John Hancock Tax-Advantaged Dividend Income Fund · NYSE:HTD
John Hancock Tax-Advantaged Dividend Income Fund — Proxy Contest (March 2008)
21 slides from John Hancock Tax-Advantaged Dividend Income Fund's proxy contest presentation, Mar 11, 2008
Slide 1: Western Investment LLC: John Hancock Tax Advantaged Dividend Income Fund Annual Meeting
Western Investment LLC John Hancock Tax Advantaged Dividend Income Fund Annual Meeting March 31, 2008
Slide 2: Western Investment LLC
Western Investment LLC « Western and its affiliates own approximatel 4.7% of the outstanding shares of the Fund. « Seeking to elect Trustees with a meaningful ownership interest in the Fund * Our nominees have with no affiliation with other funds in the Hancock fund farmily.
Slide 3: Independent Stockholder Representation is Required
Independent Stockholder Representation is Required « Incumbent Trustees serve on the Boards of, and are compensated by at least fifty-five other Hancock funds. + We believe they have not, and cannot, properly and effectively serve HTD’s shareholders. + We believe this is clearly demonstrated by thei
Slide 4: Our Goals
Our Goals: + Improve HTD’s performance and reduce the NAV discount. * Seeking significant minority representation, not control: 2 nominees to a 7 seat board. « No intention of seeking to open-end or liquidate HTD.
Slide 5: Incumbents: Conflict not Commitment
Incumbents: Conflict not Commitment « Mr. Cunningham: sits on the Boards of 55 other Hancock Funds and seven other corporate boards: paid $145,250 for his Hancock service; less than $7,000 from HTD. Owns not a single share of HTD. + Mr. Carlin: sits on the Boards of 55 other Hancock Funds; paid $145
Slide 6: Institutionalized Inattention
Institutionalized Inattention + Both of the Fund’s incumbent nominees serve on the boards of 55 other Hancock funds. + We believe that HTD shareholders deserve Trustees who are overseeing their investment in HTD, and not 55 other funds!
Slide 7: Our interests are aligned with all Shareholders
Our interests are aligned with all Shareholders What we bring to the Board: * Commitment to Good Governance. * Ownership Representation in the Boardroom. « Active, Engaged Advocacy. « Talent, Expertise and Experience. + Focus on delivering Full Value through a managed distribution policy or share re
Slide 8: Discounted Market Value
Discounted Market Value A modest discount to NAV is normal and acceptable. A persistent and double-digit deep discount for years is not. Discount reflects the market's response to the Board’s failure to respond to the interests of shareholders. The discount is an immediate loss to selling shareholde
Slide 9: Losses Due to Discount
Losses Due to Discount + Adiscount as high as 17%, plus the initial sales load of 4.5%, has resulted in possible lost value of over 20% to original shareholders. « Adiscount of this magnitude is unfairly punitive to selling stockholders — especially for a fund designed for income. * HTD's current Tr
Slide 10: The Price of Inaction: HTD's Discount to NAV puts it at the Bottom of the Industry
The Price of Inaction: HTD’s Discount to NAV puts it at the Bottom of the Industry: HTD PremiumiDiscount Percentile Rank sox A. ox il # é é é é é é é é éé éé ééé é 10
Slide 11: Disciplined Stock Repurchase
Disciplined Stock Repurchase « A program of incremental stock repurchases when HTD is trading at a punitive discount to NAV benefits all HTD holders. * The underlying value of the shares is immediately increased. * The discount to NAV is narrowed. * The Fund’s closed-end structure is unchanged. « Ma
Slide 12: Disciplined Stock Repurchase
Disciplined Stock Repurchase A Win for Stockholders * The following table illustrates the impact of a regular, disciplined program of stock repurchases triggered when the market price for Fund shares falls at least 3% below the value of the assets they represent. « Our estimate of the incremental co
Slide 13: Impact of Share Buyback on NAV
Disciplined Stock Repurchase Inmpact of Share Buyback on NAV Percentage ot ‘trading Number of shares Yeo! shares Weighted averags NAY NAY wath volume bought outstanding buyback sor HTD NAY buyback purchased back bought back dizcount lion (2/08) socretion 5% eena7es 13% 122% 1.90% 1989 2029 10% 11253
Slide 14: Impact of Share Buyback on Per-Share Return on Equity
Disciplined Stock Repurchase Tinpact of Share Buyback on Per-Share Return on Equity (ROE) Percentage ot Net ROE per ‘wading Baseline Per-share share volume pertatio Gross ROE expense increase ROE after purchased ROE %NAV accretion increase increase stlerfees buyback 5% 2.00% 120% 0.46% 0.01% 0.46% 2
Slide 15: HTD Per-Share Expense Analysis
Disciplined Stock Repurchase HTD Per-Share Expense Analysis Fund Expenses bvestment Management Fee pooounting and legal services Compliance fees APS auction fee Faseral ecizetac Custodian tase Frintina fees Trustess fess Frofessiona fez Registration and fing tes Transfer agent feos terest Mscallaneo
Slide 16: Disciplined Stock Repurchase
Disciplined Stock Repurchase + This analysis assume the company buys back a fixed percentage (5%-25%) of the trading volume each week at the weekly discount when the weekly discount is 3% or greater. Buying back shares at a discount results in NAV accretion --- increased NAV per share. + The ROE ana
Slide 17: Stockholders Deserve
Stockholders Deserve: A voice in the HTD boardroom. Trustees whose interests are aligned with theirs. Effective, engaged oversight of the fund manager. An amelioration of the persistent and overly deep discount to NAV at which the HTD’s shares have historically traded. A fair price for their investe
Slide 18: Our Nominees
Our Nominees Highly Qualified Professional Accomplished Experienced 18
Slide 19: Arthur D. Lipson
Arthur D. Lipson Has successfully managed private investment partnerships since 1995. Principal of Western Investment, he has been the sole managing member or investment manager, specializing in undervalued stocks since 1997. Mr. Lipson first started working on Wall Street at Goldman Sachs in 1968 a
Slide 20: Robert A. Wood
Robert A. Wood Has been Distinguished Professor of Finance at the University of Memphis since July 1990. Professor Wood previously taught at Penn State University and New York University. Dr. Wood holds a PhD in Finance from the University of Pittsburgh, a Masters in Operations Research from Stanfor
Slide 21: Vote the White Proxy
VOTE THE WHITE PROXY VOTE FOR THE SLATE THAT IS COMMITTED TO THE REALIZATION OF FAIR VALUE THROUGH CORPORATE DEMOCRACY. 2
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