As filed with the Securities and Exchange Commission on March 24, 1999.
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
FILE NUMBER 811-8568
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. __)
[X] Filed by the Registrant
[ ] Filed by a Party other than the Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
JOHN HANCOCK BANK AND THRIFT OPPORTUNITY
(Name of Registrant as Specified in Its Charter)
JOHN HANCOCK BANK AND THRIFT OPPORTUNITY
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c) (1) (ii), 14a-6 (i) (1), or
14a-6 (i) (2) or Item 22(a) (2) or schedule 14A (sent by wire transmission).
[ ] Fee paid previously with preliminary materials.
[X] No fee required.
John Hancock Bank and Thrift Opportunity Fund
March 24, 1999
Dear Fellow Shareholder:
As an investor in the John Hancock Bank and Thrift Opportunity Fund, you are
cordially invited to attend the annual shareholder meeting on Thursday, April
29, 1999 at 9:00 a.m. Eastern time, to be held at John Hancock Funds, 101
Huntington Avenue, Boston, MA 02199.
The proposals in the enclosed proxy statement to elect trustees and ratify the
selection of accountants are routine items. A routine item is one which occurs
annually and makes no fundamental or material changes to the fund's investment
objective, policies or restrictions, or to the investment management contract.
Elect Your Fund's Board of Trustees
Proposal number one asks you to elect five trustees to serve until their
respective successors are elected and qualified. Your proxy statement includes a
brief description of each individual's background.
Ratify The Trustees' Selection of Accountants
Proposal number two asks you to ratify or reject the trustees' selection of
Deloitte & Touche LLP as the fund's independent accountants for the current
fiscal year. Deloitte & Touche LLP have been the fund's independent accountants
since the fund's inception.
Amend Fundamental Investment Restrictions
Proposal number three asks you to approve the amendment of the fund's
restrictions relating to the fund's ability to issue senior securities.
Your Vote is Important!
Please complete the enclosed proxy ballot form, sign it and mail it to us
immediately. For your convenience, a postage-paid return envelope has been
provided. Your prompt response will help avoid the cost of additional mailings
at your fund's expense.
If you have any questions, please call 1-800-426-5523, Monday through Friday
between 8:30 a.m. and 5:00 p.m. Eastern time.
Thank you in advance for your prompt action on this very important matter.
Sincerely,
/s/Edward J. Boudreau, Jr.
--------------------------
Edward J. Boudreau, Jr.
Chairman and CEO
JOHN HANCOCK BANK AND THRIFT OPPORTUNITY FUND
101 Huntington Avenue, Boston, Massachusetts 02199
NOTICE OF ANNUAL MEETINGS OF SHAREHOLDERS
To Be Held April 29, 1999
This is the formal agenda for your fund's shareholder meeting. It tells you what
matters will be voted on and the time and place of the meeting, in case you want
to attend in person.
To the Shareholders of John Hancock Bank and Thrift Opportunity Fund (the
"fund"):
A shareholder meeting for your fund will be held at 101 Huntington Avenue,
Boston, Massachusetts on Thursday, April 29, 1999 at 9:00 a.m., Eastern time, to
consider the following proposals:
(1) To elect five Trustees to serve until their respective successors are
elected and qualified.
(2) To ratify or reject the Trustees' selection of Deloitte & Touche LLP as the
fund's independent public accountants for the fund's current fiscal year.
(3) To approve amendments to certain of the fund's fundamental investment
restrictions.
(4) To transact such other business as may properly come before the meeting or
any adjournments of the meeting.
Your Trustees recommend that you vote in favor of all proposals.
Shareholders of record as of the close of business on March 10, 1999 are
entitled to notice of and to vote at the annual meeting and at any related
follow-up meeting.
Whether or not you expect to attend the meeting, please complete and return the
enclosed proxy in the accompanying envelope. No postage is necessary if mailed
in the United States.
By order of the Board of Trustees,
/s/Susan S. Newton
------------------
Susan S. Newton
Vice President and Secretary
March 24, 1999
P90PX 3/99
JOHN HANCOCK BANK AND THRIFT OPPORTUNITY FUND
101 Huntington Avenue, Boston, Massachusetts 02199
ANNUAL MEETING OF SHAREHOLDERS
To held on April 29, 1999
PROXY STATEMENT
This proxy statement contains the information you should know before
voting on the proposals described in the notice. The fund will furnish without
charge a copy of its Annual Report to any shareholder upon request. If you would
like a copy of your fund's report, please send a written request to the
attention of the fund at 101 Huntington Avenue, Boston, Massachusetts 02199 or
call John Hancock Funds at 1-800-892-9552.
This proxy statement is being used by your fund's Trustees to solicit
proxies to be voted at the annual meeting of your fund's shareholders. This
meeting will be held at 101 Huntington Avenue, Boston, Massachusetts on
Thursday, April 29, 1999 at 9:00 a.m., Eastern time.
If you sign the enclosed proxy card and return it in time to be voted
at the meeting, your shares will be voted in accordance with your instructions.
Signed proxies with no instructions will be voted FOR all proposals. If you want
to revoke your proxy, you may do so before it is exercised at the meeting by
filing a written notice of revocation with the fund at 101 Huntington Avenue,
Boston, Massachusetts 02199, by returning a signed proxy with a later date
before the meeting, or by attending the meeting and voting in person by
notifying the fund's secretary (without complying with any formalities) at any
time before your proxy is voted.
Record Ownership
The Trustees have fixed the close of business on March 10, 1999 as the
record date to determine which shareholders are entitled to vote at the meeting.
Shareholders are entitled to one vote per share on all business relating to the
fund at the annual meeting or any postponements. On the record date, there were
87,100,000 common shares of beneficial interest of the fund outstanding. The
fund's management does not know of anyone who beneficially owned more than 5% of
the fund's shares outstanding on the record date. (Beneficial ownership means
voting power and/or investment power, which includes the power to dispose of
shares.)
PROPOSAL I
ELECTION OF TRUSTEES
General
The fund's Board of Trustees consists of thirteen members. The Board is
divided into three staggered term classes. Two classes contain four Trustees
each and the third class contains five Trustees. The term of one class expires
each year and no term continues for more than three years after the applicable
election. Each class of Trustees will stand for election at the conclusion of
their respective three-year terms. Classifying the Trustees in this manner may
prevent replacement of a majority of the Trustees for up to a two-year period.
1
Each nominee for Trustee is currently serving as a Trustee of the fund.
Each Trustee has served on the Board of Trustees since the fund's inception on
June 16, 1994, except that Messrs. Cunningham, Linbeck, Dion and Brown have
served on the Board since December 1994, December 1994, September 1998 and March
1999, respectively and Ms. Hodsdon has served on the Board of Trustees since
March 1996.
You may use the proxy card to authorize the proxies to vote for the
nominees or you may withhold authority to vote for the nominees. If no contrary
instructions are given, the proxies will vote FOR the nominees. All of the
nominees have consented to their nominations and have agreed to serve if
elected. If, for any reason, any nominee should not be available for election or
able to serve as a Trustee, the proxies will exercise their voting power in
favor of a substitute nominee, if any, as the Trustees may designate. The fund
has no reason to believe that it will be necessary to designate a substitute
nominee.
Proposal 1
Because of the staggered Board of Trustees' system, the terms of
Messrs. Brown, Carlin, Cunningham, Hiser and Toolan expire at the 1999 annual
meeting and they are therefore the current nominees for election; the terms of
Messrs. Dion, Ladner, Linbeck and Scipione expire at the 2000 annual meeting;
and the terms of Ms. Hodsdon and Messrs. Boudreau, Pruchansky and Smith expire
at the 2001 annual meeting. The table below lists the nominees for election as
Trustees, including their principal occupations for the past five years and
their beneficial share ownership in the fund. The table also lists the Trustees
who are not currently standing for election and whose current terms continue
until the annual meetings in 2000 and 2001, respectively.
Vote Required For Proposal 1
The vote of a plurality of the votes cast by the shares of the fund is
sufficient to elect the nominees.
Common Shares Owned
Beneficially, Directly
Name (Age) and Position Principal Occupation or Indirectly, on
with the Fund During the Past Five Years March 10, 1999(1)(2)
------------- -------------------------- --------------------
NOMINEES FOR ELECTION
TERM TO EXPIRE IN 2002
*Stephen L. Brown Chairman and Chief Executive Officer, John Hancock --
(Age 61) Mutual Life Insurance Company; Director, the Adviser,
Trustee John Hancock Funds, Inc. ("John Hancock Funds"),
John Hancock Insurance Agency, Inc. ("Insurance
Agency, Inc."), John Hancock Subsidiaries, Inc., The
Berkeley Financial Group ("The Berkeley Group") and
Federal Reserve Bank of Boston; Director, John
Hancock Signature Services ("Signature Services")
(until January 1997); Trustee, John Hancock Asset
Management (until March 1997) and Trustee of 68 funds
managed by the Adviser.
2
Common Shares Owned
Beneficially, Directly
Name (Age) and Position Principal Occupation or Indirectly, on
with the Fund During the Past Five Years March 10, 1999(1)(2)
------------- -------------------------- --------------------
NOMINEES FOR ELECTION
TERM TO EXPIRE IN 2002
James F. Carlin Chairman and CEO, Carlin Consolidated, Inc. 400
(Age 58) (management/investments); Director, Arbella Mutual
Trustee (insurance), Health Plan Services, Inc., Massachusetts
Health and Education Tax Exempt Trust, Flagship
Healthcare, Inc., Carlin Insurance Agency, Inc.,
West Insurance Agency, Inc. (until May 1995) and Uno
Restaurant Corp.; Chairman, Massachusetts Board of Higher
Education (since 1995) and Trustee of 33 funds managed
by the Adviser.
William H. Cunningham Chancellor, University of Texas System and former --
(Age 55) President of the University of Texas, Austin, Texas;
Trustee Lee Hage and Joseph D. Jamail Regents Chair of
Free Enterprise; Director, LaQuinta Motor Inns, Inc.
(hotel management company), Jefferson-Pilot Corporation
(diversified life insurance company) and LBJ Foundation
Board (education foundation); Advisory Director, Texas
Commerce Bank-Austin and Trustee of 33 funds managed by
the Adviser.
Harold R. Hiser, Jr. Executive Vice President, Schering-Plough Corporation 15,200
(Age 67) (pharmaceuticals) (retired 1996); Director, ReCapital
Trustee Corporation (reinsurance) (until 1995) and Trustee of
33 funds managed by the Adviser.
John P. Toolan Director, The Smith Barney Muni Bond Funds, The Smith 10,000
(Age 68) Barney Tax-Free Money Funds, Inc., Vantage Money Market
Trustee Funds (mutual funds), The Inefficient-Market Fund, Inc.
(closed-end investment company) and Smith Barney Trust
Company of Florida; Chairman, Smith Barney Trust
Company (retired December 1991); Director, Smith
Barney, Inc., Mutual Management Company and Smith
Barney Advisers, Inc. (investment advisers) (retired
1991); Senior Executive Vice President, Director and
member of the Executive Committee, Smith Barney, Harris
Upham & Co., Incorporated (investment bankers) (until
1991) and Trustee of 33 funds managed by the Adviser.
3
Common Shares Owned
Beneficially, Directly
Name (Age) and Position Principal Occupation or Indirectly, on
with the Fund During the Past Five Years March 10, 1999(1)(2)
------------- -------------------------- --------------------
TERM TO EXPIRE IN 2000
Ronald R. Dion President and Chief Executive Officer, R.M. Bradley & Co., 100
(Age 52) Inc.; Director, The New England Council and Massachusetts
Trustee Roundtable; Trustee, North Shore Medical Center and a
corporator of the Eastern Bank; Trustee, Emmanuel College
and Trustee of 33 funds managed by the Adviser.
Charles L. Ladner Senior Vice President and Chief Financial Officer, UGI Corp. 800
(Age 60) (Public Utility Holding Company); Vice President and
Trustee Director, AmeriGas Inc. (until 1998); Vice President, AmeriGas
Partners L.P. (until 1997); Director, EnergyNorth, Inc.
(until 1995) and Trustee of 33 funds managed by the Adviser.
Leo E. Linbeck, Jr. Chairman, President, Chief Executive Officer and Director, --
(Age 64) Linbeck Corporation (a holding company engaged in various
Trustee phases of the construction industry and warehousing interests);
Former Chairman, Federal Reserve Bank of Dallas (1992, 1993);
Chairman of the Board, Linbeck Construction Corporation;
Director, Duke Energy Corporation (a diversified energy
company), Daniel Industries, Inc. (manufacturer of gas
measuring products and energy related equipment), GeoQuest
International Holdings, Inc. (a geophysical consulting firm);
Director, Greater Houston Partnership and Trustee of 33 funds
managed by the Adviser.
*Richard S. Scipione General Counsel, John Hancock Mutual Life Insurance 2,477
(Age 61) Company; Director, the Adviser, John Hancock Funds,
Trustee Signator Investors, Inc., Insurance Agency, Inc., John
Hancock Subsidiaries, Inc., Sovereign Asset Management
Corporation ("SAMCorp") and NM Capital Management Inc. ("NM
Capital"); Director, The Berkeley Group and JH Networking
Insurance Agency, Inc.; Director, Signature Services(until
January 1997) and Trustee of 68 funds managed by the Adviser.
4
Common Shares Owned
Beneficially, Directly
Name (Age) and Position Principal Occupation or Indirectly, on
with the Fund During the Past Five Years March 10, 1999(1)(2)
------------- -------------------------- --------------------
TERM TO EXPIRE IN 2001
*Edward J. Boudreau, Jr. Chairman and Chief Executive Officer, the Adviser 2,400
(Age 54) and The Berkeley Group; Chairman, NM Capital,
Chairman SAMCorp and John Hancock Advisers International
Limited ("Advisers International"); Director, John Hancock
Advisers International (Ireland); Chairman, Chief Executive
Officer and President, John Hancock Funds and First Signature
Bank and Trust Company; Director, John Hancock Freedom
Securities Corporation, Insurance Agency, Inc., John Hancock
Capital Corporation and New England/Canada Business Council;
Member, Investment Company Institute Board of Governors;
Director, Asia Strategic Growth Fund, Inc.; Director,
Signature Services (until January 1997) and Trustee and
Chairman of 68 funds managed by the Adviser.
*Anne C. Hodsdon President, Chief Operating Officer and Director, the --
(Age 45) Adviser; Director, The Berkeley Group, John Hancock
President Funds, Advisers International, John Hancock Advisers
International (Ireland) and Insurance Agency, Inc.; Director
and President, NM Capital and SAMCorp; Director, Signature
Services (until January 1997) and Trustee and President of 68
funds managed by the Adviser.
Steven R. Pruchansky Director and President, Mast Holdings, Inc. (since 3,132(3)
(Age 54) 1991); Director, First Signature Bank & Trust Company
Trustee (until August 1991); Director, Mast Realty Trust (until
1994); President, Maxwell Building Corp. (until 1991)
and Trustee of 33 funds managed by the Adviser.
Norman H. Smith Lieutenant General, United States Marine Corps; Deputy 1,046
(Age 65) Chief of Staff for Manpower and Reserve Affairs,
Trustee Headquarters Marine Corps; Commanding General III Marine
Expeditionary Force/3rd Marine Division (retired 1991) and
Trustee of 33 funds managed by the Adviser.
All Trustees and executive officers of the Fund as a group 35,555
* "Interested Person," as defined in the Investment Company Act of 1940, as
amended (the "Investment Company Act"), of the fund and the Adviser.
(1) The information as to beneficial ownership is based on statements furnished
to the fund by the Trustees. Except as otherwise noted, each Trustee has all
voting and investment powers with respect to the shares indicated.
(2) None of the Trustees beneficially owned individually and the Trustees and
executive officers of the fund as a group did not beneficially own, in
excess of one percent of the outstanding shares of the fund as of
March 10, 1999.
(3) Includes 1,312 shares held by Mr. Pruchansky's spouse.
5
The Board of Trustees held four meetings during the fund's fiscal year
ended October 31, 1998. No Trustees 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 they served during the
period in which they served in such capacity.
The Board of Trustees has an Audit Committee. The Audit Committee
members are Messrs. Pruchansky, Cunningham and Dion. All members of the Audit
Committee are Independent Trustees who are not "interested persons." The Audit
Committee held four meetings during the fund's 1998 fiscal year. The Audit
Committee recommends to the full Board auditors for the fund, oversees the audit
of the fund, communicates with both the independent auditors and inside auditors
on a regular basis and provides a forum for the auditors to report and discuss
any matters they deem appropriate at any time.
The Board of Trustees has a special nominating committee known as the
Administration Committee. The Administration Committee members are Messrs. Dion,
Toolan, Ladner, Smith, Pruchansky, Carlin, Linbeck, Cunningham and Hiser. All
members of the Administration Committee are Independent Trustees. The
Administration Committee held four meetings during the fund's 1998 fiscal year.
The Administration Committee selects and nominates for appointment and elects
candidates to serve as Trustees who are not "interested persons." The
Administration Committee also coordinates with Trustees who are interested
persons in the selection and election of fund officers and will consider
nominees recommended by shareholders to serve as Trustees, provided that
shareholders submit recommendations in compliance with all of the pertinent
provisions of Rule 14a-8 under the Securities Exchange Act of 1934, as amended
("Exchange Act").
The Board of Trustees has a Contracts/Operations Committee. The
Contracts/Operations Committee members are Messrs. Ladner, Hiser and Linbeck.
All members of the Contracts/Operations Committee are Independent Trustees. The
Contract/Operations Committee held four meetings during the fund's 1998 fiscal
year. The Contracts/Operations Committee oversees the initiation, operation and
renewal of the various contracts between the fund and other entities. These
contracts include advisory and subadvisory agreements, custodial and transfer
arrangements and arrangements with other service providers.
The Board of Trustees has an Investment Performance Committee. The
Investment Performance Committee members are Messrs. Toolan, Carlin and Smith.
All members of the Investment Performance Committee are Independent Trustees.
The Investment Performance Committee held four meetings during the fund's 1998
fiscal year. The Investment Performance Committee monitors and analyzes the
performance of the fund generally, consults with the Adviser as necessary with
respect to matters considered to require special attention and reviews peer
groups and other comparative standards as necessary.
Compliance With Section 16(a) Reporting Requirements
Section 16(a) of the Securities Exchange Act of 1934 requires the
fund's executive officers, Trustees and persons who own more than ten percent of
the fund's shares ("10% Shareholders") to file reports of ownership and changes
in ownership with the Securities and Exchange Commission ("SEC"). Executive
officers, Trustees and 10% Shareholders are required by SEC regulations to
furnish the fund with copies of all Section 16(a) forms they file. Based solely
on a review of the copies of these reports furnished to the fund and
representations that no other reports were required to be filed, the fund
believes that during the past fiscal year its executive officers, Trustees and
10% Shareholders complied with all applicable Section 16(a) filing requirements.
6
Executive Officers
In addition to the Chairman (Mr. Boudreau) and the President (Ms.
Hodsdon), the table below lists the fund's executive officers. The officers of
the fund became officers on June 16, 1994 (inception), except for Mr. Hood who
became an officer on January 1, 1999.
Name (Age) and Position Principal Occupation
With the Funds During the Past Five Years
- -------------- --------------------------
Osbert Hood Senior Vice President and Chief Financial Officer, each of the John
(Age 46) Hancock funds; Senior Vice President, the Adviser, The Berkeley Group
Senior Vice President and and John Hancock Funds; Vice President and Chief Financial Officer,
Chief Financial Officer John Hancock Mutual Life Insurance Company - Retail Sector (until 1997)
Susan S. Newton Vice President and Secretary, each of the John Hancock funds; Vice President, the Adviser,
(Age 49) John Hancock Funds, Signature Services and The Berkeley Group.
Vice President and Secretary
John A. Morin Vice President and Secretary of the Adviser, John Hancock Funds, Signature Services and
(Age 48) The Berkeley Group; Secretary, NM Capital and SAMCorp.; Clerk, Insurance Agency, Inc.;
Vice President Counsel, John Hancock Mutual Life Insurance Company (until February 1996).
James J. Stokowski Vice President, Treasurer and Chief Accounting Officer, each of the John Hancock
(Age 52) funds; Vice President, the Adviser.
Vice President, Treasurer and
Chief Accounting Officer
Thomas H. Connors Vice President, Assistant Secretary and Compliance Officer, each of the John
(Age 39) Hancock funds; Vice President, the Adviser.
Vice President and
Compliance Officer
Remuneration of Trustees and Officers
The following table provides information about the compensation paid by the fund
and the other investment companies in the John Hancock Fund Complex to the
Independent Trustees for their services. The four non-Independent Trustees, Ms.
Hodsdon and Messrs. Boudreau, Brown and Scipione and each of the fund's officers
are Interested Persons of the Adviser, are compensated by the Adviser and or its
affliates and receive no compensation from the fund for their services.
7
Aggregate Total Compensation from all
Compensation Funds in John Hancock Fund
Independent Trustees From the Fund(1) Complex to Trustees(2)
- -------------------- ---------------- ----------------------
James F. Carlin $8,163 $74,000
William H. Cunningham* 8,163 74,000
Ronald R. Dion 1,331 18,500
Charles F. Fretz 6,974 57,121
Harold R. Hiser, Jr.* 7,729 70,000
Charles L. Ladner 8,657 77,100
Leo E. Linbeck, Jr. 8,413 74,000
Patricia P. McCarter * 5,801 43,696
Steven R. Pruchansky* 8,738 77,100
Norman H. Smith* 8,893 79,350
John P. Toolan* 8,657 77,100
------- ---------
Totals $81,519 $721,967
(1) Compensation is for fiscal year ended October 31, 1998.
(2) The total compensation paid by the John Hancock Fund Complex to the
Independent Trustees for the calendar year ended December 31, 1998. Al
the Independent Trustees are Trustees of 33 funds in the John Hancock Fund
Complex.
+ Mr. Dion was appointed as Trustee effective September 30, 1998.
++ Ms. McCarter and Mr. Fretz retired from their positions as trustees
effective October 1, 1998.
* As of December 31, 1998, the value of the aggregate accrued deferred
compensation amount from all funds in the John Hancock Fund
Complex for Mr. Cunningham was $320,943, for Mr. Hiser was $115,084, for Ms.
McCarter was $183,645, for Mr. Pruchansky was $75,016, for Mr. Smith was
$109,807 and for Mr. Toolan was $403,714 under the John Hancock Deferred
Compensation Plan for Independent Trustees (the "Plan"). Under the Plan, an
Independent Trustee may elect to have his or her deferred fees invested in
shares of one or more funds in the John Hancock Fund Complex and the amount paid
to the Trustees under the Plan will be determined based upon the performance of
such investments. Deferral of Trustees' fees does not obligate the fund to
retain the services of any Trustee or obligate the fund to pay any particular
level of compensation to the Trustee.
PROPOSAL 2
RATIFICATION OF SELECTION OF THE INDEPENDENT PUBLIC ACCOUNTANTS
The Trustees, including a majority of the Independent Trustees, have
selected Deloitte & Touche LLP ("Deloitte & Touche") to act as independent
public accountants for the fund's fiscal year ending October 31, 1999.
Deloitte & Touche has advised the fund that it has no direct or
indirect financial interest in the fund. This selection is subject to the
ratification by the shareholders of the fund at the meeting. The enclosed proxy
card provides space for instructions directing the proxies named on the proxy
card to vote for, against, or abstain from, ratifying that selection. A
representative of Deloitte & Touche is expected to be present at the meeting,
will have the opportunity to make a statement if the representative desires to
do so and will be available to respond to appropriate questions relating to the
examination of the fund's financial statements.
The Board of Trustees, including all the Independent Trustees,
unanimously recommends that shareholders ratify the selection of Deloitte &
Touche as independent public accountants of the fund for the fiscal year ending
October 31, 1999.
8
Vote Required to Ratify the Selection of Independent Public Accountants
The approval of a "majority" (as described below) of the shares of the
fund is required to ratify the selection of Deloitte & Touche as the fund's
independent public accountants.
PROPOSALS 3(a) and 3(b)
AMENDMENT OF CERTAIN FUNDAMENTAL INVESTMENT RESTRICTIONS
General
The Trustees recommend that shareholders approve the following
proposals to amend two of the fund's fundamental investment restrictions. These
restrictions limit the fund's ability to issue senior securities under any
circumstances and to borrow money except in limited circumstances. These
restrictions cannot be changed without shareholder approval. If shareholders
approve the proposals to amend these restrictions, the fund would be permitted
to increase the capital available for investment by issuing senior securities
(an investment strategy called "leverage"). A senior security is one that has
priority over a company's common shares in payment of dividends or interest and
distribution of the company's assets in the event the company is liquidated. A
senior security may be an equity security or a debt security. Preferred shares
are equity securities that are senior to a company's common shares. Notes, bonds
and debentures are debt securities that are senior to a company's preferred
shares and common shares.
Proposal 3(a): Investment restriction on senior securities.
The fund's current investment restriction is as follows:
The fund may not issue senior securities or borrow, except that (a)
short-term credits necessary for settlement of securities transactions
are not considered borrowings or senior securities, (b) the fund may
borrow up to 5% of its total assets (including the amount borrowed) for
temporary or emergency purposes and (c) the fund may borrow to the
extent permitted by the Investment Company Act pending the orderly
disposition of portfolio securities sufficient to repay such borrowings
in connection with the funding of repurchases of common shares or
tender offers.
The fund's proposed investment restriction is as follows:
The fund may not borrow, except that (a) the fund may issue senior
securities, as defined in the Investment Company Act, to the extent
permitted under the Investment Company Act, (b) short-term credits
necessary for settlement of securities transactions are not considered
borrowings, (c) the fund may borrow up to 5% of its total assets
(including the amount borrowed) for temporary or emergency purposes and
(d) the fund may borrow to the extent permitted by the Investment
Company Act pending the orderly disposition of portfolio securities
sufficient to repay such borrowings in connection with the funding of
repurchases or retirement of securities, or tender offers.
The fund's current restriction prohibits the issuance of senior securities. As
amended, the fund would be permitted to issue senior securities without any
limitations other than those imposed by the Investment Company Act. See "Senior
Securities" below for a description of those limitations. The fund's current
restriction also limits the purposes for which the fund may borrow money and the
amount of money the fund may borrow. These borrowing restrictions will not
change except that the fund would be permitted to borrow in connection with the
repurchase or retirement of senior securities in addition to its existing
ability to borrow in connection with the repurchase of common shares.
9
Proposal 3(b): Investment restriction regarding pledging, mortgaging or
hypothecating assets.
The fund's proposed investment restriction is as follows (amendment in italics):
The fund may not pledge, hypothecate, mortgage or otherwise encumber
its assets, except to secure borrowings or issue senior securities
permitted by the preceding paragraph. Collateral arrangements with
respect to margin, option and other risk management and when-issued and
forward commitment transactions are not deemed to be pledges or other
encumbrances for purposes of this restriction.
The amendment to this restriction permits the fund to pledge,
hypothecate, mortgage or otherwise encumber its assets if necessary in
connection with the issuance of senior securities.
Discussion
If shareholders approve these proposals, the fund would be authorized
to leverage the fund by issuing senior securities. Senior securities offered by
the fund could be either equity or debt securities. The fund would not be
authorized to leverage the fund by borrowing money from banks or other financial
institutions. Unlike a mutual fund, the fund does not continuously offer its
shares and the fund's asset size naturally increases only as a result of the
appreciation of its portfolio securities and the reinvestment of dividends and
distributions. If the fund were to increase its asset size through use of
leverage, the fund could purchase new portfolio securities with the proceeds of
an offering of senior securities. If these securities performed as the adviser
expected, i.e., if the investment return on the additional assets exceeded the
cost of the leverage, there would be an increase in the fund's return and
greater distributions of income and capital gain might be possible for the
holders of the fund's common shares. Leverage, however, involves risks,
particularly if the return on the additional assets is less than the fund's
adviser expects. See "Risks of Leverage."
The issuance of a second class of fund securities-whether equity or
debt securities-could be an attractive strategy to increase the fund's return.
The holders of the common shares may benefit in the long term if the fund issues
senior securities. Over time the earnings to the fund from the portfolio
securities purchased with the proceeds of an offering of senior securities may
be greater than both (i) the cost of offering the senior securities and the
operating expenses of the senior securities and (ii) dividends that must be paid
to holders of senior equity or interest that must be paid to holders of senior
debt. The excess earnings will be applied to the benefit of the holders of
common shares in the form of increased distributions of income and/or capital
gain. The fund's increased asset size may also permit certain economies of scale
that may result in lower annual operating expenses for the holders of the common
shares. An offering of senior securities should not dilute the common
shareholders' proportionate share of the fund's net assets. However, dilution
might occur if the fund loses money or the return on the additional assets is
less than the full cost of leverage.
Senior Securities
If shareholders approve the proposals, the Trustees will be authorized
to consider and act upon a future recommendation by the fund's adviser to
approve the issuance of a class of senior securities. As of the date of this
proxy statement, the adviser has not recommended that the Trustees consider
authorizing the fund to issue a second class of securities. Such a
recommendation would depend on many factors including, but not limited to, an
analysis of conditions in the equity and debt markets, whether there was
interest among institutional investors for the fund's senior securities and
whether there were sufficient securities meeting the fund's investment criteria
available for purchase with the proceeds of the offering. If the Trustees
approve the issuance of senior securities, they will determine the terms of the
securities including voting powers, preferences or other rights and the timing
and the terms of the offering without further shareholder approval, but subject
to applicable law and the fund's declaration of trust and by-laws. There can be
no assurance, however, that the Trustees would ever authorize the fund to issue
senior securities and if offered, whether the proceeds of the offering and the
change to the fund's capital structure would be sufficient to provide the
benefits of leverage to the holders of the common shares either immediately
after the offering or at some future time.
10
Senior securities have certain dividend and liquidation rights that are
different from those of common shares. Also, the Investment Company Act imposes
requirements to control the extent to which an investment company can use
leverage and grants special voting rights to an investment company's senior
securities.
Dividend and liquidation rights. The fund's senior securities will have
the right to the payment of dividends (senior equity) or interest (senior debt)
before dividends can be paid on the fund's common shares. If the dividends or
interest that must be paid on the senior securities exceed the net return of the
fund's portfolio attributable to the assets acquired with the proceeds of the
offering, there will be a lower rate of return to the holders of the common
shares. In that case, there might even be a return of capital.
In the event of any liquidation, dissolution or winding up of the fund,
the holders of senior securities are entitled to receive a final distribution of
the fund's assets after creditors are satisfied and before any distribution is
paid to the holders of the common shares. Unless and until payment in full has
been made to holders of senior securities of the liquidation distributions to
which they are entitled, no distributions will be made to holders of the common
shares.
Asset coverage requirements and voting rights. After a fund issues
senior securities, the fund must comply with the asset coverage under the
Investment Company Act. This means that the value of the fund's total assets,
less all liabilities and indebtedness for borrowed money, must be a certain
percentage of the liquidation value of the senior securities outstanding. If the
fund fails to meet an asset coverage test, the fund may not, until the fund
complies with the test, (i) pay any dividends to the holders of the fund's
common shares (except for dividends paid in additional common shares) or (ii)
repurchase the fund's common shares. Senior securities issued by investment
companies also have special voting rights.
The table below shows the asset coverage requirements and different
voting rights that must apply to senior securities under the Investment Company
Act.
SENIOR SECURITIES
Equity Debt
Asset The value of the fund's total assets, less all The value of the fund's total assets, less all
coverage liabilities and indebtedness for borrowed money, liabilities and indebtedness for borrowed
must be 200% of the liquidation value of the money, must be 300% of the liquidation
senior equity outstanding: value of the senior debt outstanding:
o immediately after the senior equity is issued; o immediately after the senior debt is
o before any dividend is paid to common issued;
shareholders (other than a dividend paid in o before any dividend is paid to common
additional shares); and shareholders (other than a dividend paid
o before the fund repurchases outstanding in additional shares); and
common shares. o before the fund repurchases outstanding
common shares.
11
Equity Debt
Voting o Voting as a separate class, entitled to elect two Unlike senior equity, the fund may choose to
rights trustees. If dividends on senior equity remain be governed by either of the following provi-
unpaid in an amount equal to two full years' sions, the first of which gives senior debt a
dividends, then, voting as a separate class, limited right to elect trustees.
entitled to elect additional trustees, who, o Voting as a separate class, entitled to elect a
together with the two trustees ordinarily elected majority of the trustees if the fund fails the
by the class, will constitute a majority of the 100% asset coverage test on the last business
fund's trustees. day of each of 12 consecutive calendar
o Voting as a separate class, entitled to vote on months. This voting right continues until the
any reorganization that adversely affects the asset coverage test equals 110% for 3
senior equity class. consecutive calendar months.
o Voting as a separate class, entitled to vote on o If, on the last business day of each of 24
changes to the fund's fundamental policies and consecutive calendar months, the senior debt
restrictions. has an asset coverage of less than 100%, the
fund is considered to have defaulted on its
obligations with respect to the senior debt.
As described above, preferred shares have certain voting rights that
are required under the Investment Company Act. If preferred shares are issued,
the fund's common shares may be precluded from approving certain matters for
which a vote of preferred shares is also required. As an example, included in
the voting rights of preferred shares is the right of the preferred shares to
vote as a class on changes to the fund's fundamental policies and restrictions.
If the fund were to present a proposal to convert the fund to an open-end
management investment company, the proposal would require the vote of the
preferred shares and the common shares voting separately because the fund's
status as a closed-end fund is a fundamental policy that cannot be changed
without shareholder approval. However, the interests of preferred shares and the
common shares in considering such a proposal may be different and the preferred
shares might vote as a class against the proposal. In this event, the proposal
would not be approved and the fund would not convert to an open-end company.
In addition to the voting rights preferred shares are required to have
under the Investment Company Act, if at any time in the future the fund's Board
considers whether to approve the issuance of preferred shares, the Board will
consider what, if any, additional voting rights should be granted to the
preferred shares.
Rating agency guidelines. To enhance the marketability of any senior
securities, the fund may request that a nationally recognized statistical rating
organization, such as Standard & Poor's Ratings Group or Moody's Investors
Service, Inc., rate the securities. If a rating agency agrees to assign a rating
to the senior securities, the rating agency will require the fund to meet
certain guidelines to ensure, as far as possible, that the fund will meet the
Investment Company Act's asset coverage test and be able to pay the agreed-upon
dividends to the holders of the senior equity or interest to the holders of
senior debt, as the case may be. These rating agency guidelines may impose
restrictions on the securities in which the fund invests, may impose limitations
or prohibitions of the fund's ability to engage in certain investment practices,
may limit the fund's ability to engage in repurchases of its securities and in
certain circumstance, may require the fund to redeem or purchase outstanding
senior securities, suspend dividends and other distributions on the common
shares and liquidate portfolio securities. If the fund is limited in its ability
to repurchase common shares, the market price of the common shares may be
affected. Redemption of senior securities and liquidations of portfolio
securities could cause the fund to incur transactions costs and could result in
capital losses. Prohibitions on dividends and other distributions could impair
the fund's ability to qualify as a regulated investment company under the
Internal Revenue Code of 1986, as amended.
12
Risks of Leverage
As described above, there are potential benefits to the holders of the
fund's common shares upon the issuance of senior securities and the resulting
leveraging of the fund's capital structure. Shareholders should note, however,
that there are risks associated with leverage. Because any decline in the net
asset value of the fund's investments is borne entirely by the holders of the
common shares, the effect of leverage in a declining market would be to further
reduce the fund's net asset value in an amount greater than would be the case if
the fund were not leveraged. This could result in a greater decline in the
market price for common shares.
Fluctuations in the markets, short-term interest rates and other
factors that might affect the fund's ability to pay the dividend rate on senior
equity or pay interest on senior debt may affect the yield to the holders of
common shares. If the dividends or interest paid to the senior securities
approach the net return on the fund's investment portfolio attributable to the
assets acquired with the proceeds of the senior securities' offering, the
benefit of leverage to the common shares will be reduced or eliminated. If the
dividends or interest paid to the senior securities are greater than the net
return on those assets, the leveraged capital structure will result in a lower
rate of return or a greater loss to the common shares than if the fund were not
leveraged and may result in a return of capital.
The fund bears the costs and expenses associated with the offering of
senior securities. This will reduce net assets available to holders of common
shares.
An offering of senior securities is not a taxable event to the fund or
the holders of the common shares. If the fund issues senior equity, for tax
purposes, the fund allocates net capital gain, dividends and other types of
income, if any, between its common shares and any class of senior equity. It is
the current position of the Internal Revenue Service that income with particular
tax characteristics, such as income qualifying for the dividends received
deduction or net capital gain, may be designated as distributed to a particular
class only in proportion to that class's share of the total dividends paid by
the fund. If net capital gain and other income that does not qualify for the
dividends received deduction are allocated to the additional equity for tax
purposes and distributed, the fund may pay additional dividends to holders of
these additional equity shares to compensate them for the increased tax
liability. If the fund issues senior debt instead of senior equity, interest
payments on this debt may reduce or eliminate the ordinary dividend
distributions the fund would otherwise be able to pay with respect to its common
shares and may also reduce the assets attributable to those shares.
A high rating from a rating agency on the fund's senior securities does
not eliminate or mitigate the risk of leverage for the holders of the fund's
common shares. The rating agency will continuously monitor the fund's compliance
with the Investment Company Act asset coverage test and the rating agency
guidelines. If the rating agency is not satisfied with the fund's compliance, it
could impose additional restrictions on the fund's investment operations,
withdraw the rating or reduce the rating assigned to the fund to a lower rating
category. A withdrawal or a reduction in the rating of the senior securities may
signal a decline in the quality of the fund's portfolio securities and may
reduce the market price of the fund's common shares.
The fund may attempt to offset the negative effects of leverage that
result from changes in short-term interest rates or other changed market
conditions by reducing the degree to which it is leveraged by redeeming,
repurchasing or otherwise liquidating the senior securities.
13
Trustees' Evaluation and Recommendation
The Trustees have considered the proposals to amend certain of the
fund's fundamental investment restrictions with the result that the fund would
be permitted to issue senior securities. In the course of their evaluation, the
Trustees considered several factors including: the risks to which the fund may
be exposed as a result of the leveraging effect of an offering of senior
securities; the possibility that common shares may be precluded from approving
certain matters for which a majority vote of the preferred shares voting as a
class is required; the fact that the fund's distributions to common shareholders
may increase or decrease as a result of the leveraging effect of the offering of
senior securities; the fact that the economic interest of the holders of the
common shares will not be diluted by the offering of senior securities; the fact
that the fund will bear the expenses of an offering of senior securities; and
the adviser's experience in managing funds with a dual class capital structure.
As a result of their consideration of the above factors and other
relevant information, the trustees recommend that shareholders approve the
amendments to the fund's investment restrictions to permit the fund to issue
senior securities.
Required vote
Each of proposals 3(a) and 3(b) must be approved by the vote of a
majority of the fund's shares (as described below). If shareholders do not
approve proposals 3(a) and 3(b), that fundamental investment restriction will
not be amended. The Trustees will consider what further action, if any, to take
in the event one or both of proposals 3(a) and 3(b) are not approved.
The Trustees recommend that shareholders vote FOR the proposals to amend certain
of the fund's fundamental investment restrictions.
MISCELLANEOUS
Shareholder Proposals
Shareholder proposals intended to be presented at the fund's annual
meeting to be held in 2000 must be received by the fund at its offices at 101
Huntington Avenue, Boston, Massachusetts, no later than October 8, 1999 for
inclusion in the fund's proxy statement and form of proxy relating to that
meeting.
Voting; Quorum; Adjournment
The affirmative vote of the holders of a plurality of the fund's shares
present in person or represented by proxy at the meeting, assuming a majority of
the outstanding shares is present, is required to elect the nominees. The
adoption by the fund shareholders of Proposals 2 and 3(a) and 3(b) requires the
affirmative vote of a majority of the shares with respect to each proposal. A
majority of the fund's shares is defined as the lesser of: (i) 67% or more of
the shares present at the meeting, if the holders of more than 50% of the shares
are present or represented by proxy; or (ii) more than 50% of the outstanding
shares of the fund.
Shares represented in person or by proxy (including shares which
abstain or do not vote with respect to one or more of the proposals presented
for shareholder approval) will be counted for purposes of determining whether a
quorum is present at the meeting. Abstentions from voting will be treated as
shares that are present and entitled to vote for purposes of determining the
number of shares that are present and entitled to vote with respect to a
proposal, but will not be counted as a vote in favor of that proposal.
Accordingly, an abstention from voting has no effect on the voting in
determining whether Proposal 1 has been adopted but has the same effect as a
vote against Proposals 2, 3(a) or 3(b).
14
Proposals 1 and 2 in this proxy statement are considered routine
matters on which brokers holding shares in "street name" may vote without
instruction under the rules of the New York Stock Exchange. If a broker or
nominee holding shares in "street name" nevertheless indicates on the proxy that
it does not have discretionary authority to vote on either proposal, those
shares will not be considered as present and entitled to vote as to that
proposal. Accordingly, a "broker non-vote" has no effect on the voting in
determining whether Proposal 1 has been adopted and has no effect on the voting
in determining whether Proposals 2, 3(a) or 3(b) have been adopted pursuant to
item (i) above, provided that the holders of more than 50% of the outstanding
shares (excluding the "broker non-votes") are present or represented by proxy.
However, with respect to determining whether Proposals 2, 3(a) or 3(b) have been
adopted pursuant to item (ii) above, because shares represented by a "broker
non-vote" are considered outstanding shares, a "broker non-vote" has the same
effect as a vote against such proposal.
In the event that at the time any session of the meeting is called to
order and a quorum is not present in person or by proxy, the persons named as
proxies may vote those proxies which have been received to adjourn the meeting
to a later date. In the event that a quorum is present at any meeting but
sufficient votes in favor of Proposals 2, 3(a) or 3(b) or FOR the nominees set
forth in Proposal 1 have not been received, the persons named as proxies may
propose one or more adjournments of the meeting to permit further solicitation
of proxies with respect to that proposal. Any adjournment will require the
affirmative vote of a majority of the shares present in person or by proxy at
the session of the meeting to be adjourned. The persons named as proxies will
vote those proxies which they are entitled to vote in favor of any such proposal
in favor of the adjournment and will vote those proxies required to be voted
against any such proposal against the adjournment. A shareholder vote may be
taken on one or more of the proposals prior to the adjournment if sufficient
votes for the proposal's approval have been received and it is otherwise
appropriate.
Expenses and Methods of Solicitation
The costs of the meeting, including the solicitation of proxies, will
be paid by the fund. Persons holding shares as nominees will be reimbursed by
the fund, upon request, for their reasonable expenses in sending soliciting
material to the principals of the accounts. In addition to the solicitation of
proxies by mail, Trustees, officers and employees of the fund or of the fund's
adviser may solicit proxies in person or by telephone. John Hancock Advisers,
Inc., 101 Huntington Avenue, Boston, Massachusetts 02199-7603, serves as the
fund's investment adviser and administrator. Corporate Investors Communications,
Inc. has been retained to assist in the solicitation of proxies at a cost of
approximately $5,500.
Other Matters
The management of the fund knows of no business to be brought before
the meeting except as mentioned above. If, however, any other matters were
properly to come before the meeting, the persons named on the enclosed proxy
card intend to vote on those matters in accordance with their best judgment. If
any shareholders desire additional information about the matters proposed for
action, the management will provide further information.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY
JOHN HANCOCK BANK AND THRIFT OPPORTUNITY FUND
Date: March 24, 1999
P R O X Y
JOHN HANCOCK BANK AND THRIFT OPPORTUNITY FUND
The undersigned holder of common shares of beneficial interest of John Hancock
Bank and Thrift Opportunity Fund hereby constitutes and appoints Edward J.
Boudreau, Jr. , Susan S. Newton and James J. Stokowski, and each of them singly,
proxies and attorneys of the undersigned, with full power of substitution to
each, for and in the name of the undersigned, to vote and act upon all matters
(unless and except as expressly limited below) at the Annual Meeting of
Shareholders of the Fund to be held on Thursday, April 29, 1999 at the offices
of the Fund, 101 Huntington Avenue, Boston, Massachusetts, at 9:00 A.M., Eastern
time, and at any and all adjournments thereof, in respect of all common shares
of the Fund held by the undersigned or in respect of which the undersigned would
be entitled to vote or act, with all the powers the undersigned would possess if
personally present. All proxies previously given by the undersigned in respect
of this meeting are hereby revoked.
PLEASE VOTE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.
Please complete, sign, date and return this proxy in the enclosed envelope as
soon as possible. Please sign exactly as your name or names appear in the box on
the reverse. 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.
HAS YOUR ADDRESS CHANGED?
- -----------------------------------------------
- -----------------------------------------------
- -----------------------------------------------
For All With- For all
Nominees hold Except For Against Abstain
2.) To ratify the selection of
1.) To elect the following nominees Deloitte & Touche LLP as Inde-
to serve as Trustees of the Fund. ____ ____ ____ pendent public accountants. _____ _____ _____
Stephen L. Brown, James F. Carlin, William H. Cunningham,
Harold R. Hiser, Jr., John P. Toolan
3a.) To amend the fund's investment restriction
on issuing senior securities. ____ ____ ____
3b.) To amend the fund's investment restriction on pledging,
mortgaging or hypothecating assets. ____ ____ ____
Note: If you do not wish your shares voted "FOR" a particular nominee,
mark the "For All Except" box and strike a line through the name(s) THIS PROXY IS SOLICITED BY THE
of the nominee(s). Your shares will be voted for the remaining BOARD OF TRUSTEES
nominee(s).
Specify your vote by marking the appropriate
spaces. If no specification is made, this
proxy will be voted for the nominees named
in the proxy statement and in favor of
proposals 2, 3a and 3b. The persons named as
proxies have discretionary authority, which
they intend to exercise in favor of the
proposals referred to and according to their
best judgment as to the other matters which
may properly come before the meeting.
Please be sure to sign and date this proxy Date Mark box at right if address change has
been noted on the reverse side of this card. _____
Shareholder sign here Co-owner sign here RECORD DATE SHARES: