File No. 33-65822
File No. 811-7870
As Filed with the Securities and Exchange Commission on April 25, 1995.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /_X__/
Pre-Effective Amendment No. ___ /____/
Post-Effective Amendment No. 4 /_X__/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT
OF 1940 /_X__/
Amendment No. 5 /_X__/
(Check appropriate box or boxes)
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PIONEER WINTHROP REAL ESTATE INVESTMENT FUND
(Exact name of registrant as specified in charter)
60 State Street, Boston, Massachusetts 02109
(Address of principal executive office) Zip Code
(617) 742-7825
(Registrant's Telephone Number, including Area Code)
Joseph P. Barri, Hale and Dorr, 60 State Street, Boston, MA 02109
(Name and address of agent for service)
It is proposed that this filing will become effective (check
appropriate box):
___ immediately upon filing pursuant to paragraph (b)
___ on [date] pursuant to paragraph (b)
___ 60 days after filing pursuant to paragraph (a)(1)
_X_ on April 28, 1995 pursuant to paragraph (a)(1)
___ 75 days after filing pursuant to paragraph (a)(2)
___ on [date] pursuant to paragraph (a)(2)of Rule 485
The Registrant has registered an indefinite number of shares pursuant to Rule 24f-2 under the Investment Company Act of 1940, as amended. The Registrant has filed its Rule 24f-2 Notice for its current fiscal year on February 27, 1995.
This Post-Effective Amendment No.y4 to the Registration Statement of Pioneer Winthrop Real Estate Investment Trust, a Massachusetts business trust (the "Massachusetts Trust"), is being filed by Pioneer Winthrop Real Estate Investment Trust, a Delaware business trust (the "Delaware Trust"), pursuant to Ruley414(d) and Ruley485(a) under the Securities Act of 1933, as amended, for the purpose of the Delaware Trust adopting the Massachusetts Trust's Registration Statement on Form N-1A. The Delaware Trust is requesting acceleration of the effective date of this Post-Effective Amendment to 9:00 a.m. on April 28, 1995 which is the start of business on the first business date after the Massachusetts Trust is reorganized as a Delaware business trust. The reorganization was approved by the shareholders of the Massachusetts Trust at a meeting held on April 11, 1995.
ADOPTION OF REGISTRATION STATEMENT
The Delaware Trust hereby affirmatively adopts the Registration Statement (File Nos. 33-65822 and 811-7870) of the Massachusetts Trust.
PIONEER WINTHROP REAL ESTATE INVESTMENT FUND
Cross-Reference Sheet Showing Location in Prospectus and Statement of Additional Information of Information Required by Items of the Registration Form
Form N-1A Item Number and Caption Location
Part A
1. Cover Page............................ Cover Page
2. Synopsis.............................. Expense Information
3. Condensed Financial Information....... Financial Highlights
4. General Description of Registrant..... Investment Objectives and
Policies; Management of
the Fund; Information
About Fund Shares
5. Management of the Fund................ Management of the Fund
6. Capital Stock and Other Securities.... Investment Objectives and
Policies; Information
About Fund Shares
7. Purchase of Securities Being Offered.. Information About Fund Shares;
Distribution Plan; Shareholder
Services
8. Redemption or Repurchase.............. Information About Fund Shares;
Shareholder Services
9. Pending Legal Proceedings............. Not Applicable
Part B
10. Cover Page............................ Cover Page
11. Table of Contents..................... Cover Page
12. General Information and History....... Cover Page;
Certain Liabilities
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Form N-1A Item Number and Caption Location
13. Investment Objectives and Policies.... Investment Policies and
Restrictions
14. Management of the Fund................ Management of the Fund;
Advisory and Subadvisory
Services
15. Control Persons and Principle Holders
of Securities....................... Management of the Fund
16. Investment Advisory and Other
Services............................ Management of the Fund;
Advisory and Subadvisory
Services; Shareholder
Servicing/Transfer Agent;
Custodian; Independent Public
Accountant
17. Brokerage Allocation and Other
Practices........................... Portfolio Transactions
18. Capital Stock and Other Securities.... Description of Shares;
Certain Liabilities
19. Purchase Redemption and Pricing of
Securities Being Offered............ Determination of Net Asset
Value; Letter of Intention;
Systematic Withdrawal Plan
20. Tax Status............................ Tax Status
21. Underwriters.......................... Principal Underwriter;
Underwriting Agreement and
Distribution Plan
22. Calculation of Performance Data....... Investment Results
23. Financial Statements.................. Financial Statements
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Part C
Information required to be included in Part C is set forth under the appropriate item, so numbered, in Part C of this Registration Statement.
Pioneer Winthrop
Real Estate Investment Fund
Prospectus
April 28, 1995
Pioneer Winthrop Real Estate Investment Fund (the "Fund") is a non-diversified open-end investment company seeking primarily long-term growth of capital. Current income is a secondary objective. The Fund will seek to achieve its investment objectives by investing at least 75% of its total assets in a portfolio consisting primarily of equity securities of real estate investment trusts and other real estate industry companies.
The Fund may also invest up to 25% of its total assets in debt securities of real estate industry companies, mortgage- backed securities and short-term investments. In pursuit of its objectives, the Fund may employ active management techniques (including futures and options) in an attempt to hedge risks associated with the Fund's investments in real estate equity securities. There is, of course, no assurance that the Fund will achieve its investment objectives.
Fund returns and share prices fluctuate and the value of your account upon redemption may be more or less than your purchase price. Shares in the Fund are not deposits or obligations of, or guaranteed or endorsed by, any bank or other depository institution, and the shares are not federally insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other government agency. Investments in securities of real estate industry companies entail risks in addition to those customarily associated with investing in securities in general. The Fund is intended for investors who can accept the risks associated with its investments and may not be suitable for all investors. See "Investment Objectives and Policies" for a discussion of these risks.
This Prospectus provides information about the Fund that you should know before investing in the Fund. Please read and retain it for your future reference. More information about the Fund is included in the Statement of Additional Information, also dated April 28, 1995, which is incorporated in this Prospectus by reference. A copy of the Statement of Additional Information may be obtained free of charge by calling Shareholder Services at 1-800-225-6292 or by written request to the Fund at 60 State Street, Boston, Massachusetts 02109. Other information about the Fund has been filed with the Securities and Exchange Commission (the "SEC") and is available upon request and without charge.
TABLE OF CONTENTS PAGE
I. EXPENSE INFORMATION 2
II. FINANCIAL HIGHLIGHTS 2
III. INVESTMENT OBJECTIVES AND POLICIES 2
IV. MANAGEMENT OF THE FUND 4
V. DISTRIBUTION PLAN 6
VI. INFORMATION ABOUT FUND SHARES 6
How to Purchase Shares 6
Net Asset Value and Pricing of Orders 7
Dividends, Distributions and Taxation 8
Redemptions and Repurchases 8
Redemption of Small Accounts 10
Description of Shares and Voting Rights 10
VII. SHAREHOLDER SERVICES 10
Account and Confirmation Statements 10
Additional Investments 11
Financial Reports and Tax Information 11
Distribution Options 11
Directed Dividends 11
Direct Deposit 11
Voluntary Tax Withholding 11
Exchange Privilege 11
Telephone Transactions and Related Liabilities 12
Telecommunications Device for the Deaf (TDD) 12
Retirement Plans 12
Systematic Withdrawal Plans 12
Reinstatement Privilege 12
VIII. INVESTMENT RESULTS 13
APPENDIX A: Certain Investment Practices 13
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
I. EXPENSE INFORMATION
This table is designed to help you understand the charges and expenses that you, as a shareholder, will bear directly or indirectly when you invest in the Fund. The table reflects annual operating expenses based on actual expenses for the fiscal period ended December 31, 1994.
Shareholder Transaction Expenses: Maximum Initial Sales Charge on Purchases (as a percentage of offering price) 5.75% Maximum Sales Charge on Reinvestment of Dividends None Deferred Sales Charge None(1) Redemption Fee None(2) Exchange Fee None Annual Operating Expenses (as a percentage of net assets): Management Fee (after Expense Limitation)(3) 0.48% 12b-1 Fees 0.25% Other Expenses (including transfer agent fee, custodian fees and accounting and printing expenses) 1.02% Total Operating Expenses (after Expense Limitation):(3) 1.75% |
(1) Purchases of $1 million or more and certain purchases by participants in a "Group Plan" (as described under "How to Purchase Shares") are not subject to an initial sales charge. A contingent deferred sales charge of 1.00% may, however, be charged on redemptions by such accounts of shares held less than 12 months, as further described under "Redemptions and Repurchases" in this Prospectus.
(2) Separate fees (currently $10 and $20, respectively) apply to domestic and international bank wire transfers of redemption proceeds.
(3) Pioneer Winthrop Associates ("PWA" or the "Manager") has agreed not to impose a portion of its management fee and to make other arrangements, if necessary, to the extent necessary to limit the operating expenses of the Fund as listed below. This agreement is voluntary and temporary and may be revised or terminated at any time.
Expense Limitation 1.75% Expenses Absent Limitation Total Operating Expenses 2.27% Management Fee 1.00% |
Example:
You would pay the following fees and expenses on a $1,000 investment, assuming a 5% annual return and constant expenses, with or without redemption at the end of each time period:
One Year Three Years Five Years Ten Years $74 $109 $147 $252 |
The example above assumes reinvestment of all dividends and distributions and that the percentage amounts listed under "Annual Operating Expenses" remain the same each year.
The example is designed for information purposes only, and should not be considered a representation of past or future expenses or return. Actual fund expenses and return vary from year to year and may be higher or lower than those shown.
For further information regarding management fees, 12b-1 fees and other expenses of the Fund, including information regarding the basis upon which fees and expenses are reduced or reallocated, see "Management of the Fund," "Distribution Plan" and "How to Purchase Shares" in this Prospectus and "Management of the Fund" and "Underwriting Agreement and Distribution Plan" in the Statement of Additional Information. The Fund's payment of a 12b-1 fee may result in long-term shareholders indirectly paying more than the economic equivalent of the maximum initial sales charge permitted under the Rules of Fair Practice of the National Association of Securities Dealers, Inc. ("NASD").
The maximum sales charge is reduced on purchases of specified amounts and the value of shares owned in other Pioneer mutual funds is taken into account in determining the applicable sales charge. See "How to Purchase Shares." No sales charge is applied to exchanges of shares of other publicly available Pioneer mutual funds.
II. FINANCIAL HIGHLIGHTS
The following information has been derived from financial statements which have been audited by Arthur Andersen LLP, independent public accountants, in connection with their examination of the Fund's financial statements. Arthur Andersen LLP's report on the Fund's financial statements as of December 31, 1994 appears in the Fund's Annual Report, which is incorporated by reference into the Statement of Additional Information. The Annual Report includes more information about the Fund's performance and is available free of charge by calling Shareholder Services at 1-800-225-6292.
Pioneer Winthrop Real Estate Investment Fund For A Share Outstanding Throughout the Period:
October 25, 1993
(commencement
July 1, 1994 of operations)
through through
December 31, 1994 June 30, 1994
Net asset value, beginning of period $12.020 $12.500
Income from investment operations--
Net investment income $ 0.210 $ 0.268
Net realized and unrealized loss on
investments (0.475) (0.448)
Total loss from investment operations $(0.265) $(0.180)
Distribution to shareholders from--
Net investment income (0.199) (0.270)
Paid-in capital (0.151) (0.030)
Realized capital gains (0.025) --
Net decrease in net asset value $(0.640) $(0.480)
Net asset value, end of period $11.380 $12.020
Total return* (2.16%) (1.47%)
Ratio of net operating expenses to average
net assets 1.75%** 1.71%**
Ratio of net investment income to average
net assets 3.72%** 3.73%**
Portfolio turnover rate 17.40%** 23.98%**
Net assets, end of period (in thousands) $28,068 $29,584
Ratios assuming no waiver of fees or
assumption of expenses--
Net operating expenses 2.27%** 2.15%**
Net investment income 3.20%** 3.28%**
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* Assumes initial investment at net asset value at the beginning of period, reinvestment of all dividends, and the complete redemption of the investment at the net asset value at the end of the period and no sales charges. Total return would be reduced if sales charges were taken into account. ** Annualized
III. INVESTMENT OBJECTIVES AND POLICIES
The Fund's primary investment objective is to seek long-term growth of capital. Current income is a secondary investment objective. The Fund pursues these objectives by investing in a non-diversified portfolio consisting primarily of equity securities
of real estate investment trusts and other real estate industry companies and, to a lesser extent, in debt securities of such companies and in mortgage-backed securities.
Under normal circumstances, at least 75% of the Fund's total assets are invested in equity securities of real estate investment trusts ("REITs") and other real estate industry companies. For purposes of the Fund's investments, a "real estate industry company" is a company that derives at least 50% of its gross revenues or net profits from either (a) the ownership, development, construction, financing, management or sale of commercial, industrial or residential real estate or (b) products or services related to the real estate industry like building supplies or mortgage servicing. The equity securities of real estate industry companies in which the Fund will invest consist of common stock, shares of beneficial interest of real estate investment trusts and securities with common stock characteristics, such as preferred stock and debt securities convertible into common stock ("Real Estate Equity Securities").
The Fund may also invest up to 25% of its total assets in
(a) debt securities of real estate industry companies, (b) mortgage-backed
securities, such as mortgage pass-through certificates, real estate mortgage
investment conduit ("REMIC") certificates and collateralized mortgage
obligations ("CMOs") and (c) short-term investments (as listed below). See
"Other Eligible Investments."
In pursuit of its objectives, the Fund may employ certain management techniques including options on securities indices and futures contracts on securities and indices and options on such futures contracts. These techniques may be employed in an attempt to hedge interest rate or other risks associated with the Fund's portfolio securities. See Appendix A for a description of these investment practices and associated risks.
For temporary defensive purposes, the Fund may invest up to 100% of its total assets in short-term investments (as listed below). The Fund will assume a temporary defensive posture only when economic and other factors affect the real estate industry market to such an extent that the Manager believes there to be extraordinary risks in being substantially invested in Real Estate Equity Securities.
As to any specific investment in Real Estate Equity Securities, the Manager's analysis will focus on evaluating the fundamental value of an enterprise. The Fund will purchase securities for its portfolio when, in the judgment of the Manager, their market price appears to be less than their fundamental value and/or which offer a high level of current income consistent with reasonable investment risk. In selecting specific investments, the Manager will attempt to identify securities with significant potential for appreciation relative to their downside exposure and/or which have a timely record and high level of interest or dividend payments. In making these determinations, the Manager will take into account price-earnings ratios, cash flow, the relationship of asset value to market price of the securities, interest or dividend payment history and other factors which it may determine from time to time to be relevant. The Manager will attempt to allocate the Fund's portfolio investments across regional economies and property types.
Risk Factors Associated with the Real Estate Industry
Although the Fund does not invest directly in real estate, it does invest primarily in Real Estate Equity Securities and does concentrate its investments in the real estate industry, and, therefore, an investment in the Fund may be subject to certain risks associated with the direct ownership of real estate and with the real estate industry in general. These risks include, among others: possible declines in the value of real estate; risks related to general and local economic conditions; possible lack of availability of mortgage funds; overbuilding; extended vacancies of properties; increases in competition, property taxes and operating expenses; changes in zoning laws; costs resulting from the clean-up of, and liability to third parties for damages resulting from, environmental problems; casualty or condemnation losses; uninsured damages from floods, earthquakes or other natural disasters; limitations on and variations in rents; and changes in interest rates.
In addition, if the Fund has rental income or income from the disposition of real property acquired as a result of a default on securities the Fund owns, the receipt of such income may adversely affect its ability to retain its tax status as a regulated investment company. See "Tax Status" in the Statement of Additional Information. Investments by the Fund in securities of companies providing mortgage servicing will be subject to the risks associated with refinancings and their impact on servicing rights.
Real Estate Investment Trusts and Associated Risk Factors
The Fund may invest without limitation in shares of REITs. REITs are pooled investment vehicles which invest primarily in income producing real estate or real estate related loans or interests. REITs are generally classified as equity REITs, mortgage REITs or a combination of equity and mortgage REITs. Equity REITs invest the majority of their assets directly in real property and derive income primarily from the collection of rents. Equity REITs can also realize capital gains by selling properties that have appreciated in value. Mortgage REITs invest the majority of their assets in real estate mortgages and derive income from the collection of interest payments. Like investment companies such as the Fund, REITs are not taxed on income distributed to shareholders provided they comply with several requirements of the Internal Revenue Code of 1986, as amended (the "Code"). The Fund will indirectly bear its proportionate share of any expenses paid by REITs in which it invests in addition to the expenses paid by the Fund.
Investing in REITs involves certain unique risks in addition to those risks associated with investing in the real estate industry in general. Equity REITs may be affected by changes in the value of the underlying property owned by the REITs, while mortgage REITs may be affected by the quality of any credit extended. REITs are dependent upon management skills, are not diversified, and are subject to the risks of financing projects. REITs are subject to heavy cash flow dependency, default by borrowers, self-liquidation, and the possibilities of failing to qualify for the exemption from tax for distributed income under the Code and failing to maintain their exemptions from the Investment Company Act of 1940, as amended (the "1940 Act"). REITs whose underlying assets
include long-term health care properties, such as nursing, retirement and assisted living homes, may be impacted by federal regulations concerning the health care industry.
REITs (especially mortgage REITs) are also subject to interest rate risks. When interest rates decline, the value of a REIT's investment in fixed rate obligations can be expected to rise. Conversely, when interest rates rise, the value of a REIT's investment in fixed rate obligations can be expected to decline. In contrast, as interest rates on adjustable rate mortgage loans are reset periodically, yields on a REIT's investments in such loans will gradually align themselves to reflect changes in market interest rates, causing the value of such investments to fluctuate less dramatically in response to interest rate fluctuations than would investments in fixed rate obligations.
Investing in REITs involves risks similar to those associated with investing in small capitalization companies. REITs may have limited financial resources, may trade less frequently and in a limited volume and may be subject to more abrupt or erratic price movements than larger company securities. Historically, small capitalization stocks, such as REITs, have been more volatile in price than the larger capitalization stocks included in the Standard & Poor's Index of 500 Common Stocks.
Other Eligible Investments
The Fund may invest up to 25% of its total assets in any of the investments described in this section.
Debt Securities of Real Estate Industry Companies and Mortgage-Backed Securities. The Fund may invest in debt securities (including convertible debt securities) of real estate industry companies. The Manager intends to invest no more than 5% of the Fund's net assets in debt securities rated below Baa by Moody's Investors Service, Inc. ("Moody's") or BBB by Standard & Poor's Ratings Group ("Standard & Poor's") or, if unrated, judged by the Manager to be of at least comparable quality. Securities rated Baa by Moody's or BBB by Standard & Poor's and securities of comparable quality, referred to as "medium grade" obligations, have speculative characteristics, and changes in economic conditions and other factors are more likely to lead to weakened capacity to pay principal and interest than is the case for higher rated investment grade securities. In the event a debt security purchased by the Fund is subsequently down graded below investment grade, the Manager will consider whether the Fund should continue to hold the security. See the Statement of Additional Information for a description of the corporate debt ratings assigned by Moody's and Standard & Poor's and the risks associated with lower-rated debt securities.
The Fund may also invest in securities that directly or indirectly represent participations in, or are collateralized by and payable from, mortgage loans secured by real property ("Mortgage-Backed Securities"). Investing in Mortgage- Backed Securities involves certain unique risks in addition to those associated with investing in the real estate industry in general. These risks include the failure of a counter-party to meet its commitments, adverse interest rate changes and the effects of prepayments on mortgage cash flows. See Appendix A for a more complete description of the characteristics of Mortgage-Backed Securities and associated risks.
Short-Term Investments. The Fund may invest in short-term investments consisting of: corporate commercial paper and other short-term commercial obligations, in each case rated or issued by companies with similar securities outstanding that are rated Prime-1, Aa or better by Moody's or A-1, AA or better by Standard & Poor's; obligations (including certificates of deposit, time deposits, demand deposits and bankers' acceptances) of banks with securities outstanding that are rated Prime-1, Aa or better by Moody's, or A-1, AA or better by Standard & Poor's; obligations issued or guaranteed by the U.S. Government or its agencies or instrumentalities with remaining maturities not exceeding 18 months; and repurchase agreements.
Foreign Investments
The Fund may invest up to 5% of its net assets in equity and debt securities of foreign real estate companies. See "Foreign Real Estate Companies and Associated Risks" in the Statement of Additional Information for a description of the risks associated with foreign investments.
Restricted and Illiquid Securities
The Fund may invest up to 5% of its net assets in securities exempt from registration and up to 15% of its net assets in illiquid investments. See Appendix A for a description of the risks associated with these securities.
Non-Diversified Status
The Fund is "non-diversified" for purposes of the 1940 Act. As a
non-diversified mutual fund, the Fund may be more susceptible to risks
associated with a single economic, political or regulatory occurrence than a
diversified fund might be. Like most other registered investment companies,
however, the Fund intends to qualify as a "regulated investment company" under
the Code and therefore will be subject to diversification limits, which
generally require that, as of the close of each quarter of its taxable year,
(i) no more than 25% of its assets may be invested in the securities of a
single issuer (except for U.S. Government securities) and (ii) with respect to
50% of its total assets, no more than 5% of its total assets may be invested in
the securities of a single issuer (except for U.S. Government securities) or
invested in more than 10% of the outstanding voting securities of a single
issuer.
Portfolio Turnover
The Manager generally avoids market-timing or speculating on broad market fluctuations. Therefore, except as described above, the Fund will be substantially fully invested at all times. It is anticipated that the portfolio turnover rate of the Fund will not exceed 75% in the coming year. Changes in the portfolio may be made promptly when determined to be advisable by reason of developments not foreseen at the time of the initial investment decision, and usually without reference to the length of time a security has been held. Accordingly, portfolio turnover rates are not considered a limiting factor in the execution of investment decisions.
The Fund's investment objectives and certain investment restrictions designated as fundamental in the Statement of Additional Information may be changed by the Board of Trustees only with shareholder approval.
IV. MANAGEMENT OF THE FUND
The Fund's Board of Trustees has overall responsibility for the management and supervision of the Fund. There are cur-
rently ten Trustees, six of whom are not "interested persons" of the Fund as defined in the 1940 Act. The Board meets at least quarterly. By virtue of the functions performed by Pioneer Winthrop Advisers ("PWA" or the "Manager") as investment adviser, the Fund requires no employees other than its executive officers, all of whom receive their compensation from PWA or other sources. The Statement of Additional Information contains the names and general business and professional background of each Trustee and executive officer of the Fund.
The Fund is managed under an investment advisory contract with PWA. PWA serves as investment adviser to the Fund and is responsible for the overall management of the Fund's business affairs, subject only to the authority of the Board of Trustees. All the Fund's portfolio investment decisions are made by PWA's advisory committee which relies on investment subadvisory services provided by Pioneering Management Corporation ("PMC"), a Delaware corporation, and by Winthrop Advisors Limited Partnership ("WALP"), a Delaware limited partnership, pursuant to their investment subadvisory contracts with the Fund. PWA's advisory committee consists of David D. Tripple, PMC's Chief Investment Officer, Robert Benson, Senior Vice President of PMC and Francis X. Jacoby, Managing Director of WALP. Day-to-day portfolio decisions are the responsibility of Robert Benson. Mr. Benson joined PMC in 1974 and is a Vice President of the Fund. PWA is a joint venture of The Pioneer Group, Inc. ("PGI"), a Delaware corporation, and Winthrop Financial Associates, A Limited Partnership ("WFA"), a Maryland limited partnership. PWA and WALP currently provide investment advice to one other Pioneer mutual fund.
PMC, a wholly owned subsidiary of PGI, manages and serves as the investment adviser for other mutual funds and is an investment adviser to certain other institutional accounts. PMC is one of the oldest money managers in the United States and, as of March 31, 1994, PMC managed more than $11 billion in assets for more than 900,000 investors. Also as of that date, PGI employed more than 500 people in the United States and more than 800 people abroad. In its capacity as subadviser to the Fund, PMC (i) is responsible for making portfolio investment recommendations to PWA based on information, data and analysis provided to PMC by WALP and other sources, (ii) assures the Fund's investment portfolio complies with its investment objectives, policies and restrictions, and is adequately diversified and sufficiently liquid, (iii) analyzes factors that affect investment securities generally and (iv) places purchase and sale orders for the Fund's portfolio transactions as approved by PWA. Pioneer Funds Distributor, Inc. ("PFD"), an indirect wholly owned subsidiary of PGI, is the principal underwriter of shares of the Fund.
WALP is a wholly owned subsidiary of WFA, one of the nation's largest owners and managers of real estate. WFA is an indirect majority owned subsidiary of The Nomura Securities Co., Ltd., an international brokerage and fianancial services firm. In its capacity as subadviser to the Fund, WALP (i) identifies and analyzes real estate industry companies, including their real estate properties, and other permissible investments for the Fund, (ii) analyzes market conditions affecting the real estate industry generally and specific geographical and securities markets in which the Fund may invest or is invested, (iii) continuously reviews and analyzes the investments in the Fund's portfolio, and (iv) furnishes advisory reports based on such analysis to PWA and PMC.
The executive offices of PWA, PMC, PGI and PFD are located at 60 State Street, Boston, Massachusetts 02109. WFA's and WALP's executive offices are located at One International Place, Boston, Massachusetts 02110.
Under the terms of its contract with the Fund, PWA serves as the Fund's
manager and investment adviser subject to the supervision of the Fund's
Trustees. PWA pays all the ordinary operating expenses, including executive
salaries and the rental of office space relating to its services for the Fund
with the exception of the following which are to be paid by the Fund: (a) taxes
and other governmental charges, if any; (b) interest on borrowed money, if any;
(c) legal fees and expenses; (d) auditing fees; (e) insurance premiums; (f)
dues and fees for membership in trade associations; (g) fees and expenses of
registering and maintaining registrations by the Fund of its shares with the
SEC, individual states, territories and foreign jurisdictions and of preparing
reports to government agencies; (h) fees and expenses of Trustees not
affiliated with or interested persons of PWA; (i) fees and expenses of the
custodian, dividend disbursing agent, transfer agent and registrar; (j) issue
and transfer taxes chargeable to the Fund in connection with securities
transactions to which the Fund is a party; (k) costs of reports to
shareholders, shareholders' meetings and Trustees' meetings; (l) the cost of
certificates representing shares of the fund; (m) fund accounting, pricing and
appraisal charges and related overhead; and (n) distribution fees in accordance
with Rule 12b-1. The Fund also pays all brokerage commissions and any taxes or
other charges in connection with its portfolio transactions. In addition, the
expense of organizing the Fund and initially registering and qualifying its
shares under federal and state securities laws are being charged to the Fund's
operations, as an expense, over a period not to exceed 60 months from the
Fund's inception date.
Orders for the Fund's portfolio securities transactions are placed by PMC, which strives to obtain the best price and execution for each transaction. In circumstances in which two or more broker-dealers are in a position to offer comparable prices and execution, consideration may be given to whether the broker-dealer provides investment research or brokerage services or sells shares of the Fund or other Pioneer mutual funds. See the Statement of Additional Information for a further description of PMC's brokerage allocation practices.
As compensation for its management and investment advisory services and certain expenses which PWA incurs, PWA is entitled to a management fee equal to 1.00% per annum of the Fund's average daily net assets. The management fee, which is greater than those paid by most funds, reflects the added complexity and additional expenses associated with analyzing real estate investments and related securities. As compensation for their investment subadvisory services,
PMC and WALP are each entitled to a fee equal to 0.30% per annum of the Fund's average daily net assets. These subadvisory fees are payable solely by PWA, and the Fund is not responsible for their payment. All fees are normally computed daily and paid monthly.
During the fiscal periods ended June 30, 1994 and December 31, 1994, the Fund incurred expenses of $223,842 and $320,405, respectively, including management fees paid or payable to PWA of $103,371 and $141,284, respectively. PWA has agreed temporarily to limit its management fee, so that the Fund's expenses will not exceed 1.75% of average daily net assets. During the fiscal periods ended June 30, 1994 and December 31, 1994, this arrangement resulted in a reduction of expenses for the Fund of $45,812 and $73,158, respectively, due to reduced management fees. This agreement is voluntary and temporary and may be revised or terminated at any time.
As of March 31, 1995, John F. Cogan, Jr., Chairman and Chief Executive Officer of the Fund and PWA, Chairman of PFD, and President and a Director of PGI, owned approximately 15% of the outstanding capital stock of PGI.
V. DISTRIBUTION PLAN
The Fund has adopted a Plan of Distribution (the "Distribution Plan") in accordance with Rule 12b-1 under the 1940 Act pursuant to which certain distribution fees are paid to PFD.
Pursuant to the Distribution Plan, the Fund reimburses PFD for its actual expenditures to finance any activity primarily intended to result in the sale of Fund shares or to provide services to Fund shareholders, provided the categories of expenses for which reimbursement is made are approved by the Fund's Board of Trustees. As of the date of this Prospectus, the Board of Trustees has approved the following categories of expenses for the Fund: (i) a service fee to be paid to qualified broker-dealers in an amount not to exceed 0.25% per annum of the Fund's average daily net assets; (ii) reimbursement to PFD, PWA, PMC and WALP for their expenditures for broker-dealer commissions and employee compensation on certain sales of the Fund's shares with no initial sales charge (see "How to Purchase Shares"); and (iii) reimbursement to PFD for expenses incurred in providing services to shareholders and supporting broker-dealers and other organizations (such as banks and trust companies) in their efforts to provide such services. Banks are currently prohibited under the Glass-Steagall Act from providing certain underwriting or distribution services. If a bank were prohibited from acting in any capacity or providing any of the described services, management would consider what action, if any, would be appropriate.
Total expenses under the plan may not exceed 0.25% of average daily net assets. Distribution expenses of PFD are expected to substantially exceed the distribution fees paid by the Fund in a given year. The Distribution Plan may not be amended to increase materially the annual percentage limitation of average net assets which may be spent for the services described therein without approval of the shareholders of the Fund.
The Distribution Plan does not provide for the carryover of reimbursable expenses beyond 12 months from the time they are incurred. The limited carryover provision in the Plan may result in an expense invoiced to the Fund in one fiscal year being paid in the subsequent fiscal year and thus being treated for purposes of calculating the maximum expenditures of the Fund as having been incurred in the subsequent fiscal year. In the event of termination or non-continuance of the Distribution Plan, the Fund may nevertheless, within 12 months of such termination or non-continuance, reimburse any expense which it incurs prior to such termination or non- continuance, provided that payments by the Fund during such 12-month period shall not exceed 0.25% of the Fund's average daily net assets during such period.
VI. INFORMATION ABOUT FUND SHARES
How to Purchase Shares
You may purchase shares of the Fund at the public offering price from any securities broker-dealer having a sales agreement with PFD. The minimum initial investment is $1,000, except for accounts being established to utilize monthly bank drafts, government allotments and other similar automatic investment plans. The minimum investment for such plans, as well as all other subsequent additions to an account, is $50. Separate minimum investment requirements apply to retirement plans and no sales charge or minimum investment requirements apply to the reinvestment of dividends or capital gains distributions.
The public offering price is the net asset value per share next computed after receipt of a purchase order, plus a sales charge as follows:
Sales Charge as a % of
Dealer
Net Allowance
Offering Amount as a % of
Amount of Purchase Price Invested Price
Less than $50,000 5.75% 6.10% 5.00%
$50,000 but less than $100,000 4.50 4.71 4.00
$100,000 but less than $250,000 3.50 3.63 3.00
$250,000 but less than $500,000 2.50 2.56 2.00
$500,000 but less than $1,000,000 2.00 2.04 1.75
$1 million or more -0- -0- See Below
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No sales charge is payable at the time of purchase on investments of $1 million or more, or for investments by certain group plans ("Group Plans"), but for such investments a contingent deferred sales charge ("CDSC") of 1.00% is imposed in the event of certain redemption transactions within 12 months of purchase. See "Redemptions and Repurchases" below. PFD may, in its discretion, pay a commission to broker-dealers who initiate and are responsible for such purchases as follows: 1.00% on the first $1 million invested; 0.50% on the next $4 million invested; and 0.10% on the excess over $5 million invested. These commissions shall not be payable if the purchaser is affiliated with the broker-dealer or if the purchase represents the reinvestment of a redemption made during the previous 12 calendar months. Broker-dealers who receive a commission in connection with purchases at net asset value by 401(a) or 401(k) retirement plans with 1,000 or more eligible participants or with at least $10 million in plan assets will be required to return any commissions paid or a pro rata portion thereof if the retirement plan redeems its shares within 12 months of purchase. See also "Waiver or Reduction of
Contingent Deferred Sales Charge." In connection with PGI's acquisition of Mutual of Omaha Fund Management Company and contingent upon the achievement of certain sales objectives, PFD pays to Mutual of Omaha Investor Services, Inc. 50% of PFD's retention of any sales commission on sales of the Fund's shares through such dealer. Shares sold outside the U.S. to persons who are not U.S. citizens may be subject to different sales charges, CDSCs and dealer compensation arrangements in accordance with local laws and business practices.
The schedule of sales charges above is applicable to purchases of shares of the Fund by (i) an individual, (ii) an individual, his or her spouse and children under the age of 21 and (iii) a trustee or other fiduciary of a trust, estate or fiduciary account or related trusts or accounts, including pension, profit-sharing and other employee benefit trusts qualified under Section 401 or 408 of the Code although more than one beneficiary is involved.
The sales charge applicable to a current purchase of shares of the Fund by a person listed above is determined by adding the value of shares to be purchased to the aggregate value (at current offering price) of shares of any of the Pioneer mutual funds previously purchased and then owned (except direct purchases of the Class A shares of Pioneer Money Market Trust), provided PFD is notified by such person or his or her broker-dealer each time a purchase is made which would so qualify. For purposes of the preceding sentence, Pioneer mutual funds include all mutual funds for which PFD serves as principal underwriter. For example, a person investing $5,000 in the Fund who currently owns shares of the Pioneer funds with a value of $50,000 would pay a sales charge of 4.50% of the offering price on the new investment.
Qualifying for a Reduced Sales Charge. Sales charges may also be reduced through an agreement to purchase a specified quantity of shares over a designated thirteen-month period by completing the "Letter of Intention" section of the Account Application. Information about the "Letter of Intention" procedure, including its terms, is contained on the back of the Account Application as well as in the Statement of Additional Information.
Shares of the Fund may be sold at a reduced or eliminated sales charge to certain Group Plans under which a sponsoring organization makes recommendations to, permits group solicitation of, or otherwise facilitates purchases by, its employees, members or participants. Shares of the Fund may be sold at net asset value per share without a sales charge to state-sponsored Optional Retirement Program participants if (i) the employer has authorized a limited number of investment company providers for the Program, (ii) all authorized investment company providers offer their shares to Program participants at net asset value, (iii) the employer has agreed in writing to actively promote the authorized investment providers to Program participants and (iv) the Program provides for a matching contribution for each participant contribution. Information about such arrangements is available from PFD.
Shares of the Fund may also be sold at net asset value per share without a sales charge to: (a) current or former Trustees and officers of the Fund and partners and employees of its legal counsel; (b) current or former directors, officers, employees or sales representatives of PGI, its subsidiaries or affiliates; (c) current or former directors, officers, employees or sales representatives of any subadviser or predecessor investment adviser to any investment company for which PMC serves as an investment adviser, and the subsidiaries or affiliates of such persons; (d) current or former officers, partners, employees or registered representatives of broker-dealers which have entered into sales agreements with PFD; (e) members of the immediate families of any of the foregoing persons; (f) any trust, custodian, pension, profit-sharing or other benefit plan of the foregoing persons; (g) insurance company separate accounts; (h) certain "wrap accounts" for the benefit of clients of financial planners adhering to standards established by PFD; (i) other funds and accounts for which PMC or any of its affiliates serves as investment adviser or manager; and (j) certain unit investment trusts. Shares so purchased are purchased for investment purposes and may not be resold except through redemption or repurchase by or on behalf of the Fund. The availability of this privilege is conditioned on the receipt by PFD of written notification of eligibility. Shares of the Fund may also be sold at net asset value without a sales charge in connection with certain reorganization, liquidation or acquisition transactions involving other investment companies or personal holding companies.
Investors who are clients of a broker-dealer with a current sales agreement with PFD may purchase shares of the Fund at net asset value, without a sales charge, to the extent that the purchase price is paid out of proceeds from one or more redemptions by the investor of shares of certain other mutual funds. In order for a purchase to qualify for this privilege, the investor must document to the broker-dealer that the redemption occurred within 60 days immediately preceding the purchase of shares of the Fund; that the client paid a sales charge on the original purchase of the shares redeemed; and that the mutual fund whose shares were redeemed also offers net asset value purchases to redeeming shareholders of any of the Pioneer family of mutual funds. Further details may be obtained from PFD.
Net Asset Value and Pricing of Orders
Shares of the Fund are sold at the public offering price, which is the net asset value per share plus the applicable sales charge, if any. Net asset value per share of the Fund is determined by dividing the value of its assets, less liabilities, by the number of shares outstanding. The net asset value is computed once daily, on each day the New York Stock Exchange (the "Exchange") is open, as of the close of regular trading hours of the Exchange.
Securities are valued at the last sale price on the principal exchange or market where they are traded. Securities which have not traded on the date of valuation, or securities for which sales prices are not generally reported, are valued at the mean between the current bid and asked prices. Securities quoted in foreign currencies are converted to U.S. dollars utilizing foreign exchange rates employed by the Fund's independent pricing services. Generally, trading in foreign securities is substantially completed each day at various times
prior to the close of regular trading hours on the Exchange. The values of such securities used in computing the net asset value of the Fund's shares are determined as of such times. Foreign currency exchange rates are also generally determined prior to the close of regular trading hours on the Exchange. Occasionally, events which affect the values of such securities and such exchange rates may occur between the times at which they are determined and the close of regular trading hours on the Exchange and will therefore not be reflected in the computation of the Fund's net asset value. If events materially affecting the value of such securities occur during such period, then these securities are valued at their fair value as determined in good faith by the Trustees. All assets of the Fund for which there is no other readily available valuation method are valued at their fair value as determined in good faith by the Trustees.
An order for shares received by a broker-dealer prior to the close of regular trading of the Exchange (currently 4:00 p.m. Eastern Time) is confirmed at the offering price determined at the close of the Exchange on the day the order is received, provided the order is received by PFD prior to its close of business (normally 5:30 p.m. Eastern Time). It is the responsibility of broker-dealers to transmit orders promptly so that they will be received by PFD prior to its close of business. An order received by a broker-dealer following the close of regular trading of the Exchange will be confirmed at the offering price as of the close of regular trading of the Exchange on the next trading day.
The Fund reserves the right in its sole discretion to withdraw all or any part of the offering of shares when, in the judgment of the Fund's management, such withdrawal is in the best interest of the Fund. An order to purchase shares is not binding on, and may be rejected by, PFD until it has been confirmed in writing by PFD and payment has been received.
Dividends, Distributions and Taxation
The Fund's policy is to pay dividends from net investment income, if any, quarterly during the months of March, June, September and December and to make distributions from net realized long-term capital gains, if any, in December. Net short-term capital gains distributions, if any, may be paid with such dividends, and additional distributions may also be made at such times as may be necessary to avoid federal income or excise tax. Dividends from the Fund's net investment income, net short-term capital gains and certain net foreign exchange gains are taxable as ordinary income. Dividends from the Fund's net long-term capital gains are taxable as long-term capital gains.
Unless shareholders specify otherwise, all distributions will be automatically reinvested in additional full and fractional shares of the Fund. For federal income tax purposes, all distributions are taxable as described above whether a shareholder takes them in cash or reinvests them in additional shares of the Fund. Information as to the federal tax status of distributions will be provided to shareholders annually. For further information on the distribution options available to shareholders, see "Distribution Options" and "Directed Dividends" below.
Distributions by the Fund of the dividend income it receives from U.S. domestic corporations, if any, may qualify for the corporate dividends-received deduction for corporate shareholders, subject to minimum holding requirements and debt-financing restrictions under the Code.
Dividends and other distributions and the proceeds of the redemptions, repurchases or exchanges of Fund shares paid to individuals and other non-exempt payees will be subject to a 31% backup withholding of federal income tax if the Fund is not provided with the shareholder's correct taxpayer identification number and certification that the number is correct and the shareholder is not subject to such backup withholding or if the Fund receives notice from the Internal Revenue Service or a broker that such withholding applies. Please refer to the Account Application for additional information.
The Fund has elected to be treated, has qualified and intends to qualify each year as a "regulated investment company" under Subchapter M of the Code so that it will not pay federal income taxes on income and capital gains distributed to shareholders at least annually.
Under the Code, the Fund will be subject to a nondeductible 4% federal excise tax on a portion of its undistributed ordinary income and capital gains if it fails to meet certain distribution requirements with respect to each calendar year. The Fund intends to make distributions in a timely manner and, accordingly, does not expect to be subject to the excise tax.
The description above relates only to U.S. federal income tax consequences for shareholders who are U.S. persons, i.e., U.S. citizens or residents or U.S. corporations, partnerships, trusts or estates and who are subject to U.S. federal income taxes. Non-U.S. shareholders and tax-exempt shareholders are subject to different tax treatment that is not described above. Shareholders should consult their own tax advisers regarding state, local and other applicable tax laws.
Redemptions and Repurchases
Redemption by Mail. As a shareholder, you have the right to offer your shares for redemption by delivering to Pioneering Services Corporation ("PSC") a written request for redemption in proper form and, if applicable, your share certificates properly endorsed and in good order for transfer. Redemptions will be made in cash at the net asset value per share next determined following receipt by PSC of all necessary documents subject in certain cases to the contingent deferred sales charge described below.
Good order means that there are no outstanding claims or requests to hold
redemptions on the account, any certificates are endorsed by the record
owner(s) exactly as the shares are registered and the signature(s) are
guaranteed by any of the following eligible guarantor institutions: (i) all
brokers, dealers, municipal securities dealers and/or brokers, government
securities dealers and/or brokers, who are members of a clearing agency or
whose net capital exceeds $100,000; (ii) all banks; (iii) all credit unions;
(iv) all savings associations, including all savings and loan associations; (v)
all national securities exchanges, registered securities associations, and all
clearing agencies; and (vi) all trust companies. In addition, in some cases
(involving fiduciary or corporate transactions), good order may require the
furnishing of additional documents. You cannot provide a signature guarantee by
facsimile ("fax").
Signature guarantees are not necessary for redemption requests of $50,000 or less, provided that the request is otherwise in good order, the record holder executes the redemption request, payment is directed to the record holder at the record address, and the address was not changed during the previous 30 days. Payment normally will be made within seven days after receipt of the appropriate documents. The Fund reserves the right to withhold payment until checks received in payment of shares purchased have cleared, which may take up to 15 calendar days from the purchase date. For additional information about the necessary documentation for redemption by mail, please contact PSC at 1-800-225-6292.
Redemption by Telephone or Fax. Your account is automatically authorized to have the telephone redemption privilege unless you indicated otherwise on your Account Application or by writing to PSC. Proper account identification will be required for each telephone redemption. The telephone redemption option is not available to retirement plan accounts. A maximum of $50,000 per account per day may be redeemed by telephone or fax and the proceeds may be received by check or by bank wire. To receive the proceeds by check: the check must be made payable exactly as the account is registered and the check must be sent to the address of record which must not have changed in the last 30 days. To receive the proceeds by bank wire: the wire must be sent to the bank wire address of record which must have been properly pre-designated either on your Account Application or on an Account Options Form and which must not have changed in the last 30 days. To redeem by fax, send your redemption request to 1-800-225-4240. You may always elect to deliver redemption instructions to PSC by mail. See "Telephone Transactions and Related Liabilities" below. Telephone redemptions will be priced as described above.
Additional Conditions of Redemption. For the convenience of shareholders, the Fund has authorized PFD to act as its agent in the repurchase of shares of the Fund. The Fund reserves the right to terminate this procedure at any time. Shareholders whose accounts are registered in the name of a broker, dealer or other financial institution must contact a representative of the institution holding the shares to arrange for redemption. Offers to sell shares to the Fund may be communicated to PFD by wire or telephone by broker-dealers for their customers. The Fund repurchases shares offered to it at the net asset value per share determined as of the close of regular trading on the Exchange on the day the offer for repurchase is received and accepted by the broker-dealer if the offer is received by PFD before the close of business on that day.
A broker-dealer which receives an offer for repurchase is responsible for the prompt transmittal of such offer to PFD. Payment of the repurchase proceeds will be made in cash to the broker-dealer placing the order. Except for certain large accounts subject to a contingent deferred sales charge (as described below) neither the Fund nor PFD charges any fee or commission upon such repurchase which is then settled as an ordinary transaction with the broker-dealer (which may make a charge to the shareholder for this service) delivering the shares repurchased. Payment will be made within seven days of the receipt by PSC of valid instructions, including validly endorsed certificates, if appropriate, in good order as described above.
The net asset value per share received upon redemption or repurchase may be more or less than the cost of shares to an investor, depending upon the market value of the portfolio at the time of redemption or repurchase. Redemptions and repurchases are taxable transactions to shareholders.
Redemptions and repurchases may be suspended or payment postponed during any period in which any of the following conditions exist: the Exchange is closed or trading on the Exchange is restricted; an emergency exists as a result of which disposal by the Fund of securities owned by it is not reasonably practicable or it is not reasonably practicable for the Fund to fairly determine the value of the net assets of its portfolio; or the SEC, by order, so permits.
Purchases of $1,000,000 or more, and purchases by participants in a Group Plan which have not been subject to a sales charge, may be subject to a CDSC upon redemption or repurchase. A CDSC is payable to PFD on these investments in the event of a share redemption within 12 months following the share purchase, at the rate of 1.00% of the lesser of the value of the shares redeemed (exclusive of reinvested dividend and capital gain distributions) or the total cost of such shares. In determining whether a CDSC is payable, and, if so, the amount of the charge, it is assumed that shares purchased with reinvested dividend and capital gain distributions and then such other shares which are held the longest will be the first redeemed. Shares subject to the CDSC which are exchanged into another Pioneer fund will continue to be subject to the CDSC until the original 12-month period expires. However, no CDSC is payable with respect to purchases of shares by 401(a) or 401(k) retirement plans with 1,000 or more eligible participants or with at least $10 million in plan assets.
Waiver or Reduction of Contingent Deferred Sales Charge. The CDSC on any shares subject to a CDSC may be waived or reduced for non-retirement accounts if: (a) the redemption results from the death of all registered owners of an account (in the case of UGMAs, UTMAs and trust accounts, waiver applies upon the death of all beneficial owners) or a total and permanent disability (as defined in Section 72 of the Code) of all registered owners occurring after the purchase of the shares being redeemed or (b) the redemption is made in connection with a Systematic Withdrawal Plan (limited in any year to 10% of the value of the account in the Fund at the time the withdrawal plan is established).
The CDSC on any shares subject to a CDSC may be waived or reduced for retirement plan accounts if: (a) the redemption results from the death or a total and permanent disability (as defined in Section 72 of the Code) occurring after the purchase of the shares being redeemed of a shareholder or participant in an employer-sponsored retirement plan; (b) the distribution is to a participant in an IRA, 403(b) or employer- sponsored retirement plan, is part of a series of substantially equal payments made over the life expectancy of the participant or the joint life expectancy of the participant and his or her beneficiary or as scheduled periodic payments to a
participant (limited in any year to 10% of the value of the participant's
account at the time the distribution amount is established; a required minimum
distribution due to the participant's attainment of age 70-1/2 may exceed the
10% limit only if the distribution amount is based on plan assets held by
Pioneer); (c) the distribution is from a 401(a) or 401(k) retirement plan and
is a return of excess employee deferrals or employee contributions or a
qualifying hardship distribution as defined by the Code or results from a
termination of employment (limited with respect to a termination to 10% per
year of the value of the plan's assets in the Fund as of the later of the prior
December 31 or the date the account was established unless the plan's assets
are being rolled over to or reinvested in the same class of shares of a Pioneer
mutual fund subject to the CDSC of the shares originally held); (d) the
distribution is from an IRA, 403(b) or employer-sponsored retirement plan and
is to be rolled over to or reinvested in the same class of shares in a Pioneer
mutual fund and which will be subject to the applicable CDSC upon redemption;
(e) the distribution is in the form of a loan to a participant in a plan which
permits loans (each repayment of the loan will constitute a new sale which will
be subject to the applicable CDSC upon redemption); or (f) the distribution is
from a qualified defined contribution plan and represents a participant's
directed transfer (provided that this privilege has been pre-authorized
through a prior agreement with PFD regarding participant directed transfers).
The CDSC on any shares subject to a CDSC may be waived or reduced for either non-retirement or retirement plan accounts if: (a) the redemption is made by any state, county, or city, or any instrumentality, department, authority, or agency thereof, which is prohibited by applicable laws from paying a CDSC in connection with the acquisition of shares of any registered investment management company; or (b) the redemption is made pursuant to the Fund's right to liquidate or involuntarily redeem shares in a shareholder's account.
Redemption of Small Accounts
If a shareholder holds shares of the Fund in an account with a net asset value of less than $500 due to redemptions or exchanges, the Fund may redeem the shares held in this account at net asset value if the shareholder has not increased the net asset value of the shares in the account to at least $500 within six months of written notice by the Fund to the shareholder of the Fund's intention to redeem the shares.
Description of Shares and Voting Rights
The Fund, a non-diversified open-end management investment company (commonly referred to as a mutual fund) was established as a Massachusetts business trust on July 1, 1993 and was reorganized as a Delaware business trust on April 28, 1995 under an Agreement and Declaration of Trust (the "Declaration of Trust").
The Trustees are responsible for the overall management and supervision of the Fund's affairs. Each share represents an equal proportionate interest in the Fund with each other share. Shares entitle their holders to one vote per share in the election of Trustees and other matters submitted to shareholders. Shares have noncumulative voting rights, do not have preemptive or subscription rights and are transferable. The Trustees are empowered, without shareholder approval, by the Agreement and Declaration of Trust (the "Declaration of Trust") and By-Laws to create additional series of shares and to classify and reclassify any new or existing series of shares into one or more classes.
The Declaration of Trust permits the issuance of series of shares in addition to the Fund which would represent interests in separate portfolios of investments. No series would be entitled to share in the assets of any other series or be liable for the expenses or liabilities of any other series. The Fund is authorized, but does not currently intend to, issue multiple classes of its shares.
The Fund does not intend to hold annual shareholder meetings. Shareholders have certain rights, as set forth in the Declaration of Trust, including the right to call a meeting of shareholders for the purpose of voting on the removal of one or more Trustees. Such removal can be effected upon the action of two-thirds of the outstanding shares of the Fund.
In addition to the requirements under Delaware law, the Declaration of Trust provides that a shareholder of the Fund may bring a derivative action on behalf of the Fund only if the following conditions are met: (a) shareholders eligible to bring such derivative action under Delaware law who hold at least 10% of the outstanding shares of the Fund, or 10% of the outstanding shares of the series or class to which such action relates, shall join in the request for the Trustees to commence such action; and (b) the Trustees must be afforded a reasonable amount of time to consider such shareholder request and investigate the basis of such claim. The Trustees shall be entitled to retain counsel or other advisers in considering the merits of the request and shall require an undertaking by the shareholders making such request to reimburse the Fund for the expense of any such advisers in the event that the Trustees determine not to bring such action.
In the interest of economy and convenience, the Fund does not issue certificates representing Fund shares unless requested. Instead, the transfer agent maintains a record of each shareholder's ownership. Certificates for fractional shares will not be issued. Although there is currently no fee for the issuance of certificates, the Fund reserves the right to charge such a fee.
VII. SHAREHOLDER SERVICES
PSC is the shareholder services and transfer agent for shares of the Fund. PSC, a Massachusetts corporation, is a wholly owned subsidiary of PGI. PSC's offices are located at 60 State Street, Boston, Massachusetts 02109, and inquiries to PSC should be mailed to Pioneering Services Corporation, P.O. Box 9014, Boston, Massachusetts 02205-9014. Brown Brothers Harriman & Co. (the "Custodian") serves as the custodian of the Fund's portfolio securities and other assets. The principal business address of the Mutual Fund Division of the Custodian is 40 Water Street, Boston, Massachusetts 02109.
Account and Confirmation Statements
PSC maintains an account for each shareholder and all transactions of the shareholder are recorded in this account.
Confirmation statements showing the details of transactions are sent to shareholders quarterly for dividend reinvestment and Investomatic transactions and more frequently for other types of transactions. The Pioneer Combined Account Statement, mailed quarterly, is available to all shareholders who have more than one Pioneer account.
Shareholders whose shares are held in the name of an investment broker-dealer or other party will not normally have an account with the Fund and might not be able to utilize some of the services available to shareholders of record. Examples of services that might not be available are investment or redemption of shares by mail or telephone, automatic reinvestment of dividends and capital gains distributions, systematic withdrawal plan, Letters of Intention, Rights of Accumulation, telephone exchanges and redemptions, and newsletters.
Additional Investments
You may add to your account by sending a check ($50 minimum) to PSC; please indicate your account number clearly. The designated portion of a confirmation statement may be used as a remittance slip to make additional investments. You may also make arrangements for regular automatic investments through payroll deduction, government/military allotments or through a Pioneer Investomatic Plan. A Pioneer Investomatic Plan provides for monthly or quarterly investments by means of a preauthorized electronic funds transfer or draft drawn on a checking account. Pioneer Investomatic Plan investments are voluntary, and you may discontinue the Plan without penalty upon 30 days' written notice to PSC. PSC acts as agent for the purchasers, the broker-dealer and PFD in maintaining Pioneer Investomatic Plans.
Additions to a shareholder's account, whether by check or through a Pioneer Investomatic Plan, are invested in full and fractional shares of the Fund at the applicable offering price in effect as of the close of the Exchange on the day of receipt.
Financial Reports and Tax Information
As a shareholder, you will receive financial reports at least semiannually. In January of each year the Fund will mail to you information about the tax status of dividends and distributions.
Distribution Options
Dividends and capital gains distributions, if any, will automatically be invested in additional shares of the Fund, at the applicable net asset value per share, unless you indicate another option on the Account Application.
Two other options available are (a) dividends in cash and capital gains distributions in additional shares; and (b) all dividends and distributions in cash. These two options are not available, however, for retirement plans or an account with a net asset value of less than $500. Changes in the distribution option may be made by written request to PSC.
Directed Dividends
You may elect (in writing) to have the dividends paid by one Pioneer fund account invested in a second Pioneer fund. The value of this second account must be at least $1,000 ($500 for Pioneer Fund or Pioneer II). Invested dividends may be in any amount. There are no fees or charges for this service. Retirement plan shareholders may only direct dividends to accounts with identical registrations; e.g., PGI IRA Cust for John Smith may only go into another account registered PGI IRA Cust for John Smith.
Direct Deposit
If you have elected to take distributions, whether dividends or dividends and capital gains, in cash, or have established a Systematic Withdrawal Plan, you may choose to have those cash payments deposited directly into your savings, checking, or NOW bank account. You may establish this service by completing the appropriate section on the Account Application when opening a new account or the Account Options Form for an existing account.
Voluntary Tax Withholding
You may request (in writing) that PSC withhold 28% of the dividends and capital gain distributions paid from an account (before any reinvestment) and forward the amount withheld to the Internal Revenue Service as a credit against federal income taxes. This option is not available for retirement plan accounts or for accounts subject to backup withholding.
Exchange Privilege
You may exchange your shares of the Fund at net asset value, without a sales charge, for shares of other Pioneer funds which do not offer different classes of shares or for the Class A shares of those Pioneer funds that offer more than one class of shares. There are currently no sales charges or fees on exchanges.
Exchanges must be at least $1,000. A new Pioneer account opened through an exchange must have a registration identical to that on the original account. PSC will process exchanges only after receiving an exchange request in proper form. The exchange privilege is available only in those states where exchanges can legally be made.
Written Exchanges. If the exchange request is in writing, it must be signed by all record owner(s) exactly as the shares are registered. If your original account includes a Pioneer Investomatic or Systematic Withdrawal Plan and you open a new account by exchange, you should specify whether the plans should continue in your new account or remain with your original account. Written exchange requests may be sent by mail or fax.
Telephone Exchanges. Your account is automatically authorized to have the telephone exchange privilege unless you indicated otherwise on your Account Application or by writing to PSC. Proper account identification will be required for each telephone exchange. Telephone exchanges may not exceed $500,000 per account per day. All telephone exchange requests will be recorded.
Automatic Exchange. You may automatically exchange shares from one Pioneer account to another Pioneer account on a regular schedule, either monthly or quarterly. The accounts must have identical registrations and the originating account must have a minimum balance of $5,000. The exchange will occur on the 18th day of each month.
If an exchange request is received by PSC before 4:00 p.m. Eastern Time (or before the time that the Exchange closes for regular trading on that day, if different), the exchange will be effective on that day if the requirements above have been met. If the exchange request is received after 4:00 p.m. Eastern Time, the exchange will be effective on the following business day.
You should consider the differences in objectives and policies of the funds, as described in each fund's current prospectus, before making any exchange. For federal and (generally) state income tax purposes, an exchange represents a sale of the shares exchanged and a purchase of shares in another fund. Therefore, an exchange could result in a gain or loss on the shares sold, depending on the cost basis of these shares and the timing of the transaction, and special tax rules may apply.
To prevent abuse of the exchange privilege to the detriment of other Fund shareholders, the Fund and PFD reserve the right to limit the number and/or frequency of exchanges and/or to charge a fee for exchanges. The Fund will notify shareholders at least 60 days prior to any such modification or termination of the exchange privilege.
Telephone Transactions and Related Liabilities
Your account is automatically authorized to have telephone transaction privileges unless you indicated otherwise on your Account Application or by writing to PSC. You may sell or exchange your Fund shares by telephone by calling 1-800- 225-6292 between the hours of 8:00 a.m. and 8:00 p.m. Eastern Time on weekdays. See "Redemptions and Repurchases" and "Exchange Privilege" for more information.
To confirm that each transaction instruction received by telephone is genuine, the Fund will record each telephone transaction, require the caller to provide the personal identification number (PIN) for the account and send you a written confirmation of each telephone transaction. Different procedures may apply to accounts that are registered to non-U.S. citizens or that are held in the name of an institution or in the name of an investment broker-dealer or other third-party. If reasonable procedures, such as those described above, are not followed, the Fund may be liable for any loss due to unauthorized or fraudulent instructions. In all other cases, neither the Fund, PSC nor PFD will be responsible for the authenticity of instructions received by telephone, therefore, you bear the risk of loss for unauthorized or fraudulent telephone transactions. The Fund may implement other procedures from time to time.
During times of economic turmoil or market volatility or as a result of severe weather or a natural disaster, it may be difficult to contact the Fund by telephone to institute a redemption or exchange. You should communicate with the Fund in writing if you are unable to reach the Fund by telephone.
Telecommunications Device for the Deaf (TDD)
If you have a hearing disability and your own TDD keyboard equipment, you can call our TDD number toll-free at 1-800- 225-1997, week days from 8:30 a.m. to 5:30 p.m. Eastern Time, to contact our telephone representatives with questions about your account.
Retirement Plans
Please contact the Retirement Plans Department of PSC at 1-800-622-0176 for information relating to retirement plans for business, Simplified Employee Pension Plans, Individual Retirement Accounts (IRAs), Section 401(k) salary reduction plans and Section 403(b) retirement plans for employees of certain non-profit organizations and public school systems, all of which are available in conjunction with investments in the Fund. The Account Application accompanying this Prospectus should not be used to establish such plans. Separate applications are required.
Systematic Withdrawal Plans
If your account has a total value of at least $10,000, you may establish a Systematic Withdrawal Plan providing for fixed payments at regular intervals. Periodic checks of $50 or more will be sent to you, or any person designated by you, monthly or quarterly, and your periodic redemptions of shares may be taxable transactions. You may also direct that withdrawal checks be paid to another person, although if you make this designation after you have opened your account, a signature guarantee must accompany your instructions. Purchases of shares of the Fund at a time when you have a Systematic Withdrawal Plan in effect may result in the payment of unnecessary sales charges and may therefore be disadvantageous.
You may obtain additional information by calling PSC at 1-800-225-6292 or by referring to the Statement of Additional Information.
Reinstatement Privilege
If you redeem all or part of your shares of the Fund, you may reinvest all or part of the redemption proceeds without a sales commission in shares of the Fund if you send a written request to PSC not more than 90 days after your shares were redeemed. Your redemption proceeds will be reinvested at the next determined net asset value of the shares of the Fund after receipt of the written request for reinstatement. You may realize a gain or loss for federal income tax purposes as a result of the redemption, and special tax rules may apply if a reinvestment occurs. You may also reinvest in certain other Pioneer mutual funds; in this case you must meet the minimum investment requirement for each fund you enter. The 90-day reinstatement period may be extended by PFD for periods of up to one year for shareholders living in areas that have experienced a natural disaster, such as a flood, hurricane, tornado, or earthquake.
The options and services available to shareholders, including the terms of the Exchange Privilege and the Pioneer Investomatic Plan, may be revised, suspended, or terminated at any time by PFD or by the Fund. You may establish the services described in this section when you open your account. You may also establish or revise many of them on an existing account by completing an Account Options Form, which you may obtain by calling 1-800-225-6292.
VIII. INVESTMENT RESULTS
The Fund may include in advertisements, and furnish to existing or prospective shareholders, information concerning the average annual total return on an investment in the Fund for a designated period of time. Whenever this information is provided, it includes a standardized calculation of average annual total return computed by determining the average annual compounded rate of return that would cause a hypothetical investment (after deduction of the maximum sales charge) made on the first day of the designated period (assuming all dividends and distributions are reinvested) to equal the resulting net asset value of such hypothetical investment on the last day of the designated period. The periods illustrated would normally include one, five and ten years or such lesser periods as the Fund has been in existence. These standardized calculations do not reflect the impact of federal or state income taxes.
From time to time, the Fund may include in advertisements or other communications to existing or proposed shareholders its respective "yield" and "effective yield." Whenever yield information is provided, it includes a standardized yield calculation computed by dividing the Fund's net investment income per share during a base period of 30 days, or one month, by the maximum offering price per share of the Fund on the last day of such base period. The resulting "30-day yield" is then annualized as described below. The Fund's net investment income per share is determined by dividing the Fund's net investment income during the base period by the average number of shares of the Fund entitled to receive dividends during the base period. The Fund's 30-day yield is then "annualized" by a computation that assumes that the Fund's net investment income is earned and reinvested for a six-month period at the same rate as during the 30-day base period and that the resulting six-month income will be generated over an additional six months.
The computation methods described above are prescribed for advertising and other communications subject to SEC Rule 482. Communications not subject to this rule may contain a number of different measures of performance, computation methods and assumptions, including but not limited to: historical total returns; distribution returns; results of actual or hypothetical investments; changes in dividends, distributions or share values; or any graphic illustration of such data. These data may cover any period of the Fund's existence and may or may not include the impact of sales charges, taxes or other factors.
The Fund's investment results will vary from time to time depending on market conditions, the composition of the Fund's portfolio, and operating expenses of the Fund. The temporary management fee reduction and expense limitation arrangement by PWA has the effect of increasing total return. These factors and possible differences in the methods used in calculating investment results should be considered when comparing performance information regarding the Fund to information published for other investment companies and other investment vehicles. You should also consider return quotations relative to changes in the value of the Fund's shares and the risks associated with the Fund's investment objectives and policies. At any time in the future, return quotations may be higher or lower than past return quotations, and there can be no assurance that any historical return quotation will continue in the future.
The Fund may also include securities industry, real estate industry or comparative performance information in advertising or marketing the Fund's shares. Such performance information may include rankings or listings by magazines, newspapers, or independent statistical or ratings services, such as Lipper Analytical Services, Inc. or Ibbotson Associates.
For more information about the calculation methods used to compute the Fund's investment results, see the Statement of Additional Information.
APPENDIX A: Certain Investment Practices
This Appendix provides a brief description of certain securities in which the Fund may invest and certain transactions it may make. For a more complete discussion of these and other securities and practices, see "Investment Objectives and Policies" in this Prospectus and "Investment Policies and Restrictions" in the Statement of Additional Information.
Mortgage-Backed Securities and Associated Risks
The Fund may invest up to 25% of its total assets in mortgage pass-through certificates and multiple-class pass-through securities, such as real estate mortgage investment conduits ("REMIC") pass-through certificates, collateralized mortgage obligations ("CMOs") and stripped mortgage-backed securities ("SMBS"), and other types of Mortgage-Backed Securities that may be available in the future.
Guaranteed Mortgage Pass-Through Securities. The Fund may invest in guaranteed mortgage pass-through securities which represent participation interests in pools of residential mortgage loans and are issued by U.S. Governmental or private lenders and guaranteed by the U.S. Government or one of its agencies or instrumentalities, including but not limited to the Government National Mortgage Association ("Ginnie Mae"), the Federal National Mortgage Association ("Fannie Mae") and the Federal Home Loan Mortgage Corporation ("Freddie Mac"). Ginnie Mae certificates are guaranteed by the full faith and credit of the United States government for timely payment of principal and interest on the certificates. Fannie Mae certificates are guaranteed by Fannie Mae, a federally chartered and privately-owned corporation for full and timely payment of principal and interest on the certificates. Freddie Mac certificates are guaranteed by Freddie Mac, a corporate instrumentality of the United States government, for timely payment of interest and the ultimate collection of all principal of the related mortgage loans.
Multiple-Class Pass-Through Securities and Collateralized Mortgage
Obligations. The Fund may also invest in CMOs and REMIC pass-through or
participation certificates, which may be issued by, among others, U.S.
Government agencies and instrumentalities as well as private lenders. CMOs and
REMIC certificates are issued in multiple classes and the principal of and
interest on the mortgage assets may be
allocated among the several classes of CMOs or REMIC certificates in various
ways. Each class of CMOs or REMIC
certificates, often referred to as a "tranche," is issued at a specific adjustable or fixed interest rate and must be fully retired no later than its final distribution date. Generally, interest is paid or accrues on all classes of CMOs or REMIC certificates on a monthly basis.
Typically, CMOs are collateralized by Ginnie Mae, Fannie Mae or Freddie Mac certificates but also may be collateralized by other mortgage assets such as whole loans or private mortgage pass-through securities. Debt service on CMOs is provided from payments of principal and interest on collateral of mortgaged assets and any reinvestment income thereon.
A REMIC is a CMO that qualifies for special tax treatment under the Code and invests in certain mortgages primarily secured by interests in real property and other permitted investments. Investors may purchase "regular" and "residual" interest shares of beneficial interest in REMIC trusts although the Fund does not intend to invest in residual interests.
Risk Factors Associated with Mortgage-Backed Securities. As discussed above, investing in Mortgage-Backed Securities involves certain unique risks in addition to those risks associated with investing in the real estate industry in general. These risks include the failure of a counter-party to meet its commitments, adverse interest rate changes and the effects of prepayments on mortgage cash flows. The Fund will not invest in the lowest tranche of CMOs and REMIC certificates. When interest rates decline, the value of an investment in fixed rate obligations can be expected to rise. Conversely, when interest rates rise, the value of an investment in fixed rate obligations can be expected to decline. In contrast, as interest rates on adjustable rate mortgage loans are reset periodically, yields on investments in such loans will gradually align themselves to reflect changes in market interest rates, causing the value of such investments to fluctuate less dramatically in response to interest rate fluctuations than would investments in fixed rate obligations.
Further, the yield characteristics of Mortgage-Backed Securities, such as those in which the Fund may invest, differ from those of traditional fixed income securities. The major differences typically include more frequent interest and principal payments (usually monthly), the adjustability of interest rates, and the possibility that prepayments of principal may be made substantially earlier than their final distribution dates.
Prepayment rates are influenced by changes in current interest rates and a variety of economic, geographic, social and other factors and cannot be predicted with certainty. Both adjustable rate mortgage loans and fixed rate mortgage loans may be subject to a greater rate of principal prepayments in a declining interest rate environment and to a lesser rate of principal prepayments in an increasing interest rate environment. Under certain interest rate and prepayment rate scenarios, the Fund may fail to recoup fully its investment in Mortgage-Backed Securities notwithstanding any direct or indirect governmental or agency guarantee. When the Fund reinvests amounts representing payments and unscheduled prepayments of principal, it may receive a rate of interest that is lower than the rate on existing adjustable rate mortgage pass-through securities. Thus, Mortgage-Backed Securities, and adjustable rate mortgage pass-through securities in particular, may be less effective than other types of U.S. Government securities as a means of "locking in" interest rates.
Repurchase Agreements
The Fund may enter into repurchase agreements, generally not exceeding seven days. In a repurchase agreement, an investor (e.g., the Fund) purchases a debt security from a seller which undertakes to repurchase the security at a specified resale price on an agreed future date (ordinarily a week or less). The resale price generally exceeds the purchase price by an amount which reflects an agreed-upon market interest rate for the term of the repurchase agreement. Repurchase agreements entered into by the Fund will be fully collateralized with United States Treasury and/or U.S. Government agency obligations with a market value of not less than 100% of the obligation, valued daily. Collateral will be held in a segregated, safekeeping account for the benefit of the Fund. In the event that a repurchase agreement is not fulfilled, the Fund could suffer a loss to the extent that the value of the collateral falls below the repurchase price or if the Fund is prevented from realizing the value of the collateral by reason of an order of a court with jurisdiction over an insolvency proceeding with respect to the other party to the repurchase agreement.
Restricted and Illiquid Securities
The Fund may invest up to 5% of its net assets in "restricted securities" (i.e., securities that would be required to be registered prior to distribution to the public), excluding restricted securities eligible for resale to certain institutional investors pursuant to Rule 144A of the Securities Act of 1933 or foreign securities which are offered or sold outside the United States; provided, however, that no more than 15% of the Fund's net assets may be invested in restricted securities including securities eligible for resale under Rule 144A. In addition, the Fund may invest up to 15% of its net assets in illiquid investments, which includes securities that are not readily marketable, repurchase agreements maturing in more than seven days. The Board of Trustees may adopt guidelines and delegate to the Manager the daily function of determining and monitoring the liquidity of restricted securities. The Board, however, will retain sufficient oversight and be ultimately responsible for the determinations.
Since it is not possible to predict with assurance exactly how this market for restricted securities sold and offered under Rule 144A will develop, the Board will carefully monitor the Fund's investments in these securities, focusing on such important factors, among others, as valuation, liquidity and availability of information. This investment practice could have the effect of increasing the level of illiquidity in the Fund to the extent that qualified institutional buyers become for a time uninterested in purchasing these restricted securities.
Limitations and Risks Associated with Transactions in Options and Futures Contracts
The Fund may employ certain active management techniques including options on securities indices, futures contracts and options on futures contacts. Each of these active management techniques involves transaction costs as well
as (1) liquidity risk that contractual positions cannot be easily closed out in the event of market changes or generally in the absence of a liquid secondary market, (2) correlation risk that changes in the value of hedging positions may not match the securities market fluctuations intended to be hedged, and (3) market risk that an incorrect prediction of securities prices by the Manager may cause the Fund to perform less well than if such positions had not been entered. The ability to terminate over-the-counter options is more limited than with exchange traded options and may involve the risk that the counter-party to the option will not fulfill its obligations. The Fund will treat over-the-counter options (both purchased and written) as illiquid securities. The use of options and futures contracts are highly specialized activities which involve investment techniques and risks that are different from those associated with ordinary portfolio transactions. The loss that may be incurred by the Fund in entering into futures contracts and written options thereon is potentially unlimited. There is no limit on the percentage of the Fund's assets that may be invested in futures contracts and related options. The Fund may not invest more than 5% of its total assets in purchased options other than protective put options.
The Fund's transactions in options, futures contracts and options on futures contracts may be limited by the requirements for qualification of the Fund as a regulated investment company for tax purposes. See "Tax Status" in the Statement of Additional Information.
Options on Securities Indices
The Fund may purchase put and call options on securities indices that are based on securities in which it may invest in an attempt to hedge against risks of market-wide price fluctuations.
The Fund may purchase put options in an attempt to hedge against an anticipated decline in securities prices that might adversely affect the value of the Fund's portfolio securities. If the Fund purchases a put option on a securities index, the amount of the payment it would receive upon exercising the option would depend on the extent of any decline in the level of the securities index below the exercise price. Such payments would tend to offset a decline in the value of the Fund's portfolio securities. However, if the level of the securities index increases and remains above the exercise price while the put option is outstanding, the Fund will not be able to profitably exercise the option and will lose the amount of the premium and any transaction costs. Such loss may be partially offset by an increase in the value of the Fund's portfolio securities.
The Fund may purchase call options on securities indices in an attempt to lock in a favorable price on securities that it intends to buy in the future. If the Fund purchases a call option on a securities index, the amount of the payment it receives upon exercising the option depends on the extent of an increase in the level of other securities indices above the exercise price. Such payments would in effect allow the Fund to benefit from securities market appreciation even though it may not have had sufficient cash to purchase the underlying securities. Such payments may also offset increases in the price of securities that the Fund intends to purchase. If, however, the level of the securities index declines and remains below the exercise price while the call option is outstanding, the Fund will not be able to exercise the option profitably and will lose the amount of the premium and transaction costs. Such loss may be partially offset by a reduction in the price the Fund pays to buy additional securities for its portfolio.
The Fund may sell an option it has purchased or a similar option prior to the expiration of the purchased option in order to close out its position in an option which it has purchased. The Fund may also allow options to expire unexercised, which would result in the loss of the premium paid.
Futures Contracts and Options on Futures Contracts
To hedge against changes in securities prices or interest rates, the Fund may purchase and sell various kinds of futures contracts, and purchase and write call and put options on any of such futures contracts. The Fund may also enter into closing purchase and sale transactions with respect to any of such contracts and options. The futures contracts may be based on various securities and other financial instruments and indices. The Fund will engage in futures and related options transactions for bona fide hedging purposes as are permitted by regulations of the Commodity Futures Trading Commission.
The Fund may not purchase or sell non-hedging futures contracts or purchase or sell related non-hedging options, except for closing purchase or sale transactions. These transactions involve brokerage costs, require margin deposits and, in the case of contracts and options obligating the Fund to purchase securities, require the Fund to segregate assets to cover such contracts and options. Perfect correlation between the Fund's futures positions and portfolio positions will be difficult to achieve because no futures contracts based on corporate fixed-income securities are currently available.
Pioneer Winthrop
Real Estate Investment Fund
60 State Street
Boston, Massachusetts 02109
OFFICERS
JOHN F. COGAN, JR., Chairman and Chief Executive Officer
ARTHUR J. HALLERAN, JR., President and Chief Operating Officer
DAVID D. TRIPPLE, Executive Vice President
ROBERT W. BENSON, Vice President
STEPHEN G. KASNET, Vice President
WILLIAM H. KEOUGH, Treasurer
JOSEPH P. BARRI, Secretary
INVESTMENT ADVISER
PIONEER WINTHROP ADVISERS
INVESTMENT SUBADVISERS
PIONEERING MANAGEMENT CORPORATION
WINTHROP ADVISORS LIMITED PARTNERSHIP
PRINCIPAL UNDERWRITER
PIONEER FUNDS DISTRIBUTOR, INC.
CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.
INDEPENDENT PUBLIC ACCOUNTANTS
ARTHUR ANDERSEN LLP
LEGAL COUNSEL
HALE AND DORR
SHAREHOLDER SERVICES AND TRANSFER AGENT
PIONEERING SERVICES CORPORATION
60 State Street
Boston, Massachusetts 02109
Telephone: 1-800-225-6292
SERVICE INFORMATION
If you would like information on the following, please call... Existing and new accounts, prospectuses, applications, service forms, and telephone transactions ........................................ 1-800-225-6292 Automated fund yields, prices and account information ............................................ 1-800-225-4321 Retirement plans ................................................ 1-800-622-0176 Toll-free fax ................................................... 1-800-225-4240 Telecommunications Device for the Deaf (TDD) .................... 1-800-225-1997 0495-2459 (C)Pioneer Funds Distributor, Inc. |
PIONEER WINTHROP REAL ESTATE INVESTMENT FUND
60 State Street
Boston, Massachusetts 02109
STATEMENT OF ADDITIONAL INFORMATION
April 28, 1995
This Statement of Additional Information (Part B of the Registration Statement) is not a Prospectus, but should be read in conjunction with the Prospectus dated April 28, 1995, as amended and/or supplemented from time to time (the "Prospectus") of Pioneer Winthrop Real Estate Investment Fund (the "Fund"). A copy of the Prospectus can be obtained free of charge by calling Shareholder Services at 1-800-225-6292 or by written request to the Fund at 60 State Street, Boston, Massachusetts 02109.
TABLE OF CONTENTS
Page
1. Investment Policies and Restrictions.............................B-2
2. Management of the Fund...........................................B-14
3. Advisory and Subadvisory Services................................B-19
4. Underwriting Agreement and
Distribution Plan..............................................B-21
5. Shareholder Servicing/Transfer Agent.............................B-23
6. Custodian........................................................B-23
7 Principal Underwriter............................................B-24
8. Independent Public Accountant....................................B-25
9. Portfolio Transactions...........................................B-25
10. Tax Status.......................................................B-27
11. Description of Shares............................................B-31
12. Certain Liabilities..............................................B-32
13. Determination of Net Asset Value.................................B-33
14. Systematic Withdrawal Plan.......................................B-34
15. Letter of Intention..............................................B-35
16. Investment Results...............................................B-35
17. Financial Statements.............................................B-40
APPENDIX A - Description of Bond Ratings.........................A-1
APPENDIX B - Additional Pioneer Information......................B-*1
APPENDIX C - Securities Indices .................................C-1
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THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
1. INVESTMENT POLICIES AND RESTRICTIONS
The Prospectus of Pioneer Winthrop Real Estate Investment Fund (the "Fund"), identifies the investment objectives and the principal investment policies of the Fund. Other investment policies of the Fund are set forth below. Capitalized terms not otherwise defined herein have the meaning given to them in the Prospectus.
Lower-Rated Debt Securities and Associated Risks
As described in the Prospectus, the Fund may make a variety of investments, including corporate debt obligations of real estate industry companies which may be unrated or rated in the lowest rating categories by Standard & Poor's Ratings Group ("Standard & Poor's") or by Moody's Investors Services, Inc. ("Moody's") (i.e., ratings of BB or lower by Standard & Poor's or Ba or lower by Moody's). Bonds rated BB or Ba or below (or comparable unrated securities) are commonly referred to as "junk bonds" and are considered speculative and may be questionable as to principal and interest payments. In some cases, such bonds may be highly speculative, have poor prospects for reaching investment standing and be in default. As a result, investment in such bonds will entail greater speculative risks than those associated with investment in investment-grade bonds (i.e., bonds rated BBB or better by Standard & Poor's or Baa or better by Moody's). The Fund will limit its investment in non-investment grade corporate debt obligations, and comparable unrated debt obligations, to less than 5% of its net assets. See Appendix A for a description of the ratings issued by investment rating services.
The amount of junk bond securities outstanding has proliferated in conjunction with the increase in merger and acquisition and leveraged buyout activity. An economic downturn could severely affect the ability of highly leveraged issuers to service their debt obligations or to repay their obligations upon maturity. Factors having an adverse impact on the market value of lower rated securities will have an adverse effect on the Fund's net asset value to the extent it invests in such securities. In addition, the Fund may incur additional expenses to the extent it is required to seek recovery upon a default in payment of principal or interest on its portfolio holdings.
The secondary market for junk bond securities, which is concentrated in relatively few market makers, may not be as liquid as the secondary market for more highly rated securities, a factor which may have an adverse effect on the Fund's ability to dispose of a particular security when necessary to meet its liquidity needs. Under adverse market or economic conditions, the secondary market for junk bond securities could contract further, independent of any
specific adverse changes in the condition of a particular issuer. As a result, the Manager could find it more difficult to sell these securities or may be able to sell the securities only at prices lower than if such securities were widely traded. Prices realized upon the sale of such lower rated or unrated securities, under these circumstances, may be less than the prices used in calculating the Fund's net asset value.
Certain proposed and recently enacted federal laws including the required divestiture by federally insured savings and loan associates of their investments in junk bonds and proposals designed to limit the use, or tax and other advantages, of junk bond securities could adversely affect the Fund's net asset value and investment practices. Such proposals could also adversely affect the secondary market for junk bond securities, the financial condition of issuers of these securities and the value of outstanding junk bond securities. The form of such proposed legislation and the probability of such legislation being passed are uncertain.
Since investors generally perceive that there are greater risks associated with the medium to lower rated securities of the type in which the Fund may invest, the yields and prices of such securities may tend to fluctuate more than those for higher rated securities. In the lower quality segments of the fixed-income securities market, changes in perceptions of issuers' creditworthiness tend to occur more frequently and in a more pronounced manner than do changes in higher quality segments of the fixed-income securities market resulting in greater yield and price volatility.
Another factor which causes fluctuations in the prices of fixed-income securities is the supply and demand for similarly rated securities. In addition, the prices of fixed-income securities fluctuate in response to the general level of interest rates. Fluctuations in the prices of portfolio securities subsequent to their acquisition will not affect cash income from such securities but will be reflected in the Fund's net asset value.
Medium-to-lower rated and comparable non-rated securities tend to offer higher yields than higher rated securities with the same maturities because the historical financial condition of the issuers of such securities may not have been as strong as that of other issuers. Since medium-to-lower rated securities generally involve greater risks of loss of income and principal than higher rated securities, investors should consider carefully the relative risks associated with investment in securities which carry medium to lower ratings and in comparable non-rated securities. In addition to the risk of default, there
are the related costs of recovery on defaulted issues. The Manager will attempt to reduce these risks through diversification of the Fund's portfolio and by analysis of each issuer and its ability to make timely payments of income and principal, as well as broad economic trends in corporate developments.
Foreign Real Estate Companies and Associated Risks
The Fund may invest up to 5% of its net assets in securities of foreign real estate companies. Such investments involve certain risks which are not typically associated with investing in securities of domestic real estate companies. Foreign companies are not subject to uniform accounting, auditing and financial standards and requirements comparable to those applicable to United States companies. There may also be less government supervision and regulation of foreign securities exchanges, brokers and listed companies than exists in the United States. Interest and dividends paid by foreign issuers may be subject to withholding and other foreign taxes which will decrease the net return on such investments as compared to interest and dividends paid to the Fund by the United States Government or by domestic companies. In addition, there may be the possibility of expropriation, confiscatory taxation, political, economic or social instability, or diplomatic developments which could affect assets of the Fund held in foreign countries.
In addition, the value of foreign securities may also be adversely affected by fluctuations in the relative rates of exchange between the currencies of different nations and exchange control regulations. There may be less publicly available information about foreign companies compared to reports and ratings published about United States companies. Foreign securities markets have substantially less trading volume than domestic markets and securities of some foreign companies are less liquid and more volatile than securities of comparable United States companies. Transaction costs on foreign securities exchanges are generally higher than in the U.S.
The Fund's investments in securities denominated in foreign currencies are also subject to currency risk, as the U.S. dollar value of these securities may be favorably or unfavorably affected by changes in foreign currency exchange rates and exchange control regulations. Currency exchange rates may fluctuate significantly over short periods of time causing, among other factors, the Fund's net asset value to fluctuate as well. Currency exchange rates are generally determined by forces of supply and demand and the perceived relative merits of investments in various countries, but can be affected unpredictable by intervention from U.S. and foreign governments or central banks, political events and currency control measures. The Manager will take these and other
factors into consideration in managing the Fund's investments.
Securities Index Options
The Fund may purchase call and put options on securities indices for the purpose of hedging against the risk of unfavorable price movements adversely affecting the value of the Fund's securities or securities the Fund intends to buy. Securities index options will not be used for speculative purposes.
Currently, options on stock indices are traded on national securities exchanges and over-the-counter, both in the United States and in foreign countries. A securities index fluctuates with changes in the market values of the securities included in the index. For example, some stock index options are based on a broad market index such as the S&P 500 or the Value Line Composite Index. Index options may also be based on a narrower market index such as the S&P 100 or on an industry or market segment such as the AMEX Oil and Gas Index or the Computer and Business Equipment Index.
The Fund may purchase put options in order to hedge against an anticipated decline in securities prices that might adversely affect the value of the Fund's portfolio securities. If the Fund purchases a put option on a securities index, the amount of the payment it would receive upon exercising the option would depend on the extent of any decline in the level of the securities index below the exercise price. Such payments would tend to offset a decline in the value of the Fund's portfolio securities. However, if the level of the securities index increases and remains above the exercise price while the put option is outstanding, the Fund will not be able to profitably exercise the option and will lose the amount of the premium and any transaction costs. Such loss may be partially offset by an increase in the value of the Fund's portfolio securities.
The Fund may purchase call options on securities indices in an attempt to lock in a favorable price on securities that it intends to buy in the future. If the Fund purchases a call option on a securities index, the amount of the payment it receives upon exercising the option depends on the extent of an increase in the level of other securities indices above the exercise price. Such payments would in effect allow the Fund to benefit from securities market appreciation even though it may not have had sufficient cash to purchase the underlying securities. Such payments may also offset increases in the price of securities that the Fund intends to purchase. If, however, the level of the securities index declines and remains below the exercise price while the call option is outstanding, the Fund will not be able to exercise the option
profitably and will lose the amount of the premium and transaction costs. Such loss may be partially offset by a reduction in the price the Fund pays to buy additional securities for its portfolio.
The Fund may sell the securities index option it has purchased or write a similar offsetting securities index option in order to close out a position in a securities index option which it has purchased. These closing sale transactions enable the Fund to immediately realize gains or minimize losses on its options positions. However, there is no assurance that a liquid secondary market on an options exchange will exist for any particular option, or at any particular time, and for some options no secondary market may exist. In addition, securities index prices may be distorted by interruptions in the trading of securities of certain companies or of issuers in certain industries, or by restrictions that may be imposed by an exchange on opening or closing transactions, or both, which would disrupt trading in options on such indices and preclude the Fund from closing out its options positions. If the Fund is unable to effect a closing sale transaction with respect to options that it has purchased, it would have to exercise the options in order to realize any profit.
The hours of trading for options may not conform to the hours during which the underlying securities are traded. To the extent that the options markets close before the markets for the underlying securities, significant price and rate movements can take place in the underlying markets that can not be reflected in the options markets. The purchase of options is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions.
In addition to the risks of imperfect correlation between the Fund's portfolio and the index underlying the option, the purchase of securities index options involves the risk that the premium and transaction costs paid by the Fund in purchasing an option will be lost. This could occur as a result of unanticipated movements in prices of the securities comprising the securities index on which the option is based.
Futures Contracts and Options on Futures Contracts
To hedge against changes in securities prices, the Fund may purchase and sell various kinds of futures contracts, and purchase and write (sell) call and put options on any of such futures contracts. The Fund may also enter into closing purchase and sale transactions with respect to any of such contracts and options. The futures contracts may be based on various securities (such as U.S. Government securities), securities indices and other financial instruments and
indices. The Fund will engage in futures and related options transactions for bona fide hedging and, although the Fund has no current intention of doing so, for non-hedging purposes as described below. All futures contracts entered into by the Fund are traded on U.S. exchanges or boards of trade that are licensed and regulated by the Commodity Futures Trading Commission (the "CFTC") or on foreign exchanges.
Futures Contracts. A futures contract may generally be described as an agreement between two parties to buy and sell particular financial instruments for an agreed price during a designated month (or to deliver the final cash settlement price, in the case of a contract relating to an index or otherwise not calling for physical delivery at the end of trading in the contract).
When interest rates are rising or securities prices are falling, the Fund can seek to offset a decline in the value of its current portfolio securities through the sale of futures contracts. When interest rates are falling or securities prices are rising, the Fund, through the purchase of futures contracts, can attempt to secure better rates or prices than might later be available in the market when it effects anticipated purchases.
Positions taken in the futures markets are not normally held to maturity but are instead liquidated through offsetting transactions which may result in a profit or a loss. A clearing corporation associated with the exchange on which futures on securities are traded guarantees that, if still open, the sale or purchase will be performed on the settlement date.
Hedging Strategies. Hedging, by use of futures contracts, seeks to establish with more certainty the effective price and rate of return on portfolio securities and securities that the Fund owns or proposes to acquire. The Fund may, for example, take a "short" position in the futures market by selling futures contracts in order to hedge against an anticipated rise in interest rates that would adversely affect the value of the Fund's portfolio securities. Such futures contracts may include contracts for the future delivery of securities held by the Fund or securities with characteristics similar to those of the Fund's portfolio securities. If, in the opinion of PWA, there is a sufficient degree of correlation between price trends for the Fund's portfolio securities and futures contracts based on other financial instruments, securities indices or other indices, the Fund may also enter into such futures contracts as part of its hedging strategy. Although under some circumstances prices of securities in the Fund's portfolio may be more or less volatile than prices of such futures contracts, PWA will attempt to estimate the extent of this volatility difference based on historical patterns and compensate for any
such differential by having the Fund enter into a greater or lesser number of futures contracts or by attempting to achieve only a partial hedge against price changes affecting the Fund's securities portfolio. When hedging of this character is successful, any depreciation in the value of portfolio securities will be substantially offset by appreciation in the value of the futures position. On the other hand, any unanticipated appreciation in the value of the Fund's portfolio securities would be substantially offset by a decline in the value of the futures position.
On other occasions, the Fund may take a "long" position by purchasing futures contracts. This would be done, for example, when the Fund anticipates the subsequent purchase of particular securities when it has the necessary cash, but expects the prices or currency exchange rates then available in the applicable market to be less favorable than prices or rates that are currently available.
Options on Futures Contracts. The acquisition of put and call options on futures contracts will give the Fund the right (but not the obligation) for a specified price to sell or to purchase, respectively, the underlying futures contract at any time during the option period. As the purchaser of an option on a futures contract, the Fund obtains the benefit of the futures position if prices move in a favorable direction but limits its risk of loss in the event of an unfavorable price movement to the loss of the premium and transaction costs.
The writing of a call option on a futures contract generates a premium which may partially offset a decline in the value of the Fund's assets. By writing a call option, the Fund becomes obligated, in exchange for the premium, to sell a futures contract, which may have a value higher than the exercise price. Conversely, the writing of a put option on a futures contract generates a premium which may partially offset an increase in the price of securities that the Fund intends to purchase. However, the Fund becomes obligated to purchase a futures contract which may have a value lower than the exercise price. Thus, the loss incurred by the Fund in writing options on futures is potentially unlimited and may exceed the amount of the premium received. The Fund will incur transaction costs in connection with the writing of options on futures.
The holder or writer of an option on a futures contract may terminate its position by selling or purchasing an offsetting option on the same series. There is no guarantee that such closing transactions can be effected. The Fund's ability to establish and close out positions on such options will be subject to the development and maintenance of a liquid market.
Other Considerations. The Fund may engage in futures and related options transactions only for bona fide hedging and, although the Fund has no current intention of doing so, for non-hedging purposes in accordance with CFTC regulations which permit principals of an investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"), to engage in such transactions without registering as commodity pool operators. The Fund is not permitted to engage in speculative futures trading. The Fund will determine that the price fluctuations in the futures contracts and options on futures used for hedging purposes are substantially related to price fluctuations in securities held by the Fund or which it expects to purchase. The Fund's futures transactions will be entered into for traditional hedging purposes -- i.e., futures contracts will be sold to protect against a decline in the price of securities that the Fund owns, or futures contracts will be purchased to protect the Fund against an increase in the price of securities it intends to purchase. As evidence of this hedging intent, the Fund expects that on 75% or more of the occasions on which it takes a long futures or option position (involving the purchase of futures contracts), the Fund will have purchased, or will be in the process of purchasing, equivalent amounts of related securities or assets in the cash market at the time when the futures or option position is closed out. However, in particular cases, when it is economically advantageous for the Fund to do so, a long futures position may be terminated or an option may expire without the corresponding purchase of securities or other assets.
As an alternative to literal compliance with the bona fide hedging definition, a CFTC regulation permits the Fund to elect to comply with a different test, under which the sum of the amounts of initial margin deposits on the Fund's existing non-hedging futures contracts and premiums paid for non-hedging options on futures (net of the amount the positions are "in the money") would not exceed 5% of the market value of the Fund's total assets. As noted above, the Fund has no current intention of entering into non-hedging futures contracts and non-hedging options on futures. The Fund will engage in transactions in futures contracts and related options only to the extent such transactions are consistent with the requirements of the Internal Revenue Code of 1986, as amended (the "Code"), for maintaining its qualification as a regulated investment company for federal income tax purposes.
Transaction costs associated with futures contracts and related options involve brokerage costs, require margin deposits and, in the case of contracts and options obligating the Fund to purchase securities, require the Fund to segregate assets to cover such contracts and options.
While transactions in futures contracts and options on futures may reduce certain risks, such transactions themselves entail certain other risks. Thus, while the Fund may benefit from the use of futures and options on futures, unanticipated changes in interest rates or securities prices may result in a poorer overall performance for the Fund than if it had not entered into any futures contracts or options transactions. In the event of an imperfect correlation between a futures position and a portfolio position which is intended to be protected, the desired protection may not be obtained and the Fund may be exposed to risk of loss. The only futures contracts available to hedge the Fund's portfolio are various futures on U.S. Government securities, futures on a municipal securities index and stock index futures.
Repurchase Agreements
The Fund may enter into repurchase agreements with "primary dealers" in U.S. Government securities and member banks of the Federal Reserve System which furnish collateral at least equal in value or market price to the amount of their repurchase obligation. The Fund may also enter into repurchase agreements involving certain foreign government securities. The primary risk is that, if the seller defaults, the Fund might suffer a loss to the extent that the proceeds from the sale of the underlying securities and other collateral held by the Fund in connection with the related repurchase agreement are less than the agreed-upon repurchase price. Another risk is that, in the event of bankruptcy of the seller, the Fund could be delayed in or prohibited from disposing of the underlying securities and other collateral held by the Fund in connection with the related repurchase agreement pending court proceedings. In evaluating whether to enter a repurchase agreement, the Manager will carefully consider the creditworthiness of the seller pursuant to procedures reviewed and approved by the Trustees.
Investment Restrictions
The Fund has adopted certain additional investment restrictions which may not be changed without the affirmative vote of the holders of a majority of the Fund's outstanding voting securities. The Fund may not:
(1) Issue senior securities, except as permitted by paragraphs (2), (6) and (7) below. For purposes of this restriction, the issuance of shares of beneficial interest in multiple classes or series, the purchase or sale of options, futures contracts and options on futures contracts, forward commitments, forward foreign exchange contracts, repurchase agreements and reverse repurchase agreements entered into in accordance with the Fund's investment policy, and the pledge, mortgage or hypothecation of the Fund's
assets within the meaning of paragraph (3) below are not deemed to be senior securities.
(2) Borrow money, except from banks as a temporary measure for extraordinary emergency purposes and except pursuant to reverse repurchase agreements and then only in amounts not to exceed 33 1/3% of the Fund's total assets (including the amount borrowed) taken at market value. The Fund will not use leverage to attempt to increase income. The Fund will not purchase securities while outstanding borrowings (including reverse repurchase agreements) exceed 5% of the Fund's total assets.
(3) Pledge, mortgage, or hypothecate its assets, except to secure indebtedness permitted by paragraph (2) above and then only if such pledging, mortgaging or hypothecating does not exceed 33 1/3% of the Fund's total assets taken at market value.
(4) Act as an underwriter, except to the extent that, in connection with the disposition of portfolio securities, the Fund may be deemed to be an underwriter for purposes of the Securities Act of 1933.
(5) Purchase or sell real estate, including limited partnership interests, except that the Fund may invest in securities that are secured by real estate or interests therein and may purchase and sell mortgage-related securities and may hold and sell real estate acquired by the Fund as a result of the ownership of securities.
(6) Make loans, except that the Fund may lend portfolio securities in accordance with the Fund's investment policies and may purchase or invest in repurchase agreements, bank certificates of deposit, all or a portion of an issue of publicly distributed bonds, bank loan participation agreements, bankers' acceptances, debentures or other securities, whether or not the purchase is made upon the original issuance of the securities.
(7) Invest in commodities or commodity contracts or in puts, calls, or
combinations of both, except interest rate futures contracts, options on
securities, securities indices, currency and other financial instruments,
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futures contracts on securities, securities indices, currency and other financial instruments and options on such futures contracts, forward foreign currency exchange contracts, forward commitments, securities index put or call warrants and repurchase agreements entered into in accordance with the Fund's investment policies.
The Fund will invest 25% or more of its total assets in securities issued by companies in the real estate industry. Except as noted in the previous sentence, it is the fundamental policy of the Fund not to concentrate its
investments in securities of companies in any particular industry. In the opinion of the staff of the Securities and Exchange Commission, investments are concentrated in a particular industry if such investments (but not investments in U.S. Government securities) aggregate 25% or more of the Fund's total assets.
The Fund does not intend to invest in or to enter into any forward commitments, forward foreign currency exchange contracts, reverse repurchase agreements, options on securities or currency or securities index put and call warrants or to lend portfolio securities as described in fundamental investment restrictions (1), (2), (6) and (7) above, during the current fiscal year.
In addition, as a matter of nonfundamental investment policy and in connection with the offering of its shares in various states and foreign countries, the Fund has agreed not to:
(a) Participate on a joint-and-several basis in any securities trading account. The "bunching" of orders for the sale or purchase of marketable portfolio securities with other accounts under the management of the Manager to save commissions or to average prices among them is not deemed to result in a securities trading account.
(b) Purchase securities on margin or make short sales unless by virtue of its ownership of other securities, the Fund has the right to obtain, without payment of additional consideration, securities equivalent in kind and amount to the securities sold and, if the right is conditional, the sale is made upon the same conditions, except that a Fund may obtain such short-term credits as may be necessary for the clearance of purchases and sales of securities and in connection with transactions involving forward foreign currency exchange transactions.
(c) Purchase a security if, as a result, (i) more than 10% of the Fund's assets would be invested in securities of closed-end investment companies, (ii) such purchase would result in more than 3% of the total outstanding voting securities of any one such closed-end investment company being held by the Fund, or (iii) more than 5% of the Fund's assets would be invested in any one such closed-end investment company; provided, however, the Fund can exceed such limitations in connection with a plan of merger or consolidation with or acquisition of substantially all the assets of such other closed-end investment company. The Fund will not invest in the securities of any open-end investment company, except in connection with a plan of merger or consolidation with or acquisition of substantially all the assets of such other open-end investment company.
(d) Purchase securities of any issuer which, together with any predecessor, has a record of less than three years' continuous operations prior to the purchase if such purchase would cause investments of the Fund in all such issuers to exceed 5% of the value of the total assets of the Fund.
(e) Invest for the purpose of exercising control over or management of any company.
(f) Purchase warrants of any issuer, if, as a result of such purchases, more than 2% of the value of the Fund's total assets would be invested in warrants which are not listed on the New York Stock Exchange or the American Stock Exchange or more than 5% of the value of the total assets of the Fund would be invested in warrants generally, whether or not so listed. For these purposes, warrants are to be valued at the lesser of cost or market, but warrants acquired by the Fund in units with or attached to debt securities shall be deemed to be without value.
(g) Knowingly purchase or retain securities of an issuer if one or more of the Trustees or officers of the Fund or directors or officers of the Manager or any investment management subsidiary of the Manager individually owns beneficially more than 0.5% and together own beneficially more than 5% of the securities of such issuer.
(h) Purchase interests in oil, gas or other mineral leases or exploration programs; however, this policy will not prohibit the acquisition of securities of companies engaged in the production or transmission of oil, gas or other minerals. These restrictions may not be changed without the approval of the regulatory agencies in such states or foreign countries.
(i) Purchase any security, including stripped mortgage-backed securities and any repurchase agreement maturing in more than seven days, which is illiquid, if more than 15% of the net assets of the Fund, taken at market value, would be invested in such securities.
(j) Invest more than 10% of its total assets in restricted securities, excluding restricted securities eligible for resale pursuant to Rule 144A under the Securities Act of 1933; provided, however, that no more than 15% of the Fund's total assets may be invested in restricted securities including restricted securities eligible for resale under Rule 144A.
(k) Write covered calls or put options with respect to more than 25% of the value of its total assets or invest more than 5% of its total assets in puts, calls, spreads, or straddles, other than protective put options.
(l) Invest more than 10% of its total assets in shares of real estate investment trusts that are not readily marketable.
2. MANAGEMENT OF THE FUND
The Fund's Board of Trustees provides broad supervision over the affairs of the Fund. The officers of the Fund are responsible for the Fund's operations. The Trustees and executive officers of the Fund are listed below, together with their principal occupations during the past five years. An asterisk indicates those Trustees who are interested persons of the Fund within the meaning of the 1940 Act.
JOHN F. COGAN, JR.*, President and Director of The
Chairman of the Board, Pioneer Group, Inc. ("PGI");
President and Trustee Chairman and Director of
Pioneering Management Corporation ("PMC");
Chairman of the Board and Chief Executive
Officer of Pioneer Winthrop Advisers
("PWA" or the "Manager") since 1993;
Chairman and Director of Pioneer Funds
Distributor, Inc. ("PFD"); Director of
Pioneering Services Corporation ("PSC")
and Pioneer Capital Corporation ("PCC");
President and Director of Pioneer Plans
Corporation ("PPC"); Chairman and Director
of Teberebie Goldfields Limited; and
Chairman and Partner, Hale and Dorr
(counsel to the Fund).
ARTHUR J. HALLERAN, JR.*, Chairman and Chief Executive Officer
Trustee, President and Chief of Winthrop Financial Associates,
Operating Officer A Limited Partnership ("WFA") (a
49 Miles River real estate investment and
Hamilton, Massachusetts management firm); Chairman and Chief
Executive Officer of Winthrop Advisors
Limited Partnership ("WALP"); and
President, Chief Operating Officer and a
Director of PWA since 1993.
RICHARD H. EGDAHL, M.D., Professor of Management, Boston
Trustee University School of Management,
53 Bay State Road since 1988; Professor of Public
Boston, Massachusetts Health, Boston University School of Public
Health; Professor of Surgery, Boston
University School of Medicine and Boston
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University Health Policy Institute; Director, Boston University Medical Center; Executive Vice President and Vice Chairman of the Board, University Hospital; Academic Vice President for Health Affairs, Boston University; Director, Essex Investment Management Company, Inc. (investment adviser), Health Payment Review, Inc. (health care containment software firm), Mediplex Group, Inc. (nursing care facilities firm), Peer Review Analysis, Inc. (health care utilization management firm) and Springer-Verlag New York, Inc. (publisher); Honorary Director, Franciscan Children's Hospital. Boston University Health Policy Institute.
MARGARET B.W. GRAHAM, Manager of Research Operations,
Trustee Xerox Palo Alto Research Center,
The Keep since September 1991; Professor of
Post Office Box 110 Operations Management and Management
Little Deer Isle, of Technology, Boston University
Maine 04650 School of Management ("BUSM"), since 1989;
Associate Dean, BUSM, 1988 to 1990 and
previously, Associate Professor,
Department of Operations Management, BUSM.
STEPHEN G. KASNET*, Managing Director, WFA since 1991;
Trustee and Vice President Director and Vice President of PWA
One University Lane since 1993; Executive Vice
Manchester, Massachusetts President, Cabot, Cabot & Forbes, 1989 to
1991; Executive Vice President, R.M.
Bradley & Co., prior to 1989.
JOHN W. KENDRICK, Professor Emeritus, George
Trustee Washington University; Economic
6363 Waterway Drive Consultant and Director, American
Falls Church, Virginia Productivity and Quality Center.
MARGUERITE A. PIRET, President, Newbury, Piret & Company,
Trustee Inc. (a merchant banking firm).
One Boston Place,
Suite 2635
Boston, Massachusetts
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DAVID D. TRIPPLE*, Executive Vice President and
Trustee and Executive Director of PGI; Director of PFD,
Vice President since 1989; Director of PCC and
Pioneer SBIC Corporation;
President, Chief Investment
Officer and a Director of
PMC; Director and Executive
Vice President of PWA since
1993.
JOHN WINTHROP, President, John Winthrop & Co., Inc.
Trustee (a private investment firm);
One North Adgers Wharf Director of NUI Corp., and Trustee
Charleston, South Carolina of Alliance Capital Reserves, Alliance
Government Reserves and Alliance Tax
Exempt Reserves.
STEPHEN K. WEST, Partner, Sullivan & Cromwell (a law
Trustee firm).
125 Broad Street
New York, New York
ROBERT W. BENSON, Senior Vice President of PMC
Vice President
WILLIAM H. KEOUGH, Senior Vice President, Chief
Treasurer Financial Officer and Treasurer of PGI and
Treasurer of PFD, PMC, PSC, PCC, PPC and
Pioneer SBIC Corporation; Treasurer of PWA
since 1993.
ERIC W. RECKARD, Manager of Fund Accounting and
Assistant Treasurer Compliance for PMC since May,
1994; Manager of Auditing and Business
Analysis for PGI prior to May, 1994.
ROBERT P. NAULT, General Counsel of PGI since 1995;
Assistant Secretary formerly of Hale and Dorr (counsel to the
Fund) where he most recently served as a
junior partner.
JOSEPH P. BARRI, Secretary of PGI, PMC, PCC and PWA;
Secretary Clerk of PFD and PSC and Partner, Hale and
Dorr (counsel to the Fund).
FRANCIS X. JACOBY, III, Managing Director, WFA.
Assistant Secretary
14 Parkman Street
Brookline, Massachusetts
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Each of the above (except Messrs. Halleran, Jacoby and Kasnet) is also an officer and/or Trustee of each Pioneer mutual fund listed below. The Fund's Declaration of Trust provides that the holders of two-thirds of its outstanding shares may vote to remove a Trustee of the Fund at any meeting of shareholders. The business address of all officers is 60 State Street, Boston, Massachusetts 02109.
All of the outstanding capital stock of Pioneering Management Corporation and Pioneering Services Corporation is owned by The Pioneer Group, Inc., a publicly-owned Delaware corporation. All of the capital stock of Pioneer Funds Distributor, Inc. is indirectly owned by The Pioneer Group, Inc. The table below lists all the Pioneer mutual funds, including the Fund, currently offered to the public and the investment adviser and principal underwriter for each fund.
Investment Principal
Fund Name Adviser Underwriter
Pioneer Fund PMC PFD
Pioneer II PMC PFD
Pioneer Three PMC PFD
Pioneer Growth Shares PMC PFD
Pioneer Capital Growth Fund PMC PFD
Pioneer Equity-Income Fund PMC PFD
Pioneer Gold Shares PMC PFD
Pioneer Winthrop Real Estate
Investment Fund Note 1 PFD
Pioneer Europe Fund PMC PFD
Pioneer India Fund PMC PFD
Pioneer International Growth Fund PMC PFD
Pioneer Emerging Markets Fund PMC PFD
Pioneer Bond Fund PMC PFD
Pioneer America Income Trust PMC PFD
Pioneer Short-Term Income Trust PMC PFD
Pioneer Income Fund PMC PFD
Pioneer Tax-Free Income Fund PMC PFD
Pioneer Intermediate Tax-Free Fund PMC PFD
Pioneer California Double Tax-Free Fund PMC PFD
Pioneer New York Triple Tax-Free Fund PMC PFD
Pioneer Massachusetts Double Tax-Free Fund PMC PFD
Pioneer Cash Reserve Fund PMC PFD
Pioneer U.S. Government Money Fund PMC PFD
Pioneer Tax-Free Money Fund PMC PFD
Pioneer Interest Shares, Inc. PMC Note 2
B-17
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Note 1 Pioneer Winthrop Advisers is the investment adviser for this fund. Note 2 This fund is a closed-end fund. |
PMC also manages the investments of certain institutional private accounts. As of March 31, 1995, to the knowledge of the Fund, no officer or Trustee of the Fund owned 5% or more of the issued and outstanding shares of PGI, except Mr. Cogan who then owned approximately 15% of such shares.
Remuneration of Trustees
The following table provides information regarding the compensation paid by the Fund and the other Pioneer Funds to the Trustees for their services for the Fund's most recently completed fiscal year. The Fund pays no salaries or compensation to any of its officers. The Fund pays an annual trustees' fee of $500 to each Trustee who is not affiliated with PWA, WALP, PMC, PFD or PSC as well as an annual fee of $200 to each of the Trustees who is a member of the Fund's Audit Committee, except for the Chairman of such Committee, who receives an annual fee of $250. The Fund also pays an annual trustees' fee of $500 plus expenses to each Trustee affiliated with PWA, WALP, PMC, PSC or PFD. Any such fees and expenses paid to affiliates or interested persons of PWA, WALP. PMC, PFD or PSC are reimbursed to the Fund under its Management Contract. As of a date no earlier than 30 days prior to the date of this SAI, the Trustees and officers of the Fund owned in the aggregate 1.02% (23,879 shares) of the outstanding securities of the Fund and there were no shareholders of record who owned 5% or more of the Fund's outstanding voting securities, except Merrill, Lynch, Pierce, Fenner & Smith Inc., Mutual Fund Operations, 4800 Deer Lake Drive East, Third Floor, Jacksonville, Florida 32246-6484 owned 257,191 (11.03%) shares of the Fund.
Total Compensa-
tion from the
Pension or Fund and other
Aggregate Retirement funds in the
Compensation Benefits Pioneer Family
Trustee From the Fund* Accrued of Mutual Funds**
John F. Cogan, Jr.*** $250 0 $11,750
David D. Tripple*** 250 0 11,750
Arthur J. Halleran, Jr.*** 250 0 250
Stephen G. Kasnet*** 250 0 250
Richard H. Egdahl, M.D. 250 0 55,650
Margaret B.W. Graham 250 0 55,650
John W. Kendrick 250 0 55,650
Marguerite A. Piret 375 0 66,650
Stephen K. West 350 0 63,650
John Winthrop 350 0 63,650
--- --- -------
Totals $2,825 $0 $384,900
===== == ========
- --------
* As of the Fund's most recent completed fiscal year.
** For the calendar year ended December 31, 1994.
*** WALP fully reimbursed the Fund and PMC fully reimbursed the other funds
in the Pioneer Family of Mutual Funds for compensation paid to Messrs.
Cogan and Tripple. In addition, WALP fully reimbursed the Fund for
compensation paid to Messrs. Halleran and Kasnet.
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3. ADVISORY AND SUBADVISORY SERVICES
The Investment Adviser
As stated in the Prospectus, Pioneer Winthrop Advisers ("PWA" or the "Manager"), 60 State Street, Boston, Massachusetts, serves as the Fund's investment adviser. The management contract expires on April 30, 1996, but it is renewable annually after such date by the vote of a majority of the Board of Trustees of the Fund (including a majority of the Board of Trustees who are not parties to the contract or interested persons of any such parties) cast in person at a meeting called for the
purpose of voting on such renewal. This contract terminates if assigned and may be terminated without penalty by either party by vote of its Board of Directors or Trustees or a majority of its outstanding voting securities and the giving of sixty days' written notice.
As compensation for its investment advisory and management services and expenses incurred, PWA is entitled to a management fee at the rate of 1.00% per annum of the Fund's average daily net assets. The fee is normally computed daily and paid monthly. PWA has voluntarily agreed not to impose a portion of its management fee to the extent required to limit the Fund's total expenses to 1.75% of the Fund's average daily net assets. This agreement is voluntary and temporary and may be revised or terminated at any time.
For the period October 25, 1993 through June 30, 1994 and for the period July 1, 1994 through December 31, 1994, the Fund would have paid or accrued total management fees to PWA of approximately $103,371 and $141,284, respectively, but $45,812 and $73,158, respectively, of such fee was not imposed pursuant to PWA's voluntary agreement described above.
PWA has agreed that if in any fiscal year the aggregate expenses of the Fund exceed the expense limitation established by any state having jurisdiction over the Fund, PWA will reduce its management fee to the extent required by state law. The most restrictive state expense limit currently applicable to the Fund provides that the Fund's expenses in any fiscal year may not exceed 2.5% of the first $30 million of average daily net assets, 2.0% of the next $70 million of such assets and 1.5% of such assets in excess of $100 million. In the past, the relevant state has granted relief for real estate investment funds, such as the Fund, because of their higher operations costs, and the Fund expects to seek such relief to the extent it becomes necessary to do so.
In an attempt to avoid any potential conflict with portfolio transactions for the Fund, the Adviser, Subadvisers and the Fund have adopted extensive restrictions on personal securities trading by personnel of the Adviser and its affiliates. These restrictions include: pre-clearance of all personal securities transactions and a prohibition of purchasing initial public offerings of securities. These restrictions are a continuation of the basic principle that the interests of the Fund and its shareholders come before those of the Adviser and Subadvisers and their respective employees.
The Investment Subadvisers
As stated in the Prospectus, Pioneering Management Corporation ("PMC"), 60 State Street, Boston Massachusetts, and Winthrop Advisors Limited Partnership
("WALP"), One International Place, Boston, Massachusetts, have been appointed by the Manager as investment subadvisers to the Fund pursuant to Investment Subadvisory Contracts by and among the Fund, PWA and PMC or WALP, as the case may be. The Investment Subadvisory Contract with PMC expires on April 30, 1996 and the Investment Subadvisory Contract with WALP expires on April 30, 1997, but each is renewable annually after such date by the vote of a majority of the Board of Trustees of the Fund (including a majority of the Board of Trustees who are not parties to the contract or interested persons of any such parties) cast in person at a meeting called for the purpose of voting on such renewal. The Investment Subadvisory Contracts terminate if assigned and may be terminated without penalty by any party by vote of its Board of Directors or Trustees, as the case may be, or a majority of its outstanding voting securities and the giving of sixty days' written notice.
Pursuant to the Investment Subadvisory Contracts, PMC and WALP are each entitled to a fee payable by PWA equal to 0.30% per annum of the Fund's average daily net assets. The Fund has no responsibility to pay such subadvisory fees. For the period October 25, 1993 through June 30, 1994, PWA paid or accrued total subadvisory fees to PMC and WALP of approximately $12,500 and $12,500, respectively. For the period July 1, 1994 through December 31, 1994, PWA paid or accrued total subadvisory fees to PMC and WALP of approximately $26,010 and $26,010, respectively. See "Management of the Fund" in the Prospectus for a discussion of the services provided by PWA, PMC and WALP.
4. UNDERWRITING AGREEMENT AND DISTRIBUTION PLAN
The Fund and Pioneer Funds Distributor, Inc. are parties to an Underwriting Agreement. See "Principal Underwriter" below. The Trustees who were not at the time they voted interested persons of the Fund, as defined in the 1940 Act, approved the Underwriting Agreement. The Underwriting Agreement will continue from year to year if annually approved by the Trustees. The Underwriting Agreement provides that PFD will bear certain distribution expenses not borne by the Fund.
PFD bears all expenses it incurs in providing services under the Underwriting Agreement. Such expenses include compensation to its employees and representatives and to securities dealers for distribution related services performed for the Fund. PFD also pays certain expenses in connection with the distribution of the Fund's shares, including the cost of preparing, printing and distributing advertising or promotional materials, and the cost of printing and
distributing prospectuses and supplements to prospective shareholders. The Fund bears the cost of registering its shares under federal and state securities law.
The Fund and PFD have agreed to indemnify each other against certain liabilities, including liabilities under the Securities Act of 1933, as amended. Under the Underwriting Agreement, PFD will use its best efforts in rendering services to the Fund.
The Fund has adopted a plan of distribution pursuant to Rule 12b-1 promulgated by the Commission under the 1940 Act (the "Plan") pursuant to which the Fund may reimburse PFD for its expenditures in financing any activity primarily intended to result in the sale of Fund shares. Certain categories of such expenditures have been approved by the Board of Trustees and are set forth in the Prospectus. See "Distribution Plan" in the Prospectus. The expenses of the Fund pursuant to the Plan are accrued on a fiscal year basis and may not exceed the annual rate of 0.25% of the Fund's average annual net assets. The Plan does not provide for the carryover of reimbursable expenses beyond twelve months from the date they are incurred. In accordance with the terms of the Plan, PFD provides to the Fund for review by the Trustees a quarterly written report of the amounts expended under the Plan and the purpose for which such expenditures were made.
No interested person of the Fund, nor any Trustee of the Fund who is not an interested person of the Fund, has any direct or indirect financial interest in the operation of the Plan except to the extent that PFD and certain of its employees may be deemed to have such an interest as a result of receiving a portion of the amounts expended under the Plan by the Fund and except to the extent certain officers may have an interest in PFD's ultimate parent, PGI.
The Plan was adopted by a majority vote of the Board of Trustees, including all of the Trustees who are not, and were not at the time they voted, interested persons of the Fund, as defined in the 1940 Act (none of whom had or have any direct or indirect financial interest in the operation of the Plan), cast in person at a meeting called for the purpose of voting on the Plan and approved by the shareholders of the Fund. In approving the Plan, the Trustees identified and considered a number of potential benefits which the Plan may provide. The Board of Trustees believes that there is a reasonable likelihood that the Plan will benefit the Fund and its current and future shareholders. Under its terms, the Plan remains in effect from year to year provided such continuance is approved annually by vote of the Trustees in the manner described above. The Plan may not be amended to increase materially the annual percentage limitation of average net assets which may be spent for the services described therein without approval of the shareholders of the Fund, and material amendments to the Plan
must also be approved by the Trustees in the manner described above. The Plan may be terminated at any time, without payment of any penalty, by vote of the majority of the Trustees who are not interested persons of the Fund and have no direct or indirect financial interest in the operations of the Plan, or by a vote of a majority of the outstanding voting securities of the Fund (as defined in the 1940 Act). The Plan will automatically terminate in the event of its assignment (as defined in the 1940 Act). In the Trustees' quarterly review of the Plan, they will consider its continued appropriateness and the level of compensation it provides.
During the period October 25, 1993 through June 30, 1994, the Fund did not incur any distribution fees pursuant to the Plan. The Fund commenced accruing distribution and service fees under the Plan on July 1, 1994. For the period July 1, 1994 through December 31, 1994, the Fund incurred total distribution fees of $35,321. Such fees will be paid to PFD in reimbursement of expenses related to servicing of shareholder accounts and to compensating dealers and sales personnel.
5. SHAREHOLDER SERVICING/TRANSFER AGENT
The Fund has contracted with Pioneering Services Corporation ("PSC"), 60 State Street, Boston, Massachusetts, to act as shareholder servicing agent and transfer agent for the Fund. This contract terminates if assigned and may be terminated without penalty by either party by vote of its Board of Directors or Trustees or a majority of its outstanding voting securities and the giving of ninety days' written notice.
Under the terms of its contract with the Fund, PSC will service shareholder accounts, and its duties will include: (i) processing sales, redemptions and exchanges of shares of the Fund; (ii) distributing dividends and capital gains associated with Fund portfolio accounts; and (iii) maintaining account records and responding to routine shareholder inquiries.
PSC receives an annual fee of $22.00 per shareholder account from the Fund as compensation for the services described above. This fee is set at an amount determined by vote of a majority of the Trustees (including a majority of the Trustees who are not parties to the contract with PSC or interested persons of any such parties) to be comparable to fees for such services being paid by other investment companies.
6. CUSTODIAN
Brown Brothers Harriman & Co. (the "Custodian") is the custodian of the Fund's assets. The Custodian's responsibilities include safekeeping and controlling the Fund's cash and securities in the United States as well as in foreign countries, handling the receipt and delivery of securities, and collecting interest and dividends on the Fund's investments. The Custodian fulfills its function in foreign countries through a network of subcustodian banks located in the foreign countries (the "Subcustodians").
The Custodian does not determine the investment policies of the Fund or decide which securities it will buy or sell. The Fund may invest in securities issued by the Custodian, deposit cash in the Custodian and deal with the Custodian as a principal in securities transactions. Portfolio securities may be deposited into the Federal Reserve-Treasury Department Book Entry System or the Depository Trust Company in the United States or in recognized central depositories in foreign countries.
7. PRINCIPAL UNDERWRITER
Pioneer Funds Distributor, Inc., 60 State Street, Boston, Massachusetts, serves as the principal underwriter for the Fund in connection with the continuous offering of its shares. The Fund will not generally issue Fund shares for consideration other than cash. At the Fund's sole discretion, however, it may issue Fund shares for consideration other than cash in connection with an acquisition of portfolio securities pursuant to a bona fide purchase of assets, merger or reorganization provided (i) securities meet the investment objectives and policies of the Fund; (ii) the securities are acquired by the Fund for investment and not for resale; (iii) the securities are not restricted as to transfer either by law or liquidity of market; and (iv) the securities have a value which is readily ascertainable (and not established only by evaluation procedures) as evidenced by a listing on the American Stock Exchange or the New York Stock Exchange, or by quotation under the NASD Automated Quotation System. An exchange of securities for Fund shares will generally be a taxable transaction to the shareholder.
The redemption price of shares of beneficial interest of the Fund may, at PWA's discretion, be paid in cash or portfolio securities. The Fund has, however, elected to be governed by Rule 18f-1 under the 1940 Act pursuant to which the Fund is obligated to redeem shares solely in cash up to the lesser of $250,000 or 1% of the Fund's net asset value during any 90-day period for any one shareholder. Should the amount of redemptions by any shareholder exceed such limitation, the Fund will have the option of redeeming the excess in cash or
portfolio securities. In the latter case, the securities are taken at their value employed in determining the Fund's net asset value. A shareholder whose shares are redeemed in-kind may incur brokerage charges in selling the securities received in-kind. The selection of such securities will be made in such manner as the Board deems fair and reasonable.
During the period from October 25, 1993 through June 30, 1994, net underwriting commissions earned by PFD in connection with its offering of Fund shares were approximately $66,304. For the period from July 1, 1994 through December 31, 1994, net underwriting commissions earned by PFD in connection with its offering of Fund shares were $27,497. For the same periods, commissions reallowed to dealers by PFD were approximately $1,124,000 and $186,213, respectively.
8. INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP is the Fund's independent public accountant, providing audit services, tax return review, and assistance and consultation with respect to the preparation of filings with the Commission.
9. PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on behalf of the Fund by PMC pursuant to authority contained in the Investment Subadvisory Contract with PMC. In selecting brokers or dealers, PMC considers other factors relating to best execution, including, but not limited to, the size and type of the transaction; the nature and character of the markets of the security to be purchased or sold; the execution efficiency, settlement capability, and financial condition of the dealer; the dealer's execution services rendered on a continuing basis; and the reasonableness of any dealer spreads. Most transactions in foreign equity securities are executed by broker-dealers in foreign countries in which commission rates are fixed and, therefore, are not negotiable (as such rates are in the United States) and are generally higher than in the United States.
PMC may select dealers which provide brokerage and/or research services to the Fund and/or other investment companies or accounts managed by PMC, PWA or WALP. Such services may include advice concerning the value of securities; the advisability of investing in, purchasing or selling securities; the availability of securities or the purchasers or sellers of securities; furnishing analyses
and reports concerning issuers, industries, securities, economic factors and trends, portfolio strategy and performance of accounts; and effecting securities transactions and performing functions incidental thereto (such as clearance and settlement). PMC maintains a listing of dealers who provide such services on a regular basis. However, because many transactions on behalf of the Fund and other investment companies or accounts managed by PWA, PMC or WALP are placed with dealers (including dealers on the listing) without regard to the furnishing of such services, it is not possible to estimate the proportion of such transactions directed to such dealers solely because such services were provided. Management believes that no exact dollar value can be calculated for such services.
The research received from dealers may be useful to PMC, PWA or WALP in rendering investment management services to the Fund as well as to other investment companies or accounts managed by PMC, PWA or WALP, although not all of such research may be useful to the Fund. Conversely, such information provided by brokers or dealers who have executed transaction orders on behalf of such other accounts may be useful to PMC, PWA or WALP in carrying out their obligations to the Fund. The receipt of such research has not reduced PMC, PWA or WALP's normal independent research activities; however, it enables PMC, PWA and WALP to avoid the additional expenses which might otherwise be incurred if they were to attempt to develop comparable information through their own staffs.
In circumstances where two or more broker-dealers offer comparable prices and executions, preference may be given to a broker-dealer which has sold shares of the Fund as well as shares of other investment companies or accounts managed by PMC, PWA or WALP. This policy does not imply a commitment to execute all portfolio transactions through all broker-dealers that sell shares of the Fund. In addition, if PMC determines in good faith that the amount of commissions charged by a broker is reasonable in relation to the value of the brokerage and research services provided by such broker, the Fund may pay commissions to such broker in an amount greater than the amount another firm may charge.
The Trustees periodically review PMC's performance of its responsibilities in connection with the placement of portfolio transactions on behalf of the Fund.
Neither PWA nor WALP currently provides investment advisory services to any other fund or account. In addition to serving as investment subadviser to the Fund, PMC acts as investment adviser to other mutual funds in the Pioneer group and private accounts with investment objectives similar to those of the Fund. As such, securities may meet investment objectives of the Fund, such other funds
and such private accounts. In such cases, the decision to recommend to purchase for one fund or account rather than another is based on a number of factors. The determining factors in most cases are the amount of securities of the issuer then outstanding, the value of those securities and the market for them. Other factors considered in the investment recommendations include other investments which each fund or account presently has in a particular industry or country and the availability of investment funds in each fund or account.
It is possible that, at times, identical securities will be held by more than one fund and/or account. However, the position of any fund or account in the same issue may vary and the length of time that any fund or account may choose to hold its investment in the same issue may likewise vary. To the extent that the Fund, another fund in the Pioneer group or a private account managed by PMC seeks to acquire the same security at about the same time, the Fund may not be able to acquire as large a position in such security as it desires or it may have to pay a higher price for the security. Similarly, the Fund may not be able to obtain as large an execution of an order to sell or as high a price for any particular portfolio security if PMC decides to sell on behalf of another account the same portfolio security at the same time. On the other hand, if the same securities are bought or sold at the same time by more than one account, the resulting participation in volume transactions could produce better executions for the Fund or other account. In the event that more than one account purchases or sells the same security on a given date, the purchases and sales will normally be made as nearly as practicable on a pro rata basis in proportion to the amounts desired to be purchased or sold by each.
During the periods from October 25, 1993 through June 30, 1994 and from July 1, 1994 through December 31, 1994, the Fund paid or accrued aggregate brokerage and underwriting commissions of approximately $170,534 and $213,710, respectively.
10. TAX STATUS
It is the Fund's policy to meet the requirements of Subchapter M of the Code for qualification as a regulated investment company. If the Fund meets all such requirements and distributes to its shareholders at least annually all investment company taxable income and net capital gain, if any, which it receives, the Fund will be relieved of the necessity of paying federal income tax.
In order to qualify as a regulated investment company under Subchapter M, the Fund must, among other things, derive at least 90% of its annual gross income from dividends, interest, gains from the sale or other disposition of stock, securities or foreign currencies, or other income (including gains from options, futures and forward contracts) derived with respect to its business of investing in such stock, securities or currencies (the "90% income test"), limit its gains from the sale of certain investments held for less than three months to less than 30% of its annual gross income (the "30% test") and satisfy certain annual distribution and quarterly diversification requirements.
Dividends from net investment income, net short-term capital gains, and certain net foreign exchange gains are taxable as ordinary income, whether received in cash or in additional shares. Dividends from net long-term capital gains, if any, whether received in cash or additional shares, are taxable to the Fund's shareholders as long-term capital gains for Federal income tax purposes without regard to the length of time shares of the Fund have been held. The federal income tax status of all distributions will be reported to shareholders annually.
Any dividend declared by the Fund in October, November or December as of a record date in such a month and paid during the following January will be treated for federal income tax purposes as received by shareholders on December 31 of the calendar year in which it is declared.
For purposes of the 70% dividends-received deduction available to corporations, dividends received by the Fund, if any, from U.S. domestic corporations in respect of any share of stock with a tax holding period of at least 46 days (91 days in the case of certain preferred stock) in an unleveraged position and distributed and designated by the Fund may be treated as qualifying dividends. Any corporate shareholder should consult its tax adviser regarding the possibility that its tax basis in its shares may be reduced, for federal income tax purposes, by reason of "extraordinary dividends" received with respect to the shares. Corporate shareholders must meet the minimum holding period requirement stated above (46 or 91 days), taking into account any holding-period reductions from certain hedging or other transactions that diminish risk of loss, with respect to their Fund shares in order to qualify for the deduction and, if they borrow to acquire Fund shares, may be denied a portion of the dividends-received deduction. The entire qualifying dividend, including the otherwise deductible amount, will be included in determining the excess (if any) of a corporation's adjusted current earnings over its alternative minimum taxable income, which may increase a corporation's alternative minimum tax liability.
The Fund may be subject to withholding and other taxes imposed by foreign countries with respect to investments in those countries. Tax conventions between certain countries and the U.S. may reduce or eliminate such taxes. The Fund will not satisfy the requirements for passing through to shareholders their pro rata shares of foreign taxes paid by the Fund, with the result that its shareholders will not include such taxes in their gross incomes and will not be entitled to a tax deduction or credit for such taxes on their own tax returns.
Foreign exchange gains and losses realized by the Fund in connection with certain transactions involving foreign currency- denominated debt securities, foreign currencies, or payables or receivables denominated in a foreign currency are subject to Section 988 of the Code, which generally causes such gains and losses to be treated as ordinary income and losses and may affect the amount, timing and character of distributions to shareholders.
If the Fund acquires the stock of certain non-U.S. corporations that receive at least 75% of their annual gross income from passive sources (such as sources that produce interest, dividend, rental, royalty or capital gain income) or hold at least 50% of their assets in such passive sources ("passive foreign investment companies"), the Fund could be subject to Federal income tax and additional interest charges on "excess distributions" received from such companies or gain from the sale of stock in such companies, even if all income or gain actually received by the Fund is timely distributed to its shareholders. The Fund would not be able to pass through to its shareholders any credit or deduction for such a tax. In certain cases, an election may be available that would ameliorate these adverse tax consequences. The Fund may limit its investments in passive foreign investment companies and will undertake appropriate actions, including consideration of any available elections, to limit its tax liability, if any, or take other defensive action with respect to such investments.
Investment in debt obligations that are at risk of or in default presents special tax issues for the Fund. Tax rules are not entirely clear about issues such as when the Fund may cease to accrue interest, original issue discount or market discount, when and to what extent deductions may be taken for bad debts or worthless securities, how payments received on obligations in default should be allocated between principal and income, and whether exchanges of debt obligations in a workout context are taxable. These and other issues will be addressed by the Fund, in the event it invests in such securities, in order to ensure that it distributes sufficient income to preserve its status as a regulated investment company and to avoid becoming subject to federal income or excise tax.
Since, at the time of an investor's purchase of Fund shares, a portion of the per share net asset value by which the purchase price is determined may be represented by realized or unrealized appreciation in the Fund's portfolio or undistributed taxable income of the Fund, subsequent distributions (or portions thereof) on such shares may be taxable to such investor even if the net asset value of his shares is, as a result of the distributions, reduced below his cost for such shares and the distributions (or portions thereof) in reality represent a return of a portion of his investment.
Any loss realized upon the redemption of shares with a tax holding period of six months or less will be treated as a long-term capital loss to the extent of any amounts treated as distributions of long-term capital gain with respect to such shares.
In addition, if shares redeemed or exchanged have been held for less than 91 days, (a) in the case of a reinvestment at net asset value the sales charge paid on such shares is not included in their tax basis under the Code if a reinvestment occurs, and (2) in a case of an exchange, all or a portion of the sales charge paid on such shares is not included in their tax basis under the Code, to the extent a sales charge that would otherwise apply to the shares received is reduced pursuant to the exchange privilege. In either case, the portion of the sales charge not included in the tax basis of the shares redeemed or surrendered in an exchange is included in the tax basis of the shares acquired in the reinvestment or exchange. Losses on certain redemptions may be disallowed under "wash sale" rules in the event of other investments in the Fund within 30 days before or after a redemption or other sale of shares.
For Federal income tax purposes, the Fund is permitted to carry forward a net realized capital loss in any year to offset realized capital gains, if any, during the eight years following the year of the loss. To the extent subsequent net realized capital gains are offset by such losses, they would not result in Federal income tax liability to the Fund and are not expected to be distributed as such to shareholders.
Different tax treatment, including penalties on certain excess contributions and deferrals, certain pre-retirement and post-retirement distributions, and certain prohibited transactions, is accorded to accounts maintained as qualified retirement plans. Shareholders should consult their tax advisers for more information.
Provided that the Fund qualifies as a regulated investment company ("RIC") under the Code, it will not be required to pay any Massachusetts income,
corporate excise or franchise taxes. Provided that the Fund qualifies as a RIC and meets certain income source requirements under Delaware Law, the Fund should also not be required to pay Delaware corporation income tax.
Options written or purchased and futures contracts entered into by the Fund on certain securities and securities indices may cause the Fund to recognize gains or losses from marking-to-market at the end of its taxable year even though such options may not have lapsed, been closed out, or exercised or such futures contracts may not have been closed out or disposed of and may affect the characterization as long-term or short-term of some capital gains and losses realized by the Fund. Losses on certain options or futures contracts and/or offsetting positions (portfolio securities or other positions with respect to which the Fund's risk of loss is substantially diminished by one or more options or futures contracts) may also be deferred under the tax straddle rules of the Code, which may also affect the characterization of capital gains or losses from straddle positions and certain successor positions as long-term or short-term. The tax rules applicable to options, futures and straddles may affect the amount, timing and character of the Fund's income and loss and hence of its distributions to shareholders.
Federal law requires that the Fund withhold (as "backup withholding") 31% of reportable payments, including dividends, capital gain dividends, and the proceeds of redemptions (including exchanges) and repurchases, to shareholders who have not complied with IRS regulations. In order to avoid this withholding requirement, shareholders must certify on their Account Applications, or on separate W-9 Forms, that the Social Security or other Taxpayer Identification Number they provide is their correct number and that they are not currently subject to backup withholding, or that they are exempt from backup withholding. The Fund may nevertheless be required to withhold if it receives notice from the IRS or a broker that the number provided is incorrect or backup withholding is applicable as a result of previous underreporting of interest or dividend income.
The description above relates only to U.S. federal income tax consequences for shareholders who are U.S. persons, i.e., U.S. citizens or residents and U.S. domestic corporations, partnerships, trusts or estates, and who are subject to U.S. federal income tax. The description does not address special tax rules applicable to certain classes of investors, such as tax-exempt entities, insurance companies, and financial institutions. Shareholders should consult their own tax advisers on these matters and on state, local and other applicable tax laws. Investors other than U.S. persons may be subject to different U.S. tax treatment, including a possible 30% U.S. withholding tax (or withholding tax at
a lower treaty rate) on dividends treated as ordinary income.
11. DESCRIPTION OF SHARES
The Fund's Agreement and Declaration of Trust permits its Board of Trustees to authorize the issuance of an unlimited number of full and fractional shares of beneficial interest (without par value) which may be divided into such separate series as the Trustees may establish. The Trustees may establish additional series of shares, and may divide or combine the shares into a greater or lesser number of shares without thereby changing the proportionate beneficial interests in the Fund. Each share represents an equal proportionate interest in the Fund with each other share. The shares of any additional series would participate equally in the earnings, dividends and assets of the particular series, and would be entitled to vote separately to approve investment advisory agreements or changes in investment restrictions, but shareholders of all series would vote together in the election and selection of Trustees and accountants. Upon liquidation of the Fund, the Fund's shareholders are entitled to share pro rata in the Fund's net assets available for distribution to shareholders. The Fund currently has only one class of shares of beneficial interest, but may establish other classes in the future upon such terms as the Trustees may establish.
As determined by the Trustees, shareholders are entitled to one vote for each share held or each dollar of net asset value (number of shares held times the Fund's net asset value). Shareholders may vote in the election of Trustees and on other matters submitted to meetings of shareholders. Although Trustees are not elected annually by the shareholders, shareholders have under certain circumstances the right to remove one or more Trustees. No amendment adversely affecting certain rights of shareholders may be made to the Fund's Agreement and Declaration of Trust without the affirmative vote of a majority of its shares. Shares have no preemptive or conversion rights. Shares are fully paid and non-assessable. See "Certain Liabilities."
12. CERTAIN LIABILITIES
As a Delaware business trust, the Fund's operations are governed by its Agreement and Declaration of Trust dated March 10, 1995, a copy of which is on file with the Office of the Secretary of State of the State of Delaware.
Generally, Delaware business trust shareholders are not personally liable for obligations of the Delaware business trust under Delaware law. The Delaware
Business Trust Act (the "Delaware Act") provides that a shareholder of a Delaware business trust shall be entitled to the same limitation of liability extended to shareholders of private for-profit corporations. The Fund's Agreement and Declaration of Trust expressly provides that the Fund has been organized under the Delaware Act and that the Agreement and Declaration of Trust is to be governed by Delaware law. It is nevertheless possible that a Delaware business trust, such as the Fund, might become a party to an action in another state whose courts refused to apply Delaware law, in which case the trust's shareholders could be subject to personal liability.
To guard against this risk, the Agreement and Declaration of Trust (i) contains an express disclaimer of shareholder liability for acts or obligations of the Fund and provides that notice of such disclaimer may be given in each agreement, obligation and instrument entered into or executed by the Fund or its Trustees, (ii) provides for the indemnification out of Fund property of any shareholders held personally liable for any obligations of the Fund or any series of the Fund and (iii) provides that the Fund shall, upon request, assume the defense of any claim made against any shareholder for any act or obligation of the Fund and satisfy any judgment thereon. Thus, the risk of a Fund shareholder incurring financial loss beyond his or her investment because of shareholder liability is limited to circumstances in which all of the following factors are present: (1) a court refused to apply Delaware law; (2) the liability arose under tort law or, if not, no contractual limitation of liability was in effect; and (3) the Fund itself would be unable to meet its obligations. In light of Delaware law, the nature of the Fund's business and the nature of its assets, the risk of personal liability to a Fund shareholder is remote.
The Agreement and Declaration of Trust further provides that the Fund shall indemnify each of its Trustees and officers against liabilities and expenses reasonably incurred by them, in connection with, or arising out of, any action, suit or proceeding, threatened against or otherwise involving such Trustee or officer, directly or indirectly, by reason of being or having been a Trustee or officer of the Fund. The Agreement and Declaration of Trust does not authorize the Fund to indemnify any Trustee or officer against any liability to which he or she would otherwise be subject by reason of or for willful misfeasance, bad faith, gross negligence or reckless disregard of such person's duties.
13. DETERMINATION OF NET ASSET VALUE
The net asset value per share of the Fund is determined as of the close of regular trading (currently 4:00 p.m., Eastern Time) on each day on which the New York Stock Exchange (the "Exchange") is open for regular trading. As of the date of this Statement of Additional Information, the Exchange is open for trading every weekday except for the following holidays: New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The net asset value per share of the Fund is also determined on any other day in which the level of trading in its portfolio securities is sufficiently high so that the current net asset value per share might be materially affected by changes in the value of its portfolio securities. The Fund is not required to determine its net asset value per share on any day in which no purchase orders for the shares of the Fund become effective and no shares are tendered for redemption.
The net asset value per share of the Fund is computed by taking the value of all of its assets, less its liabilities, and dividing it by the number of outstanding shares. Expenses of the Fund are accrued daily. Securities which have not traded on the date of valuation or securities for which sales prices are not generally reported are valued at the mean between the last bid and asked prices. Securities for which no market quotations are readily available (including those the trading of which has been suspended) will be valued at fair value as determined in good faith by the Board of Trustees, although the actual computations may be made by persons acting pursuant to the direction of the Board. The maximum offering price per share is the net asset value per share, plus the maximum sales charge.
14. SYSTEMATIC WITHDRAWAL PLAN
The Systematic Withdrawal Plan is designed to provide a convenient method of receiving fixed payments at regular intervals from shares of the Fund deposited by the applicant under this Plan. The applicant must deposit or purchase for deposit with PSC shares of the Fund having a total value of not less than $10,000. Periodic checks of $50 or more will be sent to the applicant, or any person designated by him, monthly or quarterly. A designation of a third party to receive checks requires an acceptable signature guarantee.
Any income dividends or capital gains distributions on shares under the Systematic Withdrawal Plan will be credited to the Plan account on the payment date in full and fractional shares at the net asset value per share in effect on the record date.
Systematic Withdrawal Plan payments are made from the proceeds of the redemption of shares deposited under the Plan in a Plan account. To the extent that such redemptions for periodic withdrawals exceed dividend income reinvested in the Plan account, such redemptions will reduce and may ultimately exhaust the number of shares deposited in the Plan account. Redemptions are taxable transactions to shareholders. In addition, the amounts received by a shareholder cannot be considered as an actual yield or income on his or her investment because part of such payments may be a return of his or her investment.
The Systematic Withdrawal Plan may be terminated at any time (1) by written notice to PSC or from PSC to the shareholder; (2) upon receipt by PSC of appropriate evidence of the shareholder's death; or (3) when all shares under the Plan have been redeemed.
15. LETTER OF INTENTION
Purchases in the Fund of $50,000 or over (excluding any reinvestments of dividends and capital gains distributions) made within a 13-month period pursuant to a Letter of Intention provided by PFD will qualify for a reduced sales charge. Such reduced sales charge will be the charge that would be applicable to the purchase of all shares purchased during such 13-month period pursuant to a Letter of Intention had such shares been purchased all at once. See "Information About Fund Shares" in the Prospectus. For example, a person who signs a Letter of Intention providing for a total investment in Fund shares of $50,000 over a 13-month period would be charged at the 4.50% sales charge rate with respect to all purchases during that period. Should the amount actually purchased during the 13-month period be more or less than that indicated in the Letter, an adjustment in the sales charge will be made. A purchase not made pursuant to a Letter of Intention may be included thereafter if the Letter is filed within 90 days of such purchase. Any shareholder may also obtain the reduced sales charge by including the value (at current offering price) of all his shares in the Fund and all other Pioneer open-end mutual funds, except direct purchases of the Class A shares of Pioneer Money Market Trust, held of record as of the date of his Letter of Intention as a credit toward determining the applicable scale of sales charge for the shares to be purchased under the Letter of Intention.
The Letter of Intention authorizes PSC to escrow shares having a purchase price equal to 5% of the stated investment in the Letter of Intention. A Letter of Intention is not a binding obligation upon the investor to purchase, or the
Fund to sell, the full amount indicated and the investor should read the provisions of the Letter of Intention contained in the Account Application carefully before signing.
16. INVESTMENT RESULTS
One of the primary methods used to measure the Fund's performance is "total return." "Total return" will normally represent the percentage change in value of an account, or of a hypothetical investment in the Fund, over any period up to the lifetime of the Fund. Total return calculations will usually assume the reinvestment of all dividends and capital gains distributions and will be expressed as a percentage increase or decrease from an initial value, for the entire period or for one or more specified periods within the entire period. Total return percentages for periods of less than one year will usually be annualized; total return percentages for periods longer than one year will usually be accompanied by total return percentages for each year within the period and/or by the average annual compounded total return for the period. The income and capital components of a given return may be separated and portrayed in a variety of ways in order to illustrate their relative significance. Performance may also be portrayed in terms of cash or investment values, without percentages. Past performance cannot guarantee any particular future result.
The Fund's yield quotations and average annual total return quotations as they may appear in the Prospectus, this Statement of Additional Information or in advertising are calculated by standard methods prescribed by the Commission.
Standardized Yield Quotations. The Fund's yield is computed by dividing the Fund's net investment income per share during a base period of 30 days, or one month, by the maximum offering price per share of the Fund on the last day of such base period in accordance with the following formula:
a-b YIELD = 2[ ( ----- +1)6 -1]
Where: a = interest earned during the period
b = net expenses accrued for the period
c = the average daily number of shares outstanding
during the period that were entitled to
receive dividends
d = the maximum offering price per share on the
last day of the period
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For purposes of calculating interest earned on debt obligations as provided in item "a" above:
(i) The yield to maturity of each obligation held by the Fund is computed based on the market value of the obligation (including actual accrued interest, if any) at the close of business each day during the 30-day base period, or, with respect to obligations purchased during the month, the purchase price (plus actual accrued interest, if any) on settlement date, and with respect to obligations sold during the month the sale price (plus actual accrued interest, if any) between the trade and settlement dates.
(ii) The yield to maturity of each obligation is then divided by 360 and the resulting quotient is multiplied by the market value of the obligation (including actual accrued interest, if any) to determine the interest income on the obligation for each day. The yield to maturity calculation has been made on each obligation during the 30-day base period.
(iii) Interest earned on all debt obligations during the 30-day or one month period is then totaled.
(iv) The maturity of an obligation with a call provision(s) is the next call date on which the obligation reasonably may be expected to be called or, if none, the maturity date.
With respect to the treatment of discount and premium on mortgage or other receivables-backed obligations which are expected to be subject to monthly payments of principal and interest ("pay downs"), the Fund accounts for gain or loss attributable to actual monthly pay downs as an increase or decrease to interest income during the period. In addition, the Fund may elect (i) to amortize the discount or premium remaining on a security, based on the cost of
the security, to the weighted average maturity date, if such information is available, or to the remaining term of the security, if the weighted average maturity date is not available, or (ii) not to amortize the remaining discount or premium on a security.
The Fund's standardized yield for the 30-day periods October 25, 1993 to June 30, 1994 and July 1, 1994 to December 31, 1994 were 3.45% and 5.63%, respectively. Assuming no fee reductions or expense limitations, the Fund's standardized yield for the same periods would have been 2.88% and 4.97%, respectively.
Standardized Average Annual Total Return Quotations. Average annual total return quotations are computed by finding the average annual compounded rates of return that would cause a hypothetical investment made on the first day of a designated period (assuming all dividends and distributions are reinvested) to equal the ending redeemable value of such hypothetical investment on the last day of the designated period in accordance with the following formula:
P(1+T)n = ERV
Where: P = a hypothetical initial payment of $1000,
less the maximum sales load of $5.75.
T = average annual total return
n = number of years
ERV = ending redeemable value of the hypothetical $1000
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initial payment made at the beginning of the designated period (or fractional portion thereof)
For purposes of the above computation, it is assumed that the maximum sales charge of 5.75% was deducted from the initial investment and that all dividends and distributions made by the Fund are reinvested at net asset value during the designated period. The average annual total return quotation is determined to the nearest 1/100 of 1%.
In determining the average annual total return (calculated as provided above), recurring fees, if any, that are charged to all shareholder accounts are taken into consideration. For any account fees that vary with the size of the account, the account fee used for purposes of the above computation is assumed to be the fee that would be charged to the Fund's mean account size.
The Fund's annual total return for the periods October 25, 1993 to June 30, 1994 and July 1, 1994 to December 31, 1994 were -1.47% and -2.16%, respectively. The Fund's one-year and life-of-Fund annual total returns as of December 31, 1994 were -5.54% and -7.78%, respectively. Assuming no fee reductions or expense limitations, the Fund's annual total return for the same periods would have been lower.
Other Quotations, Comparisons, and General Information. From time to time, in advertisements, in sales literature, or in reports to shareholders, the past performance of the Fund may be illustrated and/or compared with that of other mutual funds with similar investment objectives, and to stock or other relevant indices. For example, the Fund's total return may be compared to averages or rankings prepared by Lipper Analytical Services, Inc., a widely recognized independent service which monitors mutual fund performance; the Standard & Poor's 500 Stock Index ("S&P 500"), an unmanaged index of common stocks; or the Dow Jones Industrial Average, a recognized unmanaged index of common stocks of 30 industrial companies listed on the New York Stock Exchange.
In addition, the performance of the Fund may be compared to alternative investment or savings vehicles and/or to indexes or indicators of economic activity, e.g., inflation or interest rates. Performance rankings and listings reported in newspapers or national business and financial publications, such as Barron's, Business Week, Consumer's Digest, Consumer's Report, Financial World, Forbes, Fortune, Investors Business Daily, Kiplinger's Personal Finance Magazine, Lipper Real Estate Funds Average, Money Magazine, NARIET All Reit Index, NAREIT Equity Reit Index, the New York Times, RUSSELL-NACRIEF Index, Smart Money, USA Today, U.S. News and World Report, The Wall Street Journal, Wilshire Real Estate Securities Trust and Worth may also be cited (if the Fund is listed in any such publication) or used for comparison, as well as performance listings and rankings from various other sources including Bloomberg Financial Systems, CDA/Wiesenberger Investment Companies Service, Donoghue's Mutual Fund Almanac, Investment Company Data, Inc., Johnson's Charts, Kanon Bloch Carre & Co., Micropal, Inc., Morningstar, Inc., Schabacker Investment Management, Towers Data Systems and Weisenberger Investment Companies Service.
In addition, from time to time, quotations from articles from financial publications, such as those listed above, may be used in advertisements, in sales literature or in reports to shareholders of the Fund.
Automated Information Line
FactFone, Pioneer's 24-hour automated information line, allows shareholders to dial toll-free 1-800-225-4321 and hear recorded fund information, including:
o net asset value prices for all Pioneer mutual funds;
o annualized 30-day yields on Pioneer's bond funds;
o annualized 7-day yields and 7-day effective (compound) yields for Pioneer's money market funds; and
o dividends and capital gains distributions on all Pioneer mutual funds.
Yields are calculated in accordance with standard formulas mandated by the Securities and Exchange Commission.
In addition, by using a personal identification number (PIN), shareholders may access their account balance and last three transactions and may order a duplicate statement.
All performance numbers communicated through FactFone represent past performance; figures for all quoted bond funds include the maximum applicable sales charge. A shareholder's actual yield and total return will vary with changing market conditions. The value of shares (except for Pioneer money market funds, which seek a stable $1.00 share price) will also vary, and they may be worth more or less at redemption than their original cost.
17. FINANCIAL STATEMENTS
The Fund's financial statements for the periods from October 25, 1993 (commencement of operations) through June 30, 1994 and from July 1, 1994 through December 31, 1994 attached to this Statement of Additional Information have been included in reliance upon the report of Arthur Andersen LLP, independent public accountants, as experts in accounting and auditing.
APPENDIX A
DESCRIPTION OF BOND RATINGS
The rating systems described herein are believed to be the most recent ratings systems available from Moody's Investors Service, Inc. and Standard & Poor's Ratings Group at the date of this Statement of Additional Information for the securities listed. Ratings are generally given to securities at the time of issuance. While the rating agencies may from time to time revise such ratings, they undertake no obligation to do so, and the ratings indicated do not necessarily represent ratings which will be given to these securities on the date of the Fund's fiscal year end.
Moody's Investors Service, Inc.
Aaa: Bonds which are rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt edge." Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes and are to be considered as upper medium grade obligations. Factors giving security to principal and interest are considered adequate, but elements may be present which suggest a susceptibility to impairment sometime in the future.
Baa: Bonds which are rated Baa are considered as medium grade obligations, i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well.
Ba: Bonds which are rated Ba are judged to have speculative elements; their future cannot be considered as well assured. Often the protection of interest and principal payments may be very moderate and thereby not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class.
B: Bonds which are rated B generally lack characteristics of the desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small.
Caa: Bonds which are rated Caa are of poor standing. Such issues may be in default or there may be present elements of danger with respect to principal or interest.
Ca: Bonds which are rated Ca represent obligations which are speculative in a high degree. Such issues are often in default or have other marked shortcomings.
C: Bonds which are rated C are the lowest rated class of bonds, and issues so rated can be regarded as having extremely poor prospects of ever attaining any real investment standing.
Unrated: Where no rating has been assigned or where a rating has been suspended or withdrawn, it may be for reasons unrelated to the quality of the issue.
Should no rating be assigned, the reason may be one of the following:
1. An application for rating was not received or accepted.
2. The issue or issuer belongs to a group of securities or companies that are not rated as a matter of policy.
3. There is a lack of essential data pertaining to the issue or issuer.
4. The issue was privately placed, in which case the rating is not published in Moody's publications.
Suspension or withdrawal may occur if new and material circumstances arise, the effects of which preclude satisfactory analysis; if there is no longer available reasonable up-to-date data to permit a judgment to be formed; if a bond is called for redemption; or for other reasons.
Note: Those bonds in the Aa, A, Baa, Ba and B groups which Moody's believe possess the strongest investment attributes are designated by the symbols Aa1, A1, Baa1 and B1.
Standard & Poor's Ratings Group1
AAA: Bonds rated AAA have the highest rating assigned by Standard & Poor's. Capacity to pay interest and repay principal is extremely strong.
AA: Bonds rated AA have a very strong capacity to pay interest and repay principal and differ from the higher rated issues only in small degree.
A: Bonds rated A have a very strong capacity to pay interest and repay principal although they are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than bonds in higher rated categories.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay interest and repay principal. Whereas they normally exhibit adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for bonds in this category than in higher rated categories.
BB, B, CCC, CC, C: Bonds rated BB, B, CCC, CC and C are regarded, on balance, as predominantly speculative with respect to capacity to pay interest and repay principal in accordance with the terms of the obligation. BB indicates the lowest degree of speculation and the highest degree of speculation. While such bonds will likely have some quality and protective characteristics, these are outweighed by large uncertainties of major risk exposures to adverse conditions.
D: Bonds rated D are in payment default. The D rating category is used when interest payments or principal payments are not made on the date due even if the applicable grace period has not expired, unless Standard & Poor's believes that such payments will be made during such grace period.
Plus (+) or Minus (-): The ratings from "AA" to "B" may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories.
Unrated: Indicates that no public rating has been requested, that there is insufficient information on which to base a rating, or that Standard & Poor's does not rate a particular type of obligations as a matter of policy.
APPENDIX B
ADDITIONAL PIONEER INFORMATION
The Pioneer family of mutual funds was established in 1928 with the creation of Pioneer Fund. Pioneer is one of the oldest, most respected and successful money managers in the United States.
As of December 31, 1994, PMC employed a professional investment staff of 46, with a combined average of 14 years' experience in the financial services industry.
At December 31, 1994, there were 591,192 non-retirement shareholder accounts and 337,577 retirement shareholder accounts in the Pioneer's funds. Total assets for all Pioneer Funds as of December 31, 1994 were $10,038,000,000 representing 928,769 shareholder accounts.
B-*1
Pioneer Winthrop Real Estate Investment Fund
Date Initial Investment Offering Price Sales Charge Shares Purchased Net Asset Value Initial Net Asset
Included Per Share Value
10/25/93 10,000 $13.26 5.75% 754.148 $12.50 $9,425
Dividends and Capital Gains Reinvested
Value of Shares
Date From Investment From Cap. Gains From Dividends Total Value
Reinvested Reinvested
12/31/93 $9,012 $0 $55 $9,067
12/31/94 $8,583 $20 $485 $9,088
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APPENDIX C - SECURITIES INDICES
INDEX DESCRIPTIONS
S&P 500 *
This index is a readily available, carefully constructed, market value weighted
benchmark of common stock performance. Currently, the S&P Composite Index
includes 500 of the largest stocks (in terms of stock market value) in the
United States; prior to March 1957 it consisted of 90 of the largest stocks.
DOW JONES INDUSTRIAL AVERAGE *
This is a total return index based on the performance of 30 blue chip stocks.
SMALL CAPITALIZATION STOCKS *
This index is a market value weighted index of the ninth and tenth deciles of
the New York Stock Exchange (NYSE), plus stocks listed on the American Stock
Exchange (AMEX) and over-the-counter (OTC) with the same or less capitalization
as the upper bound of the NYSE ninth decile.
INFLATION *
The Consumer Price Index for All Urban Consumers (CPI-U), not seasonally
adjusted, is used to measure inflation, which is the rate of change of consumer
goods prices. Unfortunately, the inflation rate as derived by the CPI is not
measured over the same period as the other asset returns. All of the security
returns are measured from one month-end to the next month-end. CPI commodity
prices are collected during the month. Thus, measured inflation rates lag the
other series by about one-half month. Prior to January 1978, the CPI (as
compared with CPI-U) was used. Both inflation measures are constructed by the
U.S. Department of Labor, Bureau of Labor Statistics, Washington, DC.
S&P/BARRA INDEXES *
"The S&P/BARRA Growth and Value Indexes are constructed by dividing the stocks
in the S&P 500 Index according to price-to-book ratios. The Growth Index
contains stocks with higher price-to-book ratios, and the Value Index contains
stocks with lower price-to-book ratios. Both indexes are market capitalization
weighted."
LONG-TERM MUNICIPAL BOND PORTFOLIO *
For 1926-1984, returns are calculated form yields on 20-year prime issues from
Solomon Brothers' Analytical Record of Yields and Yields Spreads, assuming
coupon equals previous year-end yield and a 20-year maturity. For 1985-present,
returns are calculated using Moody's Bond Record, using the December average
municipal yield as the beginning-of-following year coupon (average of Aaa, Aa,
A, Baa grades).
LONG-TERM CORPORATE BONDS *
For 1969-1991, corporate bond total returns are represented by the Salomon
Brothers Long-Term High-Grade Corporate Bond Index. Since most large corporate
bond transactions take place over the counter, a major dealer is the natural
source of these data. The index includes nearly all Aaa- and Aa-rated bonds. If
a bond is downgraded during a particular month, its return for the month is
included in the index before removing the bond from future portfolios.
INDEX DESCRIPTIONS
Over 1926-1968 the total returns were calculated by summing the capital appreciation returns and the income returns. For the period 1946-1968, Ibbotson and Sinquefield backdated the Salomon Brothers' index, using Salomon Brothers' monthly yield data with a methodology similar to that used by Salomon for 1969-1991. Capital appreciation returns were calculated from yields assuming (at the beginning of each monthly holding period) a 20-year maturity, a bond price equal to par, and a coupon equal to the beginning-of-period yield. For the period 1926-1945, the Standard and Poor's monthly High-Grade Corporate Composite yield data were used, assuming a 4 percent coupon and a 20-year maturity. The conventional present-value formula for bond price for the beginning and end-of-month prices was used. (This formula is presented in Ross, Stephen A., and Randolph W. Westerfield, Corporate Finance, Times Mirror/Mosby, St. Louis, 1990, p. 97 ["Level-Coupon Bonds"].) The monthly income return was assumed to be one-twelfth the coupon.
LONG-TERM GOVERNMENT BOND TOTAL RETURN *
The total returns on long-term government bonds from 1977 to 1991 are
constructed with data from The Wall Street Journal. Over 1926-1976, data are
obtained from the Government bond file at the Center for Research in Security
Prices (CRSP), Graduate School of Business, University of Chicago. Each year, a
one-bond portfolio with a term of approximately 20 years and a reasonably
current coupon was used, and whose returns did not reflect potential tax
benefits, impaired negotiability, or special redemption or call privileges.
Where callable bonds had to be used, the term of the bond was assumed to be a
simple average of the maturity and first call dates minus the current date. The
bond was "held" for the calendar year and returns were computed. Total returns
for 1977-1991 are calculated as the change in the flat price or and-interest
price.
INTERMEDIATE-TERM GOVERNMENT BONDS TOTAL RETURN *
Total returns of the intermediate-term government bonds for 1977-1991 are
calculated from The Wall Street Journal prices, using the change in flat price.
Returns from 1934-1986 are obtained from the CRSP Government Bond File.
Each year, one-bond portfolios are formed, the bond chosen is the shortest noncallable bond with a maturity not less than 5 years, and this bond is "held" for the calendar year. Monthly returns are computed. (Bonds with impaired negotiability or special redemption privileges are omitted, as are partially or fully tax-exempt bonds starting with 1943.) From 1934-1942, almost all bonds with maturities near 5 years were partially or full tax-exempt and were selected using the rules described above. Personal tax rates were generally low in that period, so that yields on tax-exempt bonds were similar to yields on taxable bonds. From 1926-1933, there are few bonds suitable for construction of a series with a 5-year maturity. For this period, five year bond yield estimates are used.
INDEX DESCRIPTIONS
U.S. (30 DAY) TREASURY BILL TOTAL RETURNS *
For the U.S. Treasury bill index, data from The Wall Street Journal are used for
1977-1991; the CRSP U.S. Government Bond File is the source until 1976. Each
month a one-bill portfolio containing the shortest-term bill having not less
than one month to maturity is constructed. (The bill's original term to maturity
is not relevant.) To measure holding period returns for the one-bill portfolio,
the bill is priced as of the last trading day of the previous month-end and as
of the last trading day of the current month.
BANK SAVINGS ACCOUNT **
Data sources include the U.S. League of Savings Institutions Sourcebook; average
annual yield on savings deposits in FSLIC [FDIC] insured savings institutions
for the years 1963-1987 and The Wall Street Journal for the years 1988-1994.
6 MONTH CD **
Data sources include the Federal Reserve Bulletin and The Wall Street Journal.
MSCI
Morgan Stanley Capital International Indices, developed by the Capital
International S.A., are based on share prices of some 1470 companies listed on
the stock exchanges around the world.
Countries in the MSCI EAFE Portfolio *are: Australia; Austria; Belgium; Denmark; Finland; France; Germany; Hong Kong; Italy; Japan; Netherlands; N. Zealand; Norway; Singapore/Malaysia; Spain; Sweden; Switzerland; United Kingdom.
Countries in the MSCI EUROPE 14 Portfolio *** are: Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Netherlands, Norway, Spain, Sweden, Switzerland, United Kingdom
Countries in the MSCI WORLD Portfolio *** are: Australia; Austria; Belgium; Canada; Denmark; Finland; France; Germany; Hong Kong; Italy; Japan; Netherlands; N. Zealand; Norway; Singapore/Malaysia; Spain; Sweden; Switzerland; United Kingdom; United States.
INTERNATIONAL FINANCE CORPORATION COMPOSITE *
An index representing the performance of a composite of Latin America
(Argentina, Brazil, Chile, Columbia, Mexico, Peru, Venezuela), East Asia (China,
Korea, Philippines, Taiwan), South Asia (India, Indonesia, Malaysia, Pakistan,
Sri Lanka, Thailand), Europe/Mideast/Africa (Greece, Hungary, Jordan, Nigeria,
Poland, Portugal, Turkey, Zimbabwe).
Sources: * Ibbotson Associates
** Towers Data Systems
*** Lipper Analytical Services
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Dow Jones U.S. Small S&P/BARRA S&P/BARRA
S&P500 Ind'l Avg Stock Index U.S. Inflation Growth Value
%TR %TR %TR %TR %TR %TR
Dec 1928 43.61 55.38 39.69 -0.97 N/A N/A
Dec 1929 -8.42 -13.64 -51.36 0.20 N/A N/A
Dec 1930 -24.90 -30.22 -38.15 -6.03 N/A N/A
Dec 1931 -43.34 -49.03 -49.75 -9.52 N/A N/A
Dec 1932 -8.19 -16.88 -5.39 -10.30 N/A N/A
Dec 1933 53.99 73.71 142.87 0.51 N/A N/A
Dec 1934 -1.44 8.07 24.22 2.03 N/A N/A
Dec 1935 47.67 43.77 40.19 2.99 N/A N/A
Dec 1936 33.92 30.23 64.80 1.21 N/A N/A
Dec 1937 -35.03 -28.88 -58.01 3.10 N/A N/A
Dec 1938 31.12 33.16 32.80 -2.78 N/A N/A
Dec 1939 -0.41 1.31 0.35 -0.48 N/A N/A
Dec 1940 -9.78 -7.96 -5.16 0.96 N/A N/A
Dec 1941 -11.59 -9.88 -9.00 9.72 N/A N/A
Dec 1942 20.34 14.12 44.51 9.29 N/A N/A
Dec 1943 25.90 19.06 88.37 3.16 N/A N/A
Dec 1944 19.75 17.19 53.72 2.11 N/A N/A
Dec 1945 36.44 31.60 73.61 2.25 N/A N/A
Dec 1946 -8.07 -4.40 -11.63 18.16 N/A N/A
Dec 1947 5.71 7.61 0.92 9.01 N/A N/A
Dec 1948 5.50 4.27 -2.11 2.71 N/A N/A
Dec 1949 18.79 20.92 19.75 -1.80 N/A N/A
Dec 1950 31.71 26.40 38.75 5.79 N/A N/A
Dec 1951 24.02 21.77 7.80 5.87 N/A N/A
Dec 1952 18.37 14.58 3.03 0.88 N/A N/A
Dec 1953 -0.99 2.02 -6.49 0.62 N/A N/A
Dec 1954 52.62 51.25 60.58 -0.50 N/A N/A
Dec 1955 31.56 26.58 20.44 0.37 N/A N/A
Dec 1956 6.56 7.10 4.28 2.86 N/A N/A
Dec 1957 -10.78 -8.63 -14.57 3.02 N/A N/A
Dec 1958 43.36 39.31 64.89 1.76 N/A N/A
Dec 1959 11.96 20.21 16.40 1.50 N/A N/A
Dec 1960 0.47 -6.14 -3.29 1.48 N/A N/A
Dec 1961 26.89 22.60 32.09 0.67 N/A N/A
Dec 1962 -8.73 -7.43 -11.90 1.22 N/A N/A
Dec 1963 22.80 20.83 23.57 1.65 N/A N/A
Dec 1964 16.48 18.85 23.52 1.19 N/A N/A
Dec 1965 12.45 14.39 41.75 1.92 N/A N/A
Dec 1966 -10.06 -15.78 -7.01 3.35 N/A N/A
Dec 1967 23.98 19.16 83.57 3.04 N/A N/A
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Dow Jones U.S. Small S&P/BARRA S&P/BARRA
S&P500 Ind'l Avg Stock Index U.S. Inflation Growth Value
%TR %TR %TR %TR %TR %TR
Dec 1968 11.06 7.93 35.97 4.72 N/A N/A
Dec 1969 -8.50 -11.78 -25.05 6.11 N/A N/A
Dec 1970 4.01 9.21 -17.43 5.49 N/A N/A
Dec 1971 14.31 9.83 16.50 3.36 N/A N/A
Dec 1972 18.98 18.48 4.43 3.41 N/A N/A
Dec 1973 -14.66 -13.28 -30.90 8.80 N/A N/A
Dec 1974 -26.47 -23.58 -19.95 12.20 N/A N/A
Dec 1975 37.20 44.75 52.82 7.01 31.72 43.38
Dec 1976 23.84 22.82 57.38 4.81 13.84 34.93
Dec 1977 -7.18 -12.84 25.38 6.77 -11.82 -2.57
Dec 1978 6.56 2.79 23.46 9.03 6.78 6.16
Dec 1979 18.44 10.55 43.46 13.31 15.72 21.16
Dec 1980 32.42 22.17 39.88 12.40 39.40 23.59
Dec 1981 -4.91 -3.57 13.88 8.94 -9.81 0.02
Dec 1982 21.41 27.11 28.01 3.87 22.03 21.04
Dec 1983 22.51 25.97 39.67 3.80 16.24 28.89
Dec 1984 6.27 1.31 -6.67 3.95 2.33 10.52
Dec 1985 32.16 33.55 24.66 3.77 33.31 29.68
Dec 1986 18.47 27.10 6.85 1.13 14.50 21.67
Dec 1987 5.23 5.48 -9.30 4.41 6.50 3.68
Dec 1988 16.81 16.14 22.87 4.42 11.95 21.67
Dec 1989 31.49 32.19 10.18 4.65 36.40 26.13
Dec 1990 -3.17 -0.56 -21.56 6.11 0.20 -6.85
Dec 1991 30.55 24.19 44.63 3.06 38.37 22.56
Dec 1992 7.67 7.41 23.35 2.90 5.07 10.53
Dec 1993 9.99 16.94 20.98 2.75 1.68 18.60
Dec 1994 1.31 5.06 3.11 2.78 3.13 -0.64
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Source: Ibbotson Associates
PIONEER WINTHROP REAL ESTATE INVESTMENT FUND
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
(a) Financial Statements:
The financial statements of the Registrant are incorporated by reference from the 1994 Annual Report to Shareholders which is attached and incorporated by reference into Part B, the Statement of Additional Information.
(b) Exhibits:
1. Agreement and Declaration of Trust.*
2. By-Laws.*
3. None.
4. None.
5.1 Management Contract between the Registrant and Pioneer Winthrop Advisers.*
5.2 Investment Subadvisory Contract by and among the Registrant, Pioneer Winthrop Advisers and Pioneering Management Corporation.*
5.3 Investment Subadvisory Contract by and among the Registrant, Pioneer Winthrop Advisers and Winthrop Advisors Limited Partnership.*
6. Underwriting Agreement between the Registrant and Pioneer Funds Distributor, Inc.*
7. None.
8. Custodian Agreement between the Registrant and Brown Brothers Harriman & Co.*
9. Investment Company Service Agreement between the Registrant and Pioneering Services Corporation.*
10. Opinion and Consent of Counsel.*
11. Consent of Independent Public Accountants.*
12. None.
13. Share Purchase Agreement.*
14. None.
15. Distribution Plan.*
16. None.
17. Financial Data Schedule.*
18. None.
19. Powers of Attorney.*
* Filed herewith.
Item 25. Persons Controlled By or Under
Common Control With Registrant.
Pioneer Winthrop Advisers, a Massachusetts general partnership ("PWA"), is a joint venture between The Pioneer Group, Inc., a Delaware corporation ("PGI"), and Winthrop Financial Associates, A Limited Partnership, a Delaware limited partnership ("WFA").
Nomura Asset Capital Corporation ("NACC") is an indirect wholly owned subsidiary of Nomura Securities Co., Ltd., a Japanese corporation with publicly traded shares. NACC has a 65% ownership interest in W.L. Realty, L.P. composed
of limited partnership interests and the sole general partnership interest. W.L. Realty, L.P. owns 100% of Linnaeus Associates Limited Partnership, a Maryland limited partnership ("Linnaeus"). Linnaeus is the sole general partner in, and owns 71.5% of the limited partnership interest and 13.0% of the general partnership interest of, WFA. WFA is the sole general partner and owns 100% of the partnership interests of Winthrop Advisors Limited Partnership, a Delaware limited partnership (WALP"). WFA owns 100% of the outstanding capital stock of First Winthrop Corporation, a Delaware corporation ("FWC"). WFA also owns 50% of the partnership interests in PWA.
PGI owns 100% of the outstanding capital stock of Pioneering Management Corporation, a Delaware corporation ("PMC"), Pioneering Services Corporation ("PSC"), Pioneer Capital Corporation ("PCC"), Pioneer Fonds Marketing GmbH ("GmbH"), Pioneer SBIC Corp. ("SBIC"), Pioneer Associates, Inc., Pioneer International Corporation, Pioneer Plans Corporation ("PPC"), Pioneer Goldfields Limited ("PGL"), and Pioneer Investments Corporation ("PIC"), all Massachusetts corporations. PMC owns 100% of the outstanding capital stock of Pioneer Funds Distributor, Inc. ("PFD"). PGI also owns 100% of the outstanding capital stock of Pioneer Metals and Technology, Inc. ("PMT"), a Delaware corporation, and Pioneer First Polish Trust Fund Joint Stock Company ("First Polish"), a Polish corporation. PGI owns 90% of the outstanding shares of Teberebie Goldfields Limited ("TGL"). Pioneer Fund, Pioneer II, Pioneer Three, Pioneer Bond Fund, Pioneer Intermediate Tax-Free Fund, Pioneer Growth Trust, Pioneer Europe Fund, Pioneer International Growth Fund, Pioneer ShortATerm Income Trust, Pioneer TaxAFree State Series Trust and Pioneer America Income Trust (each of the foregoing, a Massachusetts business trust), and Pioneer Income Fund, Pioneer Emerging Markets Fund, Pioneer Tax-Free Income Fund, Pioneer India Fund, Pioneer Growth Shares and Pioneer Money Market Trust (each of the foregoing, a Delaware business trust) and Pioneer Interest Shares, Inc. (a Nebraska corporation) are all parties to management contracts with PMC. The Registrant is a party to a sub-investment management contract with PMC and a management contact with PWA. PCC owns 100% of the outstanding capital stock of SBIC. SBIC is the sole general partner of Pioneer Ventures Limited Partnership, a Massachusetts limited partnership. John F. Cogan, Jr. owns approximately 15% of the outstanding shares of PGI. Mr. Cogan is Chairman of the Board, President and Trustee of the Registrant and of each of the Pioneer mutual funds; Director and President of PGI; President and Director of PPC, PIC, Pioneer International Corporation and PMT; Director of PCC and PSC; Chairman of the Board and Director of PMC, PFD and TGL; Chairman, President and Director of PGL; Chairman of the Supervisory Board of GmbH; Chairman and Chief Executive Officer of PWA; Chairman and Member of Supervisory Board of First Polish; and Chairman and Partner, Hale and Dorr.
Item 26. Number of Holders of Securities
Number of Record Holders
Title of Class as of March 31, 1995
Shares of Beneficial Interest 2,514
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Item 27. Indemnification.
Except for the Agreement and Declaration of Trust dated March 10, 1995, establishing the Registrant as a Trust under Delaware law, there is no contract, arrangement or statute under which any director, officer, underwriter or affiliated person of the Registrant is insured or indemnified. The Agreement and Declaration of Trust provides that no Trustee or officer will be indemnified against any liability to which the Registrant would otherwise be subject by reason of or for willful misfeasance, bad faith, gross negligence or reckless disregard of such person's duties.
Insofar as indemnification for liability arising under the Securities Act of 1933, as amended (the "Act"), may be available to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment of the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser.
The business and other connections of the officers and partners of the Registrant's investment adviser, Pioneer Winthrop Advisers, are listed on the Form ADV of Pioneer Winthrop Advisers as currently on file with the Commission (File No. 801A44697), the text of which is hereby incorporated by reference.
The business and other connections of the officers and directors of the Registrant's investment subadviser, Pioneering Management Corporation, are listed on the Form ADV of Pioneering Management Corporation as currently on file with the Commission (File No. 01A8255) the text of which is hereby incorporated by reference.
The business and other connections of the officers and partners of the Registrant's investment subadviser, Winthrop Advisors Limited Partnership, are listed on the Form ADV of Winthrop Advisors Limited Partnership as currently on file with the Commission (File No. 801A38027), the text of which is hereby incorporated by reference.
The following sections of each such Form ADV are incorporated herein by reference:
(a) Items 1 and 2 of Part 2;
(b) Section IV, Business Background, of each Schedule D.
Item 29. Principal Underwriter.
(a) See Item 25 above.
(b) Directors and Officers of PFD:
Positions and Offices Positions and Offices
Name with Underwriter with Registrant
John F. Cogan, Jr. Director and Chairman Chairman of the Board,
Chief Executive
Officer and Trustee
Robert L. Butler Director and President None
David D. Tripple Director Executive Vice
President and Trustee
Steven M. Graziano Senior Vice President None
Stephen W. Long Senior Vice President None
John W. Drachman Vice President None
Barry G. Knight Vice President None
William A. Misata Vice President None
C-5
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Anne W. Patenaude Vice President None
Elizabeth B. Rice Vice President None
Gail A. Smyth Vice President None
Constance S. Spiros Vice President None
Marcy Supovitz Vice President None
Steven R. Berke Assistant None
Vice President
Mary Sue Hoban Assistant None
Vice President
William H. Keough Treasurer Treasurer
Roy P. Rossi Assistant Treasurer None
Joseph P. Barri Clerk Secretary
|
(c) Not applicable.
Item 30. Location of Accounts and Records.
The accounts and records are maintained at the Registrant's office at 60 State Street, Boston, Massachusetts; contact the Treasurer.
Item 31. Management Services.
The Registrant is not a party to any management-related service contract, except as described in the Prospectus and Statement of Additional Information.
Item 32. Undertakings.
(a) Not applicable.
(b) Not applicable.
(c) The Registrant undertakes to deliver, or cause to be delivered with the Prospectus, to each person to whom the Prospectus is sent or given a copy of the Registrant's report to shareholders furnished pursuant to and meeting the requirements of Rule 30d-1 under the Investment Company Act of 1940 from which
the specified information is incorporated by reference, unless such person currently holds securities of the Registrant and otherwise has received a copy of such report, in which case the Registrant shall state in the Prospectus that it will furnish, without charge, a copy of such report on request, and the name, address and telephone number of the person to whom such a request should be directed.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant has duly caused this Amendment to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Boston and The Commonwealth of Massachusetts, on the 21st day of April, 1995.
PIONEER WINTHROP REAL ESTATE
INVESTMENT FUND
By:/s/Joseph P. Barri Joseph P. Barri Secretary |
Pursuant to the requirements of the Securities Act of 1933, this Amendment has been signed below by the following persons in the capacities and on the date indicated:
Title and Signature Date
Principal Executive Officer: )
)
)
/s/John F. Cogan, Jr.* )
John F. Cogan, Jr., Chief )
Executive Officer )
)
)
Principal Financial and )
Accounting Officer: )
)
)
/s/William H. Keough* )
William H. Keough, Treasurer )
)
)
Trustees: )
)
/s/John F. Cogan, Jr.* )
John F. Cogan, Jr. )
)
)
/s/Richard H. Egdahl, M.D.* )
Richard H. Egdahl, M.D. )
)
)
/s/Margaret B. W. Graham* )
Margaret B. W. Graham )
|
/s/Arthur J. Halleran, Jr* )
Arthur J. Halleran, Jr. )
)
)
/s/Stephen G. Kasnet* )
Stephen G. Kasnet )
)
)
/s/John W. Kendrick* )
John W. Kendrick )
)
)
/s/Marguerite A. Piret* )
Marguerite A. Piret )
)
)
/s/David D. Tripple* )
David D. Tripple )
)
)
/s/Stephen K. West* )
Stephen K. West )
)
)
/s/John Winthrop* )
John Winthrop )
- ---------
|
* By: /s/Joseph P. Barri April 21, 1995
Joseph P. Barri
Attorney-in-fact
|
Exhibit Index
Exhibit Page
Number Document Title Number
1. Agreement and Declaration of Trust
2. By-Laws.
5.1 Management Contract between the Registrant and
Pioneer Winthrop Advisers.
|
5.2 Investment Subadvisory Contract by and among the Registrant, Pioneer Winthrop Advisers and Pioneering Management Corporation.
5.3 Investment Subadvisory Contract by and among the Registrant, Pioneer Winthrop Advisers and Winthrop Advisors Limited Partnership.
6. Underwriting Agreement between the Registrant and Pioneer Funds Distributor, Inc.
8. Custodian Agreement between the Registrant and Brown Brothers Harriman & Co.
9. Investment Company Service Agreement between the Registrant and Pioneering Services Corporation.
10. Opinion of Morris, Nichols, Arsht and Tunnell.
11. Consent of Independent Public Accountants.
13. Share Purchase Agreement.
15. Distribution Plan.
17. Financial Data Schedule.
19. Powers of Attorney.
PIONEER WINTHROP REAL ESTATE INVESTMENT FUND
AGREEMENT AND DECLARATION OF TRUST
This AGREEMENT AND DECLARATION OF TRUST is made on this 10th day of March, 1995 by the persons named on the signature page hereto (together with all other persons from time to time duly elected, qualified and serving as Trustees in accordance with the provisions of Article II hereof, the "Trustees").
NOW, THEREFORE, the Trustees declare that all money and property contributed to the Trust shall be held and managed in trust pursuant to this Agreement and Declaration of Trust.
ARTICLE I
NAME AND DEFINITIONS
Section 1. Name. The name of the Trust created by this Agreement and Declaration of Trust is "Pioneer Winthrop Real Estate Investment Fund."
Section 2. Definitions. Unless otherwise provided or required by the context:
(a) "Administrator" means the party, other than the Trust, to the contract described in Article III, Section 3 hereof.
(b) "By-laws" means the By-Laws of the Trust adopted by the Trustees, as amended from time to time, which By-laws are expressly herein incorporated by reference as part of the "governing instrument" within the meaning of the Delaware Act.
(c) "Class" means the class of Shares of a Series established pursuant to Article V.
(d) "Commission," "Interested Person" and "Principal Underwriter" have the meanings provided in the 1940 Act. Except as such term may be otherwise defined by the Trustees in conjunction with the establishment of any Series of Shares, the term "vote of a majority of the Shares outstanding and entitled to vote" shall have the same meaning as is assigned to the term "vote of a majority of the outstanding voting securities" in the 1940 Act.
(e) "Covered Person" means a person so defined in Article IV,
Section 2.
(f) "Custodian" means any Person other than the Trust who has custody
of any Trust Property as required by Section 17(f) of the 1940 Act, but does not
include a system for the central handling of securities described in said
Section 17(f).
(g) "Declaration" shall mean this Agreement and Declaration of Trust, as amended or restated from time to time. Reference in this Declaration of Trust to "Declaration," "hereof," "herein," and "hereunder" shall be deemed to refer to this Declaration rather than exclusively to the article or section in which such words appear.
(h) "Delaware Act" means Chapter 38 of Title 12 of the Delaware Code entitled "Treatment of Delaware Business Trusts," as amended from time to time.
(i) "Distributor" means the party, other than the Trust, to the contract described in Article III, Section 1 hereof.
(j) "His" shall include the feminine and neuter, as well as the masculine, genders.
(k) "Investment Adviser" means the party, other than the Trust, to the contract described in Article III, Section 2 hereof.
(l) "Net Asset Value" means the net asset value of each Series of the Trust, determined as provided in Article VI, Section 3.
(m) "Person" means and includes individuals, corporations, partnerships, trusts, associations, joint ventures, estates and other entities, and governments and agencies and political subdivisions, thereof, whether domestic or foreign.
(n) "Series" means a series of Shares established pursuant to Article V.
(o) "Shareholder" means a record owner of Outstanding Shares;
(p) "Shares" means the equal proportionate transferable units of interest into which the beneficial interest of each Series or Class is divided from time to time (including whole Shares and fractions of Shares). "Outstanding
Shares" means Shares shown in the books of the Trust or its transfer agent as then issued and outstanding, but does not include Shares which have been repurchased or redeemed by the Trust and which are held in the treasury of the Trust.
(q) "Transfer Agent" means any Person other than the Trust who maintains the Shareholder records of the Trust, such as the list of Shareholders, the number of Shares credited to each account, and the like.
(r) "Trust" means Pioneer Winthrop Real Estate Investment Fund established hereby, and reference to the Trust, when applicable to one or more Series, refers to that Series.
(s) "Trustees" means the persons who have signed this Declaration of Trust, so long as they shall continue in office in accordance with the terms hereof, and all other persons who may from time to time be duly qualified and serving as Trustees in accordance with Article II, in all cases in their capacities as Trustees hereunder.
(t) "Trust Property" means any and all property, real or personal, tangible or intangible, which is owned or held by or for the Trust or any Series or the Trustees on behalf of the Trust or any Series.
(u) The "1940 Act" means the Investment Company Act of 1940, as amended from time to time.
ARTICLE II
THE TRUSTEES
Section 1. Management of the Trust. The business and affairs of the Trust shall be managed by or under the direction of the Trustees, and they shall have all powers necessary or desirable to carry out that responsibility. The Trustees may execute all instruments and take all action they deem necessary or desirable to promote the interests of the Trust. Any determination made by the Trustees in good faith as to what is in the interests of the Trust shall be conclusive. In construing the provisions of this Declaration, the presumption shall be in favor of a grant of power to the Trustees.
Section 2. Powers. The Trustees in all instances shall act as principals, free of the control of the Shareholders. The Trustees shall have
full power and authority to take or refrain from taking any action and to execute any contracts and instruments that they may consider necessary or desirable in the management of the Trust. The Trustees shall not in any way be bound or limited by current or future laws or customs applicable to trust investments, but shall have full power and authority to make any investments which they, in their sole discretion, deem proper to accomplish the purposes of the Trust. The Trustees may exercise all of their powers without recourse to any court or other authority. Subject to any applicable limitation herein or in the By-Laws or resolutions of the Trust, the Trustees shall have power and authority, without limitation:
(a) To operate as and carry on the business of an investment company, and exercise all the powers necessary and appropriate to the conduct of such operations.
(b) To invest in, hold for investment, or reinvest in, cash; securities, including common, preferred and preference stocks; warrants; subscription rights; profit-sharing interests or participations and all other contracts for or evidence of equity interests; bonds, debentures, bills, time notes and all other evidences of indebtedness; negotiable or non-negotiable instruments; government securities, including securities of any state, municipality or other political subdivision thereof, or any governmental or quasi-governmental agency or instrumentality; and money market instruments including bank certificates of deposit, finance paper, commercial paper, bankers' acceptances and all kinds of repurchase agreements, of any corporation, company, trust, association, firm or other business organization however established, and of any country, state, municipality or other political subdivision, or any governmental or quasi-governmental agency or instrumentality; or any other security, property or instrument in which the Trust or any of its Series shall be authorized to invest.
(c) To acquire (by purchase, subscription or otherwise), to hold, to trade in and deal in, to acquire any rights or options to purchase or sell, to sell or otherwise dispose of, to lend and to pledge any such securities, to enter into repurchase agreements, reverse repurchase agreements, firm commitment agreements and forward foreign currency exchange contracts, to purchase and sell options on securities, securities indices, currency and other financial assets, futures contracts and options on futures contracts of all descriptions and to engage in all types of hedging and risk-management transactions.
(d) To exercise all rights, powers and privileges of ownership or interest in all securities and repurchase agreements included in the Trust Property, including the right to vote thereon and otherwise act with respect thereto and to do all acts for the preservation, protection, improvement and enhancement in value of all such securities and repurchase agreements.
(e) To acquire (by purchase, lease or otherwise) and to hold, use, maintain, develop and dispose of (by sale or otherwise) any property, real or personal, including cash or foreign currency, and any interest therein.
(f) To borrow money or other property in the name of the Trust exclusively for Trust purposes and in this connection issue notes or other evidence of indebtedness; to secure borrowings by mortgaging, pledging or otherwise subjecting as security the Trust Property; and to endorse, guarantee, or undertake the performance of any obligation or engagement of any other Person and to lend Trust Property.
(g) To aid by further investment any corporation, company, trust, association or firm, any obligation of or interest in which is included in the Trust Property or in the affairs of which the Trustees have any direct or indirect interest; to do all acts and things designed to protect, preserve, improve or enhance the value of such obligation or interest; and to guarantee or become surety on any or all of the contracts, stocks, bonds, notes, debentures and other obligations of any such corporation, company, trust, association or firm.
(h) To adopt By-laws not inconsistent with this Declaration providing for the conduct of the business of the Trust and to amend and repeal them to the extent such right is not reserved to the Shareholders.
(i) To elect and remove such officers and appoint and terminate such agents as they deem appropriate.
(j) To employ as custodian of any assets of the Trust, subject to any provisions herein or in the By-Laws, one or more banks, trust companies or companies that are members of a national securities exchange, or other entities permitted by the Commission to serve as such.
(k) To retain one or more transfer agents and shareholder servicing agents, or both.
(l) To provide for the distribution of Shares either through a Principal Underwriter as provided herein or by the Trust itself, or both, or pursuant to a distribution plan of any kind.
(m) To set record dates in the manner provided for herein or in the By- laws.
(n) To delegate such authority as they consider desirable to any officers of the Trust and to any agent, independent contractor, manager, investment adviser, custodian or underwriter.
(o) To hold any security or other property (i) in a form not indicating any trust, whether in bearer, book entry, unregistered or other negotiable form, or (ii) either in the Trust's or Trustees' own name or in the name of a custodian or a nominee or nominees, subject to safeguards according to the usual practice of business trusts or investment companies.
(p) To establish separate and distinct Series with separately defined investment objectives and policies and distinct investment purposes, and with separate Shares representing beneficial interests in such Series, and to establish separate Classes, all in accordance with the provisions of Article V.
(q) To the full extent permitted by Section 3804 of the Delaware Act, to allocate assets, liabilities and expenses of the Trust to a particular Series and assets, liabilities and expenses to a particular Class or to apportion the same between or among two or more Series or Classes, provided that any liabilities or expenses incurred by a particular Series or Class shall be payable solely out of the assets belonging to that Series or Class as provided for in Article V, Section 4.
(r) To consent to or participate in any plan for the reorganization, consolidation or merger of any corporation or concern whose securities are held by the Trust; to consent to any contract, lease, mortgage, purchase, or sale of property by such corporation or concern; and to pay calls or subscriptions with respect to any security held in the Trust.
(s) To compromise, arbitrate, or otherwise adjust claims in favor of or against the Trust or any matter in controversy including, but not limited to, claims for taxes.
(t) To make distributions of income, capital gains, returns of capital (if any) and redemption proceeds to Shareholders in the manner hereinafter provided for.
(u) To establish committees for such purposes, with such membership, and with such responsibilities as the Trustees may consider proper, including a committee consisting of fewer than all of the Trustees then in office, which may act for and bind the Trustees and the Trust with respect to the institution, prosecution, dismissal, settlement, review or investigation of any legal action, suit or proceeding, pending or threatened.
(v) To issue, sell, repurchase, redeem, cancel, retire, acquire, hold, resell, reissue, dispose of and otherwise deal in Shares; to establish terms and conditions regarding the issuance, sale, repurchase, redemption, cancellation, retirement, acquisition, holding, resale, reissuance, disposition of or dealing in Shares; and, subject to Articles V and VI, to apply to any such repurchase, redemption, retirement, cancellation or acquisition of Shares any funds or property of the Trust or of the particular Series with respect to which such Shares are issued.
(w) To invest part or all of the Trust Property (or part or all of the assets of any Series), or to dispose of part or all of the Trust Property (or part or all of the assets of any Series) and invest the proceeds of such disposition, in securities issued by one or more other investment companies registered under the 1940 Act all without any requirement of approval by Shareholders. Any such other investment company may (but need not) be a trust (formed under the laws of the State of New York or of any other state) which is classified as a partnership for federal income tax purposes.
(x) To carry on any other business in connection with or incidental to any of the foregoing powers, to do everything necessary or desirable to accomplish any purpose or to further any of the foregoing powers, and to take every other action incidental to the foregoing business or purposes, objects or powers.
(y) To sell or exchange any or all of the assets of the Trust, subject to Article IX, Section 4.
(z) To enter into joint ventures, partnerships and other combinations and associations.
(aa) To join with other security holders in acting through a committee, depositary, voting trustee or otherwise, and in that connection to deposit any security with, or transfer any security to, any such committee, depositary or trustee, and to delegate to them such power and authority with relation to any security (whether or not so deposited or transferred) as the Trustees shall deem
proper, and to agree to pay, and to pay, such portion of the expenses and compensation of such Committee, depositary or trustee as the Trustees shall deem proper;
(bb) To purchase and pay for entirely out of Trust Property such insurance as the Trustees may deem necessary or appropriate for the conduct of the business, including, without limitation, insurance policies insuring the assets of the Trust or payment of distributions and principal on its portfolio investments, and, subject to applicable law and any restrictions set forth in the By-laws, insurance policies insuring the Shareholders, Trustees, officers, employees, agents, investment advisers, Principal Underwriters, or independent contractors of the Trust, individually, against all claims and liabilities of every nature arising by reason of holding Shares, holding, being or having held any such office or position, or by reason of any action alleged to have been taken or omitted by any such Person as Trustee, officer, employee, agent, investment adviser, Principal underwriter, or independent contractor, including any action taken or omitted that may be determined to constitute negligence, whether or not the Trust would have the power to indemnify such Person against liability;
(cc) To adopt, establish and carry out pension, profit-sharing, share bonus, share purchase, savings, thrift and other retirement, incentive and benefit plans and trusts, including the purchasing of life insurance and annuity contracts as a means of providing such retirement and other benefits, for any or all of the Trustees, officers, employees and agents of the Trust;
(dd) To enter into contracts of any kind and description;
(ee) To interpret the investment policies, practices or limitations of any Series or Class; and
(ff) To guarantee indebtedness and contractual obligations of others.
The clauses above shall be construed as objects and powers, and the enumeration of specific powers shall not limit in any way the general powers of the Trustees. Any action by one or more of the Trustees in their capacity as such hereunder shall be deemed an action on behalf of the Trust or the applicable Series, and not an action in an individual capacity. No one dealing with the Trustees shall be under any obligation to make any inquiry concerning the authority of the Trustees, or to see to the application of any payments made
or property transferred to the Trustees or upon their order. In construing this Declaration, the presumption shall be in favor of a grant of power to the Trustees.
Section 3. Certain Transactions. Except as prohibited by applicable law, the Trustees may, on behalf of the Trust, buy any securities from or sell any securities to, or lend any assets of the Trust to, any Trustee or officer of the Trust or any firm of which any such Trustee or officer is a member acting as principal, or have any such dealings with any investment adviser, administrator, distributor or transfer agent for the Trust or with any Interested Person of such person. The Trust may employ any such person or entity in which such person is an Interested Person, as broker, legal counsel, registrar, investment adviser, administrator, distributor, transfer agent, dividend disbursing agent, custodian or in any other capacity upon customary terms.
Section 4. Initial Trustees; Election and Number of Trustees. The
initial Trustees shall be the person initially signing this Declaration. The
number of Trustees (other than the initial Trustees) shall be fixed from time to
time by a majority of the Trustees; provided, that there shall be at least one
(1) Trustee and no more than fifteen (15). The Shareholders shall elect the
Trustees (other than the initial Trustees) on such dates as the Trustees may fix
from time to time.
Section 5. Term of Office of Trustees. Each Trustee shall hold office
for life or until his successor is elected or the Trust terminates; except that
(a) any Trustee may resign by delivering to the other Trustees or to any Trust
officer a written resignation effective upon such delivery or a later date
specified therein; (b) any Trustee may be removed with or without cause at any
time by a written instrument signed by at least a majority of the then Trustees,
specifying the effective date of removal; (c) any Trustee who requests to be
retired, or who is declared bankrupt or has become physically or mentally
incapacitated or is otherwise unable to serve, may be retired by a written
instrument signed by a majority of the other Trustees, specifying the effective
date of retirement; and (d) any Trustee may be removed at any meeting of the
Shareholders by a vote of at least twoAthirds of the Outstanding Shares.
Section 6. Vacancies; Appointment of Trustees. Whenever a vacancy shall exist in the Board of Trustees, regardless of the reason for such vacancy, the remaining Trustees shall appoint any person as they determine in their sole discretion to fill that vacancy, consistent with the limitations under the 1940 Act. Such appointment shall be made by a written instrument signed by a majority
of the Trustees or by a resolution of the Trustees, duly adopted and recorded in the records of the Trust, specifying the effective date of the appointment. The Trustees may appoint a new Trustee as provided above in anticipation of a vacancy expected to occur because of the retirement, resignation or removal of a Trustee, or an increase in number of Trustees, provided that such appointment shall become effective only at or after the expected vacancy occurs. As soon as any such Trustee has accepted his appointment in writing, the trust estate shall vest in the new Trustee, together with the continuing Trustees, without any further act or conveyance, and he shall be deemed a Trustee hereunder. The Trustees' power of appointment is subject to Section 16(a) of the 1940 Act. Whenever a vacancy in the number of Trustees shall occur, until such vacancy is filled as provided in this Article II, the Trustees in office, regardless of their number, shall have all the powers granted to the Trustees and shall discharge all the duties imposed upon the Trustees by the Declaration. The death, declination to serve, resignation, retirement, removal or incapacity of one or more Trustees, or all of them, shall not operate to annul the Trust or to revoke any existing agency created pursuant to the terms of this Declaration of Trust.
Section 7. Temporary Vacancy or Absence. Whenever a vacancy in the Board of Trustees shall occur, until such vacancy is filled, or while any Trustee is absent from his domicile (unless that Trustee has made arrangements to be informed about, and to participate in, the affairs of the Trust during such absence), or is physically or mentally incapacitated, the remaining Trustees shall have all the powers hereunder and their certificate as to such vacancy, absence, or incapacity shall be conclusive. Any Trustee may, by power of attorney, delegate his powers as Trustee for a period not exceeding six (6) months at any one time to any other Trustee or Trustees.
Section 8. Chairman. The Trustees shall appoint one of their number to be Chairman of the Board of Trustees. The Chairman shall preside at all meetings of the Trustees, shall be responsible for the execution of policies established by the Trustees and the administration of the Trust, and may be the chief executive, financial and/or accounting officer of the Trust.
Section 9. Action by the Trustees. The Trustees shall act by majority vote at a meeting duly called at which a quorum is present, including a meeting held by conference telephone, teleconference or other electronic media or communication equipment by means of which all persons participating in the
meeting can communicate with each other; or by written consent of a majority of Trustees (or such greater number as may be required by applicable law) without a meeting. A majority of the Trustees shall constitute a quorum at any meeting. Meetings of the Trustees may be called orally or in writing by the President or by any one of the Trustees. Notice of the time, date and place of all Trustees' meetings shall be given to each Trustee as set forth in the By-Laws; provided, however, that no notice is required if the Trustees provide for regular or stated meetings. Notice need not be given to any Trustee who attends the meeting without objecting to the lack of notice or who signs a waiver of notice either before or after the meeting. The Trustees by majority vote may delegate to any Trustee or Trustees or committee authority to approve particular matters or take particular actions on behalf of the Trust. Any written consent or waiver may be provided and delivered to the Trust by facsimile or other similar electronic mechanism.
Section 10. Ownership of Trust Property. The Trust Property of the Trust and of each Series shall be held separate and apart from any assets now or hereafter held in any capacity other than as Trustee hereunder by the Trustees or any successor Trustees. Legal title in and beneficial ownership of all of the assets of the Trust shall at all times be considered as vested in the Trust, except that the Trustees may cause legal title in and beneficial ownership of any Trust Property to be held by, or in the name of one or more of the Trustees acting for and on behalf of the Trust, or in the name of any person as nominee acting for and on behalf of the Trust. No Shareholder shall be deemed to have a severable ownership in any individual asset of the Trust or of any Series or any right of partition or possession thereof, but each Shareholder shall have, as provided in Article V, a proportionate undivided beneficial interest in the Trust or Series or Class thereof represented by Shares. The Shares shall be personal property giving only the rights specifically set forth in this Trust Instrument. The Trust, or at the determination of the Trustees one or more of the Trustees or a nominee acting for and on behalf of the Trust, shall be deemed to hold legal title and beneficial ownership of any income earned on securities of the Trust issued by any business entities formed, organized, or existing under the laws of any jurisdiction, including the laws of any foreign country. Upon the resignation or removal of a Trustee, or his otherwise ceasing to be a Trustee, he shall execute and deliver such documents as the remaining Trustees shall require for the purpose of conveying to the Trust or the remaining Trustees any Trust Property held in the name of the resigning or removed Trustee. Upon the incapacity or death of any Trustee, his legal representative
shall execute and deliver on his behalf such documents as the remaining Trustees shall require as provided in the preceding sentence.
Section 11. Effect of Trustees Not Serving. The death, resignation, retirement, removal, incapacity or inability or refusal to serve of the Trustees, or any one of them, shall not operate to annul the Trust or to revoke any existing agency created pursuant to the terms of this Declaration.
Section 12. Trustees, etc. as Shareholders. Subject to any restrictions in the By-Laws, any Trustee, officer, agent or independent contractor of the Trust may acquire, own and dispose of Shares to the same extent as any other Shareholder; the Trustees may issue and sell Shares to and buy Shares from any such person or any firm or company in which such person is interested, subject only to any general limitations herein.
Section 13. Series of Trustees. In connection with the establishment of one or more Series or Classes, the Trustees establishing such Series or Class may appoint, to the extent permitted by the Delaware Act, separate Trustees with respect to such Series or Classes (the "Series Trustees"). Series Trustees may, but are not required to, serve as Trustees of the Trust or any other Series or Class of the Trust. The Trustees shall have, to the exclusion of any other Trustee of the Trust, all the powers and authorities of Trustees hereunder with respect to such Series or Class, but shall have no power or authority with respect to any other Series or Class. Any provision of this Declaration relating to election of Trustees by Shareholders only shall entitle the Shareholders of a Series or Class for which Series Trustees have been appointed to vote with respect to the election of such Series Trustees and the Shareholders of any other Series or Class shall not be entitled to participate in such vote. In the event that Series Trustees are appointed, the Trustees initially appointing such Series Trustees shall, without the approval of any Outstanding Shares, amend either the Declaration or the By-laws to provide for the respective responsibilities of the Trustees and the Series Trustees in circumstances where an action of the Trustees or Series Trustees affects all Series of the Trust or two or more Series represented by different Trustees.
ARTICLE III
CONTRACTS WITH SERVICE PROVIDERS
Section 1. Underwriting Contract. The Trustees may in their discretion from time to time enter into an exclusive or non-exclusive distribution contract or contracts providing for the sale of the Shares whereby the Trustees may either agree to sell the Shares to the other party to the contract or appoint such other party as their sales agent for the Shares, and in either case on such terms and conditions, if any, as may be prescribed in the By-laws, and such further terms and conditions as the Trustees may in their discretion determine not inconsistent with the provisions of this Article III or of the By-laws; and such contract may also provide for the repurchase of the Shares by such other party as agent of the Trustees.
Section 2. Advisory or Management Contract. The Trustees may in their discretion from time to time enter into one or more investment advisory or management contracts or, if the Trustees establish multiple Series, separate investment advisory or management contracts with respect to one or more Series whereby the other party or parties to any such contracts shall undertake to furnish the Trust or such Series management, investment advisory, administration, accounting, legal, statistical and research facilities and services, promotional or marketing activities, and such other facilities and services, if any, as the Trustees shall from time to time consider desirable and all upon such terms and conditions as the Trustees may in their discretion determine. Notwithstanding any provisions of the Declaration, the Trustees may authorize the Investment Advisers or persons to whom the Investment Adviser delegates certain or all of their duties, or any of them, under any such contracts (subject to such general or specific instructions as the Trustees may from time to time adopt) to effect purchases, sales, loans or exchanges of portfolio securities and other investments of the Trust on behalf of the Trustees or may authorize any officer, employee or Trustee to effect such purchases, sales, loans or exchanges pursuant to recommendations of such Investment Advisers, or any of them (and all without further action by the Trustees). Any such purchases, sales, loans and exchanges shall be deemed to have been authorized by all of the Trustees.
Section 3. Administration Agreement. The Trustees may in their discretion from time to time enter into an administration agreement or, if the Trustees establish multiple Series or Classes separate administration agreements with respect to each Series or Class, whereby the other party to such agreement
shall undertake to manage the business affairs of the Trust or of a Series or Class thereof of the Trust and furnish the Trust or a Series or a Class thereof with office facilities, and shall be responsible for the ordinary clerical, bookkeeping and recordkeeping services at such office facilities, and other facilities and services, if any, and all upon such terms and conditions as the Trustees may in their discretion determine.
Section 4. Service Agreement. The Trustees may in their discretion from time to time enter into service agreements with respect to one or more Series or Classes of Shares whereby the other parties to such Service Agreements will provide administration and/or support services pursuant to administration plans and service plans, and all upon such terms and conditions as the Trustees in their discretion may determine.
Section 5. Transfer Agent. The Trustees may in their discretion from time to time enter into a transfer agency and shareholder service contract whereby the other party to such contract shall undertake to furnish transfer agency and shareholder services to the Trust. The contract shall have such terms and conditions as the Trustees may in their discretion determine not inconsistent with the Declaration. Such services may be provided by one or more Persons.
Section 6. Custodian. The Trustees may appoint or otherwise engage one or more banks or trust companies, each having an aggregate capital, surplus and undivided profits (as shown in its last published report) of at least two million dollars ($2,000,000), or any other entity satisfying the requirements of the 1940 Act, to serve as Custodian with authority as its agent, but subject to such restrictions, limitations and other requirements, if any, as may be contained in the By-laws of the Trust. The Trustees may also authorize the Custodian to employ one or more sub-custodians, including such foreign banks and securities depositories as meet the requirements of applicable provisions of the 1940 Act, and upon such terms and conditions as may be agreed upon between the Custodian and such sub-custodian, to hold securities and other assets of the Trust and to perform the acts and services of the Custodian, subject to applicable provisions of law and resolutions adopted by the Trustees.
Section 7. Affiliations of Trustees or Officers, Etc. The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust or any Series thereof is a shareholder, director, officer, partner, trustee, employee, manager, adviser or distributor of or for any partnership, corporation, trust, association or other organization or of or for any parent or affiliate of any organization, with which a contract of the character described in this Article III or for services as Custodian, Transfer Agent or disbursing agent or for related services may have been or may hereafter be made, or that any such organization, or any parent or affiliate thereof, is a Shareholder of or has an interest in the Trust, or that
(ii) any partnership, corporation, trust, association or other organization with which a contract of the character described in Sections 1, 2, 3 or 4 of this Article III or for services as Custodian, Transfer Agent or disbursing agent or for related services may have been or may hereafter be made also has any one or more of such contracts with one or more other partnerships, corporations, trusts, associations or other organizations, or has other business or interests, shall not affect the validity of any such contract or disqualify any Shareholder, Trustee or officer of the Trust from voting upon or executing the same or create any liability or accountability to the Trust or its Shareholders.
Article IV
COMPENSATION, LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 1. Compensation. The Trustees as such shall be entitled to reasonable compensation from the Trust, and they may fix the amount of such compensation. Nothing herein shall in any way prevent the employment of any Trustee for advisory, management, legal, accounting, investment banking or other services and payment for the same by the Trust.
Section 2. Limitation of Liability. All persons contracting with or having any claim against the Trust or a particular Series shall look only to the assets of all Series or such particular Series for payment under such contract or claim; and neither the Trustees nor, when acting in such capacity, any of the Trust's officers, employees or agents, whether past, present or future, shall be personally liable therefor. Every written instrument or obligation on behalf of the Trust or any Series shall contain a statement to the foregoing effect, but the absence of such statement shall not operate to make any Trustee or officer of the Trust liable thereunder. Provided they have exercised reasonable care and have acted under the reasonable belief that their actions are in the best interest of the Trust, the Trustees and officers of the Trust shall not be responsible or liable for any act or omission or for neglect or wrongdoing of them or any officer, agent, employee, investment adviser or independent contractor of the Trust, but nothing contained in this Declaration or in the Delaware Act shall protect any Trustee or officer of the Trust against liability to the Trust or to Shareholders to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office.
Section 3. Indemnification. (a)Subject to the exceptions and limitations contained in subSection (b) below:
(i) every person who is, or has been, a Trustee or an officer, employee or agent of the Trust (including any individual who serves at its request as director, officer, partner, trustee or the like of another organization in which it has any interest as a shareholder, creditor or otherwise) ("Covered Person") shall be indemnified by the Trust or the appropriate Series to the fullest extent permitted by law against liability and against all expenses reasonably incurred or paid by him in connection with any claim, action, suit or proceeding in which he becomes
involved as a party or otherwise by virtue of his being or having been a Covered Person and against amounts paid or incurred by him in the settlement thereof; and
(ii) as used herein, the words "claim," "action," "suit," or "proceeding" shall apply to all claims, actions, suits or proceedings (civil, criminal or other, including appeals), actual or threatened, and the words "liability" and "expenses" shall include, without limitation, attorneys' fees, costs, judgments, amounts paid in settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered Person:
(i) who shall have been adjudicated by a court or body before which the proceeding was brought (A) to be liable to the Trust or its Shareholders by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office, or (B) not to have acted in good faith in the reasonable belief that his action was in the best interest of the Trust; or
(ii) in the event of a settlement, unless there has been a determination that such Covered Person did not engage in willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office; (A) by the court or other body approving the settlement; (B) by at least a majority of those Trustees who are neither Interested Persons of the Trust nor are parties to the matter based upon a review of readily available facts (as opposed to a full trial-type inquiry); (C) by written opinion of independent legal counsel based upon a review of readily available facts (as opposed to a full trial-type inquiry) or (D) by a vote of a majority of the Outstanding Shares entitled to vote (excluding any Outstanding Shares owned of record or beneficially by such individual).
(c) The rights of indemnification herein provided may be insured against by policies maintained by the Trust, shall be severable, shall not be exclusive of or affect any other rights to which any Covered Person may now or
hereafter be entitled, and shall inure to the benefit of the heirs, executors and administrators of a Covered Person.
(d) To the maximum extent permitted by applicable law, expenses in
connection with the preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in subSection (a) of this
Section may be paid by the Trust or applicable Series from time to time prior to
final disposition thereof upon receipt of an undertaking by or on behalf of such
Covered Person that such amount will be paid over by him to the Trust or
applicable Series if it is ultimately determined that he is not entitled to
indemnification under this Section; provided, however, that either (i) such
Covered Person shall have provided appropriate security for such undertaking,
(ii) the Trust is insured against losses arising out of any such advance
payments or (iii) either a majority of the Trustees who are neither Interested
Persons of the Trust nor parties to the matter, or independent legal counsel in
a written opinion, shall have determined, based upon a review of readily
available facts (as opposed to a full trial-type inquiry) that there is reason
to believe that such Covered Person will not be disqualified from
indemnification under this Section.
(e) Any repeal or modification of this Article IV by the Shareholders, or adoption or modification of any other provision of the Declaration or By- laws inconsistent with this Article, shall be prospective only, to the extent that such repeal, or modification would, if applied retrospectively, adversely affect any limitation on the liability of any Covered Person or indemnification available to any Covered Person with respect to any act or omission which occurred prior to such repeal, modification or adoption.
Section 3. Indemnification of Shareholders. If any Shareholder or former Shareholder of any Series shall be held personally liable solely by reason of his being or having been a Shareholder and not because of his acts or omissions or for some other reason, the Shareholder or former Shareholder (or his heirs, executors, administrators or other legal representatives or in the case of any entity, its general successor) shall be entitled out of the assets belonging to the applicable Series to be held harmless from and indemnified against all loss and expense arising from such liability. The Trust, on behalf of the affected Series, shall, upon request by such Shareholder, assume the defense of any claim made against such Shareholder for any act or obligation of the Series and satisfy any judgment thereon from the assets of the Series.
Section 4. No Bond Required of Trustees. No Trustee shall be obligated to give any bond or other security for the performance of any of his duties hereunder.
Section 5. No Duty of Investigation; Notice in Trust Instruments, Etc. No purchaser, lender, transfer agent or other Person dealing with the Trustees or any officer, employee or agent of the Trust or a Series thereof shall be bound to make any inquiry concerning the validity of any transaction purporting to be made by the Trustees or by said officer, employee or agent or be liable for the application of money or property paid, loaned, or delivered to or on the order of the Trustees or of said officer, employee or agent. Every obligation, contract, instrument, certificate, Share, other security of the Trust or a Series thereof or undertaking, and every other act or thing whatsoever executed in connection with the Trust shall be conclusively presumed to have been executed or done by the executors thereof only in their capacity as Trustees under this Declaration or in their capacity as officers, employees or agents of the Trust or a Series thereof. Every written obligation, contract, instrument, certificate, Share, other security of the Trust or a Series thereof or undertaking made or issued by the Trustees may recite that the same is executed or made by them not individually, but as Trustees under the Declaration, and that the obligations of the Trust or a Series thereof under any such instrument are not binding upon any of the Trustees or Shareholders individually, but bind only the Trust Property or the Trust Property of the applicable Series, and may contain any further recital which they may deem appropriate, but the omission of such recital shall not operate to bind the Trustees individually. The Trustees shall at all times maintain insurance for the protection of the Trust Property or the Trust Property of the applicable Series, its Shareholders, Trustees, officers, employees and agents in such amount as the Trustees shall deem adequate to cover possible tort liability, and such other insurance as the Trustees in their sole judgment shall deem advisable.
Section 6. Reliance on Experts, Etc. Each Trustee, officer or employee of the Trust or a Series thereof shall, in the performance of his duties, powers and discretions hereunder be fully and completely justified and protected with regard to any act or any failure to act resulting from reliance in good faith upon the books of account or other records of the Trust or a Series thereof, upon an opinion of counsel, or upon reports made to the Trust or a Series thereof by any of its officers or employees or by the Investment Adviser, the Administrator, the Distributor, Transfer Agent, selected dealers, accountants,
appraisers or other experts or consultants selected with reasonable care by the Trustees, officers or employees of the Trust, regardless of whether such counsel or expert may also be a Trustee.
Article V
SERIES; CLASSES; SHARES
Section 1. Establishment of Series or Class. The Trust shall consist of one or more Series. The Trustees hereby establish a single Series which shall be designated Pioneer Winthrop Real Estate Investment Fund. Each additional Series shall be established and is effective upon the adoption of a resolution of a majority of the Trustees or any alternative date specified in such resolution. The Trustees may designate the relative rights and preferences of the Shares of each Series. The Trustees may divide the Shares of any Series into Classes. The Shares of the existing Series and each Class thereof herein established and designated and any Shares of any further Series and Classes that may from time to time be established and designated by the Trustees shall be established and designated, and the variations in the relative rights and preferences as between the different Series shall be fixed and determined, by the Trustees; provided, that all Shares shall be identical except for such variations as shall be fixed and determined between different Series or Classes by the Trustees in establishing and designating such Class or Series. All references to Shares in this Declaration shall be deemed to be Shares of any or all Series or Classes as the context may require. The Trust shall maintain separate and distinct records for each Series and hold and account for the assets thereof separately from the other assets of the Trust or of any other Series. A Series may issue any number of Shares or any Class thereof and need not issue Shares. Each Share of a Series shall represent an equal beneficial interest in the net assets of such Series. Each holder of Shares of a Series or a Class thereof shall be entitled to receive his pro rata share of all distributions made with respect to such Series or Class. Upon redemption of his Shares, such Shareholder shall be paid solely out of the funds and property of such Series. The Trustees may adopt and change the name of any Series or Class.
Section 2. Shares. The beneficial interest in the Trust shall be divided into transferable Shares of one or more separate and distinct Series or
Classes established by the Trustees. The number of Shares of each Series and Class is unlimited and each Share shall have no par value per Share or such other amount as the Trustees may establish. All Shares issued hereunder shall be fully paid and nonassessable. Shareholders shall have no preemptive or other right to subscribe to any additional Shares or other securities issued by the Trust. The Trustees shall have full power and authority, in their sole discretion and without obtaining Shareholder approval, to issue original or additional Shares at such times and on such terms and conditions as they deem appropriate; to issue fractional Shares and Shares held in the treasury; to establish and to change in any manner Shares of any Series or Classes with such preferences, terms of conversion, voting powers, rights and privileges as the Trustees may determine (but the Trustees may not change Outstanding Shares in a manner materially adverse to the Shareholders of such Shares); to divide or combine the Shares of any Series or Classes into a greater or lesser number; to classify or reclassify any unissued Shares of any Series or Classes into one or more Series or Classes of Shares; to abolish any one or more Series or Classes of Shares; to issue Shares to acquire other assets (including assets subject to, and in connection with, the assumption of liabilities) and businesses; and to take such other action with respect to the Shares as the Trustees may deem desirable. Shares held in the treasury shall not confer any voting rights on the Trustees and shall not be entitled to any dividends or other distributions declared with respect to the Shares.
Section 3. Investment in the Trust. The Trustees shall accept
investments in any Series or Class from such persons and on such terms as they
may from time to time authorize. At the Trustees' discretion, such investments,
subject to applicable law, may be in the form of cash or securities in which
that Series is authorized to invest, valued as provided in Article VI,
Section 3. Investments in a Series shall be credited to each Shareholder's
account in the form of full Shares at the Net Asset Value per Share next
determined after the investment is received or accepted as may be determined by
the Trustees; provided, however, that the Trustees may, in their sole
discretion, (a) impose a sales charge upon investments in any Series or Class,
(b) issue fractional Shares, (c) determine the Net Asset Value per Share of the
initial capital contribution or (d) authorize the issuance of Shares at a price
other than Net Asset Value to the extent permitted by the 1940 Act or any rule,
order or interpretation of the Commission thereunder. The Trustees shall have
the right to refuse to accept investments in any Series at any time without any
cause or reason therefor whatsoever.
Section 4. Assets and Liabilities of Series. All consideration received by the Trust for the issue or sale of Shares of a particular Series, together with all assets in which such consideration is invested or reinvested, all income, earnings, profits, and proceeds thereof (including any proceeds derived from the sale, exchange or liquidation of such assets, and any funds or payments derived from any reinvestment of such proceeds in whatever form the same may be), shall be held and accounted for separately from the assets of every other Series and are referred to as "assets belonging to" that Series. The assets belonging to a Series shall belong only to that Series for all purposes, and to no other Series, subject only to the rights of creditors of that Series. Any assets, income, earnings, profits, and proceeds thereof, funds, or payments which are not readily identifiable as belonging to any particular Series shall be allocated by the Trustees between and among one or more Series as the Trustees deem fair and equitable. Each such allocation shall be conclusive and binding upon the Shareholders of all Series for all purposes, and such assets, earnings, income, profits or funds, or payments and proceeds thereof shall be referred to as assets belonging to that Series. The assets belonging to a Series shall be so recorded upon the books of the Trust, and shall be held by the Trustees in trust for the benefit of the Shareholders of that Series. The assets belonging to a Series shall be charged with the liabilities of that Series and all expenses, costs, charges and reserves attributable to that Series, except that liabilities and expenses allocated solely to a particular Class shall be borne by that Class. Any general liabilities, expenses, costs, charges or reserves of the Trust which are not readily identifiable as belonging to any particular Series or Class shall be allocated and charged by the Trustees between or among any one or more of the Series or Classes in such manner as the Trustees deem fair and equitable. Each such allocation shall be conclusive and binding upon the Shareholders of all Series or Classes for all purposes.
Without limiting the foregoing, but subject to the right of the Trustees to allocate general liabilities, expenses, costs, charges or reserves as herein provided, the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a particular Series shall be enforceable against the assets of such Series only, and not against the assets of any other Series. Notice of this contractual limitation on liabilities among Series may, in the Trustees' discretion, be set forth in the certificate of trust of the Trust (whether originally or by amendment) as filed or to be filed in the Office of the Secretary of State of the State of Delaware pursuant to the Delaware Act, and upon the giving of such notice in the certificate of
trust, the statutory provisions of Section 3804 of the Delaware Act relating to
limitations on liabilities among Series (and the statutory effect under
Section 3804 of setting forth such notice in the certificate of trust) shall
become applicable to the Trust and each Series. Any person extending credit to,
contracting with or having any claim against any Series may look only to the
assets of that Series to satisfy or enforce any debt, with respect to that
Series. No Shareholder or former Shareholder of any Series shall have a claim on
or any right to any assets allocated or belonging to any other Series.
Section 5. Ownership and Transfer of Shares. The Trust or a transfer or similar agent for the Trust shall maintain a register containing the names and addresses of the Shareholders of each Series and Class thereof, the number of Shares of each Series and Class held by such Shareholders, and a record of all Share transfers. The register shall be conclusive as to the identity of Shareholders of record and the number of Shares held by them from time to time. The Trustees may authorize the issuance of certificates representing Shares and adopt rules governing their use. The Trustees may make rules governing the transfer of Shares, whether or not represented by certificates. Except as otherwise provided by the Trustees, Shares shall be transferable on the books of the Trust only by the record holder thereof or by his duly authorized agent upon delivery to the Trustees or the Trust's transfer agent of a duly executed instrument of transfer, together with a Share certificate if one is outstanding, and such evidence or the genuineness of each such execution and authorization and of such other matters as may be required by the Trustees. Upon such delivery, and subject to any further requirements specified by the Trustees or contained in the By-laws, the transfer shall be recorded on the books of the Trust. Until a transfer is so recorded, the Shareholder of record of Shares shall be deemed to be the holder of such Shares for all purposes hereunder and neither the Trustees nor the Trust, nor any transfer agent or registrar or any officer, employee or agent of the Trust, shall be affected by any notice of a proposed transfer.
Section 6. Status of Shares; Limitation of Shareholder Liability. Shares shall be deemed to be personal property giving Shareholders only the rights provided in this Declaration. Every Shareholder, by virtue of having acquired a Share, shall be held expressly to have assented to and agreed to be bound by the terms of this Declaration and to have become a party hereto. No Shareholder shall be personally liable for the debts, liabilities, obligations and expenses incurred by, contracted for, or otherwise existing with respect to,
the Trust or any Series. The death, incapacity, dissolution, termination or bankruptcy of a Shareholder during the existence of the Trust shall not operate to terminate the Trust, nor entitle the representative of any such Shareholder to an accounting or to take any action in court or elsewhere against the Trust or the Trustees, but entitles such representative only to the rights of such Shareholder under this Trust. Ownership of Shares shall not entitle the Shareholder to any title in or to the whole or any part of the Trust Property or right to call for a partition or division of the same or for an accounting, nor shall the ownership of Shares constitute the Shareholders as partners. Neither the Trust nor the Trustees shall have any power to bind any Shareholder personally or to demand payment from any Shareholder for anything, other than as agreed by the Shareholder. Shareholders shall have the same limitation of personal liability as is extended to shareholders of a private corporation for profit incorporated in the State of Delaware. Every written obligation of the Trust or any Series shall contain a statement to the effect that such obligation may only be enforced against the assets of the appropriate Series or all Series; however, the omission of such statement shall not operate to bind or create personal liability for any Shareholder or Trustee.
Article VI
DISTRIBUTIONS AND REDEMPTIONS
Section 1. Distributions. The Trustees or a committee of one or more Trustees and one or more officers may declare and pay dividends and other distributions, including dividends on Shares of a particular Series and other distributions from the assets belonging to that Series. No dividend or distribution, including, without limitation, any distribution paid upon termination of the Trust or of any Series (or Class) with respect to, nor any redemption or repurchase of, the Shares of any Series (or Class) shall be effected by the Trust other than from the assets held with respect to such Series, nor shall any Shareholder of any particular Series otherwise have any right or claim against the assets held with respect to any other Series except to the extent that such Shareholder has such a right or claim hereunder as a Shareholder of such other Series. The Trustees shall have full discretion to determine which items shall be treated as income and which items as capital; and each such determination and allocation shall be conclusive and binding upon the Shareholders. The amount and payment of dividends or distributions and their form, whether they are in cash, Shares or other Trust Property, shall be
determined by the Trustees. Dividends and other distributions may be paid pursuant to a standing resolution adopted once or more often as the Trustees determine. All dividends and other distributions on Shares of a particular Series shall be distributed pro rata to the Shareholders of that Series in proportion to the number of Shares of that Series they held on the record date established for such payment, except that such dividends and distributions shall appropriately reflect expenses allocated to a particular Class of such Series. The Trustees may adopt and offer to Shareholders such dividend reinvestment plans, cash dividend payout plans or similar plans as the Trustees deem appropriate.
Section 2. Redemptions. Each Shareholder of a Series shall have the right at such times as may be permitted by the Trustees to require the Series to redeem all or any part of his Shares at a redemption price per Share equal to the Net Asset Value per Share at such time as the Trustees shall have prescribed by resolution, or, to the extent permitted by the 1940 Act, at such other redemption price and at such times as the Trustees shall prescribe by resolution. In the absence of such resolution, the redemption price per Share shall be the Net Asset Value next determined after receipt by the Series of a request for redemption in proper form less such charges as are determined by the Trustees and described in the Trust's Registration Statement for that Series under the Securities Act of 1933. The Trustees may specify conditions, prices, and places of redemption, may specify binding requirements for the proper form or forms of requests for redemption and may specify the amount of any deferred sales charge to be withheld from redemption proceeds. Payment of the redemption price may be wholly or partly in securities or other assets at the value of such securities or assets used in such determination of Net Asset Value, or may be in cash. Upon redemption, Shares may be reissued from time to time. The Trustees may require Shareholders to redeem Shares for any reason under terms set by the Trustees, including, but not limited to, the failure of a Shareholder to supply a taxpayer identification number if required to do so, or to have the minimum investment required, or to pay when due for the purchase of Shares issued to him. To the extent permitted by law, the Trustees may retain the proceeds of any redemption of Shares required by them for payment of amounts due and owing by a Shareholder to the Trust or any Series or Class or any governmental authority. Notwithstanding the foregoing, the Trustees may postpone payment of the redemption price and may suspend the right of the Shareholders to require any Series or Class to redeem Shares during any period of time when and to the extent permissible under the 1940 Act.
Section 3. Determination of Net Asset Value. The Trustees shall cause the Net Asset Value of Shares of each Series or Class to be determined from time to time in a manner consistent with applicable laws and regulations. The Trustees may delegate the power and duty to determine Net Asset Value per Share to one or more Trustees or officers of the Trust or to a custodian, depository or other agent appointed for such purpose. The Net Asset Value of Shares shall be determined separately for each Series or Class at such times as may be prescribed by the Trustees or, in the absence of action by the Trustees, as of the close of regular trading on the New York Stock Exchange on each day for all or part of which such Exchange is open for unrestricted trading.
Section 4. Suspension of Right of Redemption. If, as referred to in
Section 2 of this Article, the Trustees postpone payment of the redemption price
and suspend the right of Shareholders to redeem their Shares, such suspension
shall take effect at the time the Trustees shall specify, but not later than the
close of business on the business day next following the declaration of
suspension. Thereafter Shareholders shall have no right of redemption or payment
until the Trustees declare the end of the suspension. If the right of redemption
is suspended, a Shareholder may either withdraw his request for redemption or
receive payment based on the Net Asset Value per Share next determined after the
suspension terminates.
Section 5. Repurchase by Agreement. The Trust may repurchase Shares directly, or through the Distributor or another agent designated for the purpose, by agreement with the owner thereof at a price not exceeding the Net Asset Value per Share determined as of the time when the purchase or contract of purchase is made or the Net Asset Value as of any time which may be later determined, provided payment is not made for the Shares prior to the time as of which such Net Asset Value is determined.
Article VII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 1. Voting Powers. The Shareholders shall have power to vote
only with respect to (a) the election of Trustees as provided in Section 2 of
this Article; (b) the removal of Trustees as provided in Article II,
Section 3(d); (c) any investment advisory or management contract as provided in
Article VIII, Section 1; (d) any termination of the Trust as provided in
Article IX, Section 4; (e) the amendment of this Declaration to the extent and
as provided in Article X, Section 8; and (f) such additional matters relating to
the Trust as may be required or authorized by law, this Declaration, or the By-Laws or any registration of the Trust with the Commission or any State, or as the Trustees may consider desirable.
On any matter submitted to a vote of the Shareholders, all Shares shall be voted by individual Series or Class, except (a) when required by the 1940 Act, Shares shall be voted in the aggregate and not by individual Series or Class, and (b) when the Trustees have determined that the matter affects the interests of more than one Series or Class, then the Shareholders of all such Series or Classes shall be entitled to vote thereon. As determined by the Trustees without the vote or consent of shareholders, on any matter submitted to a vote of Shareholders either (i) each whole Share shall be entitled to one vote as to any matter on which it is entitled to vote and each fractional Share shall be entitled to a proportionate fractional vote or (ii) each dollar of net asset value (number of Shares owned times net asset value per share of such Series or Class, as applicable) shall be entitled to one vote on any matter on which such Shares are entitled to vote and each fractional dollar amount shall be entitled to a proportionate fractional vote. Without limiting the power of the Trustees in any way to designate otherwise in accordance with the preceding sentence, the Trustees hereby establish that each whole Share shall be entitled to one vote as to any matter on which it is entitled to vote and each fractional Share shall be entitled to a proportionate fractional vote. There shall be no cumulative voting in the election of Trustees. Shares may be voted in person or by proxy or in any manner provided for in the By-Laws. The By-Laws may provide that proxies may be given by any electronic or telecommunications device or in any other manner, but if a proposal by anyone other than the officers or Trustees is submitted to a vote of the Shareholders of any Series or Class, or if there is a proxy contest or proxy solicitation or proposal in opposition to any proposal by the officers or Trustees, Shares may be voted only in person or by written proxy. Until Shares of a Series are issued, as to that Series the Trustees may exercise all rights of Shareholders and may take any action required or permitted to be taken by Shareholders by law, this Declaration or the By-Laws. Meetings of Shareholders shall be called and notice thereof and record dates therefor shall be given and set as provided in the By-laws.
Section 2. Quorum; Required Vote. OneAthird of the Outstanding Shares of each Series or Class, or oneAthird of the Outstanding Shares of the Trust, entitled to vote in person or by proxy shall be a quorum for the transaction of
business at a Shareholders' meeting with respect to such Series or Class, or with respect to the entire Trust, respectively. Any lesser number shall be sufficient for adjournments. Any adjourned session of a Shareholders' meeting may be held within a reasonable time without further notice. Except when a larger vote is required by law, this Declaration or the By-Laws, a majority of the Shares voting at a Shareholders' meeting in person or by proxy shall decide any matters to be voted upon with respect to the entire Trust and a plurality of such Shares shall elect a Trustee; provided, that if this Declaration or applicable law permits or requires that Shares be voted on any matter by individual Series or Classes, then a majority of the Shares of that Series or Class (or, if required by law, a majority of the Shares outstanding and entitled to vote of that Series or Class) voting at a Shareholders' meeting in person or by proxy on the matter shall decide that matter insofar as that Series or Class is concerned. Shareholders may act as to the Trust or any Series or Class by the written consent of a majority (or such other amount as may be required by applicable law) of the Outstanding Shares of the Trust or of such Series or Class, as the case may be.
Section 3. Record Dates. For the purpose of determining the Shareholders of any Series (or Class) who are entitled to receive payment of any dividend or of any other distribution, the Trustees may from time to time fix a date, which shall be before the date for the payment of such dividend or such other payment, as the record date for determining the Shareholders of such Series (or Class) having the right to receive such dividend or distribution. Without fixing a record date, the Trustees may for distribution purposes close the register or transfer books for one or more Series (or Classes) any time prior to the payment of a distribution. Nothing in this Section shall be construed as precluding the Trustees from setting different record dates for different Series (or Classes).
Section 4. Additional Provisions. The By-laws may include further provisions for Shareholders' votes and meetings and related matters.
Article VIII
EXPENSES OF THE TRUST AND SERIES
Section 1. Payment of Expenses by the Trust. Subject to Article V,
Section 4, the Trust or a particular Series shall pay, or shall reimburse the
Trustees from the assets belonging to all Series or the particular Series, for
their expenses (or the expenses of a Class of such Series) and disbursements,
including, but not limited to, interest charges, taxes, brokerage fees and commissions; expenses of issue, repurchase and redemption of Shares; certain insurance premiums; applicable fees, interest charges and expenses of third parties, including the Trust's investment advisers, managers, administrators, distributors, custodians, transfer agents and fund accountants; fees of pricing, interest, dividend, credit and other reporting services; costs of membership in trade associations; telecommunications expenses; funds transmission expenses; auditing, legal and compliance expenses; costs of forming the Trust and its Series and maintaining its existence; costs of preparing and printing the prospectuses of the Trust and each Series, statements of additional information and Shareholder reports and delivering them to Shareholders; expenses of meetings of Shareholders and proxy solicitations therefor; costs of maintaining books and accounts; costs of reproduction, stationery and supplies; fees and expenses of the Trustees; compensation of the Trust's officers and employees and costs of other personnel performing services for the Trust or any Series; costs of Trustee meetings; Commission registration fees and related expenses; state or foreign securities laws registration fees and related expenses; and for such nonA recurring items as may arise, including litigation to which the Trust or a Series (or a Trustee or officer of the Trust acting as such) is a party, and for all losses and liabilities by them incurred in administering the Trust. The Trustees shall have a lien on the assets belonging to the appropriate Series, or in the case of an expense allocable to more than one Series, on the assets of each such Series, prior to any rights or interests of the Shareholders thereto, for the reimbursement to them of such expenses, disbursements, losses and liabilities.
Section 2. Payment of Expenses by Shareholders. The Trustees shall have the power, as frequently as they may determine, to cause each Shareholder, or each Shareholder of any particular Series, to pay directly, in advance or arrears, for charges of the Trust's custodian or transfer, shareholder servicing or similar agent, an amount fixed from time to time by the Trustees, by setting off such charges due from such Shareholder from declared but unpaid dividends owed such Shareholder and/or by reducing the number of Shares in the account of such Shareholder by that number of full and/or fractional Shares which represents the outstanding amount of such charges due from such Shareholder.
Article IX
MISCELLANEOUS
Section 1. Trust Not a Partnership. This Declaration creates a trust and not a partnership. No Trustee shall have any power to bind personally either the Trust's officers or any Shareholder.
Section 2. Trustee Action. The exercise by the Trustees of their powers and discretion hereunder in good faith and with reasonable care under the circumstances then prevailing shall be binding upon everyone interested. Subject to the provisions of Article IV, the Trustees shall not be liable for errors of judgment or mistakes of fact or law.
Section 3. Record Dates. The Trustees may fix in advance a date up to ninety (90) days before the date of any Shareholders' meeting, or the date for the payment of any dividends or other distributions, or the date for the allotment of rights, or the date when any change or conversion or exchange of Shares shall go into effect as a record date for the determination of the Shareholders entitled to notice of, and to vote at, any such meeting, or entitled to receive payment of such dividend or other distribution, or to receive any such allotment of rights, or to exercise such rights in respect of any such change, conversion or exchange of Shares.
Section 4. Termination of the Trust. (a) This Trust shall have perpetual existence. Subject to the vote of a majority of the Shares outstanding and entitled to vote of the Trust or of each Series to be affected, the Trustees may
(i) sell and convey all or substantially all of the assets of all Series or any affected Series to another Series or to another entity which is an openAend investment company as defined in the 1940 Act, or is a series thereof, for adequate consideration, which may include the assumption of all outstanding obligations, taxes and other liabilities, accrued or contingent, of the Trust or any affected Series, and which may include shares of or interests in such Series, entity, or series thereof; or
(ii) at any time sell and convert into money all or substantially all of the assets of all Series or any affected Series.
Upon making reasonable provision for the payment of all known liabilities of all Series or any affected Series in either (i) or (ii), by such assumption or otherwise, the Trustees shall distribute the remaining proceeds or assets (as the case may be) ratably among the Shareholders of all Series or any affected Series; however, the payment to any particular Class of such Series may be reduced by any fees, expenses or charges allocated to that Class.
(b) The Trustees may take any of the actions specified in subSection (a) (i) and (ii) above without obtaining the vote of a majority of the Shares Outstanding and entitled to vote of the Trust or any Series if a majority of the Trustees determines that the continuation of the Trust or Series is not in the best interests of the Trust, such Series, or their respective Shareholders as a result of factors or events adversely affecting the ability of the Trust or such Series to conduct its business and operations in an economically viable manner. Such factors and events may include the inability of the Trust or a Series to maintain its assets at an appropriate size, changes in laws or regulations governing the Trust or the Series or affecting assets of the type in which the Trust or Series invests, or economic developments or trends having a significant adverse impact on the business or operations of the Trust or such Series.
(c) Upon completion of the distribution of the remaining proceeds or assets pursuant to subSection (a), the Trust or affected Series shall terminate and the Trustees and the Trust shall be discharged of any and all further liabilities and duties hereunder with respect thereto and the right, title and interest of all parties therein shall be canceled and discharged. Upon termination of the Trust, following completion of winding up of its business, the Trustees shall cause a certificate of cancellation of the Trust's certificate of trust to be filed in accordance with the Delaware Act, which certificate of cancellation may be signed by any one Trustee.
Section 5. Reorganization. (a) Notwithstanding anything else herein, to
change the Trust's form or place of organization the Trustees may, without
Shareholder approval unless such approval is required by applicable law,
(i) cause the Trust to merge or consolidate with or into one or more entities,
if the surviving or resulting entity is the Trust or another openAend management
investment company under the 1940 Act, or a series thereof, that will succeed to
or assume the Trust's registration under the 1940 Act, (ii) cause the Shares to
be exchanged under or pursuant to any state or federal statute to the extent
permitted by law, or (iii) cause the Trust to incorporate under the laws of
Delaware or any other U.S. jurisdiction. Any agreement of merger or consolidation or certificate of merger may be signed by a majority of Trustees and facsimile signatures conveyed by electronic or telecommunication means shall be valid.
(b) Pursuant to and in accordance with the provisions of
Section 3815(f) of the Delaware Act, an agreement of merger or consolidation
approved by the Trustees in accordance with this Section 5 may effect any
amendment to the Declaration or effect the adoption of a new trust instrument of
the Trust if it is the surviving or resulting trust in the merger or
consolidation.
(c) The Trustees may create one or more business trusts to which all or any part of the assets, liabilities, profits or losses of the Trust or any Series or Class thereof may be transferred and may provide for the conversion of Shares in the Trust or any Series or Class thereof into beneficial interests in any such newly created trust or trusts or any series or classes thereof.
Section 6. Declaration of Trust. The original or a copy of this Declaration of Trust and of each amendment hereto or Declaration of Trust supplemental shall be kept at the office of the Trust where it may be inspected by any Shareholder. Anyone dealing with the Trust may rely on a certificate by a Trustee or an officer of the Trust as to the authenticity of the Declaration of Trust or any such amendments or supplements and as to any matters in connection with the Trust. The masculine gender herein shall include the feminine and neuter genders. Headings herein are for convenience only and shall not affect the construction of this Declaration of Trust. This Declaration of Trust may be executed in any number of counterparts, each of which shall be deemed an original.
Section 7. Applicable Law. This Declaration and the Trust created
hereunder are governed by and construed and administered according to the
Delaware Act and the applicable laws of the State of Delaware; provided,
however, that there shall not be applicable to the Trust, the Trustees or this
Declaration of Trust (a) the provisions of Section 3540 of Title 12 of the
Delaware Code, or (b) any provisions of the laws (statutory or common) of the
State of Delaware (other than the Delaware Act) pertaining to trusts which
relate to or regulate (i) the filing with any court or governmental body or
agency of trustee accounts or schedules of trustee fees and charges,
(ii) affirmative requirements to post bonds for trustees, officers, agents or
employees of a trust, (iii) the necessity for obtaining court or other
governmental approval concerning the acquisition, holding or disposition of real or personal property, (iv) fees or other sums payable to trustees, officers, agents or employees of a trust, (v) the allocation of receipts and expenditures to income or principal, (vi) restrictions or limitations on the permissible nature, amount or concentration of trust investments or requirements relating to the titling, storage or other manner of holding of trust assets, or (vii) the establishment of fiduciary or other standards of responsibilities or limitations on the acts or powers of trustees, which are inconsistent with the limitations or liabilities or authorities and powers of the Trustees set forth or referenced in this Declaration. The Trust shall be of the type commonly called a Delaware business trust, and, without limiting the provisions hereof, the Trust may exercise all powers which are ordinarily exercised by such a trust under Delaware law. The Trust specifically reserves the right to exercise any of the powers or privileges afforded to trusts or actions that may be engaged in by trusts under the Delaware Act, and the absence of a specific reference herein to any such power, privilege or action shall not imply that the Trust may not exercise such power or privilege or take such actions.
Section 8. Amendments. The Trustees may, without any Shareholder vote, amend or otherwise supplement this Declaration by making an amendment, a Declaration of Trust supplemental hereto or an amended and restated trust instrument; provided, that Shareholders shall have the right to vote on any amendment (a) which would affect the voting rights of Shareholders granted in Article VII, Section l, (b) to this Section 8, (c) required to be approved by Shareholders by law or by the Trust's registration statement(s) filed with the Commission, and (d) submitted to them by the Trustees in their discretion. Any amendment submitted to Shareholders which the Trustees determine would affect the Shareholders of any Series shall be authorized by vote of the Shareholders of such Series and no vote shall be required of Shareholders of a Series not affected. Notwithstanding anything else herein, any amendment to Article IV which would have the effect of reducing the indemnification and other rights provided thereby to Trustees, officers, employees, and agents of the Trust or to Shareholders or former Shareholders, and any repeal or amendment of this sentence shall each require the affirmative vote of the holders of twoAthirds of the Outstanding Shares of the Trust entitled to vote thereon.
Section 9. Derivative Actions. In addition to the requirements set forth in Section 3816 of the Delaware Act, a Shareholder may bring a derivative
action on behalf of the Trust only if the following conditions are met:
(a) Shareholders eligible to bring such derivative action under the Delaware Act who hold at least 10% of the Outstanding Shares of the Trust, or 10% of the Outstanding Shares of the Series or Class to which such action relates, shall join in the request for the Trustees to commence such action; and
(b) the Trustees must be afforded a reasonable amount of time to consider such shareholder request and to investigate the basis of such claim. The Trustees shall be entitled to retain counsel or other advisers in considering the merits of the request and shall require an undertaking by the Shareholders making such request to reimburse the Trust for the expense of any such advisers in the event that the Trustees determine not to bring such action.
Section 10. Fiscal Year. The fiscal year of the Trust shall end on a specified date as set forth in the By-Laws. The Trustees may change the fiscal year of the Trust without Shareholder approval.
Section 11. Severability. The provisions of this Declaration are severable. If the Trustees determine, with the advice of counsel, that any provision hereof conflicts with the 1940 Act, the regulated investment company provisions of the Internal Revenue Code or with other applicable laws and regulations, the conflicting provision shall be deemed never to have constituted a part of this Declaration; provided, however, that such determination shall not affect any of the remaining provisions of this Declaration or render invalid or improper any action taken or omitted prior to such determination. If any provision hereof shall be held invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall attach only to such provision only in such jurisdiction and shall not affect any other provision of this Declaration.
IN WITNESS WHEREOF, the undersigned have executed this instrument as of the date first written above.
John F. Cogan, Jr., Richard H. Egdahl, M.D., as Trustee and not individually as Trustee and not individually 975 Memorial Drive, #802 333 Commonwealth Avenue Cambridge, Massachusetts 02138 Boston, Massachusetts 02115 - ----------------------------------- ---------------------------------- Margaret B.W. Graham Arthur J. Halleran, Jr. as Trustee and not individually as Trustee and not individually The Keep Winthrop Financial P. O. Box 110 One International Place Little Deer Isle, Maine 04650 Boston, Massachusetts 02110 - ----------------------------------- ---------------------------------- Stephen G. Kasnet John W. Kendrick as Trustee and not individually as Trustee and not individually Winthrop Financial 6363 Waterway Drive One International Place Falls Church, Virginia 22044 Boston, Massachusetts 02110 - ----------------------------------- ---------------------------------- Marguerite A. Piret David D. Tripple as Trustee and not individually as Trustee and not individually 162 Washington Street 6 Woodbine Road Belmont, Massachusetts 02178 Belmont, Massachusetts 02178 - ----------------------------------- ---------------------------------- Stephen K. West John Winthrop as Trustee and not individually as Trustee and not individually 42 Old Wood Road 9 Ladson Street Bernardsville, New Jersey 07924 Charleston, South Carolina 29401 |
BY-LAWS
OF
PIONEER WINTHROP REAL ESTATE INVESTMENT FUND
ARTICLE I
DEFINITIONS
All capitalized terms have the respective meanings given them in the Agreement and Declaration of Trust of Pioneer Winthrop Real Estate Investment Fund dated April 18, 1995, as amended or restated from time to time.
ARTICLE II
OFFICES
Section 1. Principal Office. Until changed by the Trustees, the principal office of the Trust shall be in Boston, Massachusetts.
Section 2. Other Offices. The Trust may have offices in such other places without as well as within the State of Delaware as the Trustees may from time to time determine.
Section 3. Registered Office and Registered Agent. The Board of Trustees shall establish a registered office in the State of Delaware and shall appoint as the Trust's registered agent for service of process in the State of Delaware an individual resident of the State of Delaware or a Delaware corporation or a corporation authorized to transact business in the State of Delaware; in each case the business office of such registered agent for service of process shall be identical with the registered Delaware office of the Trust.
ARTICLE III
SHAREHOLDERS
Section 1. Meetings. Meetings of the Shareholders of the Trust or a Series or Class thereof shall be held as provided in the Declaration of Trust at such place within or without the State of Delaware as the Trustees shall designate. The holders of one-third of the Outstanding Shares of the Trust or a Series or Class thereof present in person or by proxy and entitled to vote shall constitute a quorum at any meeting of the Shareholders of the Trust or a Series or Class thereof.
Section 2. Notice of Meetings. Notice of all meetings of the Shareholders, stating the time, place and purposes of the meeting, shall be given by the Trustees by mail or telegraphic or electronic means to each Shareholder at his address as recorded on the register of the Trust mailed at least (10) days and not more than ninety (90) days before the meeting, provided, however, that notice of a meeting need not be given to a Shareholder to whom such notice need not be given under the proxy rules of the Commission under the 1940 Act and the Securities Exchange Act of 1934, as amended. Only the business stated in the notice of the meeting shall be considered at such meeting. Any adjourned meeting may be held as adjourned without further notice. No notice need be given to any Shareholder who shall have failed to inform the Trust of his current address or if a written waiver of notice, executed before or after the meeting by the Shareholder or his attorney thereunto authorized, is filed with the records of the meeting.
Section 3. Record Date for Meetings and Other Purposes. For the purpose of determining the Shareholders who are entitled to notice of and to vote at any meeting, or to participate in any distribution, or for the purpose of any other action, the Trustees may from time to time close the transfer books for such period, not exceeding thirty (30) days, as the Trustees may determine; or without closing the transfer books the Trustees may fix a date not more than ninety (90) days prior to the date of any meeting of Shareholders or distribution or other action as a record date for the determination of the persons to be treated as Shareholders of record for such purposes, except for dividend payments which shall be governed by the Declaration of Trust.
Section 4. Proxies. At any meeting of Shareholders, any holder of Shares entitled to vote thereat may vote by proxy, provided that no proxy shall be voted at any meeting unless it shall have been placed on file with the
Secretary, or with such other officer or agent of the Trust as the Secretary may direct, for verification prior to the time at which such vote shall be taken. A proxy shall be deemed signed if the shareholder's name is placed on the proxy (whether by manual signature, typewriting, telegraphic transmission, facsimile, other electronic means or otherwise) by the shareholder or the shareholder's attorney-in-fact. Proxies may be given by any electronic or telecommunication device except as otherwise provided in the Declaration of Trust. Proxies may be solicited in the name of one or more Trustees or one or more of the officers of the Trust. Only Shareholders of record shall be entitled to vote. Each whole share shall be entitled to one vote as to any matter on which it is entitled by the Declaration of Trust to vote and fractional shares shall be entitled to a proportionate fractional vote. When any Share is held jointly by several persons, any one of them may vote at any meeting in person or by proxy in respect of such Share, but if more than one of them shall be present at such meeting in person or by proxy, and such joint owners or their proxies so present disagree as to any vote to be cast, such vote shall not be received in respect of such Share. A proxy purporting to be executed by or on behalf of a Shareholder shall be deemed valid unless challenged at or prior to its exercise, and the burden of proving invalidity shall rest on the challenger. If the holder of any such share is a minor or a person of unsound mind, and subject to guardianship or the legal control of any other person as regards the charge or management of such Share, he may vote by his guardian or such other person appointed or having such control, and such vote may be given in person or by proxy.
Section 5. Abstentions and Broker Non-Votes. Outstanding Shares represented in person or by proxy (including Shares which abstain or do not vote with respect to one or more of any proposals presented for Shareholder approval) will be counted for purposes of determining whether a quorum is present at a meeting. Abstentions will be treated as Shares that are present and entitled to vote for purposes of determining the number of Shares that are present and entitled to vote with respect to any particular proposal, but will not be counted as a vote in favor of such proposal. If a broker or nominee holding Shares in "street name" indicates on the proxy that it does not have discretionary authority to vote as to a particular proposal, those Shares will not be considered as present and entitled to vote with respect to such proposal.
Section 6. Inspection of Records. The records of the Trust shall be open to inspection by Shareholders to the same extent as is permitted shareholders of a Delaware business corporation.
Section 7. Action without Meeting. Any action which may be taken by Shareholders may be taken without a meeting if a majority of Outstanding Shares entitled to vote on the matter (or such larger proportion thereof as shall be required by law) consent to the action in writing and the written consents are filed with the records of the meetings of Shareholders. Such consents shall be treated for all purposes as a vote taken at a meeting of Shareholders.
ARTICLE IV
TRUSTEES
Section 1. Meetings of the Trustees. The Trustees may in their discretion provide for regular or stated meetings of the Trustees. Notice of regular or stated meetings need not be given. Meetings of the Trustees other than regular or stated meetings shall be held whenever called by the President, the Chairman or by any one of the Trustees, at the time being in office. Notice of the time and place of each meeting other than regular or stated meetings shall be given by the Secretary or an Assistant Secretary or by the officer or Trustee calling the meeting and shall be mailed to each Trustee at least two days before the meeting, or shall be given by telephone, cable, wireless, facsimile or other electronic mechanism to each Trustee at his business address, or personally delivered to him at least one day before the meeting. Such notice may, however, be waived by any Trustee. Notice of a meeting need not be given to any Trustee if a written waiver of notice, executed by him before or after the meeting, is filed with the records of the meeting, or to any Trustee who attends the meeting without protesting prior thereto or at its commencement the lack of notice to him. A notice or waiver of notice need not specify the purpose of any meeting. The Trustees may meet by means of a telephone conference circuit or similar communications equipment by means of which all persons participating in the meeting can hear each other at the same time and participation by such means shall be deemed to have been held at a place designated by the Trustees at the meeting. Participation in a telephone conference meeting shall constitute presence in person at such meeting. Any action required or permitted to be taken
at any meeting of the Trustees may be taken by the Trustees without a meeting if a majority of the Trustees consent to the action in writing and the written consents are filed with the records of the Trustees' meetings. Such consents shall be treated as a vote for all purposes.
Section 2. Quorum and Manner of Acting. A majority of the Trustees
shall be present in person at any regular or special meeting of the Trustees in
order to constitute a quorum for the transaction of business at such meeting and
(except as otherwise required by law, the Declaration of Trust or these By-laws)
the act of a majority of the Trustees present at any such meeting, at which a
quorum is present, shall be the act of the Trustees. In the absence of a quorum,
a majority of the Trustees present may adjourn the meeting from time to time
until a quorum shall be present. Notice of an adjourned meeting need not be
given.
ARTICLE V
COMMITTEES
Section 1. Executive and Other Committees. The Trustees by vote of a majority of all the Trustees may elect from their own number an Executive Committee to consist of not less than three (3) members to hold office at the pleasure of the Trustees, which shall have the power to conduct the current and ordinary business of the Trust while the Trustees are not in session, including the purchase and sale of securities and the designation of securities to be delivered upon redemption of Shares of the Trust or a Series thereof, and such other powers of the Trustees as the Trustees may delegate to them, from time to time, except those powers which by law, the Declaration of Trust or these By-laws they are prohibited from delegating. The Trustees may also elect from their own number other Committees from time to time; the number composing such Committees, the powers conferred upon the same (subject to the same limitations as with respect to the Executive Committee) and the term of membership on such Committees to be determined by the Trustees. The Trustees may designate a chairman of any such Committee. In the absence of such designation the Committee may elect its own Chairman.
Section 2. Meetings, Quorum and Manner of Acting. The Trustees may
(1) provide for stated meetings of any Committee, (2) specify the manner of
calling and notice required for special meetings of any Committee, (3) specify
the number of members of a Committee required to constitute a quorum and the
number of members of a Committee required to exercise specified powers delegated
to such Committee, (4) authorize the making of decisions to exercise specified
powers by written assent of the requisite number of members of a Committee without a meeting, and (5) authorize the members of a Committee to meet by means of a telephone conference circuit.
The Executive Committee shall keep regular minutes of its meetings and records of decisions taken without a meeting and cause them to be recorded in a book designated for that purpose and kept in the office of the Trust.
ARTICLE VI
OFFICERS
Section 1. General Provisions. The officers of the Trust shall be a President, a Treasurer and a Secretary, who shall be elected by the Trustees. The Trustees may elect or appoint such other officers or agents as the business of the Trust may require, including one or more Vice Presidents, one or more Assistant Secretaries, and one or more Assistant Treasurers. The Trustees may delegate to any officer or committee the power to appoint any subordinate officers or agents.
Section 2. Term of Office and Qualifications. Except as otherwise provided by law, the Declaration of Trust or these By-laws, the President, the Treasurer, the Secretary and any other officer shall each hold office at the pleasure of the Board of Trustees or until his successor shall have been duly elected and qualified. The Secretary and the Treasurer may be the same person. A Vice President and the Treasurer or a Vice President and the Secretary may be the same person, but the offices of Vice President, Secretary and Treasurer shall not be held by the same person. The President shall hold no other office. Except as above provided, any two offices may be held by the same person. Any officer may be but none need be a Trustee or Shareholder.
Section 3. Removal. The Trustees, at any regular or special meeting of the Trustees, may remove any officer with or without cause, by a vote of a majority of the Trustees then in office. Any officer or agent appointed by an officer or committee may be removed with or without cause by such appointing officer or committee.
Section 4. Powers and Duties of the Chairman. The Trustees may, but need not, appoint from among their number a Chairman. When present he shall preside at the meetings of the Shareholders and of the Trustees. He may call
meetings of the Trustees and of any committee thereof whenever he deems it necessary. He shall be an executive officer of the Trust and shall have, with the President, general supervision over the business and policies of the Trust, subject to the limitations imposed upon the President, as provided in Section 5 of this Article VI.
Section 5. Powers and Duties of the President. The President may call meetings of the Trustees and of any Committee thereof when he deems it necessary and shall preside at all meetings of the Shareholders. Subject to the control of the Trustees and to the control of any Committees of the Trustees, within their respective spheres, as provided by the Trustees, he shall at all times exercise a general supervision and direction over the affairs of the Trust. He shall have the power to employ attorneys and counsel for the Trust or any Series or Class thereof and to employ such subordinate officers, agents, clerks and employees as he may find necessary to transact the business of the Trust or any Series or Class thereof. He shall also have the power to grant, issue, execute or sign such powers of attorney, proxies or other documents as may be deemed advisable or necessary in furtherance of the interests of the Trust or any Series thereof. The President shall have such other powers and duties, as from time to time may be conferred upon or assigned to him by the Trustees.
Section 6. Powers and Duties of Vice Presidents. In the absence or disability of the President, the Vice President or, if there be more than one Vice President, any Vice President designated by the Trustees, shall perform all the duties and may exercise any of the powers of the President, subject to the control of the Trustees. Each Vice President shall perform such other duties as may be assigned to him from time to time by the Trustees and the President.
Section 7. Powers and Duties of the Treasurer. The Treasurer shall be the principal financial and accounting officer of the Trust. He shall deliver all funds of the Trust or any Series or Class thereof which may come into his hands to such Custodian as the Trustees may employ. He shall render a statement of condition of the finances of the Trust or any Series or Class thereof to the Trustees as often as they shall require the same and he shall in general perform all the duties incident to the office of a Treasurer and such other duties as from time to time may be assigned to him by the Trustees. The Treasurer shall
give a bond for the faithful discharge of his duties, if required so to do by the Trustees, in such sum and with such surety or sureties as the Trustees shall require.
Section 8. Powers and Duties of the Secretary. The Secretary shall keep the minutes of all meetings of the Trustees and of the Shareholders in proper books provided for that purpose; he shall have custody of the seal of the Trust; he shall have charge of the Share transfer books, lists and records unless the same are in the charge of a transfer agent. He shall attend to the giving and serving of all notices by the Trust in accordance with the provisions of these By-laws and as required by law; and subject to these By-laws, he shall in general perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the Trustees.
Section 9. Powers and Duties of Assistant Officers. In the absence or disability of the Treasurer, any officer designated by the Trustees shall perform all the duties, and may exercise any of the powers, of the Treasurer. Each officer shall perform such other duties as from time to time may be assigned to him by the Trustees. Each officer performing the duties and exercising the powers of the Treasurer, if any, and any Assistant Treasurer, shall give a bond for the faithful discharge of his duties, if required so to do by the Trustees, in such sum and with such surety or sureties as the Trustees shall require.
Section 10. Powers and Duties of Assistant Secretaries. In the absence or disability of the Secretary, any Assistant Secretary designated by the Trustees shall perform all the duties, and may exercise any of the powers, of the Secretary. Each Assistant Secretary shall perform such other duties as from time to time may be assigned to him by the Trustees.
Section 11. Compensation of Officers and Trustees and Members of the Advisory Board. Subject to any applicable provisions of the Declaration of Trust, the compensation of the officers and Trustees and members of an advisory board shall be fixed from time to time by the Trustees or, in the case of officers, by any Committee or officer upon whom such power may be conferred by the Trustees. No officer shall be prevented from receiving such compensation as such officer by reason of the fact that he is also a Trustee.
ARTICLE VII
FISCAL YEAR
The fiscal year of the Trust shall begin on the first day of January in each year and shall end on the last day of December in each year, provided, however, that the Trustees may from time to time change the fiscal year. The taxable year of each Series of the Trust shall be as determined by the Trustees from time to time.
ARTICLE VIII
SEAL
The Trustees may adopt a seal which shall be in such form and shall have such inscription thereon as the Trustees may from time to time prescribe.
ARTICLE IX
SUFFICIENCY AND WAIVERS OF NOTICE
Whenever any notice whatever is required to be given by law, the Declaration of Trust or these By-laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. A notice shall be deemed to have been sent by mail, telegraph, cable, wireless, facsimile or other electronic means for the purposes of these By-laws when it has been delivered to a representative of any company holding itself out as capable of sending notice by such means with instructions that it be so sent.
ARTICLE X
AMENDMENTS
These By-laws, or any of them, may be altered, amended or repealed, or new By-laws may be adopted by (a)yvote of a majority of the Outstanding Shares voting in person or by proxy at a meeting of Shareholders and entitled to vote or (b)yby the Trustees, provided, however, that no By-law may be amended, adopted or repealed by the Trustees if such amendment, adoption or repeal requires, pursuant to law, the Declaration of Trust or these By-laws, a vote of the Shareholders.
END OF BY-LAWS
MANAGEMENT CONTRACT
THIS AGREEMENT dated this 28th day of April, 1995 between Pioneer Winthrop Real Estate Investment Fund, a Delaware business trust (the "Trust"), and Pioneer Winthrop Advisers, a Massachusetts general partnership, (the "Manager").
W I T N E S S E T H
WHEREAS, the Trust is registered as an open-end, diversified, management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"), and has filed with the Securities and Exchange Commission (the "Commission") a registration statement (the "Registration Statement") for the purpose of registering its shares for public offering under the Securities Act of 1933, as amended,
WHEREAS, the Trust currently issues a single series of shares representing interests in one portfolio (the "Portfolio"),
WHEREAS, the parties hereto deem it mutually advantageous that the Manager should be engaged, subject to the supervision of the Trust's Board of Trustees and officers, to manage the Portfolio,
NOW, THEREFORE, in consideration of the mutual covenants and benefits set forth herein, the Trust and the Manager do hereby agree as follows:
1. (a) The Manager will regularly provide the Portfolio with investment research, advice and supervision and will furnish continuously an investment program for the Portfolio consistent with the investment objectives and policies of the Portfolio. The Manager will determine from time to time what securities shall be purchased for the Portfolio, what securities shall be held or sold by the Portfolio and what portion of the Portfolio's assets shall be held uninvested as cash, subject always to the provisions of the Trust's Declaration of Trust, By-Laws and its registration statements under the 1940 Act and under the Securities Act of 1933 covering the Trust's shares, as filed with the Securities and Exchange Commission, and to the investment objectives, policies and restrictions of the Portfolio, as each of the same shall be from time to time in effect, and subject, further, to such policies and instructions as the Board of Trustees of the Trust may from time to time establish. To carry out
such determinations, the Manager will exercise full discretion and act for the Portfolio in the same manner and with the same force and effect as the Trust itself might or could do with respect to purchases, sales or other transactions, as well as with respect to all other things necessary or incidental to the furtherance or conduct of such purchases, sales or other transactions.
(b) The Manager will, to the extent reasonably required in the conduct of the business of the Portfolio and upon the Trust's request, furnish to the Portfolio research, statistical and advisory reports upon the industries, businesses, corporations or securities as to which such requests shall be made, whether or not the Portfolio shall at the time have any investment in such industries, businesses, corporations or securities. The Manager will use its best efforts in the preparation of such reports and will endeavor to consult the persons and sources believed by it to have information available with respect to such industries, businesses, corporations or entities.
(c) The Manager will maintain all books and records with respect to
the Portfolio's securities transactions required by sub-paragraphsy(b)(5), (6),
(9) and (10) and paragraph (f) of Ruley31a-1 under the 1940 Act (other than
those records being maintained by the custodian or transfer agent appointed by
the Trust with respect to the Portfolio) and preserve such records for the
periods prescribed therefor by Rule 31a-2 of the 1940 Act. The Manager will also
provide to the Board of Trustees such periodic and special reports as the Board
may reasonably request.
2. The Manager recognizes that the Trust may from time to time create additional portfolios of the Trust, that this agreement relates only to the management of the assets of the single existing Portfolio of the Trust, and that the management of the assets of any additional portfolio of the Trust will be subject to one or more separate investment management agreements.
3. (a) Except as otherwise provided herein, the Manager, at its own expense, shall furnish to the Trust office space in the offices of the Manager or in such other place as may be agreed upon from time to time, and all necessary office facilities, equipment and personnel for managing the affairs and investments with respect to the Portfolio, and shall arrange, if desired by the Trust, for members of the Manager's organization to serve as officers or agents of the Trust.
(b) The Manager shall pay directly or reimburse the Trust for:
(i) the compensation (if any) of the Trustees who are affiliated with, or
interested persons of, the Manager and all officers of the Trust as such; and
(ii) all expenses not hereinafter specifically assumed by the Trust or the
Portfolio where such expenses are incurred by the Manager or by the Trust or the
Portfolio in connection with the management of the affairs of, and the
investment and reinvestment of the assets of, the Portfolio.
(c) The Trust shall assume and shall pay: (i) charges and
expenses for fund accounting, pricing and appraisal services and related
overhead, including, to the extent such services are performed by personnel of
the Manager or its affiliates, office space and facilities and personnel
compensation, training and benefits; (ii) the charges and expenses of auditors;
(iii) the charges and expenses of any custodian, transfer agent, plan agent,
dividend disbursing agent and registrar appointed by the Trust with respect to
the Portfolio; (iv) brokers' commissions, and issue and transfer taxes,
chargeable to the Trust in connection with securities transactions to which the
Trust is a party; (v) insurance premiums, interest charges, dues and fees for
membership in trade associations and all taxes and corporate fees payable by the
Trust to federal, state or other governmental agencies; (vi) fees and expenses
involved in registering and maintaining registrations of the Trust and/or its
shares with the Commission, state or blue sky securities agencies and foreign
countries, including the preparation of Prospectuses and Statements of
Additional Information for filing with the Commission; (vii) all expenses of
shareholders' and Trustees' meetings and of preparing, printing and distributing
prospectuses, notices, proxy statements and all reports to shareholders and to
governmental agencies; (viii) charges and expenses of legal counsel to the
Trust; (ix) distribution fees paid by the Trust in accordance with Rule 12b-1
promulgated by the Commission pursuant to the 1940 Act; (x)ycompensation of
those Trustees of the Trust who are not affiliated with or interested persons of
the Manager, the Trust (other than as Trustees), The Pioneer Group, Inc. or
Pioneer Funds Distributor, Inc.; (xi) the cost of preparing and printing share
certificates; (xii) interest on borrowed money, if any; and (xii) organizational
expenses of the Trust or Portfolio.
4. It is understood that the Manager may employ one or more sub-investment advisers (each a "Subadviser") under written agreements with each such Subadviser, provided that any such agreement is first approved by the vote of a majority of the Trustees, including a majority of the Trustees who are not "interested persons" (as the term "interested person" is defined in the 1940 Act) of the Trust, the Manager or any such Subadviser, at a meeting of Trustees called for the purpose of voting on such approval and by a vote of a "majority of the outstanding voting securities" (as defined in the 1940 Act) of the Portfolio. The authorization given to the Manager in Sections 1 and 7 hereof may be delegated by it under any such agreement to any of the Subadvisers, provided that the Subadvisers shall be subject to the same restrictions and limitations on the investments and brokerage discretion as the Manager. While the Manager shall be responsible for allocating assets among the Subadvisers and monitoring their relative performances, the Trust agrees that the Manager should not be
accountable to the Trust or the Portfolio or the Portfolio's shareholders for any loss or other liability relating to specific investments directed by any Subadviser (even though the Manager retains the right to reserve any such investment), because the Trust and the Manager will be relying almost exclusively on the expertise of the Subadvisers for the selection and monitoring of specific investments directed by the Subadvisers.
5. (a) The Trust shall pay to the Manager, as compensation for the Manager's services hereunder, a fee at the rate of 1.00% per annum of the Portfolio's average daily net assets. The management fee payable hereunder shall be computed daily and paid monthly in arrears. In the event of termination of this Agreement, the fee provided in this Section shall be computed on the basis of the period ending on the last business day on which this Agreement is in effect subject to a pro rata adjustment based on the number of days elapsed in the current month as a percentage of the total number of days in such month.
(b) If the operating expenses of the Portfolio in any year exceed
the limits set by state securities laws or regulations in states in which shares
of the Portfolio are sold, the amount payable to the Manager under subsection
(a) above will be reduced (but not below $0), and the Manager shall make other
arrangements concerning expenses but, in each instance, only as and to the
extent required by such laws or regulation. If amounts have already been
advanced to the Manager under this Agreement, the Manager will return such
amounts to the Trust to the extent required by the preceding sentence.
(c) In addition to the foregoing, the Manager may from time to time agree not to impose all or a portion of its fee otherwise payable hereunder (in advance of the time such fee or a portion thereof would otherwise accrue) and/or undertake to pay or reimburse the Trust for all or a portion of its expenses not otherwise required to be borne or reimbursed by the Manager. Any such fee reduction or undertaking may be discontinued or modified by the Manager at any time.
6. The Manager will not be liable for any error of judgment or mistake of law or for any loss sustained by reason of the adoption of any investment policy or the purchase, sale, or retention of any security on the recommendation of the Manager, whether or not such recommendation shall have been based upon its own investigation and research or upon investigation and research made by any other individual, firm or corporation, but nothing contained herein will be construed to protect the Manager against any liability to the Trust or Portfolio or its shareholders by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of its reckless disregard of its obligations and duties under this Agreement.
7. (a) Nothing in this Agreement will in any way limit or restrict the Manager or any of its officers, directors, or employees from buying, selling or trading in any securities for its or their own accounts or other accounts. The Manager may act as an investment advisor to any other person, firm or corporation, and may perform management and any other services for any other person, association, corporation, firm or other entity pursuant to any contract or otherwise, and take any action or do any thing in connection therewith or related thereto; and no such performance of management or other services or taking of any such action or doing of any such thing shall be in any manner restricted or otherwise affected by any aspect of any relationship of the Manager to or with the Trust or deemed to violate or give rise to any duty or obligation of the Manager to the Trust except as otherwise imposed by law. The Trust recognizes that Manager, in effecting transactions for its various accounts, may not always be able to take or liquidate investment positions in the same security at the same time and at the same price.
(b) In connection with purchases or sales of portfolio securities for the account of the Portfolio, neither the Manager nor any of its Directors, officers or employees will act as a principal or agent or receive any commission except as permitted by the 1940 Act. The Manager shall arrange for the placing of all orders for the purchase and sale of portfolio securities for the Portfolio's account with brokers or dealers selected by the Manager. In the selection of such brokers or dealers and the placing of such orders, the Manager is directed at all times to seek for the Portfolio the most favorable execution and net price available except as described herein. It is also understood that it is desirable for the Portfolio that the Manager have access to supplemental investment and market research and security and economic analyses provided by brokers who may execute brokerage transactions at a higher cost to the Portfolio than may result when allocating brokerage to other brokers on the basis of seeking the most favorable price and efficient execution. Therefore, the Manager is authorized to place orders for the purchase and sale of securities for the Portfolio with such brokers, subject to review by the Trust's Trustees from time to time with respect to the extent and continuation of this practice. It is understood that the services provided by such brokers may be useful to the Manager in connection with its or its affiliates services to other clients.
(c) On occasions when the Manager deems the purchase or sale of a security to be in the best interest of the Portfolio as well as other clients, the Manager, to the extent permitted by applicable laws and regulations, may aggregate the securities to be sold or purchased in order to obtain the best execution and lower brokerage commissions, if any. In such event, allocation of the securities so purchased or sold, as well as the expenses incurred in the transaction, will be made by the Manager in the manner it considers to be the most equitable and consistent with its fiduciary obligations to the Portfolio and to such clients.
8. This Agreement shall become effective on the date hereof and shall remain in force until Aprily30, 1996 and from year to year thereafter, but only so long as its continuance is approved annually by a vote of the Trustees of the Trust voting in person, including a majority of its Trustees who are not parties to this Agreement or interested persons (as the term "interested persons" is defined in the 1940 Act) of any such parties, at a meeting of Trustees called for the purpose of voting on such approval or by a vote of a "majority of the outstanding voting securities" (as defined in the 1940 Act) of the Portfolio, subject to the right of the Trust and the Manager to terminate this contract as provided in Section 9 hereof.
9. Either party hereto may, without penalty, terminate this Agreement by vote of its Board of Directors or its Board of Trustees, as the case may be, or by vote of a "majority of its outstanding voting securities" (as defined in the 1940 Act) of the Portfolio and the giving of 60 days' written notice to the other party.
10. This Agreement shall automatically terminate in the event of its assignment. For purposes of this Agreement, the term "assignment" shall have the meaning given it by Section 2(a)(4) of the 1940 Act.
11. The Manager is an independent contractor and not an employee of the Fund for any purpose. If any occasion should arise in which the Manager gives any advice to its clients concerning the shares of the Portfolio, the Manager will act solely as investment counsel for such clients and not in any way on behalf of the Trust or Portfolio.
12. This Agreement states the entire agreement of the parties hereto, and is intended to be the complete and exclusive statement of the terms hereof. It may not be added to or changed orally, and may not be modified or rescinded except by a writing signed by the parties hereto and in accordance with the 1940 Act, when applicable.
13. This Agreement and all performance hereunder shall be governed by the laws of The Commonwealth of Massachusetts, which apply to contracts made and to be performed in The Commonwealth of Massachusetts.
14. Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction be ineffective to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms or provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction.
15. The parties to this Agreement acknowledge and agree that all liabilities arising hereunder, whether direct or indirect, and of any and every nature whatsoever shall be satisfied solely out of the assets of the portfolio affected thereby and that no Trustee, officer or holder of shares of beneficial interest of the Trust shall be personally liable for any of the foregoing liabilities. The Trust's Certificate of Trust, as amended from time to time, is on file in the Office of the Secretary of State of the State of Delaware. Such Certificate of Trust and the Trust's Declaration of Trust describe in detail the respective responsibilities and limitations on liability of the Trustees, officers, and holders of shares of beneficial interest.
16. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers and their seal to be hereto affixed as of the day and year first above written.
ATTEST: PIONEER WINTHROP REAL ESTATE INVESTMENT FUND - --------------------------- ---------------------------- Joseph P. Barri John F. Cogan, Jr. Secretary Chief Executive Officer ATTEST: PIONEER WINTHROP ADVISERS - --------------------------- ---------------------------- Joseph P. Barri John F. Cogan, Jr. Secretary Chief Executive Officer |
INVESTMENT SUBADVISORY AGREEMENT
AGREEMENT made of the 28th day of April, 1995, by and among PIONEER WINTHROP REAL ESTATE INVESTMENT FUND, a Delaware business trust (the "Fund"), PIONEER WINTHROP ADVISERS, a Massachusetts general partnership (the "Manager"), and PIONEERING MANAGEMENT CORPORATION, a Delaware corporation (the "Subadviser").
W I T N E S S E T H
WHEREAS, the Fund is an open-end, management investment company, registered under the Investment Company Act of 1940, as amended (the "1940 Act"), and the Manager and the Subadviser are investment advisers registered under the Investment Advisers Act of 1940 (the "Advisers Act"); and
WHEREAS, pursuant to authority granted the Manager by the Fund's Trustees and pursuant to the provisions of the Management Contract of even date herewith between the Manager and the Fund (the "Management Contract"), the Manager has selected the Subadviser to act as a sub-investment adviser of the Fund and to provide certain other services, as more fully set forth below, and to perform such services under the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual agreements herein contained, it is agreed as follow:
1. The Subadviser's Services.
(a) The Subadviser will regularly provide the Manager with advice concerning the investment management of that portion or all of the Fund's portfolio (the "Portfolio") as designated by the Manager. The Subadviser will recommend to the Manager what securities shall be purchased for the Portfolio and what securities shall be held or sold by the Portfolio; subject always to the provisions of the Fund's Declaration of Trust and By-laws and the 1940 Act, and to the investment objectives, policies and restrictions (including, without limitation, the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended, for qualification as a regulated investment company) of the Fund, as each of the same shall be from time to time in effect as set forth in the Fund's Prospectus and Statement of Additional Information, or any investment
guidelines or other instructions received in writing from the Manager, and subject, further, to such policies and instructions as the Manager may from time to time establish and deliver to the Subadviser. The Subadviser will regularly provide the Manager with investment research and advice and will recommend continuously to the Manager an investment program for the Fund with respect to the Portfolio. The Manager shall manage directly (or through another investment subadviser), and the Subadviser shall not be responsible for the management of, any portion of the Fund's portfolio not designated as part of the Portfolio.
(b) The Subadviser shall not be responsible for the provision of administrative, bookkeeping or accounting services to the Fund, except as otherwise provided herein or as may be necessary for the Subadviser to supply to the Manager, the Fund or its Trustees the information required to be supplied under this Contract.
The Subadviser shall maintain separate books and detailed records of all matters pertaining to the Fund and the Portfolio (the "Fund's Books and Records"), including without limitation a daily ledger of such assets and liabilities relating thereto and brokerage and other records of all securities transactions. The Subadviser shall also require that its Access Persons (as defined in the Fund's Code of Ethics) provide the Subadviser with monthly reports of their personal securities transactions. The Fund's Books and Records shall be available to the Manager at any time upon request and shall be available for telecopying without delay to the Manager during any day that the Fund is open for business.
(c) The Subadviser is hereby authorized and directed and hereby agrees to purchase, hold and sell Portfolio securities for the account of the Fund as directed by the Manager and to monitor on a continuing basis the performance of those Portfolio securities. In addition, the Subadviser will place orders for the purchase and sale of Portfolio securities as directed by the Manager and, subject to the provisions of the following paragraph, will take reasonable steps to assure that Portfolio transactions are effected at the best price and execution available, as such phrase is used in the Fund's Prospectus, as in effect from time to time.
In using its best efforts to obtain for the Fund the most favorable price and execution available, the Subadviser, bearing in mind the Fund's best interests at all times, shall consider all factors it deems relevant, including by way of illustration, price, the size of the transaction, the nature of the market for the security, the amount of the commission, the timing of the transaction taking into account market prices and trends, the reputation, experience and financial stability of the broker or dealer involved and the quality of service rendered by the broker or dealer in other transactions. Subject to such policies as the Trustees of the Fund may determine, the Subadviser shall not be deemed to have acted unlawfully or to have breached any duty created by this Contract or otherwise solely by reason of its having caused the Fund to pay an affiliated broker or dealer that provides brokerage and research services to the Subadviser or the Manager an amount of commission for effecting a Portfolio investment transaction that is no greater than the amount of commission than an unaffiliated broker or dealer would have charged for effecting that transaction.
It is understood that the Subadviser, the Manager and the Fund may have advisory, management, service or other contracts with other individuals or entities, and may have other interests and businesses. When a security proposed to be purchased or sold for the Fund is also to be purchased or sold for other accounts managed by the Subadviser at the same time, the Subadviser shall make such purchases or sales on a proArata, rotating or other equitable basis so as to avoid any one account being preferred over any other account.
The Subadviser will advise the Manager and, if instructed by the Manager, the Fund's custodian on a prompt basis each day by electronic telecommunication of each confirmed purchase and sale of a Portfolio security specifying the name of the issuer, the full description of the security including its class, and amount or number of shares of the security purchased or sold, the market price, commission, government charges and gross or net price, trade date, settlement date and identity of the effecting broker or dealer and, if different, the identity of the clearing broker. Under no circumstances may
the Subadviser or any affiliate of the Subadviser act as a principal in a securities transaction with the Fund or any other investment company managed by the Manager.
The Subadviser shall assure that at least two representatives of the Manager, as specified by the Manager, shall be authorized to give directions (without restriction of any kind) to brokers and dealers employed by the Subadviser to execute Portfolio transactions for the Fund and to custodians or depositories that hold securities or other assets of the Fund at any time.
(d) From time to time as the Manager or the Trustees of the Fund may reasonably request, the Subadviser shall furnish to the Manager and to each of the Fund's Trustees reports on Portfolio transactions and reports on securities held in the Portfolio, all in such detail as the Manager or the Trustees may reasonably request. The Subadviser will also inform the Manager and the Fund's Trustees on a current basis of changes in investment strategy or tactics or in key personnel. The Subadviser will make its officers and employees available to meet with the Fund's Trustees at least annually on due notice to review the investments of the Fund in the light of current and prospective economic and market conditions.
It shall be the duty of the Subadviser to furnish to the Trustees of the Fund such information as may reasonably be necessary in order for such Trustees to evaluate this Contract or any proposed amendments thereto for the purposes of casting a vote pursuant to Sectiony7 ory8 hereof.
2. Allocation of Charges and Expenses. The Subadviser will bear its own costs of providing services hereunder. Other than as herein specifically indicated, the Subadviser shall not be responsible for the Fund's or the Manager's expenses, including brokerage and other expenses incurred in placing orders for the purchase and sale of securities. Specifically, the Subadviser will not be responsible for expenses of the Fund or the Manager, as the case may be, including, but not limited to, the following: (i) charges and expenses for determining from time to time the value of the Fund's net assets and the keeping of its books and records and related overhead; (ii) the charges and expenses of auditors; (iii) the charges and expenses of any custodian, transfer agent, plan
agent, dividend disbursing agent and registrar appointed by the Fund; (iv) brokers' commissions, and issue and transfer taxes, chargeable to the Fund in connection with securities transactions to which the Fund is a party; (v) insurance premiums, interest charges, dues and fees for membership in trade associations and all taxes and corporate fees payable by the Fund to federal, state or other governmental agencies; (vi) fees and expenses involved in registering and maintaining registrations of the Fund and/or its shares with the Commission, state or blue sky securities agencies and foreign countries, including the preparation of Prospectuses and Statements of Additional Information for filing with the Commission; (vii) all expenses of shareholders' and Trustees' meetings and of preparing, printing and distributing prospectuses, notices, proxy statements and all reports to shareholders and to governmental agencies; (viii) charges and expenses of legal counsel; (ix) distribution fees paid by the Fund in accordance with Rule 12b-1 promulgated by the Commission pursuant to the 1940 Act; (x) compensation and expenses of Trustees of the Fund. The Fund or the Manager, as the case may be, shall reimburse the Subadviser for any such expenses or other expenses of the Fund or the Manager, as may be reasonably incurred by such Subadviser on behalf of the Fund or the Manager. The Subadviser shall keep and supply to the Fund and the Manager adequate records of all such expenses.
3. Information supplied by the Manager. The Manager shall provide the Subadviser with written statements of the Fund's Declaration of Trust, By-laws, Prospectus and Statement of Additional Information, and instructions, as in effect from time to time; and the Subadviser shall have no responsibility for actions taken in reliance on any such documents.
4. Representations, Warranties and Covenants. The Subadviser represents and warrants to each of the Fund and the Manager that it is registered as an "investment adviser" under the Advisers Act and covenants that it will remain so registered for the duration of this Contract.
The Subadviser has reviewed the Registration Statement of the Fund as filed with the Securities and Exchange Commission and represents and warrants that with respect to disclosure about the Subadviser or information relating directly or indirectly to the Subadviser, such Registration Statement contains, as of the date hereof, no untrue statement of any material fact and does not
omit any statement of material fact which was required to be stated therein or necessary to make the statements contained therein not misleading.
The Subadviser agrees to comply with and will ensure that its recommendations concerning the Portfolio conform with the requirements of the 1940 Act and the Advisers Act and the respective rules and regulations thereunder, as applicable, and the requirements for qualification as a regulated investment company under Subchapter M of the Internal Revenue Code, as well as with all other applicable Federal and state laws, rules, regulations and case law that relate to the services and relationships described hereunder, and with the provisions of the Registration Statement, as amended or supplemented, of the Fund.
5. Subadviser's Compensation. The Manager shall pay to the Subadviser, as compensation for the Subadviser's services hereunder, 0.30% per annum of the Fund's average daily net assets. Such fee shall be computed daily and paid monthly. The Fund shall have no responsibility for any fee payable to the Subadviser.
The method of determining net assets of the Fund for purposes hereof shall be the same as the method of determining net assets for purposes of establishing the offering and redemption price of Fund shares as described in the Fund's Prospectus. If this Contract shall be effective for only a portion of a month, the aforesaid fee shall be prorated for that portion of such month during which this Contract is in effect.
In the event that the advisory fee payable by the Fund to the Manager shall be reduced, the amount payable to the Subadviser shall be likewise reduced by a proportionate amount. The Subadviser may from time to time agree not to impose all or a portion of its fee otherwise payable hereunder (in advance of the time such fee or portion thereof would otherwise accrue). Any such fee reduction may be discontinued or modified by the Subadviser at any time.
6. Independent Contractor. In the performance of its duties hereunder, the Subadviser is and shall be an independent contractor and unless otherwise expressly provided herein or otherwise authorized in writing, shall have no authority to act for or represent the Fund in any way or otherwise be deemed to be an agent of the Fund or of the Manager.
7. Assignment and Amendments. This Contract shall automatically terminate, without the payment of any penalty, in the event of (i) its
assignment, including any change of control of the Manager or the Subadviser, or
(ii) in the event of the termination of the Management Contract; provided that
such termination shall not relieve the Manager or the Subadviser of any
liability incurred hereunder.
The terms of this Contract shall not be changed unless such change is approved at a meeting by the affirmative vote of a majority of the outstanding voting securities of the Fund and unless also approved by the affirmative vote of a majority of Trustees of the Fund voting in person, including a majority of the Trustees who are not interested persons of the Fund, the Manager or the Subadviser, at a meeting called for the purpose of voting on such change.
8. Duration and Termination. This Contract shall become effective as of the date first above written and shall remain in full force and effect continually thereafter unless terminated automatically as set forth in Sectiony7 hereof or until terminated as follows:
(a) The Fund or the Manager may at any time terminate this Contract
by not more than sixty (60) days' nor less than thirty (30) days'
written notice delivered or mailed by registered mail, postage
prepaid, to the Subadviser. Action of the Fund under this
Subsection may be taken either (i) by vote of its Trustees of
(ii) by the affirmative vote of a majority of the outstanding
voting securities of the Fund;
(b) The Subadviser may at any time terminate this Contract by not less than one hundred twenty (120) days' written notice delivered or mailed by registered mail, postage prepaid, to the Manager; or
(c) This Contract shall automatically terminate on April 30 of any year beginning on April 30, 1996, in which its terms and renewal shall not have been approved by (i) a majority vote of the Trustees of the Fund voting in person, including a majority of the Trustees who are not interested persons of the Fund, the Manager or the Subadviser, at a meeting called for the purpose of voting on such approval or (ii) the affirmative vote of a majority of the outstanding voting securities of the Fund; provided, however, that if the continuance of this Contract is submitted to the shareholders of the Fund for their approval and such shareholders fail to approve such continuance of this Contract as provided herein, the Subadviser may continue to serve
hereunder as to the Fund in a manner consistent with the 1940 Act and the rules and regulations thereunder.
Termination of this Contract pursuant to this Section shall be without payment of any penalty.
In the event of termination of this Contract for any reason, the Subadviser shall, immediately upon notice of termination or on such later date as may be specified in such notice, cease all activity on behalf of the Fund and with respect to any of its assets, except as expressly directed by the Manager. In addition, the Subadviser shall deliver the Fund's Books and Records to the Manager by such means and in accordance with such schedule as the Manager shall direct and shall otherwise cooperate, as reasonably directed by the Manager, in the transition of portfolio assets management to any successor of the Subadviser, including the Manager.
9. Certain Definitions. For the purposes of this Contract:
(a) "Affirmative vote of a majority of the outstanding voting securities of the Fund" means the affirmative vote, at an annual or special meeting of shareholders of the Fund, duly called and held, (a)yof 67% or more of the shares of the Fund present (in person or by proxy) and entitled to vote at such meeting, if the holders or more than 50% of the outstanding shares of the Fund entitled to vote at such meeting are present (in person or by proxy), or (b)yof more than 50% of the outstanding shares of the Fund entitled to vote at such meeting, whichever is less.
(b) "Interested persons" and "Assignment" shall have their respective meanings as set forth in the 1940 Act, subject, however, to such exemptions as may be granted by the Securities and Exchange Commission under said Act.
10. Liability and Indemnification. In the absence of willful misfeasance, bad faith or gross negligence on the part of the Subadviser, or of reckless disregard of its obligations and duties hereunder (collectively, "Malfeasance"), the Subadviser shall not be subject to any liability to the Manager or the Fund, to any shareholder of the Fund, or to any person, firm or organization, for any act or omission in the course of, or connected with, rendering services hereunder. Nothing herein, however, shall derogate from the
Subadviser's obligations under federal and state securities laws (collectively, the "Securities Laws").
The Manager shall indemnify the Subadviser for all liabilities and related costs, including reasonable attorney's fees, which the Subadviser may sustain in connection with the discharge without Malfeasance or negligence of its obligations hereunder and in accordance with the Securities Laws. The Subadviser shall indemnify the Manager and the Fund for all liabilities and related costs, including reasonable attorneys fees, which either of them may sustain as a result of the Subadviser's Malfeasance or violation of the Securities Laws.
11. Limitation on Liability of Fund Trustees and Shareholders. A copy of the Certificate of Trust of the Fund is on file with the Secretary of State of the State of Delaware, and notice is hereby given that this Contract is executed on behalf of the Trustees of the Fund as Trustees and not individually and that the obligations of the Fund under this Contract are not binding upon any of the Trustees, officers or shareholders of the Fund but are binding only upon the assets and property of the Fund.
12. Jurisdiction. This Contract shall be governed by and construed in accordance with the substantive laws of The Commonwealth of Massachusetts and the Subadviser consents to the jurisdiction of courts, both state or federal, in Boston, Massachusetts, with respect to any dispute under this Contract.
13. Counterparts. This Contract may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be signed on their behalf by their duly authorized officers as of the date first above written.
ATTEST: PIONEER WINTHROP ADVISERS
/s/Joseph P. Barri /s/David D. Tripple
Joseph P. Barri David D. Tripple
Secretary Executive Vice President
ATTEST: PIONEERING MANAGEMENT CORPORATION
/s/Joseph P. Barri /s/David D. Tripple
Joseph P. Barri David D. Tripple
Secretary President
ATTEST: PIONEER INVESTMENT WINTHROP REAL
ESTATE FUND
/s/Joseph P. Barri /s/John F. Cogan, Jr.
Joseph P. Barri John F. Cogan, Jr.
Secretary Chief Executive Officer
|
INVESTMENT SUBADVISORY AGREEMENT
AGREEMENT made of the 28th day of April, 1995, by and among PIONEER WINTHROP REAL ESTATE INVESTMENT FUND, a Delaware business trust (the "Fund"), PIONEER WINTHROP ADVISERS, a Massachusetts general partnership (the "Manager"), and WINTHROP ADVISORS LIMITED PARTNERSHIP, a Delaware limited partnership (the "Subadviser").
W I T N E S S E T H
WHEREAS, the Fund is an open-end, management investment company, registered under the Investment Company Act of 1940, as amended (the "1940 Act"), and the Manager and the Subadviser are investment advisers registered under the Investment Advisers Act of 1940 (the "Advisers Act"); and
WHEREAS, pursuant to authority granted the Manager by the Fund's Trustees and pursuant to the provisions of the Management Contract of even date herewith between the Manager and the Fund (the "Management Contract"), the Manager has selected the Subadviser to act as a sub-investment adviser of the Fund and to provide certain other services, as more fully set forth below, and to perform such services under the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual agreements herein contained, it is agreed as follow:
1. The Subadviser's Services.
(a) The Subadviser will regularly provide the Manager with advice concerning the investment management of that portion or all of the Fund's portfolio (the "Portfolio") as designated by the Manager. The Subadviser will recommend to the Manager what securities shall be purchased for the Portfolio and what securities shall be held or sold by the Portfolio; subject always to the provisions of the Fund's Declaration of Trust and By-laws and the 1940 Act, and to the investment objectives, policies and restrictions (including, without limitation, the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended, for qualification as a regulated investment company) of the Fund, as each of the same shall be from time to time in effect as set forth in the Fund's Prospectus and Statement of Additional Information, or any investment
guidelines or other instructions received in writing from the Manager, and subject, further, to such policies and instructions as the Manager may from time to time establish and deliver to the Subadviser. The Subadviser is hereby authorized and directed and hereby agrees to monitor on a continuing basis the performance of the Portfolio securities. The Manager shall manage directly (or through another investment subadviser), and the Subadviser shall not be responsible for the management of, any portion of the Fund's portfolio not designated as part of the Portfolio.
(b) The Subadviser shall not be responsible for the provision of administrative, bookkeeping or accounting services to the Fund, except as otherwise provided herein or as may be necessary for the Subadviser to supply to the Manager, the Fund or its Trustees the information required to be supplied under this Contract.
The Subadviser shall maintain separate books and detailed records of all matters pertaining to the Fund and the Portfolio (the "Fund's Books and Records"). The Fund's Books and Records shall be available to the Manager at any time upon request and shall be available for telecopying without delay to the Manager during any day that the Fund is open for business.
(c) The Subadviser will, to the extent reasonably required in the conduct of the business of the Fund and upon request by the Fund or the Manager, furnish to the Manager research, statistical and advisory reports upon the real estate, businesses, or securities as to which such requests shall be made, whether or not the Fund shall at the time have any investment in such real estate, businesses or securities. The Subadviser will use its best efforts in the preparation of such reports and will endeavor to consult the persons and sources believed by it to have information available with respect to such real estate, businesses, corporations or securities.
The Subadviser will also inform the Manager and the Fund's Trustees on a current basis of changes in investment strategy or tactics or in key personnel. The Subadviser will make its officers and employees available to meet
with the Fund's Trustees at least annually on due notice to review the investments of the Fund in the light of current and prospective economic and market conditions.
It shall be the duty of the Subadviser to furnish to the Trustees of the Fund such information as may reasonably be necessary in order for such Trustees to evaluate this Contract or any proposed amendments thereto for the purposes of casting a vote pursuant to Sectiony7 ory8 hereof.
2. Allocation of Charges and Expenses. The Subadviser will bear its own costs of providing services hereunder. Other than as herein specifically indicated, the Subadviser shall not be responsible for the Fund's or the Manager's expenses, including brokerage and other expenses incurred in placing orders for the purchase and sale of securities. Specifically, the Subadviser will not be responsible for expenses of the Fund or the Manager, as the case may be, including, but not limited to, the following: (i) charges and expenses for determining from time to time the value of the Fund's net assets and the keeping of its books and records and related overhead; (ii) the charges and expenses of auditors; (iii) the charges and expenses of any custodian, transfer agent, plan agent, dividend disbursing agent and registrar appointed by the Fund; (iv) brokers' commissions, and issue and transfer taxes, chargeable to the Fund in connection with securities transactions to which the Fund is a party; (v) insurance premiums, interest charges, dues and fees for membership in trade associations and all taxes and corporate fees payable by the Fund to federal, state or other governmental agencies; (vi) fees and expenses involved in registering and maintaining registrations of the Fund and/or its shares with the Commission, state or blue sky securities agencies and foreign countries, including the preparation of Prospectuses and Statements of Additional Information for filing with the Commission; (vii) all expenses of shareholders' and Trustees' meetings and of preparing, printing and distributing prospectuses, notices, proxy statements and all reports to shareholders and to governmental agencies; (viii) charges and expenses of legal counsel; (ix) distribution fees paid by the Fund in accordance with Rule 12b-1 promulgated by the Commission pursuant to the 1940 Act; (x) compensation and expenses of Trustees of the Fund. The Fund or the Manager, as the case may be, shall reimburse the Subadviser for any such expenses or other expenses of the Fund or the Manager, as may be reasonably incurred by such Subadviser on behalf of the Fund or the Manager. The
Subadviser shall keep and supply to the Fund and the Manager adequate records of all such expenses.
3. Information supplied by the Manager. The Manager shall provide the Subadviser with written statements of the Fund's Declaration of Trust, By-laws, Prospectus and Statement of Additional Information, and instructions, as in effect from time to time; and the Subadviser shall have no responsibility for actions taken in reliance on any such documents.
4. Representations, Warranties and Covenants. The Subadviser represents and warrants to each of the Fund and the Manager that it is registered as an "investment adviser" under the Advisers Act and covenants that it will remain so registered for the duration of this Contract.
The Subadviser has reviewed the Registration Statement of the Fund as filed with the Securities and Exchange Commission and represents and warrants that with respect to disclosure about the Subadviser or information relating directly or indirectly to the Subadviser, such Registration Statement contains, as of the date hereof, no untrue statement of any material fact and does not omit any statement of material fact which was required to be stated therein or necessary to make the statements contained therein not misleading.
The Subadviser agrees to comply with and will ensure that its recommendations concerning the Portfolio conform with the requirements of the 1940 Act and the Advisers Act and the respective rules and regulations thereunder, as applicable, and the requirements for qualification as a regulated investment company under Subchapter M of the Internal Revenue Code, as well as with all other applicable Federal and state laws, rules, regulations and case law that relate to the services and relationships described hereunder, and with the provisions of the Registration Statement, as amended or supplemented, of the Fund.
5. Subadviser's Compensation. The Manager shall pay to the Subadviser, as compensation for the Subadviser's services hereunder, 0.30% per annum of the Fund's average daily net assets. Such fee shall be computed daily and paid monthly. The Fund shall have no responsibility for any fee payable to the Subadviser.
The method of determining net assets of the Fund for purposes hereof shall be the same as the method of determining net assets for purposes of establishing the offering and redemption price of Fund shares as described in the Fund's Prospectus. If this Contract shall be effective for only a portion of
a month, the aforesaid fee shall be prorated for that portion of such month during which this Contract is in effect.
In the event that the advisory fee payable by the Fund to the Manager shall be reduced, the amount payable to the Subadviser shall be likewise reduced by a proportionate amount. The Subadviser may from time to time agree not to impose all or a portion of its fee otherwise payable hereunder (in advance of the time such fee or portion thereof would otherwise accrue). Any such fee reduction may be discontinued or modified by the Subadviser at any time.
6. Independent Contractor. In the performance of its duties hereunder, the Subadviser is and shall be an independent contractor and unless otherwise expressly provided herein or otherwise authorized in writing, shall have no authority to act for or represent the Fund in any way or otherwise be deemed to be an agent of the Fund or of the Manager.
7. Assignment and Amendments. This Contract shall automatically
terminate, without the payment of any penalty, in the event of (i) its
assignment, including any change of control of the Manager or the Subadviser, or
(ii) in the event of the termination of the Management Contract; provided that
such termination shall not relieve the Manager or the Subadviser of any
liability incurred hereunder.
The terms of this Contract shall not be changed unless such change is approved at a meeting by the affirmative vote of a majority of the outstanding voting securities of the Fund and unless also approved by the affirmative vote of a majority of Trustees of the Fund voting in person, including a majority of the Trustees who are not interested persons of the Fund, the Manager or the Subadviser, at a meeting called for the purpose of voting on such change.
8. Duration and Termination. This Contract shall become effective as of the date first above written and shall remain in full force and effect continually thereafter unless terminated automatically as set forth in Sectiony7 hereof or until terminated as follows:
(a) The Fund or the Manager may at any time terminate this Contract by not more than sixty (60) days' nor less than thirty (30) days' written notice delivered or mailed by registered mail, postage prepaid, to the Subadviser. Action of the Fund under this
Subsection may be taken either (i) by vote of its Trustees of
(ii) by the affirmative vote of a majority of the outstanding
voting securities of the Fund;
(b) The Subadviser may at any time terminate this Contract by not less than one hundred twenty (120) days' written notice delivered or mailed by registered mail, postage prepaid, to the Manager; or
(c) This Contract shall automatically terminate on April 30 of any year beginning on April 30, 1997, in which its terms and renewal shall not have been approved by (i) a majority vote of the Trustees of the Fund voting in person, including a majority of the Trustees who are not interested persons of the Fund, the Manager or the Subadviser, at a meeting called for the purpose of voting on such approval or (ii) the affirmative vote of a majority of the outstanding voting securities of the Fund; provided, however, that if the continuance of this Contract is submitted to the shareholders of the Fund for their approval and such shareholders fail to approve such continuance of this Contract as provided herein, the Subadviser may continue to serve hereunder as to the Fund in a manner consistent with the 1940 Act and the rules and regulations thereunder.
Termination of this Contract pursuant to this Section shall be without payment of any penalty.
In the event of termination of this Contract for any reason, the Subadviser shall, immediately upon notice of termination or on such later date as may be specified in such notice, cease all activity on behalf of the Fund and with respect to any of its assets, except as expressly directed by the Manager. In addition, the Subadviser shall deliver the Fund's Books and Records to the Manager by such means and in accordance with such schedule as the Manager shall direct and shall otherwise cooperate, as reasonably directed by the Manager, in the transition of portfolio assets management to any successor of the Subadviser, including the Manager.
9. Certain Definitions. For the purposes of this Contract:
(a) "Affirmative vote of a majority of the outstanding voting securities of the Fund" means the affirmative vote, at an annual or special meeting of shareholders of the Fund, duly called and held, (a)yof 67% or more of
the shares of the Fund present (in person or by proxy) and entitled to vote at
such meeting, if the holders or more than 50% of the outstanding shares of the
Fund entitled to vote at such meeting are present (in person or by proxy), or
(b)yof more than 50% of the outstanding shares of the Fund entitled to vote at
such meeting, whichever is less.
(b) "Interested persons" and "Assignment" shall have their respective meanings as set forth in the 1940 Act, subject, however, to such exemptions as may be granted by the Securities and Exchange Commission under said Act.
10. Liability and Indemnification. In the absence of willful misfeasance, bad faith or gross negligence on the part of the Subadviser, or of reckless disregard of its obligations and duties hereunder (collectively, "Malfeasance"), the Subadviser shall not be subject to any liability to the Manager or the Fund, to any shareholder of the Fund, or to any person, firm or organization, for any act or omission in the course of, or connected with, rendering services hereunder. Nothing herein, however, shall derogate from the Subadviser's obligations under federal and state securities laws (collectively, the "Securities Laws").
The Manager shall indemnify the Subadviser for all liabilities and related costs, including reasonable attorney's fees, which the Subadviser may sustain in connection with the discharge without Malfeasance or negligence of its obligations hereunder and in accordance with the Securities Laws. The Subadviser shall indemnify the Manager and the Fund for all liabilities and related costs, including reasonable attorneys fees, which either of them may sustain as a result of the Subadviser's Malfeasance or violation of the Securities Laws.
11. Limitation on Liability of Fund Trustees and Shareholders. A copy of the Certificate of Trust of the Fund is on file with the Secretary of State of the State of Delaware, and notice is hereby given that this Contract is executed on behalf of the Trustees of the Fund as Trustees and not individually and that the obligations of the Fund under this Contract are not binding upon any of the Trustees, officers or shareholders of the Fund but are binding only upon the assets and property of the Fund.
12. Jurisdiction. This Contract shall be governed by and construed in accordance with the substantive laws of The Commonwealth of Massachusetts and the Subadviser consents to the jurisdiction of courts, both state or federal, in Boston, Massachusetts, with respect to any dispute under this Contract.
13. Counterparts. This Contract may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be signed on their behalf by their duly authorized officers as of the date first above written.
ATTEST: PIONEER WINTHROP ADVISERS
/s/Joseph P. Barri /s/David D. Tripple
Joseph P. Barri David D. Tripple
Secretary Executive Vice President
ATTEST: WINTHROP ADVISORS LIMITED
PARTNERSHIP
/s/Arthur J. Halleran, Jr.
Arthur J. Halleran, Jr.
Secretary President
ATTEST: PIONEER WINTHROP REAL
ESTATE INVESTMENT FUND
/s/Joseph P. Barri /s/John F. Cogan, Jr.
Joseph P. Barri John F. Cogan, Jr.
Secretary Chief Executive Officer
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UNDERWRITING AGREEMENT
THIS UNDERWRITING AGREEMENT, dated this 28th day of April, 1995 by and between Pioneer Winthrop Real Estate Investment Fund ("Pioneer") and Pioneer Funds Distributor, Inc. (the "Underwriter").
W I T N E S S E T H
WHEREAS, Pioneer, a Delaware business trust, is registered as an open end, diversified, management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"), and has filed a registration statement (the "Registration Statement") with the Securities and Exchange Commission (the "Commission") for the purpose of registering shares of beneficial interest for public offering under the Securities Act of 1933, as amended;
WHEREAS, the Underwriter, a corporation organized under the laws of the Commonwealth of Massachusetts in 1989, engages in the purchase and sale of securities both as a broker and a dealer and is registered as a broker-dealer with the Commission and is a member in good standing of the National Association of Securities Dealers, Inc. (the "NASD");
WHEREAS, the parties hereto deem it mutually advantageous that the Underwriter should act as Principal Underwriter, as defined in the 1940 Act, for the sale to the public of the shares of beneficial interest of the securities portfolio of each series of Pioneer which the Trustees may establish from time to time (individually, a "Portfolio" and collectively, the "Portfolios"); and
NOW, THEREFORE, in consideration of the mutual covenants and benefits set forth herein, Pioneer and the Underwriter do hereby agree as follows:
1. Pioneer does hereby grant to the Underwriter the right and option to purchase shares of beneficial interest of a Portfolio of Pioneer (the "Shares") for sale to investors either directly or indirectly through other broker-dealers. The Underwriter is not required to purchase any specified number of Shares, but will purchase from Pioneer only a sufficient number of Shares as may be necessary to fill unconditional orders received from time to time by the Underwriter from investors and dealers.
2. The Underwriter shall offer Shares to the public at an offering price based upon the net asset value of the Shares, to be calculated as described in the Registration Statement, including the Prospectus, filed with the Commission and in effect at the time of the offering, plus sales charges as
approved by the Underwriter and the Trustees of Pioneer and as further outlined in Pioneer's Prospectus. The offering price shall be subject to any provisions set forth in the Prospectus from time to time with respect thereto, including, without limitation, rights of accumulation, letters of intention, exchangeability of shares, reinstatement privileges, net asset value purchases by certain persons and reinvestments of dividends and capital gain distributions.
3. In the case of all Shares sold to investors through other broker-dealers, a portion of applicable sales charges will be reallowed to such broker-dealers who are members of the NASD or, in the case of certain sales by banks or certain sales to foreign nationals, to brokers or dealers exempt from registration with the Commission. The concession reallowed to broker-dealers shall be set forth in a written sales agreement and shall be generally the same for broker-dealers providing comparable levels of sales and service.
4. This Agreement shall terminate on any anniversary hereof if its terms and renewal have not been approved by a majority vote of the Trustees of Pioneer voting in person, including a majority of its Trustees who are not "interested persons" of the Trust and who have no direct or indirect financial interest in the operation of the Underwriting Agreement (the "Qualified Trustees"), at a meeting of Trustees called for the purpose of voting on such approval. This Agreement may also be terminated at any time, without payment of any penalty, by Pioneer on 60 days' written notice to the Underwriter, or by the Underwriter upon similar notice to Pioneer. This Agreement may also be terminated by a party upon five (5) days' written notice to the other party in the event that the Commission has issued an order or obtained an injunction or other court order suspending effectiveness of the Registration Statement covering these shares of Pioneer. Finally, this Agreement may also be terminated by Pioneer upon five (5) days' written notice to the Underwriter provided either of the following events has occurred: (i) the NASD has expelled the Underwriter or suspended its membership in that organization; or (ii) the qualification, registration, license or right of the Underwriter to sell shares in a particular state has been suspended or cancelled in a state in which sales of the shares of Pioneer during the most recent 12 month period exceeded 10% of all shares of Pioneer sold by the Underwriter during such period.
5. The compensation for the services of the Underwriter as a principal underwriter under this Agreement shall be (i) that part of the sales charge which is retained by the Underwriter after allowance of discounts to dealers as set forth in the Registration Statement, including the Prospectus, filed with
the Commission and in effect at the time of the offering, as amended, and (ii) those amounts payable to the Underwriter as reimbursement of expenses pursuant to any distribution plan for Pioneer which may be in effect. Nothing contained herein shall relieve Pioneer of any obligation under its management contract or any other contract with any affiliate of the Underwriter.
6. The parties to this Agreement acknowledge and agree that all liabilities arising hereunder, whether direct or indirect, of any nature whatsoever, including without limitation, liabilities arising in connection with any agreement of Pioneer or its Trustees as set forth herein to indemnify any party to this Agreement or any other person, if any, shall be satisfied out of the assets of Pioneer and that no Trustee, officer or holder of shares of beneficial interest of Pioneer shall be personally liable for any of the foregoing liabilities. Pioneer's Certificate of Trust, as amended from time to time, is on file in the Office of Secretary of State of the State of Delaware. Pioneer's Declaration of Trust describes in detail the respective responsibilities and limitations on liability of the Trustees, officers, and holders of shares of beneficial interest.
7. This Agreement shall automatically terminate in the event of its assignment (as that term is defined in the 1940 Act).
8. In the event of any dispute between the parties, this Agreement shall be construed according to the laws of The Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their duly authorized officers and their seal to be hereto affixed as of day and year first above written.
ATTEST: PIONEER WINTHROP REAL ESTATE INVESTMENT FUND
/s/Joseph P. Barri /s/John F. Cogan, Jr.
Joseph P. Barri, Secretary John F. Cogan, Jr.
Chief Executive Officer
ATTEST: PIONEER FUNDS DISTRIBUTOR, INC.
/s/Joseph P. Barri, Clerk /s/Robert L. Butler
Joseph P. Barri, Clerk Robert L. Butler
President
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AGREEMENT BETWEEN
BROWN BROTHERS HARRIMAN & CO.
AND
PIONEER WINTHROP REAL ESTATE INVESTMENT FUND
TABLE OF CONTENTS
1. Employment of Custodian
2. Powers and Duties of the Custodian with respect to Property of the Fund held by the Custodian
A. Safekeeping 2
B. Manner of Holding Securities 2
C. Registered Name; Nominee 2
D. Purchases 2
E. Exchanges 4
F. Sales of Securities 4
G. Depositary Receipts 5
H. Exercise of Rights; Tender Offers 6
I. Stock Dividends, Rights, Etc. 6
J. Options 6
K. Borrowings 7
L. Demand Deposit Bank Accounts 7
M. Interest Bearing Call or Time Deposits 8
N. Foreign Exchange Transactions
and Futures Contracts 9
0. Stock Loans 10
P. Collections 10
Q. Dividends, Distributions and Redemptions 11
R. Proxies, Notices, Etc. 12
S. Nondiscretionary Details 12
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T. Bills 13
U. Deposit of Fund Assets in Securities Systems 13
V. Other Transfers 15
W. Investment Limitations 16
X. Restricted Securities 16
Y. Proper Instructions 18
Z. Segregated Account 19
3. Powers and Duties of the Custodian with Respect to
the Appointment of Subcustodians 20
4. Assistance by the Custodian as to Certain Matters 24
5. Powers and Duties of the Custodian with Respect to its Role
as Financial Agent 24
A. Records
B. Accounts
C. Access to Records
D. Disbursements
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6. Standard of Care and Related Matters
A. Liability of the Custodian with Respect to Proper Instructions; Evidence of Authority; Etc.
B. Liability of the Custodian with Respect to Use of Securities System
C. Liability of the Custodian with Respect to Subcustodians
D. Standard of Care; Liability; Indemnification
E. Reimbursement of Advances
F. Security for Obligations to Custodian
G. Appointment of Agents
H. Powers of Attorney
7. Compensation of the Custodian
8. Termination; Successor Custodian
9. Amendment
10. Governing Law
11. Notices
12. Binding Effect
13. Counterparts
CUSTODIAN AGREEMENT
AGREEMENT made this day of 1995 between PIONEER WINTHROP REAL ESTATE INVESTMENT FUND (the "Fund") and Brown Brothers Harriman & Co. (the "Custodian");
WITNESSETH: That in consideration of the mutual covenants and agreements herein contained, the parties hereto agree as follows:
1. Employment of Custodian: The Fund hereby employs and appoints the Custodian as a custodian for the term and subject to the provisions of this Agreement. The Custodian shall not be under any duty or obligation to require the Fund to deliver to it any securities or funds owned by the Fund and shall have no responsibility or liability for or on account of securities or funds not so delivered. The Fund will deposit with the Custodian copies of the Declaration of Trust or Certificate of Incorporation and By-Laws (or comparable documents) of the Fund and all amendments thereto, and copies of such votes and other proceedings of the Fund as may be necessary for or convenient to the Custodian in the performance of its duties.
2. Powers and Duties of the Custodian with respect to Property of the Fund held by the Custodian: Except for securities and funds held by any Subcustodians or held by the Custodian through a non-U.S. securities depository appointed pursuant to the provisions of Section 3 hereof, the Custodian shall have and perform the following powers and duties:
A. Safekeeping - To keep safely the securities and other assets of the Fund that have been delivered to the Custodian and, on behalf of the Fund, from time to time to receive delivery of securities for safekeeping.
B. manner of Holding Securities - To hold securities of the Fund (1) by physical possession of the share certificates or other instruments representing such securities in registered or bearer form, or (2) in book-entry form by a Securities System (as said term is defined in Section 2U).
C. Registered Name; Nominee - To hold registered securities of the Fund (1) in the name or any nominee name of the Custodian or the Fund, or in the name or any nominee name of any Agent appointed pursuant to Section 6F, or (2) in street certificate form, so-called, and in any case with or without any indication of fiduciary capacity, provided that securities are held in an account of the Custodian containing only assets of the Fund or only assets held as fiduciary or custodian for customers.
D. Purchases - Upon receipt of Proper Instructions, as defined in Section X on
Page 18, insofar as funds are available for the purpose, to pay for and receive
securities purchased for the account of the Fund, payment being made only upon
receipt of the securities (1) by the Custodian, or (2) by a clearing corporation
of a national securities exchange of which the Custodian is a member, or (3) by
a Securities System. However, (i) in the case of repurchase agreements entered
into by the Fund, the Custodian (as well as an Agent) may release funds to a
Securities System or to a Subcustodian prior to the receipt of advice from the
Securities System or Subcustodian that the securities underlying such repurchase
agreement have been transferred by book entry into the Account (as defined in
Section 2U) of the Custodian (or such Agent) maintained with such Securities
System or Subcustodian, so long as such payment instructions to the Securities
System or Subcustodian include a requirement that delivery is only against
payment for securities, (ii) in the case of foreign exchange contracts, options,
time deposits, call account deposits, currency deposits, and other deposits,
contracts or options pursuant to Sections 2J, 2L, 2M and 2N, the Custodian may
make payment therefor without receiving an instrument evidencing said deposit,
contract or option so long as such payment instructions detail specific
securities to be acquired, and (iii) in the case of securities in which payment
for the security and receipt of the instrument evidencing the security are under
generally accepted trade practice or the terms of the instrument representing
the security expected to take place in different locations or through separate
parties, such as commercial paper which is indexed to foreign currency exchange
rates, derivatives and similar securities, the Custodian may make payment for
such securities prior to delivery thereof in accordance with such generally
accepted trade practice or the terms of the instrument representing such
security.
E. Exchanges - Upon receipt of proper instructions, to exchange securities held by it for the account of the Fund for other securities in connection with any reorganization, recapitalization, split-up of shares, change of par value, conversion or other event relating to the securities or the issuer of such securities and to deposit any such securities in accordance with the terms of any reorganization or protective plan. Without proper instructions, the Custodian may surrender securities in temporary form for definitive securities, may surrender securities for transfer into a name or nominee name as permitted in Section 2C, and may surrender securities for a different number of certificates or instruments representing the same number of shares or same principal amount of indebtedness, provided the securities to be issued are to be delivered to the Custodian.
F. Sales of Securities - Upon receipt of proper instructions, to make delivery of securities which have been sold for the account of the Fund, but only against payment therefor (1) in cash, by a certified check, bank cashier's check, bank credit, or bank wire transfer, or (2) by credit to the account of the Custodian with a clearing corporation of a national securities exchange of which the Custodian is a member, or (3) by credit to the account of the Custodian or an Agent of the Custodian with a Securities System; provided, however, that (i) in the case of delivery of physical certificates or instruments representing securities, the Custodian may make delivery to the broker buying the securities, against receipt therefor, for examination in accordance with "street delivery" custom, provided that the payment therefor is to be made to the Custodian (which payment may be made by a broker's check) or that such securities are to be returned to the Custodian, and (ii) in the case of securities referred to in clause (iii) of the last sentence of Section 2D, the Custodian may make settlement, including with respect to the form of payment, in accordance with generally accepted trade practice relating to such securities or the terms of the instrument representing said security.
G. Depositary Receipts - Upon receipt of proper instructions, to instruct a Subcustodian or an Agent to surrender securities to the depositary used by an issuer of American Depositary Receipts or International Depositary Receipts (hereinafter collectively referred to as "ADRs") for such securities against a written receipt therefor adequately describing such securities and written evidence satisfactory to the Subcustodian or Agent that the depositary has acknowledged receipt of instructions to issue with respect to such securities ADRs in the name of the Custodian, or a nominee of the Custodian, for delivery to the Custodian in Boston, Massachusetts, or at such other place as the Custodian may from time to time designate.
Upon receipt of proper instructions, to surrender ADRs to the issuer thereof against a written receipt therefor adequately describing the ADRs surrendered and written evidence satisfactory to the Custodian that the issuer of the ADRs has acknowledged receipt of instructions to cause its depositary to deliver the securities underlying such ADRs to a Subcustodian or an Agent.
H. Exercise of Rights; Tender Offers - Upon timely receipt of proper instructions, to deliver to the issuer or trustee thereof, or to the agent of either, warrants, puts, calls, rights or similar securities for the purpose of being exercised or sold, provided that the new securities and cash, if any, acquired by such action are to be delivered to the Custodian, and, upon receipt of proper instructions, to deposit securities upon invitations for tenders of securities, provided that the consideration is to be paid or delivered or the tendered securities are to be returned to the Custodian.
I. Stock Dividends, Rights, Etc. - To receive and collect all stock dividends, rights and other items of like nature; and to deal with the same pursuant to proper instructions relative thereto.
J. Options - Upon receipt of proper instructions, to receive and retain confirmations or other documents evidencing the purchase of writing of an option on a security or securities index by the Fund; to deposit and maintain in a segregated account, either physically or by book-entry in a Securities System, securities subject to a covered call option written by the Fund; and to release and/or transfer such securities or other assets only in accordance with the provisions of any agreement among the Fund, the Custodian and a broker-dealer relating to such securities or other assets a notice or other communication evidencing the expiration, termination or exercise of such covered option furnished by The Options Clearing Corporation, the securities or options exchange on which such covered option is traded or such other organization as may be responsible for handling such options transactions.
K. Borrowings - Upon receipt of proper instructions, to deliver securities of the Fund to lenders or their agents as collateral for borrowings effected by the Fund, provided that such borrowed money is payable to or upon the Custodian's order as Custodian for the Fund.
L. Demand Deposit Bank Accounts - To open and operate an account or accounts in the name of the Fund on the Custodian's books subject only to draft or order by
the Custodian. All funds received by the Custodian from or for the account of the Fund shall be deposited in said account(s). The responsibilities of the Custodian to the Fund for deposits accepted on the Custodian's books shall be that of a U. S. bank for a similar deposit.
If and when authorized by proper instructions, the Custodian may open and operate an additional account(s) in such other banks or trust companies as may be designated by the Fund in such instructions (any such bank or trust company so designated by the Fund being referred to hereafter as a "Banking Institution"), provided that such account(s) (hereinafter collectively referred to as "demand deposit bank accounts") shall be in the name of the Custodian for account of the Fund and subject only to the Custodian's draft or order. Such demand deposit accounts may be opened with Banking Institutions in the United States and in other countries and may be denominated in either U. S. Dollars or other currencies as the Fund may determine. All such deposits shall be deemed to be portfolio securities of the Fund and accordingly the responsibility of the Custodian therefore shall be the same as and no greater than the Custodian's responsibility in respect of other portfolio securities of the Fund.
M. Interest Bearing Call or Time Deposits - To place interest bearing fixed term and call deposits with such banks and in such amounts as the Fund may authorize pursuant to proper instructions. Such deposits may be placed with the Custodian or with Subcustodians or other Banking Institutions as the Fund may determine. Deposits may be denominated in U. S. Dollars or other currencies and need not be evidenced by the issuance or delivery of a certificate to the Custodian, provided that the Custodian shall include in its records with respect to the assets of the Fund appropriate notation as to the amount and currency of each such deposit, the accepting Banking Institution and other appropriate details, and shall retain such forms of advice or receipt evidencing the deposit, if any, as may be forwarded to the Custodian by the Banking Institution. Such deposits, other than those placed with the Custodian, shall be deemed portfolio securities of the Fund and the responsibilities of the Custodian therefor shall be the same as those for demand deposit bank accounts placed with other banks, as described in Section K of this Agreement. The responsibility of the Custodian for such deposits accepted on the Custodian's books shall be that of a U.S. bank for a similar deposit.
N. Foreign Exchange Transactions and Futures Contracts Pursuant to proper instructions, to enter into foreign exchange contracts or options to purchase
and sell foreign currencies for spot and future delivery on behalf and for the account of the Fund. Such transactions may be undertaken by the Custodian with such Banking Institutions, including the Custodian and Subcustodian(s) as principals, as approved and authorized by the Fund. Foreign exchange contracts and options other than those executed with the Custodian, shall be deemed to be portfolio securities of the Fund and the responsibilities of the Custodian therefor shall be the same as those for demand deposit bank accounts placed with other banks as described in Section 2L of this agreement. Upon receipt of proper instructions, to receive and retain confirmations evidencing the purchase or sale of a futures contract or an option on a futures contract by the Fund; to deposit and maintain in a segregated account, for the benefit of any futures commission merchant or to pay to such futures commission merchant, assets designated by the fund as initial, maintenance or variation "margin" deposits intended to secure the Fund's performance of its obligations under any futures contracts purchased or sold or any options on futures contracts written by the Fund, in accordance with the provisions of any agreement or agreements among any of the Fund, the Custodian and such futures commission merchant, designated to comply with the rules of the Commodity Futures Trading Commission and/or any contract market, or any similar organization or organizations, regarding such margin deposits; and to release and/or transfer assets in such margin accounts only in accordance with any such agreements or rules.
0. Stock Loans - Upon receipt of proper instructions, to deliver securities of the Fund, in connection with loans of securities by the Fund, to the borrower thereof prior to receipt of the collateral, if any, for such borrowing, provided that for stock loans secured by cash collateral the Custodian's instructions to the Securities System require that the Securities System may deliver the securities to the borrower thereof only upon receipt of the collateral for such borrowing.
P. Collections - To collect, receive and deposit in said account or accounts all income, payments of principal and other payments with respect to the securities held hereunder, and in connection therewith to deliver the certificates or other instruments representing the securities to the issuer thereof or its agent when securities are called, redeemed, retired or otherwise become payable; provided, that the payment is to be made in such form and manner and at such time, which may be after delivery by the Custodian of the instrument representing the security, as is in accordance with the terms of the instrument representing the security, or such proper instructions as the Custodian may receive, or
governmental regulations, the rules of Securities Systems or other U.S. securities depositories and clearing agencies or, with respect to securities referred to in clause (iii) of the last sentence of Section 2D, in accordance with generally accepted trade practice; (ii) to execute ownership and other certificates and affidavits for all federal and state tax purposes in connection with receipt of income or other payments with respect to securities of the Fund or in connection with transfer of securities, and (iii) pursuant to proper instructions to take such other actions with respect to collection or receipt of funds or transfer of securities which involve an investment decision.
Q. Dividends, Distributions and Redemptions - Upon receipt of proper instructions from the Fund, or upon receipt of instructions from the Fund's shareholder servicing agent or agent with comparable duties (the "Shareholder Servicing Agent") (given by such person or persons and in such manner on behalf of the Shareholder Servicing Agent as the Fund shall have authorized), the Custodian shall release funds or securities to the Shareholder Servicing Agent or otherwise apply funds or securities, insofar as available, for the payment of dividends or other distributions to Fund shareholders. Upon receipt of proper instructions from the Fund, or upon receipt of instructions from the Shareholder Servicing Agent (given by such person or persons and in such manner on behalf of the Shareholder Servicing Agent as the Fund shall have authorized), the Custodian shall release funds or securities, insofar as available, to the Shareholder Servicing Agent or as such Agent shall otherwise instruct for payment to Fund shareholders who have delivered to such Agent a request for repurchase or redemption of their shares of capital stock of the Fund.
R. Proxies, Notices, Etc. - Promptly to deliver or mail to the Fund all forms of proxies and all notices of meetings and any other notices or announcements affecting or relating to securities owned by the Fund that are received by the Custodian, and upon receipt of proper instructions, to execute and deliver or cause its nominee to execute and deliver such proxies or other authorizations as may be required. Neither the Custodian nor its nominee shall vote upon any of such securities or execute any proxy to vote thereon or give any consent or take any other action with respect thereto (except as otherwise herein provided) unless ordered to do so by proper instructions.
S. Nondiscretionary Details - Without the necessity of express authorization from the Fund, (1) to attend to all nondiscretionary details in connection with the sale, exchange, substitution, purchase, transfer or other dealings with
securities, funds or other property of the Portfolio held by the Custodian except as otherwise directed from time to time by the Directors or Trustees of the Fund, and (2) to make payments to itself or others for minor expenses of handling securities or other similar items relating to the Custodian's duties under this Agreement, provided that all such payments shall be accounted for to the Fund.
T. Bills - Upon receipt of proper instructions, to pay or cause to be paid, insofar as funds are available for the purpose,, bills, statementsf or other obligations of the Fund.
U. Deposit of Fund Assets in Securities Systems - The Custodian may deposit and/or maintain securities owned by the Fund in (i) The Depository Trust Company, (ii) any book-entry system as provided in Subpart 0 of Treasury Circular No. 300, 31 CFR 306, Subpart B of 31 CFR Part 350, or the book-entry regulations of federal agencies substantially in the form of Subpart 0, or (iii) any other domestic clearing agency registered with the Securities and Exchange Commission under Section 17A of the Securities Exchange Act of 1934 which acts as a securities depository and whose use the Fund has previously approved in writing (each of the foregoing being referred to in this Agreement as a "Securities System"). Utilization of a Securities System shall be in accordance with applicable Federal Reserve Board and Securities and Exchange Commission rules and regulations, if any, and subject to the following provisions:
1) The Custodian may deposit and/or maintain Fund securities, either directly or through one or more Agents appointed by the Custodian (provided that any such agent shall be qualified to act as a custodian of the Fund pursuant to the Investment Company Act of 1940 and the rules and regulations thereunder), in a Securities System provided that such securities are represented in an account ("Account") of the Custodian or such Agent in the Securities System which shall not include any assets of the Custodian or Agent other than assets held as a fiduciary, custodian, or otherwise for customers;
2) The records of the Custodian with respect to securities of the Fund which are maintained in a Securities System shall identify by book-entry those securities belonging to the Fund;
3) The Custodian shall pay for securities purchased for the account of the Fund upon (i) receipt of advice from the Securities System that such securities have been transferred to the Account, and (ii) the making of an entry on the records
of the Custodian to reflect such payment and transfer for the account of the Fund. The Custodian shall transfer securities sold for the account of the Fund upon (i) receipt of advice from the Securities System that payment for such securities has been transferred to the Account, and (ii) the making of an entry on the records of the Custodian to reflect such transfer and payment for the account of the Fund. Copies of all advices from the Securities System of transfers of securities for the account of the Fund shall identify the Fund, be maintained for the Fund by the Custodian or an Agent as referred to above, and be provided to the Fund at its request. The Custodian shall furnish the Fund confirmation of each transfer to or from the account of the Fund in the form of a written advice or notice and shall furnish to the Fund copies of daily transaction sheets reflecting each day's transactions in the Securities System for the account of the Fund on the next business day;
4) The Custodian shall provide the Fund with any report obtained by the Custodian or any Agent as referred to above on the Securities System's accounting system, internal accounting control and procedures for safeguarding securities deposited in the Securities System; and the Custodian and such Agents shall send to the Fund such reports on their own systems of internal accounting control as the Fund may reasonably request from time to time.
5) At the written request of the Fund, the Custodian will terminate the use of any such Securities System on behalf of the Fund as promptly as practicable.
V. Other Transfers - Upon receipt of proper instructions, to deliver securities, funds and other property of the Fund to a Subcustodian or another custodian of the Fund; and, upon receipt of proper instructions, to make such other disposition of securities, funds or other property of the Fund in a manner other than or for purposes other than as enumerated elsewhere in this Agreement, provided that the instructions relating to such disposition shall include a statement of the purpose for which the delivery is to be made, the amount of securities to be delivered and the name of the person or persons to whom delivery is to be made.
W. Investment Limitations - In performing its duties generally, and more particularly in connection with the purchase, sale and exchange of securities made by or for the Fund, the Custodian may assume unless and until notified in writing to the contrary that proper instructions received by it are not in conflict with or in any way contrary to any provisions of the Pund's Declaration
of Trust or Certificate of Incorporation or By-Laws (or comparable documents) or votes or proceedings of the shareholders or Directors of the Fund. The Custodian shall in no event be liable to the Fund and shall be indemnified by the Fund for any violation which occurs in the course of carrying out instructions given by the Fund of any investment limitations to which the Fund is subject or other limitations with respect to the Fund's powers to make expenditures, encumber securities, borrow or take similar actions affecting the Fund.
X. Restricted Securities. Notwithstanding any other provision of this Agreement, the Custodian shall not be liable for failure to take any action in respect of a "restricted security" (as hereafter defined) if the Custodian has not received Proper Instructions to take such action (including but not limited to the failure to exercise in a timely manner any right in respect of any restricted security) unless the Custodian's responsibility to take such action is set forth in a writing, agreed upon by the Custodian and the Fund or the investment adviser of the Fund, which specifies particular actions the Custodian is to take without Proper Instructions in respect of specified rights and obligations pertaining to a particular restricted security. Further, the Custodian shall not be responsible for transmitting to the Fund information concerning a restricted security, such as with respect to exercise periods and expiration dates for rights relating to the restricted security, except such information which the Custodian actually receives or which is published in a source which is publicly distributed and generally recognized as a major source of information with respect to corporate actions of securities similar to the particular restricted security. As used herein, the term "restricted securities" shall mean securities which are subject to restrictions on transfer, whether by reason of contractual restrictions or federal, state or foreign securities or similar laws, or securities which have special rights or contractual features which do not apply to publicly-traded shares of, or comparable interests representing, such security.
Y. Proper Instructions - Proper instructions shall mean a tested telex from the Fund or a written request, direction, instruction or certification signed or initialled on behalf of the Fund by one or more person or persons as the Board of Directors or Trustees of the Fund shall have from time to time authorized, provided, however, that no such instructions directing the delivery of securities or the payment of funds to an authorized signatory of the Fund shall be signed by such person. Those persons authorized to give proper instructions may be identified by the Board of Directors or Trustees by name, title or
position and will include at least one officer empowered by the Board to name other individuals who are authorized to give proper instructions on behalf of the Fund. Telephonic or other oral instructions given by any one of the above persons will be considered proper instructions if the Custodian reasonably believes them to have been given by a person authorized to give such instructions with respect to the transaction involved. oral instructions will be confirmed by tested telex or in writing in the manner set forth above but the lack of such confirmation shall in no way affect any action taken by the Custodian in reliance upon such oral instructions. The Fund authorizes the Custodian to tape record any and all telephonic or other oral instructions given to the Custodian by or on behalf of the Fund (including any of its officers, Directors, Trustees, employees or agents) and will deliver to the Custodian a similar authorization from any investment manager or adviser or person or entity with similar reponsibilities which is authorized to give proper instructions on behalf of the Fund to the Custodian. Proper instructions may relate to specific transactions or to types or classes of transactions, and may be in the form of standing instructions.
Proper instructions may include communications effected directly between electromechanical or electronic devices or systems, in addition to tested telex, provided that the Fund and the Custodian agree to the use of such device or system.
Z. Segregated Account - The Custodian shall upon receipt of proper instructions
establish and maintain on its books a segregated account or accounts for and on
behalf of the Fund, into which account or accounts may be transferred cash
and/or securities of the Fund, including securities maintained by the Custodian
pursuant to Section 2U hereof, (i) in accordance with the provisions of any
agreement among the Fund, the Custodian and a broker-dealer registered under the
Securities Exchange Act of 1934 and a member of the National Association of
Securities Dealers, Inc. (or any futures commission merchant registered under
the Commodity Exchange Act) relating to compliance with the rules of the Options
Clearing Corporation and of any registered national securities exchange (or the
Commodity Futures Trading Commission or any registered contract market), or any
similar organization or organizations, regarding escrow or other arrangements in
connection with transactions by the Fund, (ii) for purposes of segregating cash
or securities in connection with options purchased, sold or written by the Fund
or commodity futures contracts or options thereon purchased or sold by the Fund,
(iii) for the purposes of compliance by the Fund with the procedures required by
Investment Company Act Release No. 10666, or any subsequent release or releases of the Securities and Exchange Commission relating to the maintenance of segregated accounts by registered investment companies, and (iv) as mutually agreed from time to time between the Fund and the Custodian.
3. Powers and Duties of the Custodian with Respect to the Appointment of
Subcustodians: The Fund hereby authorizes and instructs the Custodian to hold
securities, funds and other property of the Fund which are maintained outside
the United States at subcustodians appointed pursuant to the provisions of this
Section 3 (a "Subcustodian"). The Fund shall approve in writing (1) the
appointment of each Subcustodian and the subcustodian agreement to be entered
into between such Subcustodian and the Custodian, and (2) if the Subcustodian is
organized under the laws of a country other than the United States, the country
or countries in which the Subcustodian is authorized to hold securities, cash
and other property of the Fund. The Fund hereby further authorizes and instructs
the Custodian and any Subcustodian to utilize such securities depositories
located outside the United States which are approved in writing by the Fund to
hold securities, cash and other property of the Fund. Upon such approval by the
Fund, the Custodian is authorized on behalf of the Fund to notify each
Subcustodian of its appointment as such. The Custodian may, at any time in its
discretion, remove any Subcustodian that has been appointed as such but will
promptly notify the Fund of any such action.
Those Subcustodians, and the countries where and the securities depositories through which they or the Custodian may hold securities, cash and other property of the Fund which the Fund has approved to date are set forth on Appendix A hereto. Such Appendix shall be amended from time to time as Subcustodians, and/or countries and/or securities depositories are changed, added or deleted. The Fund shall be responsible for informing the Custodian sufficiently in advance of a proposed investment which is to be held in a country not listed on Appendix A, in order that there shall be sufficient time for the Fund to give the approval required by the preceding paragraph and for the Custodian to put the appropriate arrangements in place with such Subcustodian, including negotiation of a subcustodian agreement and submission of such subcustodian agreement to the Fund for approval.
If the Fund shall have invested in a security to be held in a country before the foregoing procedures have been completed, such security shall be held by such agent as the Custodian may appoint. In any event, the Custodian shall be liable
to the Fund for the actions of such agent if and only to the extent the Custodian shall have recovered from such agent for any damages caused the Fund by such agent. At the request of the Fund, Custodian agrees to remove any securities held on behalf of the Fund by such agent, if practical, to an approved Subcustodian. Under such circumstances Custodian will collect income and respond to corporate actions on a best efforts basis.
With respect to securities and funds held by a Subcustodian, either directly or indirectly (including by a securities depository or clearing agency), notwithstanding any provision of this Agreement to the contrary, payment for securities purchased and delivery of securities sold may be made prior to receipt of the securities or payment, respectively, and securities or payment may be received in a form, in accordance with governmental regulations, rules of securities depositories and clearing agencies, or generally accepted trade practice in the applicable local market.
In the event that any Subcustodian appointed pursuant to the provisions of this
Section 3 fails to perform any of its obligations under the terms and conditions
of the applicable subcustodian agreement, the Custodian shall use its best
efforts to cause such Subcustodian to perform such obligations. In the event
that the Custodian is unable to cause such Subcustodian to perform fully its
obligations thereunder, the Custodian shall forthwith upon the Fund's request
terminate such Subcustodian in accordance with the termination provisions under
the applicable subcustodian agreement and, if necessary or desirable, appoint
another subcustodian in accordance with the provisions of this Section 3. At the
election of the Fund, it shall have the right to enforce, to the extent
permitted by the subcustodian agreement and applicable law, the Custodian's
rights against any such Subcustodian for loss or damage caused the Fund by such
Subcustodian.
The Custodian will not amend any subcustodian agreement or agree to change or permit any changes thereunder except upon the prior written approval of the Fund.
The Custodian may, at any time in its discretion upon notification to the Fund, terminate any Subcustodian of the Fund in accordance with the termination provisions under the applicable Subcustodian Agreement, and at the written request of the Fund, the Custodian will terminate any Subcustodian in accordance with the termination provisions under the applicable Subcustodian Agreement.
If necessary or desirable, the Custodian may appoint another subcustodian to
replace a Subcustodian terminated pursuant to the foregoing provisions of this
Section 3, such appointment to be made upon approval of the successor
subcustodian by the Fund's Board of Directors or Trustees in accordance with the
provisions of this Section 3. In the event the Custodian receives a claim from a
Subcustodian under the indemnification provisions of any subcustodian agreement,
the Custodian shall promptly give written notice to the Fund of such claim. No
more than thirty days after written notice to the Fund of the Custodian's
intention to make such payment, the Fund will reimburse the Custodian the amount
of such payment except in respect of any negligence or misconduct of the
Custodian.
4. Assistance by the Custodian as to Certain Matters: The Custodian may assist generally in the preparation of reports to Fund shareholders and others, audits of accounts, and other ministerial matters of like nature.
5. Powers and Duties of the Custodian with Respect to its Role as Financial Agent: The Fund hereby also appoints the Custodian as the Funds financial agent. With respect to the appointment as financial agent, the Custodian shall have and perform the following powers and duties:
A. Records - To create, maintain and retain such records relating to its activities and obligations under this Agreement as are required under the Investment Company Act of 1940 and the rules and regulations thereunder (including Section 31 thereof and Rules 3la-1 and 3la-2 thereunder) and under applicable Federal and State tax laws. All such records will be the property of the Fund and in the event of termination of this Agreement shall be delivered to the successor custodian.
B. Accounts - To keep books of account and render statements, including interim monthly and complete quarterly financial statements, or copies thereof, from time to time as reasonably requested by proper instructions.
C. Access to Records - The books and records maintained by the Custodian pursuant to Sections 5A and 5B shall at all times during the Custodian's regular business hours be open to inspection and audit by officers of, attorneys for and auditors employed by the Fund and by employees and agents of the Securities and Exchange Commission, provided that all such individuals shall observe all security requirements of the Custodian applicable to its own employees having access to similar records within the Custodian and such regulations as may be reasonably imposed by the Custodian.
D. Disbursements - Upon receipt of proper instructions, to pay or cause to be paid, insofar as funds are available for the purpose, bills, statements and other obligations of the Fund (including but not limited to interest charges, taxes, management fees, compensation to Fund officers and employees, and other operating expenses of the Fund).
6. Standard of Care and Related Matters:
A. Liability of the Custodian with Respect to Proper Instructions; Evidence of Authority, Etc. The Custodian shall not be liable for any action taken or omitted in reliance upon proper instructions believed by it to be genuine or upon any other written notice, request, direction, instruction, certificate or other instrument believed by it to be genuine and signed by the proper party or parties.
The Secretary or Assistant Secretary of the Fund shall certify to the Custodian the names, signatures and scope of authority of all persons authorized to give proper instructions or any other such notice, request, direction, instruction, certificate or instrument on behalf of the Fund, the names and signatures of the officers of the Fund, the name and address of the Shareholder Servicing Agent, and any resolutions, votes, instructions or directions of the Fund's Board of Directors or Trustees or shareholders. Such certificate may be accepted and relied upon by the Custodian as conclusive evidence of the facts set forth therein and may be considered in full force and effect until receipt of a similar certificate to the contrary.
So long as and to the extent that it is in the exercise of reasonable care, the Custodian shall not be responsible for the title, validity or genuineness of any property or evidence of title thereto received by it or delivered by it pursuant to this Agreement.
The Custodian shall be entitled, at the expense of the Fund, to receive and act upon advice of (i) counsel regularly retained by the Custodian in respect of custodian matters, (ii) counsel for the Fund, or (iii) such other counsel as the Fund and the Custodian may agree upon, with respect to all matters, and the Custodian shall be without liability for any action reasonably taken or omitted pursuant to such advice.
B. Liability of the Custodian with Respect to Use of Securities System - With respect to the portfolio securities, cash and other property of the Fund held by a Securities System, the Custodian shall be liable to the Fund only for any loss or damage to the Fund resulting from use of the Securities System if caused by any negligence, misfeasance or misconduct of the Custodian or any of its agents or of any of its or their employees or from any failure of the Custodian or any such agent to enforce effectively such rights as it may have against the Securities System. At the election of the Fund, it shall be entitled to be subrogated to the rights of the Custodian with respect to any claim against the Securities System or any other person which the Custodian may have as a consequence of any such loss or damage to the Fund if and to the extent that the Fund has not been made whole for any such loss or damage.
C. Liability of the Custodian with Respect to Subcustodians The Custodian shall be liable to the Fund for any loss or damage to the Fund caused by or resulting from the acts or omissions of any Subcustodian to the extent that under the terms set forth in the subcustodian agreement between the Custodian and the Subcustodian (or in the subcustodian agreement between a Subcustodian and any secondary Subcustodian), the Subcustodian (or secondary Subcustodian) has failed to perform in accordance with the standard of conduct imposed under such subcustodian agreement as determined in accordance with the law which is
adjudicated to govern such agreement and in accordance with any determination of any court as to the duties of said Subcustodian pursuant to said agreement. The Custodian shall also be liable to the Fund for its own negligence in transmitting any instructions received by it from the Fund and for its own negligence in connection with the delivery of any securities or funds held by it to any Subcustodian.
D. Standard of Care; Liability; Indemnification - The Custodian shall be held only to the exercise of reasonable care and diligence in carrying out the provisions of this Agreement, provided that the Custodian shall not thereby be required to take any action which is in contravention of any applicable law. The Fund agrees to indemnify and hold harmless the Custodian and its nominees from all claims and liabilities (including counsel fees) incurred or assessed against it or its nominees in connection with the performance of this Agreement, except such as may arise from its or its nominee's breach of the relevant standard of conduct set forth in this Agreement. Without limiting the foregoing indemnification obligation of the Fund, the Fund agrees to indemnify the Custodian and any nominee in whose name portfolio securities or other property of the Fund is registered against any liability the Custodian or such nominee may incur by reason of taxes assessed to the Custodian or such nominee or other costs, liability or expense incurred by the Custodian or such nominee resulting directly or indirectly from the fact that portfolio securities or other property of the Fund is registered in the name of the Custodian or such nominee.
It is also understood that the Custodian shall not be liable for any loss involving any securities, currencies, deposits or other property of the Fund, whether maintained by it, a Subcustodian, a securities depository, an agent of the Custodian or a Subcustodian, a Securities System, or a Banking Institution, or for any loss arising from a foreign currency transaction or contract, where the loss results from a Sovereign Risk or where the entity maintaining such securities, currencies, deposits or other property of the Fund, whether the Custodian, a Subcustodian, a securities depository, an agent of the Custodian or a Subcustodian, a Securities System or a Banking Institution, has exercised reasonable care maintaining such property or in connection with the transaction involving such property. A "Sovereign Risk" shall mean nationalization, expropriation, devaluation, revaluation, confiscation, seizure, cancellation, destruction or similar action by any governmental authority, de facto or de jure; or enactment, promulgation, imposition or enforcement by any such governmental authority of currency restrictions, exchange controls, taxes,
levies or other charges affecting the Fund's property; or acts of war, terrorism, insurrection or revolution; or any other act or event beyond the Custodian's control.
E. Reimbursement of Advances - The Custodian shall be entitled to receive reimbursement from the Fund on demand, in the manner provided in Section 7, for its cash disbursements, expenses and charges (including the fees and expenses of any Subcustodian or any Agent) in connection with this Agreement, but excluding salaries and usual overhead expenses.
F. Security for Obligations to Custodian - If the Fund shall require the Custodian to advance cash or securities for any purpose for the benefit of the Fund, including in connection with foreign exchange contracts or options (collectively, an "Advance") , or if the Custodian or any nominee thereof shall incur or be assessed any taxes, charges, expenses, assessments, claims or liabilities in connection with the performance of this Agreement (collectively a "Liability") , except such as may arise from its or such nominee's breach of the relevant standard of conduct set forth in this Agreement, then in such event any property at any time held for the account of the Fund by the Custodian or a Subcustodian shall be security for such Advance or Liability and if the Fund shall fail to repay or indemnify the Custodian promptly, the Custodian shall be entitled to utilize available cash and to dispose of the Fund's property, including securities, to the extent necessary to obtain reimbursement or indemnification.
G. Appointment of Agents - The Custodian may at any time or times in its discretion appoint (and may at any time remove) any other bank or trust company as its agent (an "Agent") to carry out such of the provisions of this Agreement as the Custodian may from time to time direct, provided, however, that the appointment of such Agent (other than an Agent appointed pursuant to the third paragraph of Section 3) shall not relieve the Custodian of any of its responsibilities under this agreement.
H. Powers of Attorney - Upon request, the Fund shall deliver to the Custodian such proxies, powers of attorney or other instruments as may be reasonable and necessary or desirable in connection with the performance by the Custodian or any Subcustodian of their respective obligations under this Agreement or any applicable subcustodian agreement.
7. Compensation of the Custodian: The Fund shall pay the Custodian a custody fee based on such fee schedule as may from time to time be agreed upon in writing by the Custodian and the Fund. Such fee, together with all amounts for which the Custodian is to be reimbursed in accordance with Section 6D, shall be billed to the Fund in such a manner as to permit payment by a direct cash payment to the Custodian.
8. Termination; Successor Custodian: This Agreement shall continue in full force and effect until terminated by either party by an instrument in writing delivered or mailed, postage prepaid, to the other party, such termination to take effect not sooner than seventy five (75) days after the date of such delivery or mailing. In the event of termination the Custodian shall be entitled to receive prior to delivery of the securities, funds and other property held by it all accrued fees and unreimbursed expenses the payment of which is contemplated by Sections 6D and 7, upon receipt by the Fund of a statement setting forth such fees and expenses.
In the event of the appointment of a successor custodian, it is agreed that the funds and securities owned by the Fund and held by the Custodian or any Subcustodian shall be delivered to the successor custodian, and the Custodian agrees to cooperate with the Fund in execution of documents and performance of other actions necessary or desirable in order to substitute the successor custodian for the Custodian under this Agreement.
9. Amendment: This Agreement constitutes the entire understanding and agreement of the parties hereto with respect to the subject matter hereof. No provision of this Agreement may be amended or terminated except by a statement in writing signed by the party against which enforcement of the amendment or termination is sought.
In connection with the operation of this Agreement, the Custodian and the Fund may agree in writing from time to time on such provisions interpretative of or in addition to the provisions of this Agreement as may in their joint opinion be consistent with the general tenor of this Agreement. No interpretative or additional provisions made as provided in the preceding sentence shall be deemed to be an amendment of this Agreement.
The section headings in this Agreement are for the convenience of the parties and in no way alter, amend, limit or restrict the contractual obligations of the parties set forth in this Agreement.
10. Governing Law: This instrument is executed and delivered in The Commonwealth of Massachusetts and shall be governed by and construed according to the laws of said Commonwealth.
11. Notices: Notices and other writings delivered or mailed postage prepaid to the Fund addressed to the Fund at 60 State Street, Boston, Massachusetts 02109 or to such other address as the Fund may have designated to the Custodian in writing, or to the Custodian at 40 Water Street, Boston, Massachusetts 02109, Attention: Manager, Securities Department, or to such other address as the Custodian may have designated to the Fund in writing, shall be deemed to have been properly delivered or given hereunder to the respective addressee.
12. Binding Effect: This Agreement shall be binding on and shall inure to the benefit of the Fund and the Custodian and their respective successors and assigns, provided that neither party hereto may assign this Agreement or any of its rights or obligations hereunder without the prior written consent of the other party.
13. Counterparts: This Agreement may be executed in any number of counterparts, each of which shall be deemed an original. This Agreement shall become effective when one or more counterparts have been signed and delivered by each of the parties.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed in its name and behalf on the day and year first above written.
PIONEER WINTHROP REAL ESTATE BROWN BROTHERS HARRIMAN & CO.
INVESTMENT FUND
By per pro
INVESTMENT COMPANY SERVICE AGREEMENT
April 28, 1995
Pioneer Winthrop Real Estate Investment Fund, a Delaware business trust with its principal place of business at 60 State Street, Boston, Massachusetts 02109 ("Customer") and Pioneering Services Corporation, a Massachusetts corporation ("PSC"), hereby agree as follows:
1. SERVICES TO BE PROVIDED BY PSC. During the term of this Agreement, PSC will provide to each series of shares of beneficial interest (the "Series") of Customer, which may be established, from time to time (the "Account"), with the services described in Exhibits A, B, C, and D (collectively, the "Exhibits") that are attached hereto and incorporated herein by reference. It is understood that PSC may subcontract any of such services to one or more firms designated by PSC, provided that PSC (i) shall be solely responsible for all compensation payable to any such firm and (ii) shall be liable to Customer for the acts or omissions of any such firm to the same extent as PSC would be liable to Customer with respect to any such act or omission hereunder.
2. EFFECTIVE DATE. This Agreement shall become effective on the date hereof (the "Effective Date") and shall continue in effect until it is terminated in accordance with Section 11 below.
3. DELIVERY, VERIFICATION AND RECEIPT FOR DATA AND ASSETS. Prior to the Effective Date, Customer agrees to deliver to PSC all such documentation, data and materials as PSC may reasonably prescribe to enable it to perform the services contemplated by this Agreement. If PSC so requests, Customer agrees to confirm the accuracy of any starting records of Customer's assets and accounts produced from PSC's computer or held in other recording systems. In the event Customer does not, prior to the Effective Date, comply fully with any of the foregoing provisions of this Sectiony3, the date for commencement of PSC's services hereunder may be postponed by PSC until such compliance has taken place.
Customer shall, from time to time, while this Agreement is in effect deliver all such materials and data as may be necessary or desirable to enable PSC to perform its services hereunder, including without limitation, those described in Section 12 hereof.
4. REPORTS AND MAINTENANCE OF RECORDS BY PSC. PSC will furnish to Customer and to properly authorized auditors, examiners, distributors, dealers, underwriters, salesmen, insurance companies, investors, and others designated by Customer in writing, such books, any and all records and reports at such times
as are prescribed for each service in the Exhibits attached hereto. Customer agrees to examine or to ask any other authorized recipient to examine each such report or copy promptly and will report or cause to be reported any errors or discrepancies therein of which Customer then has any knowledge. PSC may at its option at any time, and shall forthwith upon Customer's demand, turn over to Customer and cease to retain in PSC's files, any and all records and documents created and maintained by PSC pursuant to this Agreement which are no longer needed by PSC in the performance of its services or for its protection.
If not so turned over to Customer, such documents and reports will be retained by PSC for six years from the year of creation, during the first two of which the same will be in readily accessible form. At the end of six years, such records and documents, will be turned over to Customer by PSC unless Customer authorizes their destruction.
5. PSC'S DUTY OF CARE. PSC shall at all time use reasonable care and act in good faith in performing its duties hereunder. PSC shall incur no liability to Customer in connection with its performance of services hereunder except to the extent that it does not comply with the foregoing standards.
PSC shall at all times adhere to various procedures and systems consistent with industry standards in order to safeguard Customer's checks, records and other data from loss or damage attributable to fire or theft. PSC shall maintain insurance adequate to protect against the costs of reconstructing checks, records and other data in the event of such loss and shall notify Customer in the event of a material adverse change in such insurance coverage. In the event of damage or loss occurring to Customer's records or data such that PSC is unable to meet the terms of this Agreement, PSC shall transfer all records and data to a transfer agent of Customer's choosing upon Customer's written authorization to do so.
Without limiting the generality of the foregoing, PSC shall not be liable or responsible for delays or errors occurring by reason of circumstances beyond its control including acts of civil, military or banking authority, national emergencies, labor difficulties, fire, flood or other catastrophes, acts of God, insurrection, war, riots, failure of transportation, communication or power supply.
6. CONFIDENTIALITY. PSC will keep confidential all records and information provided by Customer or by the shareholders of the Account to PSC, except to the extent disclosures are required by this Agreement, are required by
the Customer's Prospectus and Statement of Additional Information, or are required by a valid subpoena or warrant issued by a court of competent jurisdiction or by a state or federal agency or governmental authority.
7. CUSTOMER INSPECTION. Upon reasonable notice, in writing signed by Customer, PSC shall make available, during regular business hours, all records and other data created and maintained pursuant to this Agreement for reasonable audit and inspection by Customer or Customer's agents, including reasonable visitation by Customer or Customer's agent, including inspecting PSC's operation facilities. PSC shall not be liable for injury to or responsible in any way for the safety of any individual visiting PSC's facilities under the authority of this section. Customer will keep confidential and will cause to keep confidential all confidential information obtained by its employees or agents or any other individual representing Customer while on PSC's premises. Confidential information shall include (1) any information of whatever nature regarding PSC's operations, security procedures, and data processing capabilities, (2) financial information regarding PSC, its affiliates, or subsidiaries, and (3) any information of whatever kind or description regarding any customer of PSC, its affiliates or subsidiaries.
8. RELIANCE BY PSC ON INSTRUCTIONS AND ADVICE; INDEMNITY. PSC shall be entitled to seek advice of Customer's legal counsel with respect to PSC's responsibilities and duties hereunder and shall in no event be liable to Customer for any action taken pursuant to such advice, except to the extent that Customer's legal counsel determines in its sole discretion that the rendering of advice to PSC would result in a conflict of interest.
Whenever PSC is authorized to take action hereunder pursuant to proper instructions from Customer, PSC shall be entitled to rely upon any certificate, letter or other instrument or telephone call reasonably believed by PSC to be genuine and to have been properly made or signed by an officer or other authorized agent of Customer, and shall be entitled to receive as conclusive proof of any fact or matter required to be ascertained by it hereunder a certificate signed by an officer of Customer or any other person authorized by Customer's Board of Trustees.
Subject to the provisions of Sectiony13 of this Agreement, Customer agrees to indemnify and hold PSC, its employees, agents and nominees harmless from any and all claims, demands, actions and suits, whether groundless or otherwise, and from and against any and all judgments, liabilities, losses, damages, costs, charges, counsel fees and other expenses of every nature and
character arising out of or in any way relating to PSC's action or non-action upon information, instructions or requests given or made to PSC by Customer with respect to the Account.
Notwithstanding the above, whenever Customer may be asked to indemnify or hold PSC harmless, Customer shall be advised of all pertinent facts arising from the situation in question. Additionally, PSC will use reasonable care to identify and notify Customer promptly concerning any situation which presents, actually or potentially, a claim for indemnification against Customer. Customer shall have the option to defend PSC against any claim for which PSC is entitled to indemnification from Customer under the terms hereof, and in the event Customer so elects, it will notify PSC and, thereupon, Customer shall take over complete defense of the claim and PSC shall sustain no further legal or other expenses in such a situation for which indemnification shall be sought or entitled. PSC may in no event confess any claim or make any compromise in any case in which Customer will be asked to indemnify PSC except with Customer's prior written consent.
9. MAINTENANCE OF DEPOSIT ACCOUNTS. PSC shall maintain on behalf of Customer such deposit accounts as are necessary or desirable from time to time to enable PSC to carry out the provisions of this Agreement.
10. COMPENSATION AND REIMBURSEMENT TO PSC. For the services rendered by PSC under this Agreement, Customer agrees to pay an annual fee of $22.00 per account to PSC, such fee to be payable in equal monthly installments. In addition, Customer shall reimburse PSC monthly for out-of-pocket expenses such as postage, forms, envelopes, checks, "outside" mailings, telephone line and other charges, mailgrams, mail insurance on certificates and data processing file recovery insurance.
11. TERMINATION. Either PSC or Customer may at any time terminate this Agreement by giving 90 days' prior written notice to the other.
After the date of termination, for so long as PSC in fact continues to perform any one or more of the services contemplated by this Agreement or any exhibit hereto, the provisions of this Agreement, including without limitation the provisions of Section 8 dealing with indemnification, shall where applicable continue in full force and effect.
12. REQUIRED DOCUMENTS. Customer agrees to furnish to PSC prior to the Effective Date the following (to the extent not previously provided):
A. Two (2) copies of the Declaration of Trust of Customer, and of any amendments thereto, certified by the proper official of the State where the Declaration of Trust is filed.
B. Two (2) copies of the following documents, currently certified by the Secretary of Customer:
a. Customer's By-laws and any amendment thereto.
b. Certified copies of resolutions of Customer's Board of Trustees covering the following matters.
(1) Approval of this Agreement.
(2) Authorization of specified officers of Customers to instruct PSC hereunder (if different from other officers of Customer previously specified by Customer as to other Customer accounts being serviced by PSC).
C. List of all officers of Customer together with specimen signatures of those officers who are authorized to sign share certificates and to instruct PSC in all other matters.
D. Two (2) copies of the following:
a. Prospectus
b. Statement of Additional Information
c. Management Agreement
d. Registration Statement
E. Opinion of counsel for Customer as to the due authorization by and binding effect of this Agreement on Customer, the applicability of the Securities Act of 1933, as amended, and the Investment Company Act of 1940, as amended, and the approval by such public authorities as may be prerequisite to lawful sale and deliver in the various states.
F. Amendments to, and changes in, any of the foregoing forthwith upon such amendments and changes being available, but in no case later than the effective date.
13. INDEMNIFICATION. The parties to this Agreement acknowledge and agree that all liabilities arising, directly or indirectly, under this Agreement, of any and every nature whatsoever, including without limitation, liabilities arising in connection with any agreement of Customer or its Trustees
set forth herein to indemnify any party to this Agreement or any other person, shall be satisfied out of the assets of the Account first and then of Customer and that no Trustee, officer or holder of shares of beneficial interest of Customer shall be personally liable for any of the foregoing liabilities. Customer's Certificate of Trust, as amended from time to time, is on file in the Office of the Secretary of State of the State of Delaware. Such Certificate of Trust and Customer's Declaration of Trust describe in detail the respective responsibilities and limitations on liability of the Trustees, officers, and holders of shares of beneficial interest of Customer.
14. MISCELLANEOUS. In connection with the operation of this Agreement, PSC and Customer may agree from time to time on such provisions interpretive of or in addition to the provisions of this Agreement as may in their joint opinion be consistent with the general tenor of this Agreement. Any such interpretive or additional provisions are to be signed by both parties and annexed hereto, but no such provision shall contravene any applicable Federal and state law or regulation, and no such provision shall be deemed to be an amendment of this Agreement.
This Agreement shall be construed in accordance with the laws of The Commonwealth of Massachusetts.
IN WITNESS WHEREOF, Customer and PSC have caused this Agreement to be executed in their respective names by their respective officers thereunto duly authorized as of the date first written above.
ATTEST: PIONEERING SERVICES CORPORATION
/s/Joseph P. Barri /s/William H. Smith, Jr.
Joseph P. Barri, Clerk William H. Smith, Jr.
President
PIONEER WINTHROP REAL ESTATE FUND
(the Delaware business trust)
/s/Joseph P. Barri /s/John F. Cogan, Jr.
Joseph P. Barri, Secretary John F. Cogan, Jr.
Chief Executive Officer
|
EXHIBIT A - TO INVESTMENT COMPANY SERVICE AGREEMENT
Shareholder Account Service:
As Servicing Agent for fund accounts and in accordance with the provisions of the standard fund application and Customer's prospectus, PSC will:
1. Open, maintain and close accounts.
2. Purchase shares for the shareholder.
3. Out of the money received in payment for sales of Customer's shares pay to the Customer's custodian the net asset value per share and pay to the underwriter and to the dealer their commission, if any, on a bimonthly basis.
4. Redeem shares by systematic withdrawal orders. (See Exhibit B)
5. Issue share certificates, upon instruction, resulting from withdrawals from share accounts (It is the policy of PSC to issue share certificates only upon request of the shareholder). Maintain records showing name, address, certificate numbers and number of shares.
6. Deposit certificates to shareholder accounts when furnished with such documents as PSC deems necessary to authorize the deposit.
7. Reinvest or disburse dividends and other distributions upon direction of shareholder.
8. Establish the proper registration of ownership of shares.
9. Pass upon the adequacy of documents submitted by a shareholder or his legal representative to substantiate the transfer of ownership of shares from the registered owner to transferees.
10. Make transfers from time to time upon the books of the Customer in accordance with properly executed transfer instructions furnished to PSC.
11. Upon receiving appropriate detailed instructions and written materials prepared by Customer and, where applicable, proxy proofs checked by Customer, mail shareholder reports, proxies and related materials of suitable design for automatic enclosing, receive and tabulate executed proxies, and furnish an annual meeting list of shareholders when required.
12. Respond to shareholder inquiries in a timely manner.
13. Maintain dealer and salesperson records.
14. Maintain and furnish to Customer such shareholder information as Customer may reasonably request for the purpose of compliance by Customer with the applicable tax and securities law of various jurisdictions.
15. Mail confirmations of transactions to shareholders in a timely fashion.
16. Provide Customer with such information regarding correspondence as well as enable Customer to comply with related N-SAR requirements.
17. Maintain continuous proof of the outstanding shares of Customer.
18. Solicit taxpayer identification numbers.
19. Provide data to enable Customer to file abandoned property reports for those accounts that have been indicated by the Post Office to be not at the address of record with no forwarding address.
20. Maintain bank accounts and reconcile same on a monthly basis.
21. Provide management information reports on a quarterly basis to Customer's Board of Trustees/Directors outlining the level of service provided.
22. Provide sale/statistical reporting for purposes of providing fund management with information to maximizing the return to shareholders.
EXHIBIT B - TO INVESTMENT COMPANY SERVICE AGREEMENT
Redemption Service:
In accordance with the provisions of the Customer's Prospectus, as servicing agent for the redemptions, PSC will:
1. Where applicable, establish accounts payable based on information furnished to PSC on behalf of Customer (i.e., copies of trade confirmations and other documents deemed necessary or desirable by PSC on the first business day following the trade date).
2. Receive for redemption either:
a. Share certificates, supported by appropriate documentation; or
b. Written or telephone authorization (where no share certificates are issued).
3. Verify there are sufficient available shares in an account to cover redemption requests.
4. Transfer the redeemed or repurchased shares to Customer's treasury share account or, if applicable, cancel such shares for retirement.
5. Pay the applicable redemption or repurchase price to the shareholder in accordance with Customer's Prospectus and Declaration of Trust on or before the seventh calendar day succeeding any receipt of certificates or requests for redemption or repurchase in "good order" as defined in the Prospectus.
6. Notify Customer and the underwriter on behalf of Customer of the total number of shares presented and covered by such requests within a reasonable period of time following receipt.
7. Promptly notify the shareholder if any such certificate or request for redemption or repurchase is not in "good order" together with notice of the documents required to comply with the good order standards. Upon receipt of the necessary documents PSC shall effect such redemption at the net asset value applicable at the date and time of receipt of such documents.
8. Produce periodic reports of unsettled items, if any.
9. Adjust unsettled items, if any, relative to dividends and distributions.
10. Report to Customer any late redemptions which must be included in Customer's N-SAR.
EXHIBIT C - TO INVESTMENT COMPANY SERVICE AGREEMENT
Exchange Service:
1. Receive and process exchanges in accordance with a duly executed exchange authorization. PSC will redeem existing shares and use the proceeds to purchase new shares. Shares of Customer purchased directly or acquired through reinvestment of dividends on such shares may be exchanged for shares of other Pioneer funds (which funds have sales charges) only by payment of the applicable sales charge, if any, as described in Customer's Prospectus. Shares of Customer acquired by exchange and through reinvestment of dividends on such shares may be re-exchanged to another Pioneer fund at their respective net asset values.
2. Make authorized deductions of fees, if any.
3. Register new shares identically with the shares surrendered for exchange. Mail new shares certificates, if requested, or an account statement confirming the exchange by first class mail to the address of record.
4. Maintain a record of unprocessed exchanges and produce a periodic report.
- -C1-
EXHIBIT D - TO INVESTMENT COMPANY SERVICE AGREEMENT
Income Accrual and Disbursing Service:
1. Distribute income dividends and/or capital gain distributions, either through reinvestment or in cash, in accordance with shareholder instructions.
2. On the mailing date, Customer shall make available to PSC collected funds to make such distribution.
3. Adjust unsettled items relative to dividends and distribution.
4. Reconcile dividends and/or distributions with Customer.
5. Prepare and file annual Federal and State information returns of distributions and, in the case of Federal returns, mail information copies to shareholders and report and pay Federal income taxes withheld from distributions made to non-resident aliens.
April 20, 1995
Pioneer Winthrop Real Estate
Investment Fund
60 State Street
Boston, Massachusetts 02109
Re: Pioneer Winthrop Real Estate Investment Fund
Ladies and Gentlemen:
We have acted as special Delaware counsel to Pioneer Winthrop Real Estate Investment Fund, a Delaware business trust (the "Trust"), in connection with certain matters relating to the formation of the Trust and the issuance of Shares of beneficial interest in the Trust. Capitalized terms used herein and not otherwise herein defined are used as defined in the Agreement and Declaration of Trust of the Trust dated March 10, 1995 (the "Governing Instrument").
In rendering this opinion, we have examined copies of the following documents, each in the form provided to us: the Certificate of Trust of the Trust as filed in the Office of the Secretary of State of the State of Delaware (the "Recording Office") on April 19, 1995 (the "Certificate"); the Governing Instrument; the By-laws of the Trust; certain resolutions of the Trustees of the Trust; an Adoption Of And Amendment To Notification Of Registration to be filed with the Securities and Exchange Commission on April 25, 1995 by which the Trust will adopt the Notification of Registration Filed Pursuant to Section 8(a) of the Investment Company Act of 1940 on Form N-8A of Pioneer Winthrop Real Estate Investment Fund, a Massachusetts business trust; Post- Effective Amendment No. 4 to the Registration Statement on Form N- 1A of Pioneer Winthrop Real Estate Investment Fund, a Massachusetts business trust, by which the Trust will adopt such Registration Statement to be filed with the Securities and Exchange Commission on April 25, 1995 (the "Post-Effective Amendment"); and a certifi- cation of good standing of the Trust obtained as of a recent date from the Recording Office. In such examinations, we have assumed the genuineness of all signatures, the conformity to original documents of all documents submitted to
Pioneer Winthrop Real Estate Investment Fund
April 20, 1995
us as copies or drafts of documents to be executed, and the legal capacity of
natural persons to complete the execution of documents. We have further assumed
for the purpose of this opinion: (i) the due authorization, execution and
delivery by, or on behalf of, each of the parties thereto of the
above-referenced instruments, certificates and other documents, and of all
documents contemplated by the Governing Instrument, the By-laws and applicable
resolutions of the Trustees to be executed by investors desiring to become
Shareholders; (ii) the payment of consideration for Shares, and the application
of such consideration, as provided in the Governing Instrument, and compliance
with the other terms, conditions and restrictions set forth in the Governing
Instrument and all applicable resolutions of the Trustees of the Trust in
connection with the issuance of Shares (including, without limitation, the
taking of all appropriate action by the Trustees to designate Series of Shares
and the rights and preferences attributable thereto as contemplated by the
Governing Instrument); (iii) that appropriate notation of the names and
addresses of, the number of Shares held by, and the consider- ation paid by,
Shareholders will be maintained in the appropriate registers and other books and
records of the Trust in connection with the issuance, redemption or transfer of
Shares; (iv) that no event has occurred subsequent to the filing of the
Certificate that would cause a termination or reorganization of the Trust under
Section 4 or Section 5 of Article IX of the Governing Instrument; (v) that the
activities of the Trust have been and will be conducted in accordance with the
terms of the Governing Instrument and the Delaware Business Trust Act, 12 Del.
C. 3801 et seq. (the "Delaware Act"); and (vi) that each of the documents
examined by us is in full force and effect and has not been modified,
supplemented or otherwise amended. No opinion is expressed herein with respect
to the requirements of, or compliance with, federal or state securities or blue
sky laws. Further, we express no opinion on the sufficiency or accuracy of any
registration or offering documentation relating to the Trust or the Shares. As
to any facts material to our opinion, other than those assumed, we have relied
without independent investigation on the above-referenced documents and on the
accuracy, as of the date hereof, of the matters therein contained.
Based on and subject to the foregoing, and limited in all respects to matters of Delaware law, it is our opinion that:
1. The Trust is a duly organized and validly existing business trust in good standing under the laws of the State of Delaware.
2. The Shares of the Trust, when issued to Shareholders in accordance with the terms, conditions, requirements and procedures set forth in the
Pioneer Winthrop Real Estate Investment Fund
April 20, 1995
Governing Instrument, will constitute legally issued, fully paid and non-assessable Shares of beneficial interest in the Trust.
3. Under the Delaware Act and the terms of the Governing Instrument, each Shareholder of the Trust, in such capacity, will be entitled to the same limitation of personal liability as that extended to stockholders of private corporations for profit organized under the general corporation law of the State of Delaware; provided, however, that we express no opinion with respect to the liability of any Shareholder who is, was or may become a named Trustee of the Trust. Neither the existence nor exercise of the voting rights granted to Shareholders under the Governing Instrument will, of itself, cause a Shareholder to be deemed a trustee of the Trust under the Delaware Act. Notwith- standing the foregoing or the opinion expressed in paragraph 2 above, we note that, pursuant to Section 2 of Article VIII of the Governing Instrument, the Trustees have the power to cause Shareholders, or Shareholders of a particular Series, to pay certain custodian, transfer, servicing or similar agent charges by setting off the same against declared but unpaid dividends or by reducing Share ownership (or by both means).
We understand that the Trust is currently in the process of registering or qualifying Shares in various states, and we hereby consent to the filing of a copy of this opinion with the securities administrators of such states and with the Securities and Exchange Commission as part of the Post-Effective Amendment. In giving this consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regula- tions of the Securities and Exchange Commission thereunder. Except as provided in this paragraph, the opinion set forth above is expressed solely for the benefit of the addressee hereof and may not be relied upon by, or filed with, any other person or entity for any purpose without our prior written consent.
Sincerely,
/s/MORRIS, NICHOLS, ARSHT & TUNNELL MORRIS, NICHOLS, ARSHT & TUNNELL |
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report (and to all references to our firm) included in or made a part of the Pioneer Winthrop Real Estate Investment Fund Post-Effective Amendment No. 4 to Registration Statement File No. 33-65822 and Amendment No. 5 to Registration Statement File No. 811-7870.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
April 20, 1995
[LOGO]
Pioneer
Winthrop
Real Estate
Investment
Fund
ANNUAL REPORT
DECEMBER 31, 1994
PIONEER WINTHROP REAL ESTATE INVESTMENT FUND
FELLOW SHAREOWNERS,
This report to shareowners of Pioneer Winthrop Real Estate Investment Fund details the Fund's performance for the six months ended December 31, 1994. As you may have noticed, we have changed the Fund's fiscal year end to December 31 from June 30. This change, which is designed to simplify the Fund's accounting procedures, will not affect the Fund's objectives or investment policies. Following is a look at events that affected your Fund and the real estate investment trust (REIT) market since we reported to you for the year ended June 30, 1994.
A Period of Rising Interest Rates
The most dominant factor in financial markets over the past six months was increasing interest rates. The Federal Reserve (the Fed) continued its active stance to cool economic growth, raising short-term rates twice during the past six months. The Fed moved the federal funds rate in August and November, pushing short-term interest rates to a three-year high of 5.5%. (On February 1, the Fed acted again, lifting short-term rates to 6%.)
Real estate investment trusts and other income-providing investments encountered a good deal of volatility during this period. Because such securities tend to be highly sensitive to interest rates, investors moved away from REITs and similar income-producing investments. REITs, utility stocks, financial stocks, as well as most bond investments, were hurt by rising interest rates and investor fears. Of course, the upside was that these securities -- including REITs -- generally produced higher income yields than they had in some time. These high yields, coupled with extremely attractive prices, created a strong demand for REITs in December. This sharply lifted REIT prices as 1994 closed, helping offset the price declines that had occurred during most of the period.
How Your Fund Performed
For the six months ended December 31, 1994, we report the following results for Pioneer Winthrop Real Estate Investment Fund:
o Shareowners received total dividends of $0.35 per share, and a capital gains distribution of $0.025 per share, bringing the total payout to $0.375 for the period. While most of the dividend distributions represented current income from holdings in the Fund's portfolio, a portion represented the depreciation of properties owned by companies in the portfolio. Because we passed on the cash flows the Fund received from its holdings (whether these cash flows came from current income or property depreciation), a portion of the income Fund shareowners received was non-taxable. For 1994, approximately 30% of distributions paid fell into this category. Going forward, we expect that some portion of the Fund's ongoing distributions will be non-taxable.
o Net asset value stood at $11.38 per share on December 31, versus $12.02 six months earlier, in part reflecting the payment of distributions.
o The Fund's six-month total return was -2.16%, based on net asset value and assuming reinvestment of distributions at net asset value. However, for the month of December, the REIT market bounced back significantly. Your Fund returned 11.58% for the month, lifting its one-year total return into positive territory, based on net asset value.
For additional performance information, please turn to page 3.
Your Fund outpaced the average real estate mutual fund over the Fund's lifetime, as tracked by Lipper Analytical Services, an independent mutual fund research firm. The average real estate fund recorded the following returns: -1.45% over six months, -3.05% over one year and -5.44% since your Fund's inception. Lipper tracked 17, 10 and nine funds, respectively, for these time periods.
Managing Your Fund in a Difficult Environment
Our selection process for REITs includes a detailed analysis of company fundamentals. In identifying a potential stock for your Fund's portfolio, we focus on:
o High-quality real estate properties with outstanding growth potential
o Companies with strong balance sheets and low debt
o A strong management team with a personal stake in the company
o Attractive and sustainable dividend income
This concentration on quality real estate investments, in our opinion, makes the most sense in pursuing your Fund's long-term growth objective. While the climate for the overall REIT market will inevitably vary over time, our criteria for choosing a stock for your Fund's portfolio remain the same. In fact, many of the stocks currently in the portfolio (despite the negative REIT environment) continue to achieve -- and in some cases, exceed -- their projected earnings.
Many investors exited the REIT market as interest rates rose over the course of 1994. This lack of investor interest inevitably led to price declines in most REIT investments, regardless of an individual company's strength and growth potential. Of course, the upside of these lower prices has been the increasingly attractive income yields offered by many REITs, which helped offset their price declines. As the real estate/interest rate climate improves, we expect investors will return to the REIT market, especially given the fact that many companies in the sector are offering strong growth potential at extremely discounted prices. We expect investors will look to REITs that are distinguishable in terms of strong earnings and growth potential -- the same fundamentals your management adheres to in choosing stocks for your Fund's portfolio.
Investors have started to share this belief; heightened investment in December benefited both the REIT market and your Fund. Consider, for example, factory outlets. Stocks in this area were particularly hard hit in 1994, leading us to believe that many prices had bottomed out. This created many excellent buying opportunities, which investors took advantage of in December. Factory outlets in the portfolio include one of the Fund's five largest holdings, Horizon Outlet Centers. This holding is appealing because of the company's strong fundamental growth characteristics, as well as the stock's attractive yield.
We also see promise in the warehouse/storage area. A good example is CenterPoint Properties Corporation, which owns warehouses in the Chicago area. Currently the stock is yielding 8%, and we think it is attractively priced. The company's Greater Chicago location has benefited from strong growth and high occupancy rates, and the warehouse industry in that region remains active.
Looking Ahead
As we saw over the past six months, real estate investments entail a degree of risk relating to economic conditions and individual properties. Nonetheless, we are encouraged by the environment for REIT investing as we move into 1995 and beyond. While interest rates may continue to rise, we think future increases will not be of the same magnitude as in 1994. We also are encouraged by recent investor movement back to the REIT market, a trend we expect will continue. As this happens, we are confident investors will look to REITs that offer solid earnings and long-term value. Our commitment is to find REITs with these characteristics, and we will continue to pursue the specific companies and locations we believe offer the best chance of meeting the Fund's objective of long-term capital growth.
One final note. Nomura Securities Co., Ltd., an international brokerage and financial services firm, recently acquired an indirect controlling interest in Winthrop Financial Associates, Pioneer's joint venture partner. We do not anticipate any change in Winthrop's contribution to the Fund or in the way the Fund is managed.
The following pages show audited portfolio holdings and financial statements as of December 31, 1994. If you have any questions about your investment in Pioneer Winthrop Real Estate Investment Fund, please contact your financial adviser or call Pioneer at 1-800-225-6292.
Respectfully submitted,
/s/John F. Cogan, Jr. /s/Arthur J. Halleran, Jr. John F. Cogan, Jr. Arthur J. Halleran, Jr. Chairman, President, Pioneer Winthrop Real Estate Investment Fund February 9, 1995 |
GROWTH OF A $10,000 INVESTMENT*
This chart shows the growth of a $10,000 investment made in Pioneer Winthrop Real Estate Investment Fund at public offering price, compared to the growth of the Standard & Poor's 500 Index+ and the Wilshire Real Estate Index.+
Average Annual Total Returns as of December 31, 1994
Life-of-Fund 1 Year 6 Months
------------ ------ --------
Net Asset Value -3.05% 0.23% -2.16%
Public Offering Price* -7.78 -5.54 -7.76
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[THE FOLLOWING TABLE IS REPRESENTED AS A PERFORMANCE GRAPH
IN THE PRINTED DOCUMENT]
S&P 500 Income Fund Lehman Corporate Bond
------- ----------- ---------------------
Dec-84 $10,000 9,550 10,000
Dec-85 $13,164 11,827 12,406
Dec-86 $15,815 12,926 14,457
Dec-87 $16,424 13,808 14,827
Dec-88 $19,133 15,505 16,196
Dec-89 $25,177 17,970 18,456
Dec-90 $24,393 18,814 19,779
Dec-91 $31,793 22,080 23,440
Dec-92 $34,212 23,755 25,477
Dec-93 $37,845 26,187 28,574
Dec-94 $38,156 25,058 27,451
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The Standard & Poor's (S&P) 500 Index is an unmanaged measure of 500 widely held common stocks listed on the New York Stock Exchange, American Stock Exchange and the Over-the-Counter market.
The Wilshire Real Estate Index is a market-capitalization weighted measure of the performance of more than 85 real estate securities. The Index is 79% REITs (equity and hybrid) and 21% real estate operating companies.
* Reflects deduction of the maximum 5.75% sales charge and assumes reinvestment of all distributions at net asset value.
+ The Fund commenced operations on October 25, 1993. Index comparisons begin October 31, 1993. Index returns assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees, expenses or sales charges. Investors cannot directly invest in the Indexes.
Past performance does not guarantee future results. Returns and share prices fluctuate, and your shares, when redeemed, may be worth more or less than their original cost.
PIONEER WINTHROP REAL ESTATE INVESTMENT FUND
SCHEDULE OF INVESTMENTS
December 31, 1994
Market
Shares Investment in Securities--100.3% Value
- ---------------------------------------------------------------------------------------------------------------------------
COMMERCIAL BANKS--1.9%
50,000 Reliance Bancorp................................................................ $ 525,000
-----------
REAL ESTATE INVESTMENT TRUSTS--94.8%
70,000 Bradley Real Estate Trust....................................................... $ 1,067,500
35,900 Carr Realty Corp................................................................ 646,200
69,000 CenterPoint Properties Corp. ................................................... 1,345,500
30,000 DeBartolo Realty Corp........................................................... 450,000
26,500 Developers Diversified Realty Corp.............................................. 828,125
125,300 Equity Inns, Inc................................................................ 1,378,300
60,000 Factory Stores of America, Inc. ................................................ 1,297,500
58,000 Gables Residential Trust........................................................ 1,247,000
55,000 Horizon Outlet Centers.......................................................... 1,436,875
35,700 IRT Property Co................................................................. 365,925
59,100 JP Realty, Inc.................................................................. 1,241,100
75,700 McArthur/Glen Realty Corp....................................................... 1,249,050
75,500 Merry Land & Investment Co., Inc................................................ 1,651,563
60,000 National Golf Properties, Inc................................................... 1,327,500
53,900 Oasis Residential, Inc.......................................................... 1,320,550
35,000 Post Properties, Inc............................................................ 1,102,500
70,000 Spieker Properties, Inc......................................................... 1,426,250
67,000 Sun Communities, Inc............................................................ 1,507,500
54,500 Tanger Factory Outlet Centers, Inc.............................................. 1,280,750
52,200 Trinet Corporate Realty Trust, Inc.............................................. 1,526,850
20,000 Weingarten Realty Investors..................................................... 757,500
88,000 Wellsford Residential Properties Trust.......................................... 1,848,000
30,000 Winston Hotels, Inc............................................................. 300,000
-----------
$26,602,038
-----------
REAL ESTATE SERVICES--3.6%
150,000 Amresco, Inc.................................................................... $ 1,012,500
-----------
TOTAL INVESTMENT IN SECURITIES (Cost $29,852,478)............................... $28,139,538
-----------
ALL OTHER ASSETS, LESS LIABILITIES--(0.3%)....................................... $ (71,436)
-----------
NET ASSETS--100%................................................................. $28,068,102
===========
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The accompanying notes are an integral part of these financial statements.
PIONEER WINTHROP REAL ESTATE
INVESTMENT FUND
BALANCE SHEET
December 31, 1994
Assets:
Investments in securities, at value (identified cost and cost for federal income
tax purposes of $29,852,478; see Schedule of Investments and Notes 1, 2 and 3)............ $28,139,538
Receivables--
Dividends ................................................................................ 251,023
Trust shares sold......................................................................... 106,483
Organization cost--net (Note 1).............................................................. 73,680
Other....................................................................................... 5,128
-----------
Total assets............................................................................ $28,575,852
-----------
Liabilities:
Payables--
Investment securities purchased........................................................... $ 146,551
Due to bank............................................................................... 207,070
Trust shares repurchased.................................................................. 90,053
Accrued expenses--
Management fees (Note 4).................................................................. 16, 206
Other (Notes 4, 5 and 6) ................................................................. 47,870
-----------
Total liabilities....................................................................... $ 507,750
-----------
Net Assets:
Trust shares (unlimited number of shares authorized), amount paid in on 2,467,250
shares outstanding (Notes 1 and 7) ....................................................... $29,771,644
Accumulated undistributed net realized gain on investments (Note 2)......................... 9,398
Net unrealized loss on investments (Note 2)................................................. (1,712,940)
-----------
Total net assets (equivalent to $11.38 per share based on 2,467,250 trust
shares outstanding)................................................................... $28,068,102
===========
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The accompanying notes are an integral part of these financial statements.
PIONEER WINTHROP REAL ESTATE
INVESTMENT FUND
STATEMENT OF OPERATIONS
For the Six Months Ended December 31, 1994
Investment Income (Note 1):
Dividends.................................................................................. $ 762,508
Interest................................................................................... 10,215
-----------
Total investment income.................................................................. $ 772,723
Expenses:
Management fees (Note 4)................................................................... $ 141,284
Distribution fees (Note 6)................................................................. 35,321
Transfer fees (Note 5)..................................................................... 32,932
Professional fees.......................................................................... 30,553
Registration............................................................................... 27,325
Accounting................................................................................. 25,140
Custodian.................................................................................. 8,980
Printing................................................................................... 1,375
Fees and expenses of nonaffiliated trustees................................................ 2,562
Organization costs (Note 1)................................................................ 9,043
Miscellaneous expenses..................................................................... 5,890
-----------
Total expenses........................................................................... $ 320,405
Less management fees waived by Pioneer Winthrop Advisers (Note 4)....................... 73,158
-----------
Net expenses............................................................................. $ 247,247
-----------
Net investment income.................................................................. $ 525,476
-----------
Realized and Unrealized Gain (Loss) on Investments:
Net realized gain on investments........................................................... $ 34,557
Net increase in unrealized loss on investments............................................. (1,237,463)
-----------
Net loss on investments.................................................................. $(1,202,906)
-----------
Net decrease in net assets resulting from operations................................... $ (677,430)
===========
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The accompanying notes are an integral part of these financial statements.
PIONEER WINTHROP REAL ESTATE INVESTMENT FUND
STATEMENT OF CHANGES IN NET ASSETS
For the Six Months Ended December 31, 1994 and for the Period from October 25, 1993
(Commencement of Operations) to June 30, 1994
Six Months
Ended Period Ended
December 31, 1994 June 30, 1994
----------------- -------------
From Operations:
Net investment income......................................................... $ 525,476 $ 388,019
Net realized gain on investments.............................................. 34,557 37,050
Net increase in unrealized loss on investments................................ (1,237,463) (475,477)
----------- -----------
Net decrease in net assets resulting from operations........................ $ (677,430) $ (50,408)
----------- -----------
Distributions to Shareholders From:
Net investment income ($0.199 and $0.270 per share, respectively)............. $ (525,476) $ (388,019)
Paid-in capital ($0.151 and $0.030 per share, respectively)................... (346,042) (78,530)
Realized gain on investments ($0.025 per share and $0.0 per share,
respectively) .............................................................. (62,209) --
----------- -----------
Net decrease in net assets resulting from distributions to shareholders..... $ (933,727) $ (466,549)
----------- -----------
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Six Months Ended Period Ended
December 31, 1994 June 30, 1994
----------------- -------------
From Trust Share Transactions: Shares Shares
----------------- -------------
Net proceeds from sale of shares................... 526,831 2,560,526 $ 6,037,861 $31,294,221
Net asset value of shares issued to
shareholders in reinvestment of
dividends........................................ 62,858 28,045 709,833 348,134
Cost of shares repurchased......................... (583,891) (207,119) (6,652,624) (2,541,209)
-------- --------- ----------- -----------
Increase in net assets resulting
from trust share transactions.................. 5,798 2,381,452 $ 95,070 $29,101,146
======== ========= ----------- -----------
Net increase (decrease) in net assets............ $(1,516,087) $28,584,189
Net Assets:
Beginning of period............................................................. 29,584,189 1,000,000
----------- -----------
End of period (including accumulated undistributed
(distributions in excess of) net investment income
of $0.00 and ($78,530), respectively) ........................................ $28,068,102 $29,584,189
=========== ===========
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The accompanying notes are an integral part of these financial statements.
PIONEER WINTHROP REAL ESTATE INVESTMENT FUND
FINANCIAL HIGHLIGHTS -- SELECTED DATA FOR A SHARE OUTSTANDING
For the Six Months Ended December 31, 1994 and for the Period from October 25, 1993
(Commencement of Operations) to June 30, 1994
Six Months
Ended Period Ended
December 31, 1994 June 30, 1994
----------------- --------------
Net asset value, beginning of period............................................ $ 12.020 $ 12.500
-------- --------
Income from investment operations--
Net investment income......................................................... $ 0.210 $ 0.268
Net realized and unrealized loss on investments............................... (0.475) (0.448)
-------- --------
Total loss from investment operations....................................... $ (0.265) $ (0.180)
Distribution to shareholders from:
Net investment income ........................................................ (0.199) (0.270)
Paid-in capital............................................................... (0.151) (0.030)
Realized capital gains........................................................ (0.025) --
-------- --------
Net decrease in net asset value................................................. $ (0.640) $ (0.480)
-------- --------
Net asset value, end of period.................................................. $ 11.380 $ 12.020
======== ========
Total return*................................................................... (2.16%) (1.47%)
Ratio of net operating expenses to average net assets........................... 1.75%** 1.71%**
Ratio of net investment income to average net assets............................ 3.72%** 3.73%**
Portfolio turnover rate......................................................... 17.40%** 23.98%**
Net assets, end of period (in thousands) ...................................... $28,068 $29,584
Ratios assuming no waiver of fees or assumption of expenses---
Net operating expenses........................................................ 2.27%** 2.15%**
Net investment income......................................................... 3.20%** 3.28%**
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* Assumes initial investment at net asset value at the beginning of period, reinvestment of all dividends, and the complete redemption of the investment at the net asset value at the end of period and no sales charges. Total return would be reduced if sales charges were taken into account.
** Annualized
The accompanying notes are an integral part of these financial statements.
PIONEER WINTHROP REAL ESTATE INVESTMENT FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1994
1. Pioneer Winthrop Real Estate Investment Fund (The Fund) is a Massachusetts business trust, organized on July 1, 1993 and registered under the Investment Company Act of 1940 as a non-diversified, open-end management company. The Fund commenced operations on October 25, 1993. Prior to October 25, 1993, the Fund had no operations other than those relating to organizational matters and the initial capitalization of the Fund by The Pioneer Group, Inc. (PGI) and Winthrop Financial Associates (WFA). In December of 1994, international brokerage and financial services firm, Nomura Securities, acquired an indirect controlling interest in WFA, a Limited Partnership. In April 1995, the shareholders of the Fund will vote to ratify the investment advisory agreement due to the change in the ownership structure of WFA.
The following is a summary of significant accounting policies consistently followed by the Fund, which are in conformity with those generally accepted in the investment company industry.
A. Investment Securities--Security transactions are recorded on the date the securities are purchased or sold. Investments in securities are valued at the last sale price on the principal exchange where they are traded. Securities that have not traded on the date of valuation or securities for which sale prices are not generally reported are valued at the mean between the last bid and asked prices. Temporary cash investments are valued at cost plus accrued interest, which approximates market value. Dividend income is recorded on the ex-dividend date. Interest income is recorded on the accrual basis.
Because the Fund may invest a substantial portion of its assets in Real Estate Investment Trusts (REITs), the Fund may be subject to certain risks associated with direct investments in REITs. REITs may be affected by changes in the value of their underlying properties and defaults by borrowers or tenants. REITs depend generally on their ability to generate cash flow to make distributions to shareholders, and certain REITs have self-liquidation provisions by which mortgages held may be paid in full and distributions of capital returns may be made at any time. In addition, the performance of a REIT may be affected by its failure to qualify for tax-free pass-through of income under the Internal Revenue Code or its failure to maintain exemption from registration under the Investment Company Act of 1940.
Substantially all of the dividend income recorded by the Fund is from distributions by publicly traded REITs and such distributions for tax purposes may consist of capital gains and return of capital. The actual return of capital and capital gains portions of such distributions will be determined by formal notifications from the REITs subsequent to the calendar year-end. Distributions received from the REITs, which are determined to be a return of capital, are recorded by the Fund as a reduction of the cost basis of the securities held. The character of such distributions, for tax purposes, is determined by the Fund based on estimates and information received by the Fund from the REITS.
Gains and losses from sales of investments are calculated on the "identified cost" method for both financial reporting and federal income tax purposes. It is the Fund's practice first to select for sale those securities that have the highest cost and also qualify for long-term capital gain or loss treatment for tax purposes.
B. Federal Taxes--It is the policy of the Fund to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its investment company taxable income and its net realized capital gains, if any, to its shareholders. Therefore, no federal income tax provisions are required.
C. Trust Shares--The Fund records sales and repurchases of its trust shares on the trade date. Net losses, if any, as a result of cancellations are absorbed by Pioneer Funds Distributor, Inc. (PFD), the principal underwriter for the Fund and a wholly owned subsidiary of PGI. For the period ended December 31, 1994, PFD earned $27,497 in underwriting commissions on the sale of shares of the Fund. Dividends and distributions to shareholders are recorded as of the ex-dividend date.
PIONEER WINTHROP REAL ESTATE INVESTMENT FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1994 (Continued)
D. Repurchase Agreements--The Fund may enter into repurchase agreements. At the time the Fund enters into a repurchase agreement, the value of the underlying security (collateral), including accrued interest, will be equal to or exceed the value of the repurchase agreement, and in the case of repurchase agreements exceeding one day, the value of the underlying security, including accrued interest, is required during the term of the agreement to be equal to or exceed the value of the repurchase agreement. The underlying securities for all repurchase agreements are held in safekeeping in the customer-only account of the Fund's custodian or at the Federal Reserve Bank of Boston. If the seller defaults and the value of the collateral declines, or if bankruptcy proceedings commence with respect to the seller of the security, realization of the collateral by the Fund may be delayed or limited.
E. Organization Costs--The costs incurred by the Fund in connection with its organization and initial registration of shares have been deferred and are amortized on a straight-line basis over a period of five years.
2. At December 31, 1994, the total cost of securities, the net realized gain, the accumulated net realized gain and the increase in unrealized loss for federal income tax purposes was identical to those on a financial reporting basis. Aggregate gross unrealized gain on securities in which there was an excess of market value over tax cost was $610,894. Aggregate gross unrealized loss on securities in which there was an excess of tax cost over market value was $2,323,834. Net unrealized loss for tax purposes was $1,712,940.
3. During the period ended December 31, 1994, the cost of purchases and proceeds from sales of investments, other than temporary cash investments, were $3,940,735 and $2,422,040, respectively.
4. Pioneer Winthrop Advisers (PWA), a joint venture between PGI and WFA, serves as investment adviser to the Fund and is responsible for the overall management of the Fund's business affairs, subject only to the authority of the Board of Trustees. All of the Fund's portfolio investment decisions are made by PWA's advisory committee, which relies on investment subadvisory services provided by Pioneering Management Corporation and by Winthrop Advisors Limited Partnership, pursuant to their investment subadvisory contracts with the Fund. As compensation for its investment advisory services and certain expenses which it incurs, PWA is entitled to a management fee equal to 1.00% per annum of the Fund's average daily net assets. The fee is normally computed daily. Included in Accrued expenses--Other is $5,405 in accounting fees payable to PMC at December 31, 1994.
PWA has agreed temporarily to limit the expenses of the Fund. Under this arrangement, PWA will not impose any management fees and, if necessary, will limit or otherwise reduce other operating expenses (excluding interest and taxes) to the extent needed to limit the Fund's expenses to 1.75% of the Fund's average daily net assets for the fiscal period ending December 31, 1994. PMC's agreement to assume expenses for the Fund is voluntary and temporary and may be revised or terminated at anytime.
5. Pioneering Services Corporation (PSC), a wholly owned subsidiary of PGI, provides substantially all transfer agent and shareholder services to the Fund, at negotiated rates. Included in Accrued expenses -- Other is $7,997 in transfer fees payable to PSC at December 31, 1994.
6. The Trust has adopted a Plan of Distribution (the Plan) in accordance with Rule 12b-1 under the Investment Company Act of 1940 pursuant to which certain distribution fees are paid to PFD. The Plan generally provides that the Fund will reimburse PFD for actual expenditures to finance activities intended to result in the sale of the Fund's shares or to provide services to the Fund's shareholders. Expenditures to the Fund, pursuant to the Plan, may not exceed 0.25% of the Fund's average annual net assets. The Plan became effective July 1, 1994. Included in Accrued expenses--Other is approximately $15,921 in distribution fees and was payable to PFD at December 31, 1994.
7. In accordance with Statement of Position 93-2 (SOP 93-2) "Determination, Disclosure, and Financial Statement Presentation of Income, Capital Gain, and Return of Capital Distribution by Investment Companies," the Fund reports the accumulated undistributed net investment income (loss) and accumulated undistributed net realized capital gain (loss) accounts to approximate amounts available for future distributions (or to offset future realized capital gains). As a result, the Fund has reclassified $424,572 from distributions in excess of net investment income to paid-in capital (trust shares). This reclassification has no impact on the net asset value of the Fund and has no impact on the net asset value of the Fund and is designed to present the Fund's capital accounts on a tax basis.
8. Change in Year End--Subsequent to December 31, 1994, the Trustees of the Fund voted to change the Fund's year end to December 31 in order to achieve consistency with the Fund's tax year end.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE SHAREHOLDERS AND THE BOARD OF TRUSTEES OF PIONEER WINTHROP REAL ESTATE INVESTMENT FUND:
We have audited the accompanying balance sheet of Pioneer Winthrop Real Estate Investment Fund (a Massachusetts business trust), including the schedule of investments as of December 31, 1994, and the related statements of operations, changes in net assets for the periods ended December 31, 1994 and June 30, 1994 and financial highlights for the periods presented. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 1994, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Pioneer Winthrop Real Estate Investment Fund as of December 31, 1994, the results of its operations, the changes in its net assets and financial highlights for the period presented, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
February 21, 1995
PIONEER WINTHROP REAL ESTATE INVESTMENT FUND
60 State Street
Boston, Massachusetts 02109
OFFICERS
JOHN F. COGAN, JR.
Chairman and Chief Executive Officer
ARTHUR J. HALLERAN, JR.
President and Chief Operating Officer
DAVID D. TRIPPLE
Executive Vice President
STEPHEN G. KASNET
Vice President
WILLIAM H. KEOUGH
Treasurer
JOSEPH P. BARRI
Secretary
TRUSTEES
JOHN F. COGAN, JR.
RICHARD H. EGDAHL, M.D.
MARGARET B. W. GRAHAM
ARTHUR J. HALLERAN, JR.
STEPHEN G. KASNET
JOHN W. KENDRICK
MARGUERITE A. PIRET
DAVID D. TRIPPLE
STEPHEN K. WEST
JOHN WINTHROP
INVESTMENT ADVISER
PIONEER WINTHROP
ADVISERS
INVESTMENT
SUBADVISERS
PIONEERING MANAGEMENT CORPORATION
WINTHROP ADVISORS
LIMITED PARTNERSHIP
CUSTODIAN
BROWN BROTHERS
HARRIMAN &CO.
PRINCIPAL UNDERWRITER
PIONEER FUNDS DISTRIBUTOR, INC.
LEGAL COUNSEL
HALE AND DORR
INDEPENDENT PUBLIC ACCOUNTANTS
ARTHUR ANDERSEN LLP
SHAREHOLDER
SERVICES AND
TRANSFER AGENT
PIONEERING SERVICES CORPORATION
60 State Street
Boston, Massachusetts
02109
Please call Pioneer for information on:
Existing accounts, new accounts, prospectuses,
applications and service forms........ 1-800-225-6292 Fund yields and prices................ 1-800-225-4321 Toll-free fax......................... 1-800-225-4240 Retirement plans...................... 1-800-622-0176 |
Telecommunications Device for the Deaf (TDD) 1-800-225-1997
When distributed to persons who are not shareholders of the Fund, this report must be accompanied by an official prospectus, which discusses the objectives, policies, sales charges, and other information about the Fund.
0295-2265
(C) Pioneer Funds Distributor, Inc.
SHARE PURCHASE AGREEMENT
This Agreement is made as of the 25th day of October, 1993 between The Pioneer Group, Inc., a Delaware corporation ("PGI"), Winthrop Financial Associates, A Limited Partnership, a Maryland limited partnership ("WFA"), and Pioneer Winthrop Real Estate Investment Fund, a Massachusetts business trust (the "Fund").
WHEREAS, the Fund has previously sold to PGI $100,000 of shares of beneficial interest of the Fund (8,000 shares) at a purchase price of $12.50 per share;
WHEREAS, the Fund wishes to sell to PGI and WFA, and PGI and WFA wish to purchase from the Fund, $400,000 and $500,000, respectively, of shares of beneficial interest of the Fund (32,000 and 40,000 shares, respectively) at a purchase price of $12.50 per share (the "Shares"); and
WHEREAS, PGI and WFA are each purchasing the Shares for the purpose of providing the initial capitalization of the Fund;
NOW, THEREFORE, the parties hereto agree as follows:
1. Simultaneously with the execution of this Agreement, PGI and WFA are delivering to the Fund checks in the amount of $400,000 and $500,000, respectively, in full payment for the Shares.
2. PGI and WFA each agree that it is purchasing the Shares for investment and each has no present intention of redeeming or reselling the Shares.
3. PGI and WFA further agree that with respect to $50,000 of each of their Shares, they may not withdraw such Shares from the Fund at a rate, which at any time during the Fund's first five years of operations, exceeds $833.33 per month.
Executed as of the date first set forth above.
THE PIONEER GROUP, INC. WINTHROP FINANCIAL ASSOCIATES,
A LIMITED PARTNERSHIP
/s/Robert L. Butler /s/Arthur J. Halleran, Jr.
Robert L. Butler Arthur J. Halleran, Jr.
Executive Vice President President
|
PIONEER WINTHROP REAL ESTATE INVESTMENT FUND
/s/John F. Cogan, Jr. John F. Cogan, Jr. Chief Executive Officer |
DISTRIBUTION PLAN
PIONEER WINTHROP REAL ESTATE INVESTMENT FUND
DISTRIBUTION PLAN, dated as of April 28, 1995 of PIONEER WINTHROP REAL
ESTATE INVESTMENT FUND, a Delaware business trust (the "Trust").
WITNESSETH
WHEREAS, the Trust is engaged in business as an open-end, diversified, management investment company and is registered under the Investment Company Act of 1940, as amended (collectively with the rules and regulations promulgated thereunder, the "1940 Act");
WHEREAS, the Trust intends to distribute its shares of beneficial interest (the "Shares") of the securities portfolio of each series of Pioneer which the Trustees may establish from time to time (the "Portfolio") in accordance with Rule 12b-1 promulgated by the Securities and Exchange Commission under the 1940 Act ("Rule 12b-1"), and desires to adopt this Distribution Plan (the "Plan") as a plan of distribution pursuant to such rule;
WHEREAS, the Trust desires to engage Pioneer Funds Distributor, Inc., a Massachusetts corporation ("PFD"), to provide certain distribution services for the Trust in connection with the Plan;
WHEREAS, the Trust desires to enter into an underwriting agreement with PFD, whereby PFD will provide facilities and personnel and render services to the Trust in connection with the offering and distribution of Shares (the "Underwriting Agreement");
WHEREAS, the Trust also recognizes and agrees that (a) PFD may retain the services of firms or individuals to act as dealers or wholesalers (collectively, the "Dealers") of the Shares in connection with the offering of Shares, (b) PFD may compensate any Dealer that sells Shares in the manner and at the rate or rates to be set forth in an agreement between PFD and such Dealer, and (c) PFD may make such payments to the Dealers for distribution services out of the fee paid to PFD hereunder, its profits or any other source available to it; and
WHEREAS, the Board of Trustees of the Trust, in considering whether the Trust should adopt and implement this Plan, has evaluated such information as it deemed necessary to an informed determination whether this Plan should be adopted and implemented and has considered such pertinent factors as it deemed necessary to form the basis for a decision to use assets of the Trust for such purposes, and has determined that there is a reasonable likelihood that the
adoption and implementation of this Plan will benefit the Trust and its shareholders;
NOW, THEREFORE, the Board of Trustees of the Trust hereby adopts this Plan for the Trust as a plan of distribution in accordance with Rule 12b-1, on the following terms and conditions:
1. The Trust may expend pursuant to this Plan amounts not to exceed .25% of 1% of the average daily net assets of each Portfolio per annum.
2. Subject to the limit in paragraph 1, the Trust shall reimburse PFD for amounts expended by PFD to finance any activity which is primarily intended to result in the sale of shares of the Trust or the provision of services to shareholders of the Trust, including but not limited to commissions or other payments to Dealers and salaries and other expenses of PFD relating to selling or servicing efforts, provided, that the Board of Trustees of the Trust shall approve categories of expenses for which reimbursement shall be made pursuant to this paragraph 2 and, without limiting the generality of the foregoing, the initial categories of such expenses shall be (i) a service fee to be paid to qualified broker-dealers in an amount not to exceed 25/100 of 1% per annum of each Portfolio's daily net assets; (ii) reimbursement to PFD for its expenditures for broker-dealer commissions and employee compensation on certain sales of the Trust's Shares with no initial sales charge; and (iii) reimbursement to PFD for expenses incurred providing services to shareholders and supporting broker-dealers and other organizations, such as banks and trust companies, in their effort to provide such services (any addition of such categories shall be subject to the approval of the Qualified Trustees, as defined below, of the Trust). Such reimbursement shall be paid ten (10) days after the end of the month or quarter, as the case may be, in which such expenses are incurred. The Trust acknowledges that PFD will charge a sales load in connection with sales of such shares and that PFD will reallow to Dealers all or a portion of such sales load, as described in the Trust's Prospectus from time to time. Nothing contained herein is intended to have any effect whatsoever on PFD's ability to charge any such sales load or to reallow all or any portion thereof to Dealers.
3. The Trust understands that agreements between PFD and Dealers may provide for payment of fees to Dealers in connection with the sale of Shares and the provision of services to shareholders of the Trust. Nothing in this Plan shall be construed as requiring the Trust to make any payment to any Dealer or to have any obligations to any Dealer in connection with services as a dealer of the Shares. PFD shall agree and undertake that any agreement entered into between PFD and any Dealer shall provide that such Dealer shall look solely to PFD for compensation for its services thereunder and that in no event shall such Dealer seek any payment from the Trust.
4. Nothing herein contained shall be deemed to require the Trust to take any action contrary to its Declaration of Trust or By-Laws or any applicable statutory or regulatory requirement to which it is subject or by which it is bound, or to relieve or deprive the Trust's Board of Trustees of the responsibility for and control of the conduct of the affairs of the Trust.
5. This Plan shall become effective upon approval by a vote of the Board of Trustees and a vote of a majority of the Trustees who are not "interested persons" of the Trust and who have no direct or indirect financial interest in the operation of the Plan or in any agreement related to the Plan (the "Qualified Trustees"), such votes to be cast in person at a meeting called for the purpose of voting on this Plan.
6. This Plan will remain in effect indefinitely, provided that such continuance is "specifically approved at least annually" by a vote of both a majority of the Trustees of the Trust and a majority of the Qualified Trustees. If such annual approval is not obtained, this Plan shall expire on Octobery5, 1994. In the event of termination or non-continuance of this Plan, each Portfolio has twelve months to reimburse any expense which it incurs prior to such termination or non-continuance, provided that payments by such Portfolio during such twelve-month period shall not exceed 25/100 of 1% of each Portfolio's average daily net assets during such period.
7. This Plan may be amended at any time by the Board of Trustees, provided that this Plan may not be amended to increase materially the limitation on the annual percentage of average net assets which may be expended hereunder without the approval of holders of a "majority of the outstanding voting securities" of the Trust and may not be materially amended in any case without a vote of a majority of both the Trustees and the Qualified Trustees. Any amendment of this Plan to increase or modify the expense categories initially designated by the Trustees in paragraph 2 above shall only require approval of a majority of the Trustees and the Qualified Trustees if such amendment does not include an increase in the expense limitation set forth in paragraph 1 above. This Plan may be terminated at any time by a vote of a majority of the Qualified Trustees or by a vote of the holders of a "majority of the outstanding voting securities" of the Trust.
8. In the event of termination or expiration of the Plan, the Trust may nevertheless, within twelve months of such termination or expiration reimburse any expense which it incurs prior to such termination or expiration, provided that payments by the Trust during such twelve-month period shall not exceed .25% or 1% of the Trust's average net daily assets during such period and provided
further that such payments are specifically approved by the Board of Trustees, including a majority of the Qualified Trustees.
9. The Trust and PFD shall provide to the Trust's Board of Trustees, and the Board of Trustees shall review, at least quarterly, a written report of the amounts expended under this Plan and the purposes for which such expenditures were made.
10. While this Plan is in effect, the selection and nomination of Qualified Trustees shall be committed to the discretion of the Trustees who are not "interested persons" of the Trust.
11. For the purposes of this Plan, the terms "interested persons," "majority of the outstanding voting securities" and "specifically approved at least annually" are used as defined in the 1940 Act.
12. The Trust shall preserve copies of this Plan, and each agreement related hereto and each report referred to in paragraph 9 hereof (collectively, the "Records"), for a period of not less than six (6) years from the end of the fiscal year in which such Records were made and for a period of two (2) years, each of such Records shall be kept in an easily accessible place.
13. This Plan shall be construed in accordance with the laws of the Commonwealth of Massachusetts and the applicable provisions of the 1940 Act.
14. If any provision of this Plan shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of the Plan shall not be affected thereby.
| ARTICLE 6 |
| CIK: 0000908996 |
| NAME: Pioneer Winthrop Real Estate |
| SERIES: |
| NUMBER: 0 |
| NAME: none |
| MULTIPLIER: 1 |
| CURRENCY: U. S .Dollars |
| PERIOD TYPE: Year |
| FISCAL YEAR END: DEC 31 1994 |
| PERIOD START: JAN 01 1994 |
| PERIOD END: DEC 31 1994 |
| EXCHANGE RATE: 1 |
| INVESTMENTS AT COST: 29,852,478 |
| INVESTMENTS AT VALUE: 28,139,538 |
| RECEIVABLES: 357,506 |
| ASSETS OTHER: 78,808 |
| OTHER ITEMS ASSETS: 0 |
| TOTAL ASSETS: 28,575,852 |
| PAYABLE FOR SECURITIES: 146,551 |
| SENIOR LONG TERM DEBT: 0 |
| OTHER ITEMS LIABILITIES: 361,199 |
| TOTAL LIABILITIES: 507,750 |
| SENIOR EQUITY: 0 |
| PAID IN CAPITAL COMMON: 29,771,644 |
| SHARES COMMON STOCK: 2,467,250 |
| SHARES COMMON PRIOR: 2,461,452 |
| ACCUMULATED NII CURRENT: 0 |
| OVERDISTRIBUTION NII: (525,476) |
| ACCUMULATED NET GAINS: 9,398 |
| OVERDISTRIBUTION GAINS: 0 |
| ACCUM APPREC OR DEPREC: (1,712,940) |
| NET ASSETS: 28,068,102 |
| DIVIDEND INCOME: 762,508 |
| INTEREST INCOME: 10,215 |
| OTHER INCOME: 0 |
| EXPENSES NET: (247,247) |
| NET INVESTMENT INCOME: 525,476 |
| REALIZED GAINS CURRENT: 34,557 |
| APPREC INCREASE CURRENT: (1,237,463) |
| NET CHANGE FROM OPS: (677,430) |
| EQUALIZATION: 0 |
| DISTRIBUTIONS OF INCOME: (525,476) |
| DISTRIBUTIONS OF GAINS: (62,209) |
| DISTRIBUTIONS OTHER: (346,042) |
| NUMBER OF SHARES SOLD: 526,831 |
| NUMBER OF SHARES REDEEMED: (583,891) |
| SHARES REINVESTED: 62,858 |
| NET CHANGE IN ASSETS: (1,516,087) |
| ACCUMULATED NII PRIOR: 9,451 |
| ACCUMULATED GAINS PRIOR: (9,926) |
| OVERDISTRIB NII PRIOR: 0 |
| OVERDIST NET GAINS PRIOR: 0 |
| GROSS ADVISORY FEES: (141,284) |
| INTEREST EXPENSE: 0 |
| GROSS EXPENSE: (320,405) |
| AVERAGE NET ASSETS: 28,685,947 |
| PER SHARE NAV BEGIN: 12.020 |
| PER SHARE NII: 0.210 |
| PER SHARE GAIN APPREC: (0.475) |
| PER SHARE DIVIDEND: (0.199) |
| PER SHARE DISTRIBUTIONS: (0.025) |
| RETURNS OF CAPITAL: (0.151) |
| PER SHARE NAV END: 11.380 |
| EXPENSE RATIO: 1.750 |
| AVG DEBT OUTSTANDING: 0 |
| AVG DEBT PER SHARE: 0.000 |
POWER OF ATTORNEY
We, the undersigned officers and/or trustees of Pioneer Winthrop Real Estate Investment Fund, a Delaware business trust, do hereby severally constitute and appoint John F. Cogan, Jr., DavidyD. Tripple, and Joseph P. Barri, and each of them acting singly, to be our true, sufficient and lawful attorneys, with full power to each of them, and each of them acting singly, to sign for each of us, in the name of each of us and in the capacities indicated below, any and all amendments to the Registration Statement on Form NA1A to be filed by Pioneer Winthrop Real Estate Investment Fund under the Investment Company Act of 1940, as amended (the "1940 Act"), and under the Securities Act of 1933, as amended (the "1933 Act"), with respect to the offering of its shares of beneficial interest and any and all other documents and papers relating thereto, and generally to do all such things in the name of each of us and on behalf of each of us in the capacities indicated to enable Pioneer Winthrop Real Estate Investment Fund to comply with the 1940 Act and the 1933 Act, and all requirements of the Securities and Exchange Commission thereunder, hereby ratifying and confirming the signature of each of us as it may be signed by said attorneys or each of them to any and all amendments to said Registration Statement.
IN WITNESS WHEREOF, we have hereunder set our hands on this Instrument the 10th day of March, 1995.
/s/John F. Cogan, Jr. /s/Arthur J. Halleran, Jr. John F. Cogan, Jr., Chairman, Arthur J. Halleran, Jr., Trustee and Chief Executive Trustee, President and Chief Officer Operating Officer /s/David D. Tripple /s/John W. Kendrick David D. Tripple, Trustee and John W. Kendrick, Trustee Executive Vice President /s/William H. Keough /s/Marguerite A. Piret William H. Keough, Treasurer Marguerite A. Piret, Trustee and Chief Financial Officer /s/Richard H. Edgahl /s/Stephen K. West Richard H. Egdahl, M.D., Stephen K. West, Trustee Trustee /s/Margaret B.W. Graham /s/John Winthrop Margaret B.W. Graham, Trustee John Winthrop, Trustee /s/Stephen G. Kasnet Stephen G. Kasnet, Trustee and Vice President |