, except as permitted by paragraph (2) below.
For purposes of this restriction, financial futures contracts and
repurchase agreements entered into in accordance with a Portfolio's
investment policy are not deemed to be senior securities.
(2) Borrow money, except from banks as a temporary measure for
extraordinary emergency purposes in amounts not to exceed 5% of the
Portfolio's total assets (including the amount borrowed) taken at
market value. The Portfolio will not leverage to attempt to increase
income. The Portfolio will not purchase securities while borrowings
are outstanding.
(3) Pledge, mortgage or hypothecate its assets, except to secure
indebtedness permitted by paragraph (2) above and then only if such
pledging, mortgaging or hypothecating does not exceed 10% of the
Portfolio's total assets taken at market value. (The Portfolios have
no present intention of engaging in transactions permitted under this
paragraph (3).)
(4) Act as an underwriter, except to the extent that in connection with
the disposition of portfolio securities, the Portfolio may be deemed
to be an underwriter for purpose of the Securities Act of 1933. A
Portfolio may also participate as part of a group in bidding for the
purchase of Tax-Exempt Bonds directly from an issuer in order to take
advantage of the lower purchase price available to members of such
groups.
(5) Purchase or sell real estate or any interest therein, but this
restriction shall not prevent a Portfolio from investing in Tax-Exempt
Bonds secured by real estate or interests therein.
(6) Make loans, except for the purchase of a portion of an issue of
Tax-Exempt Bonds or short-term taxable investment, whether or not the
purchase is made upon the original issuance of such securities, and
repurchase agreements entered into in accord with a Portfolio's
investment policy.
(7) Except as permitted by paragraph (4) above, participate in a joint or
joint-and-several basis in any securities trading account. The
"bunching" of orders for the sale or purchase of marketable portfolio
securities with other accounts under the management of the Adviser to
save commissions or to average prices among them is not deemed to
result in a joint securities trading account.
(8) Buy or sell commodity contracts, except financial futures contracts as
described in the Prospectus under the caption "Investment Objective
and Policies."
(9) Purchase securities on margin (except that it may obtain such
short-term credits as may be necessary for the clearance of purchase
D-3
or sales of securities and may make margin payments in connection with
transactions in financial futures) or make short sales of securities.
(10) Purchase the securities of issuers conducting their principal business
activity in the same industry if, immediately after such purchase, the
value of its investments in such industry would exceed 25% of its
total assets taken at market value at the time of each investment.
(Tax-Exempt Bonds and securities issued or guaranteed by the United
States Government and its agencies and instrumentalities are not
subject to this limitation.)
(11) Purchase securities of an issuer (other than the U.S. Government, its
agencies or instrumentalities), if
(a) such purchase would cause more than 10 percent of the outstanding
voting securities of such issuer to be held by the Fund; or
(b) to the Portfolio's knowledge, one or more of the Trustees or
officers of the Fund or directors or officers of the Adviser or
any investment management subsidiary of the Adviser individually
owns beneficially more than 0.5 percent and together own
beneficially more than 5 percent of the securities of such
issuer, nor will the Portfolio hold the securities of any such
issuer. For the purposes of this paragraph (11), each government
unit (state, county, city, for example) and each subdivision,
agency or instrumentality thereof, and each multimember agency of
which any of them is a member, shall be considered a separate
issuer.
(12) Invest in securities of another registered investment company.
(13) Except for investments which, in the aggregate, taken at cost do not
exceed 5 percent of the Portfolio's total assets taken at market
value, purchase securities unless the issuer thereof has a record of
at least 3 years' continuous operation prior to the purchase. (This
limitation does not apply to securities that are issued or guaranteed
by the United States government and its agencies or instrumentalities
or are secured by the pledge of the faith, credit, and taxing power of
any entity authorized to issue Tax-Exempt Bonds.)
(14) Purchase any security, including any repurchase agreement maturing in
more than seven days, which is subject to legal or contractual delays
in or restrictions on resale, or which is not readily marketable, if
more than 10% of the net assets of the Portfolio, taken at market
value, would be invested in such securities.
3. EXISTING NONFUNDAMENTAL INVESTMENT RESTRICTION
The Portfolios observe the following nonfundamental restrictions. The Portfolios
may not:
(1) Notwithstanding any investment restriction to the contrary, each
Portfolio may in connection with the John Hancock fund complex
D-4
Deferred Compensation Plan for Independent Trustees/Directors,
purchase securities of other investment companies within the John
Hancock fund complex provided that, as a result, (i) no more than 10%
of the Fund's asset would be invested in securities of all other
investment companies, (ii) such purchase would not result in more than
3% of the total outstanding voting securities of any one such
investment company being held by each Portfolio and (iii) no more than
5% of the Fund's assets would be invested in any one such investment
company.
PART II
PROPOSED FUNDAMENTAL AND NONFUNDAMENTAL INVESTMENT
RESTRICTIONS
1. PROPOSED FUNDAMENTAL INVESTMENT RESTRICTIONS
Each Portfolio may not:
(1) Issue senior securities, except as permitted by paragraphs (2) and (7)
below. For purposes of this restriction, the issuance of shares of
beneficial interest in multiple classes or series, the purchase or
sale of options, futures contracts and options on futures contracts,
forward commitments, and repurchase agreements entered into in
accordance with the Portfolios' investment policies, and the pledge,
mortgage or hypothecation of the Portfolios' assets within the meaning
of paragraph (3) below are not deemed to be senior securities.
(2) Borrow money, except from banks as a temporary measure for
extraordinary emergency purposes in amounts not to exceed 33-1/3% of
the Portfolio's total assets (including the amount borrowed) taken at
market value. The Portfolio will not purchase securities while
borrowings are outstanding.
(3) Pledge, mortgage or hypothecate its assets, except to secure
indebtedness permitted by paragraph (2) above and then only if such
pledging, mortgaging or hypothecating does not exceed 10% of the
Portfolio's total assets taken at market value.
(4) Act as an underwriter, except to the extent that in connection with
the disposition of portfolio securities, the Portfolio may be deemed
to be an underwriter for purpose of the Securities Act of 1933. A
Portfolio may also participate as part of a group in bidding for the
purchase of Tax-Exempt Bonds directly from an issuer in order to take
advantage of the lower purchase price available to members of such
groups.
(5) Purchase or sell real estate or any interest therein, but this
restriction shall not prevent a Portfolio from investing in Tax-Exempt
Bonds secured by real estate or interests therein.
(6) Make loans, except that the Portfolio (1) may lend portfolio
securities in accordance with the Portfolio's investment policies in
an amount up to 33 1/3% of the Portfolio's total assets taken at
market value, (2) enter into repurchase agreements, and (3) purchase
D-5
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.
(7) Purchase or sell commodities or commodity contracts or puts, calls or
combinations of both, except options on securities, securities
indices, currency and other financial instruments, futures contracts
on securities, securities indices, currency and other financial
instruments and options on such futures contracts, forward
commitments, interest rate swaps, caps and floors, securities index
put or call warrants and repurchase agreements entered into in
accordance with the Portfolio's investment policies.
(8) Purchase the securities of issuers conducting their principal business
activity in the same industry if, immediately after such purchase, the
value of its investments in such industry would exceed 25% of its
total assets taken at market value at the time of each investment.
(Tax-Exempt Bonds and securities issued or guaranteed by the United
States Government and its agencies and instrumentalities are not
subject to this limitation.)
(9) Purchase securities of an issuer (other than the U.S. Government, its
agencies or instrumentalities), if such purchase would cause more than
10 percent of the outstanding voting securities of such issuer to be
held by the Portfolio.
2. PROPOSED NONFUNDAMENTAL INVESTMENT RESTRICTIONS
The Portfolios may not:
(1) Except as permitted by fundamental investment restriction (4) above,
participate on a joint or joint-and-several basis in any securities
trading account. The "bunching" of orders for the sale or purchase of
marketable portfolio securities with other accounts under the
management of the Adviser to save commissions or to average prices
among them is not deemed to result in a joint securities trading
account.
(2) Purchase securities on margin or make short sales unless by virtue of
its ownership of other securities, the Portfolio 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 that the Portfolio may obtain such short-term
credits as may be necessary for the clearance of purchases and sales
of securities.
(3) Purchase securities of an issuer (other than the U.S. Government, its
agencies or instrumentalities), if to the Portfolio's knowledge, one
or more of the Trustees or officers of the Fund or directors or
officers of the Adviser or any investment management subsidiary of the
Adviser individually owns beneficially more than 0.5 percent and
together own beneficially more than 5 percent of the securities of
such issuer, nor will the Portfolio hold the securities of any such
issuer. For the purposes of this paragraph (3), each government unit
(state, county, city, for example) and each subdivision, agency or
D-6
instrumentality thereof, and each multimember agency of which any of
them is a member, shall be considered a separate issuer.
(4) Purchase a security if, as a result, (i) more than 10% of the
Portfolio's total assets would be invested in the securities of other
investment companies, (ii) the Portfolio would hold more than 3% of
the total outstanding voting securities of any one investment company,
or (iii) more than 5% of the Portfolio's total assets would be
invested in the securities of any one investment company. These
limitations do not apply to (a) the investment of cash collateral,
received by the Portfolio in connection with lending the Portfolio's
portfolio securities, in the securities of open-end investment
companies or (b) the purchase of shares of any investment company in
connection with a merger, consolidation, reorganization or purchase of
substantially all of the assets of another investment company. Subject
to the above percentage limitations, the Portfolio may, in connection
with the John Hancock Group of Funds Deferred Compensation Plan for
Independent Trustees/Directors, purchase securities of other
investment companies within the John Hancock Group of Funds. The
Portfolio may not purchase the shares of any closed-end investment
company except in the open market where no commission or profit to a
sponsor or dealer results from the purchase, other than customary
brokerage fees.
(5) Except for investments which, in the aggregate, taken at cost do not
exceed 5 percent of the Portfolio's total assets taken at market
value, purchase securities unless the issuer thereof, together with
any predecessors, has a record of at least 3 years' continuous
operation prior to the purchase. (This limitation does not apply to
securities that are issued or guaranteed by the United States
government and its agencies or instrumentalities or are secured by the
pledge of the faith, credit, and taxing power of any entity authorized
to issue Tax-Exempt Bonds.)
(6) Purchase any security, including any repurchase agreement maturing in
more than seven days, which is subject to legal or contractual delays
in or restrictions on resale, or which is not readily marketable, if
more than 15% of the net assets of the Portfolio, taken at market
value, would be invested in such securities.
D-7
JOHN HANCOCK TAX-EXEMPT SERIES FUND - MASSACHUSETTS PORTFOLIO
JOHN HANCOCK TAX-EXEMPT SERIES FUND - NEW YORK PORTFOLIO
SPECIAL MEETING OF THE SHAREHOLDERS - JUNE 26, 1996
PROXY SOLICITATION BY THE BOARD OF TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward J.
Boudreau, Jr., Susan S. Newton and James B. Little, with full power of
substitution in each, to vote all the shares of beneficial interest of the
above-referenced Portfolio which the undersigned is (are) entitled to vote at
the Special Meeting of Shareholders (the "Meeting") of the Portfolio to be held
at 101 Huntington Avenue, Boston, Massachusetts, on June 26, 1996 at 9:00 a.m.,
Boston time, and at any adjournment of the Meeting. All powers may be exercised
by a majority of said proxy holders or substitutes voting or acting, or, if only
one votes and acts, then by that one. Receipt of the Proxy Statement dated May
17, 1996 is hereby acknowledged. If not revoked, this proxy shall be voted:
PLEASE SIGN, DATE AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
Date __________________, 1996
NOTE: Signature(s) should
agree with name(s) printed
herein. When signing as
attorney, executor,
administrator, trustee or
guardian, please give your
full title as such. If a
corporation, please sign in
full corporate name by
president or other authorized
officer. If a partnership,
please sign in partnership
name by authorized person.
-----------------------
Signature(s)
VOTE THIS PROXY CARD TODAY! YOUR PROMPT RESPONSE WILL SAVE YOUR PORTFOLIO THE
EXPENSE OF ADDITIONAL MAILINGS.
THIS PROXY SHALL BE VOTED IN FAVOR OF (FOR) PROPOSALS 2, 3, 4, 5, 6, 7 AND 8 AND
FOR THE NOMINEES IN PROPOSAL 1 IF NO SPECIFICATION IS MADE BELOW. AS TO ANY
OTHER MATTER, SAID PROXY OR PROXIES SHALL VOTE IN ACCORDANCE WITH THEIR BEST
JUDGEMENT. Please use blue or black ink or dark pencil. Do not use red ink.
(1) To elect sixteen Trustees to hold office until their respective
successors have been duly elected and qualified.
Dennis S. Aronowitz William F. Glavin
Edward J. Boudreau, Jr. Bayard Henry
Richard P. Chapman, Jr. Anne C. Hodsdon
William J. Cosgrove Dr. John A. Moore
Douglas M. Costle Patti McGill Peterson
Leland O. Erdahl John W. Pratt
Richard A. Farrell Richard S. Scipione
Gail D. Fosler Edward J. Spellman
---
|___| FOR all nominees listed (except as marked to the contrary below)
---
|___| WITHHOLD AUTHORITY to vote for all nominees listed below
YOU MAY WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE BY WRITING THE NOMINEE(S)
NAME(S) ON THE LINE BELOW
(2) To approve an Amended and Restated Declaration of Trust for the
Portfolio.
---- ---- ----
FOR |____| AGAINST |____| ABSTAIN |____|
(3) To approve a new investment management contract between John Hancock
Advisers, Inc. and the Portfolio.
---- ---- ----
FOR |____| AGAINST |____| ABSTAIN |____|
(4) To redesignate as nonfundamental:
(a) the investment objective of the Portfolio as described in
Proposal 4 of the Proxy Statement.
---- ---- ----
FOR |____| AGAINST |____| ABSTAIN |____|
(b) the investment policies of the Portfolio that are described in
Proposal 4 of the Proxy Statement.
---- ---- ----
FOR |____| AGAINST |____| ABSTAIN |____|
(c) the investment restrictions of the Portfolio that are described
in Proposal 4 of the Proxy Statement.
---- ---- ----
FOR |____| AGAINST |____| ABSTAIN |____|
(5) To amend the Portfolio's fundamental investment restriction regarding
senior securities.
---- ---- ----
FOR |____| AGAINST |____| ABSTAIN |____|
(6) To amend the Portfolio's fundamental investment restriction regarding
borrowing.
---- ---- ----
FOR |____| AGAINST |____| ABSTAIN |____|
(7) To amend the Portfolio's fundamental investment restriction regarding the
making of loans.
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FOR |____| AGAINST |____| ABSTAIN |____|
(8) To amend the Portfolio's fundamental investment restriction regarding
transactions in commodities and commodity contracts.
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FOR |____| AGAINST |____| ABSTAIN |____|
PLEASE DO NOT FORGET TO SIGN THE REVERSE SIDE OF THIS CARD.