As filed with the Securities and Exchange Commission on February 6, 2009.

SCHEDULE 14A

(RULE 14A-101)

INFORMATION REQUIRED IN PROXY STATEMENT

FILE NUMBER 811-04173

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. __)

þ Filed by the Registrant

o Filed by a Party other than the Registrant

Check the appropriate box:

o Preliminary Proxy Statement

þ Definitive Proxy Statement

o Definitive Additional Materials

o Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

JOHN HANCOCK INVESTORS TRUST

(Name of Registrant as Specified in Its Charter)

JOHN HANCOCK INVESTORS TRUST

(Name of Person(s) Filing Proxy Statement)

Payment of filing fee (check the appropriate box):

o $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).

o Fee paid previously with preliminary materials.

þ No fee required.

 

February 6, 2009

 

John Hancock Investors Trust

John Hancock Income Securities Trust

 

Dear Shareholder:

 

As an investor in one or both the funds listed above, you are cordially invited to attend the annual shareholder meeting on Tuesday, April 14, 2009, at 10:30 a.m., Eastern Time, to be held at the offices of John Hancock Funds, 601 Congress Street, Boston, Massachusetts 02210-2805.

 

The enclosed proxy statement sets forth three proposals that you are being asked to vote on. The first proposal, a routine item, concerns the election of trustees. Routine items occur annually and make no fundamental or material changes to a fund’s investment objectives, policies or restrictions, or to the investment management contract. The other proposals are not considered routine items. All three are summarized below.

 

Elect your fund’s Board of Trustees

 

For each fund, the proposal asks shareholders to elect eleven Trustees to serve until their respective successors are elected and qualified. Your proxy statement includes a brief description of each nominee’s background.

 

Adopt a staggered Board for leadership stability

 

Currently each fund’s shareholders must elect all of the fund’s Trustees every year. In order to provide increased leadership stability and ensure continuity of oversight of these funds, and in line with modern accepted corporate governance practices, this proposal asks shareholders to approve changes to each fund’s governing document that would divide the fund’s Board into three classes of Trustees, with shareholders being asked to approve only one class of nominees each year.

 

Adopt a new form of investment advisory agreement

 

You are being asked to approve a new form of Advisory Agreement between each fund and John Hancock Advisers, LLC. The purpose of this proposal is to streamline the advisory agreements across the John Hancock Fund Complex, primarily to clarify that the new Agreement covers only investment advisory services. Consistency in operational procedures across the John Hancock Fund Complex will speed processes and minimize transaction error. These benefits contribute to a goal of maintaining, even reducing, operational costs. Restricting the new form of Advisory Agreement to investment advisory services will facilitate the Adviser’s ability to manage those services that are “non-investment” in nature.

 

The new form of Advisory Agreement will not result in any change in advisory fee rates or the level or quality of advisory services provided to the funds, and will not materially increase the funds’ overall expense ratios. Other details and impacts of this proposal are described in the accompanying proxy statement.

 

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 1-800-852-0218, Monday through Friday, between 9:00 a.m. and 7:00 p.m., Eastern Time.

 

Thank you in advance for your prompt action on these very important matters.

 

Sincerely,

 

Keith F. Hartstein

Chief Executive Officer

 

JOHN HANCOCK INVESTORS TRUST
JOHN HANCOCK INCOME SECURITIES TRUST
601 Congress Street, Boston, Massachusetts 02210

 

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To Be Held on April 14, 2009

 

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, should you want to attend in person.

 

To the shareholders of the funds listed above:

 

A shareholder meeting for each fund will be held at 601 Congress Street, Boston, Massachusetts 02110, on Tuesday, April 14, 2009, at 10:30 a.m., Eastern Time, and shareholders of the funds will consider the following:

 

 

Your Trustees recommend that you vote in favor of the proposals.

 

Shareholders of record of each fund as of the close of business on January 23, 2009 are entitled to notice of and to vote at the fund’s annual meeting and at any related follow-up meeting. The proxy statement and proxy card are being mailed to shareholders on or about February 6, 2009.

 

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.

 

Important Notice Regarding the Availability of Proxy Materials for
the Shareholder Meeting to be Held on April 14, 2009.

The proxy statement is available at http://bnymellon.mobular.net/bnymellon/jhi.

 

By order of the Board of Trustees,

 

Thomas M. Kinzler

Secretary

 

February 6, 2009

JOHN HANCOCK INVESTORS TRUST
JOHN HANCOCK INCOME SECURITIES TRUST
601 Congress Street, Boston, Massachusetts 02210

 

ANNUAL MEETING OF SHAREHOLDERS

To Be Held on April 14, 2009

 

PROXY STATEMENT

 

This proxy statement contains the information you should know before voting on the proposals described in the notice. Each fund will furnish without charge a copy of its Annual Report and/or Semiannual 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 601 Congress Street, Boston, Massachusetts 02210 or call John Hancock Funds at 1-800-892-9552.

 

This proxy statement is being used by each fund’s Trustees to solicit proxies to be voted at the annual meeting of each fund’s shareholders. The meeting will be held at 601 Congress Street, Boston, Massachusetts, on Tuesday, April 14, 2009, at 10:30 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 both 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 601 Congress Street, Boston, Massachusetts 02210, by returning a signed proxy with a later date before the meeting or, if attending the meeting and voting in person, by notifying your fund’s secretary (without complying with any formalities) at any time before your proxy is voted.

 

Record Ownership

 

The Trustees of each fund have fixed the close of business on January 23, 2009 as the record date to determine which shareholders are entitled to vote at the meeting. Shareholders of each fund are entitled to one vote per share on all business of the meeting or any postponement of the meeting relating to their fund. On the record date, the following number of shares of beneficial interest of each fund were outstanding:

 

 

The funds’ management does not know of anyone who beneficially owned more than 5% of either fund’s shares outstanding as of the record date, except for Sit Investment Associates, 300 IDS Center, 80 South Eighth Street, Minneapolis, Minnesota 55402, which owned 5.09% and 9.94% of the shares of Investors and Income Securities, respectively. (Beneficial ownership means voting power and/or investment power, which includes the power to dispose of shares.)

 

Although the annual meetings of the funds are being held jointly and proxies are being solicited through the use of this joint proxy statement, shareholders of each fund will vote separately as to proposals affecting their fund.

 

PROPOSAL ONE

 

ELECTION OF TRUSTEES

 

General

 

Each fund’s Board of Trustees consists of eleven members. Holders of the shares of each fund are entitled to elect eleven Trustees at this meeting. Ms. Jackson, Ms. McGill Peterson and Messrs. Boyle, Carlin, Cunningham, Ladner, Martin, Moore, Pruchansky, Russo and Vrysen have been designated as subject to election by holders of the shares of each fund.

 

As of the date of this proxy, each nominee for election, except Mr. Vrysen, currently serves as a Trustee of each fund. Using the enclosed proxy card, you may authorize the proxies to vote your shares for the nominees or you may withhold from the proxies authority to vote your shares for one or more of the nominees. If no contrary instructions are given, the proxies will vote FOR the nominees. Each of the nominees has consented to his or her nomination and has agreed to serve if elected. If, for any reason, any nominee should not be available for election or able to serve as a Trustee, the proxies will exercise their voting power in favor of such substitute nominee, if any, as the funds’ Trustees may designate. The funds have no reason to believe that it will be necessary to designate a substitute nominee.

 

Proposal One

 

For each fund, Ms. Jackson, Ms. McGill Peterson and Messrs. Boyle, Carlin, Cunningham, Ladner, Martin, Moore, Pruchansky, Russo and Vrysen are the current nominees for election by the shareholders.

 

Vote Required for Proposal One

 

The vote of a plurality of the votes cast by the shares of a fund is sufficient to elect the nominees to serve as Trustees of that fund.

 

Each Board recommends that shareholders of each fund vote “FOR” all the nominees in Proposal One.

 

Information Concerning Nominees

 

The following table sets forth certain information regarding the nominees for election to the Boards. The table also shows each nominee’s principal occupation or employment and other directorships during the past five years and the number of John Hancock funds overseen by the current Trustees. There are currently ten Trustees of each fund, nine of whom are not “interested persons” (as defined in the Investment Company Act of 1940, as amended (the “1940 Act”)) of the funds (“Independent Trustees”). The address of each nominee is 601 Congress Street, Boston, Massachusetts 02210-2805.

 

 

 

 

Executive Officers

 

The following table presents information regarding the current principal officers of the funds who are neither current Trustees nor Nominees. The address of each officer is 601 Congress Street, Boston, Massachusetts 02210-2805.

 

 

Committees

 

In 2008, each of the funds changed its fiscal year end from December 31 to October 31. Accordingly, information in this proxy statement relating to the most recent fiscal year for both funds will be shown through or as of the end of each fund’s most recently completed fiscal period (October 31, 2008), as well as for the previous full 12-month fiscal year ended December 31, 2007.

 

During the fiscal year ended December 31, 2007 and the fiscal period ended October 31, 2008, the Board had four standing committees: the Audit and Compliance Committee, the Contracts/Operations Committee, the Governance Committee and the Investment Performance Committee. Each Committee was comprised

entirely of Independent Trustees. In January 2009, the Board’s committee structure was changed to consist of five standing committees. The following discussion relates to the committee structure that was in place through December 2008. The new committee structure is described below under “Revised Committee Structure.”

 

Audit and Compliance Committee.  All members of this Committee are “independent” under the Revised Listing Rules of the New York Stock Exchange (the “NYSE”), and each member is financially literate with at least one having accounting or financial management expertise. This Committee recommends to the full Board the appointment of the independent registered public accounting firm for each fund, oversees the work of the independent registered public accounting firm in connection with each fund’s audit, communicates with the independent registered public accounting firm on a regular basis and provides a forum for the independent registered public accounting firm to report and discuss any matters it deems appropriate at any time. The written charter for the Audit Committee (which replaced the Audit and Compliance Committee in January 2009) is included as Attachment 1 to this proxy statement.

 

The Audit and Compliance Committee reports that it has: (1) reviewed and discussed each fund’s audited financial statements with management; (2) discussed with the independent registered public accounting firm the matters relating to the quality of each fund’s financial reporting as required by SAS 61; (3) received written disclosures and an independence letter from the independent registered public accounting firm required by Independent Standards Board Standard No. 1 and discussed with the independent registered public accounting firm their independence; and (4) based on these discussions, recommended to the Board that each fund’s financial statements be included in each fund’s annual report for the last fiscal year (see Attachment 2).

 

Each fund’s Audit and Compliance Committee met five times during the fiscal year ended December 31, 2007 and four times during the fiscal period ended October 31, 2008.

 

Governance Committee.  This Committee is comprised of all of the Independent Trustees. This Committee reviews the activities of the other standing committees and makes the final selection and nomination of candidates to serve as Independent Trustees. All members of this Committee also are “independent” under the NYSE’s Revised Listing Rules. The written charter for the Nominating, Governance and Administration Committee (which replaced the Governance Committee in January 2009) is included as Attachment 3 to this proxy statement. The Trustees who are not Independent Trustees and the officers of the fund are nominated and selected by the Board.

 

In reviewing a potential nominee and in evaluating the renomination of current Independent Trustees, the Governance Committee expects to apply the following criteria: (i) the nominee’s reputation for integrity; honesty and adherence to high ethical standards; (ii) the nominee’s business acumen, experience and ability to exercise sound judgments; (iii) a commitment to understand the fund and the responsibilities of a trustee of an investment company; (iv) a commitment to regularly attend and participate in meetings of the Board and its committees; (v) the ability to understand potential conflicts of interest involving management of the fund and to act in the interests of all shareholders; and (vi) the absence of a real or apparent conflict of interest that would impair the nominee’s ability to represent the interests of all the shareholders and to fulfill the responsibilities of an Independent Trustee. This Committee does not necessarily place the same emphasis on each criterion and each nominee may not have each of these qualities.

 

It is the intent of each Governance Committee that at least one Independent Trustee be an “audit committee financial expert” as defined by the Securities and Exchange Commission (the “SEC”).

 

As long as an existing Independent Trustee continues, in the opinion of the Governance Committee, to satisfy these criteria, each fund anticipates that the Committee would favor the renomination of an existing Independent Trustee rather than a new candidate. Consequently, while this Committee will consider nominees recommended by shareholders to serve as Independent Trustees, the Committee may only act upon such recommendations if there is a vacancy on the Board or the Committee determines that the selection of a new or additional Independent Trustee is in the best interests of the funds. In the event that a vacancy arises or a change in Board membership is determined to be advisable, this Committee will, in addition to any shareholder recommendations, consider candidates identified by other means, including candidates proposed

by members of the Committee. This Committee may retain a consultant to assist the Committee in a search for a qualified candidate, and has done so recently.

 

Any shareholder recommendation for Independent Trustee must be submitted in compliance with all of the pertinent provisions of Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to be considered by the Governance Committee. In evaluating a nominee recommended by a shareholder, this Committee, in addition to the criteria discussed above, may consider the objectives of the shareholder in submitting that nomination and whether such objectives are consistent with the interests of all shareholders. If the Board determines to include a shareholder’s candidate among the slate of nominees, the candidate’s name will be placed on the fund’s proxy card. If this Committee or the Board determines not to include such candidate among the Board’s designated nominees and the shareholder has satisfied the requirements of Rule 14a-8, the shareholder’s candidate will be treated as a nominee of the shareholder who originally nominated the candidate. In that case, the candidate will not be named on the proxy card distributed with the fund’s proxy statement. Each of the nominees for election as Trustee was recommended by this Committee.

 

Shareholders may communicate with the members of the Board as a group or individually. Any such communication should be sent to the Board or an individual Trustee in care of the Secretary of the fund at the address on the notice of this meeting. The Secretary may determine not to forward any letter to the members of the Board that does not relate to the business of the fund.

 

Each fund’s Governance Committee met once during the fiscal year ended December 31, 2007 and twice during the fiscal period ended October 31, 2008.

 

Contracts/Operations Committee.  This Committee oversees the initiation, operation and renewal of the various contracts between the funds and other entities. These contracts include advisory, custodial and transfer agency agreements and arrangements with other service providers. The Contracts/Operations Committee met four times during each fund’s fiscal year ended December 31, 2007 and three times during the fiscal period ended October 31, 2008.

 

Investment Performance Committee.  This Committee monitors and analyzes the performance of the funds generally, consults with the Adviser as necessary if a fund is considered to require special attention, and reviews fund peer groups and other comparative standards as necessary.

 

Each fund’s Investment Performance Committee met four times during the fiscal year ended December 31, 2007 and three times during the fiscal period ended October 31, 2008.

 

Board meetings.  Each Board held seven meetings during the fiscal year ended December 31, 2007 and seven meetings during the fiscal period ended October 31, 2008. With respect to each fund, no Trustee attended fewer than 75% of the aggregate of: (1) the total number of Board meetings; and (2) the total number of meetings held by all committees on which he or she served. The funds hold joint meetings of the Trustees and all committees.

 

Revised Committee Structure.  Beginning January 2009, each fund’s committee structure was revised to consist of five committees: the Audit Committee; the Compliance Committee; the Nominating, Governance and Administration Committee (which corresponds to the former Governance Committee); the Investment Performance Committee A (which corresponds to the former Investment Performance Committee); and the Contracts/Operations Committee (which corresponds to the former committee of the same name). In terms of function, other than the separate Audit and Compliance Committees, the current committees operate in the same manner as their predecessor committees.

 

Audit Committee.  The accounting oversight function of this Committee is described above in the discussion of the former Audit and Compliance Committee.

 

Compliance Committee.  The primary role of this Committee is to oversee the activities of each fund’s Chief Compliance Officer; the implementation and enforcement of each fund’s compliance policies and procedures; and compliance with the funds’ and the Independent Trustees’ Codes of Ethics.

The current membership of each committee is set forth below. As Chairperson of the Board, Ms. McGill Peterson is considered an ex officio member of each committee and, therefore, is able to attend and participate in any committee meeting, as appropriate. Prior to January 2009, Ms. Jackson and Messrs. Martin and Russo were not members of any committee.

 

 

Trustee Ownership

 

The following table shows the dollar range of each Trustee’s and nominee’s ownership of equity securities of the funds as well as holdings of shares of equity securities of all John Hancock funds overseen by the Trustee, as of December 31, 2008.

 

 

 

 

Compliance with Section 16(a) Reporting Requirements

 

Section 16(a) of the Exchange Act requires a fund’s executive officers, Trustees and persons who own more than 10% of a fund’s shares (“10% Shareholders”) to file reports of ownership and changes in ownership with the SEC. Executive Officers, Trustees and 10% Shareholders are also required by SEC regulations to furnish each 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 funds and representations that no other reports were required to be filed, each

fund believes that, during the past fiscal year, its executive officers, Trustees and 10% Shareholders complied with all applicable Section 16(a) filing requirements.

 

Remuneration of Trustees and Officers

 

The following table provides information regarding the compensation paid by the funds and the other investment companies in the John Hancock Fund Complex to the Independent Trustees for their services for the fiscal year ended December 31, 2007 and the fiscal period ended October 31, 2008. Any non-Independent Trustees, and each of the officers of the funds who are interested persons of the Adviser, are compensated by the Adviser and/or its affiliates and receive no compensation from the funds for their services.

 

 

 

 

Material Relationships of the Independent Trustees

 

As of December 31, 2008, none of the Independent Trustees, nor any immediate family member, owned shares of the Adviser or a principal underwriter of the funds, nor does any such person own shares of a company controlling, controlled by or under common control with the Adviser or a principal underwriter of the funds.

 

There have been no transactions by the funds since the beginning of the funds’ last two fiscal years, nor are there any transactions currently proposed in which the amount exceeds $120,000, and in which any Independent Trustee or any immediate family member has or will have a direct or indirect material interest, nor have any of the foregoing persons been indebted to the funds in an amount in excess of $120,000 at any time since that date.

 

No Independent Trustee, nor any immediate family member, has had in the past five years, any direct or indirect interest, the value of which exceeds $120,000, in the Adviser, a principal underwriter of the funds or

in a person (other than a registered investment company) directly or indirectly controlling, controlled by or under common control with the Adviser or principal underwriter of the funds. Moreover, no Independent Trustee or immediate family member has, or has had in the last two fiscal years of the funds, any direct or indirect relationships or material interest in any transaction or in any currently proposed transaction, in which the amount involved exceeds $120,000, in which the following persons were or are a party: the funds, an officer of the funds, any investment company sharing the same investment adviser or principal underwriter as the funds or any officer of such a company, any investment adviser or principal underwriter of the funds or any officer of such a party, any person directly or indirectly controlling, controlled by or under common control with the investment adviser or principal underwriter of the funds, or any officer of such a person.

 

Within the last two completed fiscal years of the funds, no officer of any investment adviser or principal underwriter of the funds or of any person directly or indirectly controlling, controlled by or under common control with the investment adviser or principal underwriter of the funds, has served as a director on a board of a company where any of the Independent Trustees or nominees of the funds, or immediate family members of such persons, has served as an officer.

 

Legal Proceedings

 

There are no material pending legal proceedings to which any Trustee or affiliated person is a party adverse to the funds or any of their affiliated persons or has a material interest adverse to the funds or any of its affiliated persons. In addition, there have been no legal proceedings that are material to an evaluation of the ability or integrity of any Trustee or executive officer of the funds within the past five years.

 

Independent Registered Public Accounting Firm

 

The Trustees of each fund, including a majority of each fund’s Independent Trustees, have selected PricewaterhouseCoopers LLC (“PwC”), 125 High Street, Boston, Massachusetts 02110, to act as independent registered public accounting firm for each fund’s fiscal year ending October 31, 2009.

 

Representatives of PwC are not expected to be present at the meeting but have been given the opportunity to make a statement, if they so desire, and will be available should any matter arise requiring their participation.

 

The following table sets forth the aggregate fees billed by PwC for each fund’s fiscal years ended December 31, 2006 and December 31, 2007, as well as for the fiscal period ended October 31, 2008 (the “Reporting Periods”), for professional services rendered for: (i) the audit of the fund’s annual financial statements and the review of financial statements included in the fund’s reports to stockholders; (ii) assurance and related services that are reasonably related to the audit of the fund’s financial statements; (iii) tax compliance, tax advice or tax planning; and (iv) all services other than (i), (ii) and (iii).

 

 

Each fund’s Audit Committee has adopted procedures to pre-approve audit and non-audit services for the funds and the Adviser and any entity controlling, controlled by or under common control with, the Adviser (the “Adviser Affiliates”). These procedures identify certain types of audit and non-audit services that are anticipated to be provided by PwC during a calendar year and, provided the services are within the scope and value standards set forth in the procedures, pre-approve those engagements. The scope and value criteria are reviewed annually. These procedures require both audit and non-audit sources to be approved by the Audit Committee prior to engaging PwC.

 

In recommending PwC as the funds’ independent registered public accounting firm, the Audit Committee has considered the compensation provided to PwC for audit and non-audit services to the Adviser and the Adviser Affiliates, and has determined that such compensation is not incompatible with maintaining PwC’s independence. The aggregate amount of non-audit fees paid by the funds, the Adviser and Adviser Affiliates that provide services to the funds, which includes amounts described above, were $879,192, $1,557,823 and $4,594,772 for the fiscal years ended December 31, 2006 and 2007, and the fiscal period ended October 31, 2008, respectively. All such non-audit services were pre-approved in accordance with the funds’ policy.

 

PROPOSAL TWO

STAGGERED BOARD ELECTIONS

 

In order to modernize the Declaration of Trust (the “Declaration”) of each fund to conform to those of other John Hancock closed-end funds and prevailing current industry practices, management proposes that the funds establish a policy of holding staggered Board elections.

 

Consistent with prevailing current industry practice, the Boards of the other John Hancock closed-end funds are divided into three separate classes of Trustees, with only one class being subject to shareholder election at any particular annual shareholder meeting. On the contrary, the Boards of the funds are not divided into classes and currently all of each such Board’s Trustees are elected each year in accordance with the relevant fund’s Declaration.

 

In order to provide increased leadership stability to these funds, and in line with modern accepted corporate governance practices, management is proposing the addition of a classified Board and staggered Board election structure substantially identical to the other John Hancock closed-end funds. Such classification may prevent replacement of a majority of the Trustees for up to a two-year period. This structure, which may be regarded as an “anti-takeover” provision, may make it more difficult for a fund’s shareholders to change the majority of Trustees of the fund and, thus, promotes the continuity of management.

 

Shareholder approval is required for this proposal. The Board of each fund approved this proposal at its meeting on September 8, 2008. The proposed changes to each Declaration would not take effect until shareholder approval is obtained.

 

If shareholders of a fund approve this Proposal Two, the fund’s Trustees will be classified as shown in the following table. The information presented in the table assumes that each nominee to serve on the Board listed in Proposal One is elected.

 

 

If shareholders of a fund do not approve this Proposal Two, the Declaration of that fund will not be amended to provide for a classified Board, and that fund will continue to vote for a full slate of Trustees at each annual meeting.

 

The proposed Board classification provisions for each Declaration are included as Attachment 4 to this proxy statement.

 

Vote Required for Proposal Two

 

For each fund, approval of Proposal Two will require the affirmative vote of a Majority of the Outstanding Voting Securities of the fund. If shareholders of a fund do not approve Proposal Two, that fund’s shareholders will continue to vote for a full slate of Trustee nominees at every annual shareholder meeting.

 

If Proposal Two is approved by the shareholders of a fund, the staggered Board election process for that fund will begin with that fund’s 2010 annual shareholder meeting.

 

Each Board recommends that shareholders of each fund vote “FOR” Proposal Two.

 

PROPOSAL THREE

REVISED FORM OF INVESTMENT ADVISORY AGREEMENT

 

Shareholders of both funds are being asked to approve a new form of Advisory Agreement for the funds. Approval of the new form of Advisory Agreement will not change the annual advisory fee rates payable by either fund and will not materially increase the funds’ overall expense ratios. Accordingly, the new form of Advisory Agreement would not result in any changes to the information presented in an annual operating expense table summarizing each fund’s expenses.

 

Introduction

 

At its meeting on December 8-9, 2008, the Board, including all the Independent Trustees, approved the new form of Advisory Agreement between the funds and the Adviser. A copy of the proposed new form of Advisory Agreement is included at Attachment 5 to this proxy statement. A discussion of the evaluation by the Board of each fund of the new form of Advisory Agreement is included in Attachment 6 to this proxy statement.

 

The purpose of this proposal is to streamline the advisory agreements across the John Hancock Fund Complex. The new form of Advisory Agreement will:

 

 

The 1940 Act requires that any change in an advisory contract be approved by shareholders of a fund.

 

Additional Information.  For additional information about the Adviser, including: “Management and Control of the Adviser,” and the amounts of advisory fees paid to the Adviser during each fund’s most recent fiscal year, see Attachment 7 to this proxy statement (“Additional Information About the Adviser and the Advisory Agreements”). The advisory fee schedule for each fund and information regarding comparable funds managed by the Adviser are set forth in Attachment 8 to this proxy statement (“Advisory Fee Schedules and Comparable Funds Managed by the Adviser”).

 

Clarification Regarding Non-Advisory Services

 

The current Advisory Agreement describes the investment advisory functions to be performed by the Adviser (or a subadviser, under the Adviser’s supervision), including the formulation and implementation of a continuous investment program for each fund consistent with the fund’s investment objectives and related investment policies (“Advisory Services”). In addition, each fund’s current Advisory Agreement provides that the Adviser will provide certain limited Non-Advisory Services. A substantial number of other Non-Advisory Services, which the funds pay for, are already provided to the funds under a separate Accounting and Legal Services Agreement.

 

In order to provide clarity and to consolidate like services in a single agreement, it is proposed that all references to Non-Advisory Services in the Advisory Agreements be eliminated. Management has proposed to the Board that each fund adopt a new, separate Service Agreement (replacing the existing Accounting and Legal Services Agreement) that will clearly cover all Non-Advisory Services, including those eliminated from the Advisory Agreement, if Proposal Three is approved.

 

Management believes that this consolidation of Non-Advisory Services under a single contract will eliminate confusion and facilitate more effective tracking of Non-Advisory Services and costs. The elimination

of Non-Advisory Services provisions from the Advisory Agreements and consolidation of Non-Advisory Services in a separate Service Agreement will not materially increase the amount of expenses incurred by the funds for Non-Advisory Services, and will not materially increase the funds’ overall expense ratios. Consistency in operational procedures across the John Hancock Fund Complex will speed processes and minimize transaction error. These benefits contribute to a goal of maintaining, even reducing, operational costs. Restricting the new form of Advisory Agreement to investment advisory services will facilitate the Adviser’s ability to manage those services that are “non-investment” in nature. The Board expects to consider management’s Service Agreement proposal, which does not require shareholder approval, at a future Board meeting.

 

The proposed new form of Advisory Agreement will not result in any increase in the advisory fee that each fund pays the Adviser under the current Advisory Agreement or in any change in the nature and level of Advisory Services provided by the Adviser to the funds, and will not materially increase the funds’ overall expense ratios.

 

Frequency of Payment

 

The new form of Advisory Agreement will restructure the advisory fees paid by both funds so that the fees will be accrued and paid on a daily basis. As compensation for its services under the Advisory Agreement, the Adviser receives a fee computed separately for each fund. The amount of the advisory fee is determined by applying the annual fee rate to the average managed assets of the fund.

 

Currently, each fund pays the Adviser advisory fees on a quarterly basis based on the average weekly managed assets of the fund. This amendment is intended to bring all advisory fee payment mechanics for the John Hancock Fund Complex into conformity and will result in greater administrative efficiencies for the funds.

 

Proposal Three would amend the frequency of accrual and payment of advisory fees for both funds so that JHA will be paid advisory fees on a daily basis on average daily managed assets. The amendment will not change the annual advisory fee rates payable by either of the funds. This amendment would promote uniformity of advisory fee distributions across the John Hancock Fund Complex. The Board believes that this will lead to greater administrative efficiencies for the funds.

 

Because each fund’s advisory fees have historically been accrued on a daily basis, there is no material difference between the amounts that a fund would have paid if daily payment of advisory fees were in effect in prior periods instead of quarterly payment. Nevertheless, the Adviser may benefit from the time value of advisory fee payments received on a daily, rather than a quarterly basis.

Key Differences

 

The following table lists the key differences between the proposed new form of Advisory Agreement and the current Advisory Agreements. These provisions would be changed to those in the proposed form if the form is approved by shareholders of a fund.

 

Key Differences between the New and Current Advisory Agreements

 

 

Description of Current and New Form of Advisory Agreements

 

The following is a summary of the terms of the current Advisory Agreements and the new form of Agreement that are substantially similar.

 

Duties.  The Adviser oversees the investment operations of each fund, and retains and compensates subadvisers that manage the investment and reinvestment of the funds’ assets pursuant to subadvisory agreements with the Adviser.

 

Compensation.  The annual percentage rates for the funds’ advisory fees are set forth in Attachment 8 to this proxy statement. The new form of Advisory Agreement does not change the annual advisory fee rates for the funds.

 

Expenses.  Each fund is responsible for the payment of all expenses of its organization, operations and business, except those that the Adviser has agreed to pay. Each fund pays the expenses of:

 

 

Liability.  The Advisory Agreement provides that the Adviser will 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 the Advisory 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 the Adviser of its obligations and duties under the Advisory Agreement.

 

Term.  Each fund’s Agreement has an initial two-year term, and continuance must be specifically approved at least annually either by: (a) the Board; or (b) a Majority of the fund’s Outstanding Voting Securities (as defined below). Any such continuance also requires the approval of a majority of the Independent Trustees.

 

In this proxy statement, the term “Majority of the Outstanding Voting Securities” means the affirmative vote of the lesser of:

 

(1) 67% or more of the voting securities of a fund present at the meeting, if the holders of more than 50% of the outstanding voting securities of the fund are present in person or by proxy; or

 

(2) more than 50% of the outstanding voting securities of the fund.

Any required shareholder approval of any continuance of the current or amended Advisory Agreements shall be effective with respect to a fund if a Majority of the Outstanding Voting Securities of that fund votes to approve such continuance even if such continuance may not have been approved by a Majority of the Outstanding Voting Securities of the other fund.

 

Failure of Shareholders to Approve Continuance.  If the outstanding voting securities of a fund fail to approve any continuance of the Advisory Agreement, the Adviser may continue to act as investment adviser with respect to such fund pending the required approval of the continuance of such agreement, a new agreement with the Adviser or a different adviser, or other definitive action. The compensation received by the Adviser during such period will be no more than: (a) its actual costs incurred in furnishing Advisory Services; or (b) the amount it would have received under the Agreement, whichever is less.

 

Termination.  Each Advisory Agreement may be terminated at any time without the payment of any penalty on 60 days’ written notice to the other parties. An Agreement may be terminated by:

 

 

An Advisory Agreement will automatically terminate in the event of its assignment.

 

Amendments.  Each fund’s Advisory Agreement may be amended, provided the amendment is approved by the vote of a Majority of the Outstanding Voting Securities of the fund and by the vote of a majority of the Trustees of the fund, including a majority of the Independent Trustees.

 

Vote Required for Proposal Three

 

For each fund, approval of Proposal Three will require the affirmative vote of a Majority of the Outstanding Voting Securities of the fund. If shareholders of a fund do not approve Proposal Three, the new form of Advisory Agreement will not take effect, and the terms of the current Advisory Agreement will continue in effect as to that fund.

 

If Proposal Three is approved by the shareholders of a fund, the new form of Advisory Agreement is expected to become effective promptly thereafter with respect to that fund.

 

Each Board, including all the Independent Trustees, recommends that shareholders of each fund vote “FOR” Proposal Three.

 

MISCELLANEOUS

 

Voting; Quorum; Adjournment

 

The following votes are required to approve the proposals:

 

 

 

 

Proposal One is considered a routine matter on which brokers holding shares in “street name” may vote on this proposal without instruction under the rules of the NYSE. Because Proposals Two and Three are not considered routine matters, brokers holding shares in “street name” may not vote those shares on these proposals without instruction from the beneficial shareholders.

 

The following table summarizes how the quorum and voting requirements are determined.

 

 

If a quorum is not present, the persons named as proxies may vote their proxies to adjourn the meeting to a later date. If a quorum is present, but there are insufficient votes to approve any proposal, the persons named as proxies may propose one or more adjournments of the meeting to permit further solicitation. Shareholder action may be taken on one or more proposals prior to such adjournment. Proxies instructing a

vote for a proposal will be voted in favor of an adjournment with respect to that proposal and proxies instructing a vote against a proposal will be voted against an adjournment with respect to that proposal.

 

Expenses and Methods of Solicitation

 

The costs of the meeting, other than the solicitation of proxies, will be allocated on a pro rata basis based on each fund’s assets. The costs for the solicitation of proxies will be borne equally by each fund, as detailed below. Persons holding shares as nominees will be reimbursed by the relevant 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 funds or of the funds’ investment adviser may solicit proxies in person or by telephone. John Hancock Advisers, LLC, 601 Congress Street, Boston, Massachusetts 02210-2805, serves as each fund’s investment adviser and administrator. Mellon Investor Services LLC has been retained to assist in the solicitation of proxies at a cost of up to approximately $6,000 per fund plus reasonable expenses.

 

Telephone Voting

 

In addition to soliciting proxies by mail, by fax or in person, the funds may also arrange to have votes recorded by telephone by officers and employees of the funds or by the personnel of the Adviser, the transfer agent or solicitor. The telephone voting procedure is designed to verify a shareholder’s identity, to allow a shareholder to authorize the voting of shares in accordance with the shareholder’s instructions and to confirm that the voting instructions have been properly recorded.

 

 

Alternatively, a shareholder may call the funds’ Voice Response Unit to vote:

 

 

With both methods of telephone voting, to ensure that the shareholder’s instructions have been recorded correctly, the shareholder will also receive a confirmation of the voting instructions.

 

If the shareholder decides after voting by telephone to attend the meeting, the shareholder can revoke the proxy at that time and vote the shares at the meeting.

 

Internet Voting

 

You will also have the opportunity to submit your voting instructions via the Internet by utilizing a program provided through a vendor. Voting via the Internet will not affect your right to vote in person if you decide to attend the meeting. Do not mail the proxy card if you are voting via the Internet. To vote via the Internet, you will need the information on your proxy card. These Internet voting procedures are designed to authenticate shareholder identities, to allow shareholders to give their voting instructions and to confirm that shareholders’ instructions have been recorded properly. If you are voting via the Internet you should understand that there may be costs associated with electronic access, such as usage charges from Internet access providers and telephone companies, which costs you must bear.

 

To vote via the Internet:

 

 

 

The Funds’ Adviser and Subadviser

 

The funds’ investment adviser is John Hancock Advisers, LLC, 601 Congress Street, Boston, Massachusetts 02210. An affiliate of the Adviser, MFC Global Investment Management (U.S.), LLC, 101 Huntington Ave., Boston, Massachusetts 02119, serves as subadviser to each fund.

 

Other Matters

 

The management of the funds knows of no business to be brought before the meeting, except as described above. If, however, any other matters were properly to come before the meeting, the persons named in the enclosed form of proxy intend to vote on such matters in accordance with their best judgment. If any shareholders desire additional information about the matters proposed for action, the management of the funds will provide further information.

 

The meeting is scheduled as a joint meeting of the respective shareholders of the funds because the shareholders of the funds are generally expected to consider and vote on similar matters. The Boards of Trustees of the funds have determined that the use of this joint proxy statement for the meetings is in the best interest of each fund’s shareholders. In the event that any shareholder present at the meetings objects to the holding of a joint meeting and moves for an adjournment of the annual meeting with respect to his or her fund to a time immediately after the annual meetings so that his or her fund’s meeting may be held separately, the persons named as proxies will vote in favor of that adjournment.

 

The shareholders of each fund will vote separately on each proposal, and voting by shareholders of one fund will have no effect on the outcome of voting by shareholders of the other fund.

 

SHAREHOLDER PROPOSALS

 

Shareholder proposals, including nominees for Trustee, intended to be presented at a fund’s annual meeting in 2010 must be received by that fund at its offices at 601 Congress Street, Boston, Massachusetts, 02210, after September 16, 2009, but no later than October 16, 2009, for inclusion in that fund’s proxy statement and form of proxy relating to that meeting (subject to certain exceptions).

 

IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY

 

JOHN HANCOCK INVESTORS TRUST

JOHN HANCOCK INCOME SECURITIES TRUST

 

Dated: February 6, 2009

 

ATTACHMENT 1

 

JOHN HANCOCK FUNDS

AUDIT COMMITTEE CHARTER

 

A.  Composition.  The Audit Committee (the “Committee”) shall be composed exclusively of Trustees who are not “interested persons” as defined in the Investment Company Act of 1940 of any of the funds, or of any fund’s investment adviser or principal underwriter (the “Independent Trustees”). The Committee shall be composed of at least three Independent Trustees who are designated for membership from time to time by the Board of Trustees. Unless otherwise determined by the Board, no member of the Committee may serve on the audit committee of more than two other public companies (other than another John Hancock Fund). Except as otherwise permitted by the applicable rules of the New York Stock Exchange, each member of the Committee shall be independent as defined by such rules and Rule 10A-3(b)(1) of the Exchange Act. Each member of the Committee must be financially literate, as such qualification is interpreted by the Board of Trustees in its business judgment, or must become financially literate within a reasonable period of time after his or her appointment to the Committee. At least one member of the Committee must have accounting or related financial management expertise, as the Board of Trustees interprets such qualification in its business judgment.

 

B.  Overview.  The Committee’s purpose is to:

 

 

The Committee shall discharge its responsibilities, and shall access the information provided by the funds’ management and independent auditors, in accordance with its business judgment. Management is responsible for the preparation of the fund’s financial statements, the maintenance of appropriate systems for accounting and internal controls over financial reporting. The Committee and the Board of Trustees recognize that management (including the internal audit staff) and the independent auditors have more experience, expertise, resources and time, and more detailed knowledge and information regarding a fund’s accounting, auditing, internal control and financial reporting practices than the Committee does. Accordingly, the Committee’s oversight role does not provide any expert or special assurance as to the financial statements and other financial information provided by a fund to its shareholders and others. The independent auditors are responsible for auditing the funds’ annual financial statements. The authority and responsibilities set forth in this charter recognize that the Committee members are not acting as accountants or auditors and this charter does not reflect or create any duty or obligation of the Committee to plan or conduct any audit, to determine or certify that any fund’s financial statements are complete, accurate, fairly presented, or in accordance with generally accepted accounting principles or applicable law, or to guarantee any independent auditor’s report.

 

C.  Oversight.  The independent auditors shall report directly to the Committee, and the Committee shall be responsible for oversight of the work of the independent auditors, including resolution of any disagreements between any fund’s management and the independent auditors regarding financial reporting. In connection with its oversight role, the Committee should also review with the independent auditors, from time to time as appropriate: significant risks and uncertainties with respect to the quality, accuracy or fairness of presentation of a fund’s financial statements; recently disclosed problems with respect to the quality, accuracy or fairness of presentation of the financial statements of companies similarly situated to the funds and recommended actions which might be taken to prevent or mitigate the risk of problems at the funds arising from such matters; accounting for unusual transactions; adjustments arising from audits that could have a significant impact on the funds’ financial reporting process; and any recent SEC comments on the funds’ SEC reports, including, in particular, any compliance comments. The Committee should inquire of the independent auditor concerning

the quality, not just the acceptability, of the funds’ accounting determinations and other judgmental areas and question whether management’s choices of accounting principles are, as a whole, conservative, moderate or aggressive.

 

D.  Specific Responsibilities.   The Committee shall have the following duties and powers, to be exercised at such times and in such manner as the Committee shall deem necessary or appropriate:

 

 

 

E.  Subcommittees.  The Committee may, to the extent permitted by applicable law, form and delegate authority to one or more subcommittees (including a subcommittee consisting of a single member), as it deems appropriate from time to time under the circumstances. Any decision of a subcommittee to preapprove audit or non-audit services shall be presented to the full Committee at its next meeting.

 

F.  Additional Responsibilities.  The Committee shall perform other tasks assigned to it from time to time by the Board of Trustees, and will report findings and recommendations to the Board of Trustees, as appropriate.

 

G.  Funding.  Each fund shall provide for appropriate funding, as determined by the Committee for payment of:

 

 

H.  Governance.  One member of the Committee shall be appointed as chair by the Board of Trustees. The chair shall be responsible for leadership of the Committee, including scheduling meetings or reviewing and approving the schedule for them, preparing agendas or reviewing and approving them before meetings, presiding over meetings, and making reports to the Board of Trustees, as appropriate. The designation of a person as an “audit committee financial expert”, within the meaning of the rules under Section 407 of the Sarbanes-Oxley Act of 2002, shall not impose any greater responsibility or liability on that person than the responsibility and liability imposed on such person as a member of the Committee, nor shall it decrease the

duties and obligations of other Committee members or the Board of Trustees. Any additional compensation of Committee members shall be as determined by the Board of Trustees. No member of the Committee may receive, directly or indirectly, any consulting, advisory or other compensatory fee from a fund, other than fees paid in his or her capacity as a member or chair of the Board of Trustees or of a committee of the Board of Trustees. The members of the Committee should confirm that the minutes of the Committee’s meetings accurately describe the issues considered by the Committee, the process the Committee used to discuss and evaluate such issues and the Committee’s final determination of how to proceed. The minutes should document the Committee’s consideration of issues in a manner that demonstrates that the Committee acted with due care.

 

I.  Evaluation.  At least annually, the Committee shall evaluate its own performance, including whether the Committee is meeting frequently enough to discharge its responsibilities appropriately.

 

J.  Miscellaneous.  The Committee shall meet as often as it deems appropriate, with or without management, as circumstances require. The Committee shall have the resources and authority appropriate to discharge its responsibilities, including the authority to retain special counsel and other advisers, experts or consultants, at the funds’ expense, as it determines necessary to carry out its duties. The Committee shall have direct access to such officers of and service providers to the funds as it deems desirable.

 

K.  Review.  The Committee shall review this charter at least annually and shall recommend such changes to the Board of Trustees as it deems desirable.

 

Last revised: December 9, 2008

EXHIBIT A

 

Policy for Raising and Investigating Complaints or Concerns
About Accounting or Auditing Matters

 

As contemplated by the Audit Committee Charter, the Committee has established the following procedures for:

 

 

A.  Policy Objectives

 

The objective of this policy is to provide a mechanism by which complaints and concerns regarding accounting, internal accounting controls or auditing matters may be raised and addressed without the fear or threat of retaliation. The funds desire and expect that covered persons will report any complaints or concerns they may have regarding accounting, internal accounting controls or auditing matters.

 

B.  Procedures for Raising Complaints and Concerns

 

The funds’ Secretary shall be responsible for communicating these procedures to covered persons. Covered persons with complaints regarding accounting, internal accounting controls or auditing matters or concerns regarding questionable accounting or auditing matters may submit such complaints or concerns to the attention of the funds’ Secretary by sending a letter or other writing to the funds’ principal executive offices. Complaints and concerns may be made anonymously. Alternatively, any complaints or concerns may also be communicated anonymously directly to any member of the Audit Committee.

 

C.  Procedures for Investigating and Resolving Complaints and Concerns

 

If any complaints or concerns regarding internal accounting controls or auditing matters that could affect the funds are received through the Ethics Line or any other similar facility maintained by John Hancock Financial Services, they shall be communicated promptly to the funds’ Secretary and shall be reported by the funds’ Secretary to the Audit Committee, promptly or quarterly according to the guidelines set forth below.

 

The funds’ Secretary shall report to the Audit Committee as to whether those responsible for the Ethics Line or similar facility have a procedure in place to communicate promptly any such complaints or concerns to the funds’ Secretary and whether any such communication would violate the terms thereof.

 

All complaints and concerns received will be promptly forwarded to the Audit Committee or the chair of the Audit Committee, unless they are determined to be without merit by Secretary of the funds. If sent only to the chair, the chair may determine the appropriate response or may refer the issues to the entire Audit Committee. In any event, the funds’ Secretary will provide a record of all complaints and concerns received (whether or not determined to have merit) to the Audit Committee quarterly.

 

The Audit Committee will evaluate any complaints or concerns received (including those reported to the committee on a quarterly basis and which the funds’ Secretary has previously determined to be without merit). If the Audit Committee requires additional information to evaluate any complaint or concern, it may conduct an investigation, including interviews of persons believed to have relevant information. The Audit Committee may, in its discretion, assume responsibility for directing or conducting any investigation or may delegate such responsibility to another person or entity.

 

After its evaluation of the complaint or concern, the Audit Committee will authorize such follow-up actions, if any, as deemed necessary and appropriate to address the substance of the complaint or concern. The funds reserve the right to take whatever action the Audit Committee believes appropriate, up to and including discharge of any employee deemed to have engaged in improper conduct.

Regardless of whether a complaint or concern is submitted anonymously, the Audit Committee will strive to keep all complaints and concerns and the identity of those who submit them and participate in any investigation as confidential as possible, limiting disclosure to those with a business need to know or as required by law or recommended by legal counsel.

 

No covered person shall penalize or retaliate against any other covered person for reporting a complaint or concern, unless it is determined that the complaint or concern was made with knowledge that it was false. The funds will not tolerate retaliation against any covered person for submitting, or for cooperating in the investigation of, a complaint or concern. Moreover, any such retaliation is unlawful and may result in criminal action. Any retaliation will warrant disciplinary action against the offending party, up to and including termination of employment.

 

John Hancock Advisers, LLC shall include this policy in its employee manual and shall distribute, at least annually, the policy to all of its employees.

 

The funds’ Secretary shall retain records of all complaints and concerns received, and the disposition thereof, for five years.

 

D.  Notification of Others

 

At any time during an evaluation or investigation of a complaint or concern, the chair of the Audit Committee may notify the funds’ CCO or any other party with a need to know of the receipt of a complaint or concern and/or the progress or results of any review and/or investigation of a complaint or concern. The chair of the Audit Committee may provide such level of detail as may be necessary to allow the appropriate consideration by such parties in light of the funds’ ongoing obligations, including, but not limited to, disclosure obligations or any required officer certifications.

 

ATTACHMENT 2

 

AUDIT AND COMPLIANCE COMMITTEE REPORT

 

The information contained in this report shall not be deemed to be “soliciting material” or “filed” or incorporated by reference in future filings with the SEC, or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, except to the extent that we specifically incorporate it by reference into a document filed under the Securities Act of 1933 or the Securities Exchange Act of 1934.

 

The Audit and Compliance Committee has reviewed and discussed with the Funds’ management and PricewaterhouseCoopers the audited financial statements of the Funds contained in the Annual Report on Form N-CSR for the 2008 fiscal year. The Audit and Compliance Committee has also discussed with PricewaterhouseCoopers the matters required to be discussed pursuant to SAS No. 61 (Codification of Statements on Auditing Standards, AU Section 380), which includes, among other items, matters related to the conduct of the audit of the Funds’ financial statements.

 

The Audit and Compliance Committee has received and reviewed the written disclosures and the letter from PricewaterhouseCoopers required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit and Compliance Committees) and has discussed with PricewaterhouseCoopers its independence from the Funds.

 

Based on the review and discussions referred to above, the Audit and Compliance Committee recommended to the Board of Trustees that the audited financial statements be included in each Funds’ Annual Report on Form N-CSR for filing with the Securities and Exchange Commission.

 

Submitted by the Audit and Compliance Committee

 

John A. Moore, Chairman

Charles L. Ladner

Patti McGill Peterson

 

ATTACHMENT 3

 

JOHN HANCOCK FUNDS

NOMINATING, GOVERNANCE AND ADMINISTRATION COMMITTEE CHARTER

 

A.  Composition.  The Nominating, Governance and Administration Committee (the “Committee”) shall be composed entirely of Trustees who are “independent” as defined in the rules of the New York Stock Exchange (“NYSE”) or any other exchange, as applicable, and are not “interested persons” as defined in the Investment Company Act of 1940 of any of the funds, or of any fund’s investment adviser or principal underwriter (the “Independent Trustees”) who are designated for membership from time to time by the Board of Trustees. The Chairman of the Board shall be a member of the Committee.

 

B.  Overview.  The overall charter of the Committee is to make determinations and recommendations to the Board on issues related to the composition and operation of the Board and corporate governance matters applicable to the Independent Trustees, as well as issues related to complex-wide matters and practices designed to facilitate uniformity and administration of the Board’s oversight of the funds, and to discharge such additional duties, responsibilities and functions as are delegated to it from time to time.

 

C.  Specific Responsibilities.  The Committee shall have the following duties and powers, to be exercised at such times and in such manner as the Committee shall deem necessary or appropriate:

 

 

 

D.  Additional Responsibilities.  The Committee will also perform other tasks assigned to it from time to time by the Chairman of the Board or by the Board of Trustees, and will report findings and recommendations to the Board of Trustees, as appropriate.

 

E.  Governance.  One member of the Committee shall be appointed as chair. The chair shall be responsible for leadership of the Committee, including scheduling meetings or reviewing and approving the schedule for them, preparing agendas or reviewing and approving them before meetings, and making reports to the Board of Trustees, as appropriate.

 

F.  Miscellaneous.  The Committee shall meet as often as it deems appropriate, with or without management, as circumstances require. The Committee shall have the resources and authority appropriate to discharge its responsibilities, including the authority to retain special counsel and other advisers, experts or consultants, at the funds’ expense, as it determines necessary to carry out its duties. The Committee shall have direct access to such officers of and service providers to the funds as it deems desirable.

 

G.  Evaluation.  At least annually, the Committee shall evaluate its own performance, including whether the Committee is meeting frequently enough to discharge its responsibilities appropriately.

 

H.  Review.  The Committee shall review this Charter periodically and recommend such changes to the Board of Trustees as it deems desirable.

 

Last revised: December 9, 2008

ANNEX A

 

General Criteria

 

 

Application of Criteria to Existing Trustees

 

The renomination of existing Trustees should not be viewed as automatic, but should be based on continuing qualification under the criteria set forth above. In addition, the Nominating, Governance and Administration Committee (the “Committee”) shall consider the existing Trustee’s performance on the Board and any committee.

 

Review of Shareholder Nominations

 

Any shareholder nomination must be submitted in compliance with all of the pertinent provisions of Rule 14a-8 under the Securities Exchange Act of 1934 in order to be considered by the Committee. In evaluating a nominee recommended by a shareholder, the Committee, in addition to the criteria discussed above, may consider the objectives of the shareholder in submitting that nomination and whether such objectives are consistent with the interests of all shareholders. If the Board determines to include a shareholder’s candidate among the slate of its designated nominees, the candidate’s name will be placed on the funds’ proxy card. If the Board determines not to include such candidate among its designated nominees, and the shareholder has satisfied the requirements of Rule 14a-8, the shareholder’s candidate will be treated as a nominee of the shareholder who originally nominated the candidate. In that case, the candidate will not be named on the proxy card distributed with the funds’ proxy statement.

 

As long as an existing Independent Trustee continues, in the opinion of the Committee, to satisfy the criteria listed above, the Committee generally would favor the re-nomination of an existing Trustee rather than a new candidate. Consequently, while the Committee will consider nominees recommended by shareholders to serve as trustees, the Committee may only act upon such recommendations if there is a vacancy on the Board, or the Committee determines that the selection of a new or additional Trustee is in the best interests of the fund. In the event that a vacancy arises or a change in Board membership is determined to be advisable, the Committee will, in addition to any shareholder recommendations, consider candidates identified by other means, including candidates proposed by members of the Committee. The Committee may retain a consultant to assist the Committee in a search for a qualified candidate.

 

ATTACHMENT 4

 

Proposed Amendment to Declarations of Trust of John Hancock Income Securities Trust and

John Hancock Investors Trust Establishing a Classified Board Structure

 

[Proposed additions are indicated in bold font below.]

 

ARTICLE II TRUSTEES

 

Section 2.5  Election of Trustees.

 

(a) Except as otherwise provided in Section 2.7 and 2.13 hereof, the Trustees shall be elected annually at the annual Shareholders’ meeting. Trustee may succeed themselves in office. Trustees may be elected at a Shareholders’ meeting. Trustees shall be elected by a plurality of the votes validly cast. The election of any Trustee (other than an individual who was serving as a Trustee immediately prior thereto) shall not become effective, however, until the individual named shall have accepted in writing such election and agreed in writing to be bound by the terms of the Declaration. Trustees need not own Shares.

 

(b) The Board of Trustees shall be divided into three classes, designated Class I, Class II and Class III. Each class shall consist, as nearly as may be possible, of one-third of the total number of Trustees constituting the entire Board of Trustees. Within the limits specified above, the number of the Trustee in each class shall be determined by resolution of the Board of Trustees. The Trustees may also determine by resolution those Trustees in each Class that shall be elected by shareholders of a particular Class of Shares (e.g., by a Class of Preferred Shares). The term of office of the Class I shall expire on the date of the first annual meeting of Shareholders following [April 14, 2009]. The term of the Class II shall expire on the date of the second annual meeting of Shareholders following [April 14, 2009]. The term of the Class III shall expire on the date of the third annual meeting of Shareholders following [April 14, 2009]. Upon expiration of the term of office of each class as set forth above, the number of Trustees in such class, as determined by the Board of Trustees, shall be elected for a term expiring the date of the third annual meeting of Shareholders following such expiration to succeed the Trustees whose terms of office expire. The Trustees shall be elected at an annual meeting of the Shareholders or special meeting in lieu thereof called for that purpose.

 

ATTACHMENT 5

 

NEW FORM OF ADVISORY AGREEMENT

 

Advisory Agreement dated           , 2009, between John Hancock          , a Massachusetts business trust (the “Fund”), and John Hancock Advisers, LLC, a Delaware limited liability company (“JHA” or the “Adviser”). In consideration of the mutual covenants contained herein, the parties agree as follows:

 

 

The Fund hereby appoints JHA, subject to the supervision of the Trustees of the Fund and the terms of this Agreement, as the investment adviser for the Fund. The Adviser accepts such appointment and agrees to render the services and to assume the obligations set forth in this Agreement commencing on its effective date. The Adviser will be an independent contractor and will have no authority to act for or represent the Fund in any way or otherwise be deemed an agent unless expressly authorized in this Agreement or another writing by the Fund and the Adviser.

 

 

 

 

 

 

 

 

 

 

The Fund will pay all expenses of its organization, operations and business not specifically assumed or agreed to be paid by the Adviser, as provided in this Agreement, or by a Subadviser, as provided in a Subadvisory Agreement. Without limiting the generality of the foregoing, in addition to certain expenses described in section 2 above, the Fund shall pay or arrange for the payment of the following:

 

 

 

 

Subject to the provisions of section 2(d) of this Agreement, the Adviser shall be entitled to a fee, paid daily, at such annual percentage rates, as specified in Appendix A to this Agreement, of the average daily managed assets of the Fund.

 

“Managed assets” means the total assets of the Fund (including all assets attributable to any form of investment leverage that may be outstanding) minus the sum of accrued liabilities (other than any liabilities relating to any form of investment leverage). For the elimination of doubt, and without limiting the generality of the foregoing, liabilities with respect to borrowings used for investment leverage, the principal amount of any debt securities issued by the Fund, and/or the liquidation preference of any preferred shares issued by the Fund shall not be deducted from total assets for purposes of determining managed assets. The parties hereto distinguish between “traditional investment leverage,” such as bank debt and preferred share issuance, and “notional leverage,” such as leverage that results from certain transactions, such as selling securities short or engaging in reverse repurchase agreements. The parties hereto understand the term “investment leverage” in the definition to refer to “traditional investment leverage” and not to “notional leverage.”

 

 

The services of the Adviser to the Fund are not to be deemed to be exclusive, and the Adviser shall be free to render investment advisory or other services to others (including other investment companies) and to engage in other activities. It is understood and agreed that the directors, officers and employees of the Adviser are not prohibited from engaging in any other business activity or from rendering services to any other person, or from serving as partners, officers, directors, trustees or employees of any other firm or corporation, including other investment companies.

 

 

The Adviser may enter into arrangements with other persons affiliated with the Adviser to better enable it to fulfill its obligations under this Agreement for the provision of certain personnel and facilities to the Adviser.

 

 

It is understood that Trustees, officers, agents and shareholders of the Fund are or may be interested in the Adviser as directors, officers, stockholders, or otherwise; that directors, officers, agents and stockholders of the Adviser are or may be interested in the Fund as Trustees, officers, shareholders or otherwise; that the Adviser may be interested in the Fund; and that the existence of any such dual interest shall not affect the validity hereof or of any transactions hereunder except as otherwise provided in the Agreement and Declaration of Trust of the Fund or the organizational documents of the Adviser or by specific provision of applicable law.

 

 

The Adviser shall submit to all regulatory and administrative bodies having jurisdiction over the services provided pursuant to this Agreement any information, reports or other material which any such body by reason of this Agreement may request or require pursuant to applicable laws and regulations.

 

This Agreement shall become effective on the later of (i) its execution and (ii) the date of the meeting of the shareholders of the Fund, at which meeting this Agreement is approved by the vote of a “majority of the outstanding voting securities” (as defined in the 1940 Act) of the Fund. The Agreement will continue in effect for a period more than two years from the date of its execution only so long as such continuance is specifically approved at least annually either by the Trustees of the Fund or by the vote of a majority of the outstanding voting securities of the Fund provided that in either event such continuance shall also be approved by the vote of a majority of the Trustees of the Fund who are not “interested persons” (as defined in the 1940 Act) of any party to this Agreement cast in person at a meeting called for the purpose of voting on such approval. The required shareholder approval of the Agreement or of any continuance of the Agreement shall be effective if a majority of the outstanding voting securities of the Fund votes to approve the Agreement or its continuance.

 

Following the effectiveness of the Agreement, if the Agreement terminates because the shareholders of the Fund fail to provide any requisite approval under the 1940 Act for the continued effectiveness of the Agreement, the Adviser will continue to act as investment adviser with respect to the Fund pending the required approval of the Agreement or its continuance or of a new contract with the Adviser or a different adviser or other definitive action; provided, that the compensation received by the Adviser in respect of the Fund during such period will be no more than its actual costs incurred in furnishing investment advisory and management services to the Fund or the amount it would have received under the Agreement in respect of the Fund, whichever is less; provided further, for the elimination of doubt, the failure of shareholders of the Fund to approve a proposed amendment to the Agreement is not a termination of the Agreement with respect to the Fund and, in such event, the Agreement shall continue with respect to the Fund as previously in force and effect.

 

This Agreement may be terminated at any time, without the payment of any penalty, by the Trustees of the Fund, by the vote of a majority of the outstanding voting securities of the Fund, on sixty days’ written notice to the Adviser, or by the Adviser on sixty days’ written notice to the Fund. This Agreement will automatically terminate, without payment of any penalty, in the event of its “assignment” (as defined in the 1940 Act).

 

10.  PROVISION OF CERTAIN INFORMATION BY ADVISER.

 

The Adviser will promptly notify the Fund in writing of the occurrence of any of the following:

 

 

 

This Agreement may be amended by the parties only if such amendment is specifically approved by the vote of a majority of the outstanding voting securities of the Fund and by the vote of a majority of the Trustees of the Fund who are not interested persons of any party to this Agreement cast in person at a meeting called for the purpose of voting on such approval. The required shareholder approval shall be effective if a majority of the outstanding voting securities of the Fund vote to approve the amendment.

 

 

This Agreement contains the entire understanding and agreement of the parties.

 

The headings in the sections of this Agreement are inserted for convenience of reference only and shall not constitute a part hereof.

 

 

All notices required to be given pursuant to this Agreement shall be delivered or mailed to the last known business address of the Fund or Adviser in person or by registered mail or a private mail or delivery service providing the sender with notice of receipt. Notice shall be deemed given on the date delivered or mailed in accordance with this section.

 

 

Should any portion of this Agreement for any reason be held to be void in law or in equity, the Agreement shall be construed, insofar as is possible, as if such portion had never been contained herein.

 

 

The provisions of this Agreement shall be construed and interpreted in accordance with the laws of The Commonwealth of Massachusetts, or any of the applicable provisions of the 1940 Act. To the extent that the laws of The Commonwealth of Massachusetts, or any of the provisions in this Agreement, conflict with applicable provisions of the 1940 Act, the latter shall control.

 

 

The Fund may use the name “John Hancock” or any name or names derived from or similar to the names “John Hancock Investment Management Services, LLC,” “John Hancock Life Insurance Company” or “John Hancock Financial Services, Inc.” only for so long as this Agreement remains in effect as to the Fund. At such time as this Agreement shall no longer be in effect as to the Fund, the Fund will (to the extent it lawfully can) cease to use such a name or any other name indicating that the Fund is advised by or otherwise connected with the Adviser. The Fund acknowledges that it has adopted the name John Hancock           through permission of John Hancock Life Insurance Company, a Massachusetts insurance company, and agrees that John Hancock Life Insurance Company reserves to itself and any successor to its business the right to grant the non-exclusive right to use the name “John Hancock” or any similar name or names to any other corporation or entity, including but not limited to any investment company of which John Hancock Life Insurance Company or any subsidiary or affiliate thereof shall be the investment adviser.

 

 

The Declaration of Trust establishing the Fund, dated           ,     , a copy of which, together with all amendments thereto (the “Declaration”), is on file in the office of the Secretary of The Commonwealth of Massachusetts, provides that no Trustee, shareholder, officer, employee or agent of the Fund shall be subject to any personal liability in connection with Fund property or the affairs of the Fund and that all persons should shall look solely to the Fund property for satisfaction of claims of any nature arising in connection with the affairs of the Fund.

 

 

In the absence of (a) willful misfeasance, bad faith or gross negligence on the part of the Adviser in performance of its obligations and duties hereunder, (b) reckless disregard by the Adviser of its obligations and duties hereunder, or (c) a loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services (in which case any award of damages shall be limited to the period and the amount set forth in Section 36(b)(3) of the 1940 Act), the Adviser shall not be subject to any liability whatsoever to the Fund, or to any shareholder for any error of judgment, mistake of law or any other act or omission in the course of, or connected with, rendering services hereunder including, without limitation, for any losses that may be sustained in connection with the purchase, holding, redemption or sale of any security on behalf of the Fund.

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed under seal by their duly authorized officers as of the date first mentioned above.

 

JOHN HANCOCK ­ ­

 

Name     

JOHN HANCOCK ADVISERS, LLC

 

Name     

 

ATTACHMENT 6

 

EVALUATION BY EACH BOARD OF AGREEMENTS UNDER PROPOSAL THREE

 

At its meeting on December 8-9, 2008, each Board, including all the Independent Trustees, approved the proposed new form of Advisory Agreement for the funds under Proposal Three.

 

Each Board, including the Independent Trustees, is responsible for selecting a fund’s investment adviser, approving the Adviser’s selection of fund subadvisers and approving that fund’s advisory and subadvisory agreements, their periodic continuation and any amendments.

 

Consistent with SEC rules, a Board regularly evaluates a fund’s advisory and subadvisory arrangements, including consideration of the factors listed below. A Board may also consider other factors (including conditions and trends prevailing generally in the economy, the securities markets and the industry) and does not treat any single factor as determinative, and each Trustee may attribute different weights to different factors. Each Board is furnished with an analysis of its fiduciary obligations in connection with its evaluation and, throughout the evaluation process, a Board is assisted by counsel for a fund and the Independent Trustees are also separately assisted by independent legal counsel. The factors considered by a Board are:

 

 

Each Board believes that information relating to all these factors is relevant to its evaluation of a fund’s advisory agreements.

 

June 2008 Meeting

 

At its meeting on June 10, 2008, each Board approved the annual continuation of the Advisory Agreements with respect to each fund and considered each of the factors listed above. With respect to each fund, a discussion of the basis of the Board’s approval of the Advisory Agreements and its consideration of such factors at that meeting is included in the shareholder report for the six months ended June 30, 2008. A copy of the relevant report may be obtained by calling 1-800-225-5291 (TDD — 1-800-554-6713) or by writing to the relevant fund at 601 Congress Street, Boston, Massachusetts 02210, Attn.: Gordon M. Shone, and is also available on the Internet at www.jhfunds.com.

 

In evaluating the advisory agreements at its meeting on June 10, 2008, the Board reviewed a broad range of information requested for this purpose. This information included:

 

 

 

The key factors considered by the Board and the conclusions reached are described below.

 

Nature, extent and quality of services

 

The Board considered the ability of the Adviser, based on its resources, reputation and other attributes, to attract and retain qualified investment professionals, including research, advisory, and supervisory personnel. The Board considered the investment philosophy, research and investment decision-making processes of the Adviser. The Board considered the Adviser’s execution of its oversight responsibilities. The Board further considered the culture of compliance, resources dedicated to compliance, compliance programs and compliance records of the Adviser. In addition, the Board took into account the non-advisory services provided to the fund by the Adviser and its affiliates.

 

Based on the above factors, together with those referenced below, the Board concluded that, within the context of its full deliberations, the nature, extent and quality of the investment advisory services provided to the fund by the Adviser supported renewal of the advisory agreements.

 

Fund performance

 

The Board considered each fund’s performance results in comparison to the performance of the Category, as well as the fund’s Peer Group and benchmark index. The Board reviewed the methodology used by Morningstar to select the funds in the Category and the Peer Group.

 

The Board concluded that each fund’s investment process and particular investments seemed consistent with the fund’s investment objectives, strategy and style.

 

Investment advisory fee rates and expenses

 

The Board reviewed and considered the contractual investment advisory fee rate payable by each fund to the Adviser for investment advisory services in comparison to the advisory fees for the Peer Group.

 

The Board received and considered expense information regarding each fund’s various components, including advisory fees, distribution and fees other than advisory and distribution fees, including transfer agent fees, custodian fees, and other miscellaneous fees (e.g., fees for accounting and legal services). The Board considered comparisons of these expenses to the Peer Group median. The Board also received and considered expense information regarding each fund’s total operating expense ratio and net expense ratio after waivers and reimbursements.

 

The Adviser also discussed the Morningstar data and rankings, and other relevant information, for each fund. Based on the above-referenced considerations and other factors, the Board concluded that the fund’s overall expenses supported the re-approval of the advisory agreements.

 

Profitability

 

The Board received and considered a detailed profitability analysis of the Adviser based on the advisory agreements, as well as on other relationships between the funds and the Adviser and its affiliates. The Board also considered a comparison of the Adviser’s profitability to that of other similar investment advisers whose profitability information is publicly available. The Board concluded that, in light of the costs of providing investment management and other services to the funds, the profits and other ancillary benefits reported by the Adviser were not unreasonable.

 

Economies of scale

 

The Board received and considered general information regarding economies of scale with respect to the management of each fund, including the fund’s ability to appropriately benefit from economies of scale under the fund’s fee structure. The Board recognized the inherent limitations of any analysis of economies of scale, stemming largely from the Board’s understanding that most of the Adviser’s costs are not specific to individual funds, but rather are incurred across a variety of products and services.

 

Information about services to other clients

 

The Board also received information about the nature, extent and quality of services and fee rates offered by the Adviser to their other clients, including other registered investment companies, institutional investors and separate accounts. The Board concluded that each fund’s advisory fees were not unreasonable, taking into account fee rates offered to others by the Adviser, after giving effect to differences in services.

 

Other benefits to the Adviser

 

The Board received information regarding potential “fall-out” or ancillary benefits received by the Adviser and its affiliates as a result of their relationship with the funds. Such benefits could include, among others, benefits directly attributable to the relationship of the Adviser with the fund and benefits potentially derived from an increase in business of the Adviser as a result of their relationship with the fund (such as the ability to market to shareholders other financial products offered by the Adviser and its affiliates).

 

The Board also considered the effectiveness of the Adviser’s and the funds’ policies and procedures for complying with the requirements of the federal securities laws, including those relating to best execution of portfolio transactions and brokerage allocation.

 

Other factors and broader review

 

As discussed above, the Board reviewed detailed materials received from the Adviser as part of the annual re-approval process. The Board also regularly reviews and assesses the quality of the services that the fund receives throughout the year. In this regard, the Board reviews reports of the Adviser at least quarterly, which include, among other things, fund performance reports and compliance reports. In addition, the Board meets with portfolio managers and senior investment officers at various times throughout the year.

 

December 2008 Meeting

 

In approving the proposed new form of Advisory Agreement at the December 8-9, 2008 meeting, each Board determined that it was appropriate to rely upon its recent consideration at its June 10, 2008 meeting of such factors as: fund performance; the realization of economies of scale; profitability of the Advisory Agreement to the Adviser; and comparative advisory fee rates (as well as its conclusions with respect to those factors). Each Board noted that it had, at the June 10, 2008 meeting, concluded that these factors, taken as a whole, supported the continuation of the Advisory Agreement. Each Board, at the December 8-9, 2008 meeting, revisited particular factors to the extent relevant to the proposed new form of Agreement. In particular, each Board noted the skill and competency of the Adviser in its past management of each fund’s affairs and subadvisory relationships, the qualifications of the Adviser’s personnel who perform services for each fund, including those who served as officers of each fund, and the high level and quality of services that the Adviser may reasonably be expected to continue to provide the funds and concluded that the Adviser may reasonably be expected to perform its services ably under the proposed new form of Advisory Agreement. Each Board also took into consideration the extensive analysis and efforts undertaken by a working group comprised by a subset of the Board’s Independent Trustees, which met several times, both with management representatives and separately, to evaluate the proposals described herein, prior to the Board’s December 8-9, 2008 meeting. Each Board considered with respect to Proposal Three the differences between the current Advisory Agreement and proposed new form of Agreement, as described in the proxy statement, and agreed that the new Advisory Agreement structure would more clearly delineate the Adviser’s duties under each agreement by separating the Adviser’s non-advisory functions from its advisory functions. The enhanced delineation is expected to facilitate oversight of the Adviser’s advisory and non-advisory activities without leading to any material increase in either fund’s overall expense ratios.

 

ATTACHMENT 7

 

ADDITIONAL INFORMATION ABOUT THE ADVISER AND THE ADVISORY AGREEMENTS

 

The information set forth below regarding the Adviser and the Advisory Agreements should be read in conjunction with the discussion of Proposal Three in the proxy statement.

 

Prior Approvals of the Advisory Agreements

 

Each fund currently has an Advisory Agreement with John Hancock Advisers, LLC (the “Adviser”). These Advisory Agreements were most recently approved by the Boards on June 10, 2008 in connection with their annual continuance. This table states the date that an Advisory Agreement became effective as to each fund, and the date of the Agreement’s most recent approval by shareholders.

 

 

Management and Control of the Adviser

 

JHA is a Delaware limited liability company having its principal offices at 601 Congress Street, Boston, Massachusetts 02210. JHA is a wholly owned subsidiary of John Hancock Financial Services, Inc., which in turn is a subsidiary of Manulife Financial Corporation. The Adviser is registered as an investment adviser under the Investment Advisers Act of 1940, as amended. The following table sets forth the principal executive officers and directors of the Adviser and their principal occupations. The business address of each such person is 601 Congress Street, Boston, Massachusetts 02210.

 

 

The Adviser pays a subadvisory fee to each fund’s subadviser, MFC Global Investment Management (U.S.), LLC, out of the advisory fee that the Adviser receives from that fund. This subadviser is an affiliate of the Adviser.

 

 

 

Advisory Fees for the Most Recent Fiscal Year

 

The following table shows the amount of advisory fees that each fund paid to the Adviser during the fund’s most recent fiscal year or period, as the case may be.

 

 

ATTACHMENT 8

 

ADVISORY FEE SCHEDULES AND COMPARABLE FUNDS MANAGED BY THE ADVISER

 

Advisory Agreement Compensation Provisions

 

The following are the relevant provisions from the funds’ investment advisory agreements regarding compensation payable to the Adviser.

 

Investors

 

Compensation of the Adviser.  For all services to be rendered and payments to be made by you as provided in paragraphs 2 and 3 hereof, the Trust will pay you quarterly [to be changed to “daily”], an investment management fee approximately equivalent on an annual basis to a stated percentage of the average weekly [to be changed to “daily”] managed assets of the Trust as set forth below:

 

 

“Managed assets” means the total assets of the Trust (including any assets attributable to any leverage that may be outstanding) minus the sum of accrued liabilities (other than liabilities representing financial leverage). The liquidation preference of any preferred shares is not a liability. The “average weekly [to be changed to “daily”] managed assets” of the Trust shall be determined on the basis set forth in the Trust’s prospectus or otherwise consistent with the 1940 Act and the rules and regulations promulgated thereunder, provided that a majority of the Trustees of the Trust, including a majority of the Trustees of the Trust who are not interested persons of you or of the Trust (otherwise than as Trustees) shall have approved the valuations of the Trust’s assets on which such fee is based.

 

Income Securities

 

Compensation of the Adviser.   For all services to be rendered and payments to be made by you as provided in paragraphs 2 and 3 hereof, the Trust will pay you quarterly [to be changed to “daily”], an investment management fee approximately equivalent on an annual basis to a stated percentage of the average weekly [to be changed to “daily”] managed assets of the Trust as set forth below:

 

 

“Managed assets” means the total assets of the Trust (including any assets attributable to any leverage that may be outstanding) minus the sum of accrued liabilities (other than liabilities representing financial leverage). The liquidation preference of any preferred shares is not a liability. The “average weekly [to be changed to “daily”] managed assets” of the Trust shall be determined on the basis set forth in the Trust’s prospectus or otherwise consistent with the 1940 Act and the rules and regulations promulgated thereunder, provided that a majority of the Trustees of the Trust, including a majority of the Trustees of the Trust who are not interested persons of you or of the Trust (otherwise than as Trustees) shall have approved the valuations of the Trust’s assets on which such fee is based.

Comparable Funds

 

The funds in this proxy statement have similar investment objectives and policies. The table shows each such fund’s managed assets as of December 31, 2008, and indicates whether the Adviser has waived its fees or reimbursed the fund’s expenses during the past fiscal year.

 

Thank
You

 

for mailing
your proxy
card promptly!

 

 

P56PX 2/09