File No. 811-21108
333-89354
As filed with the Securities and Exchange Commission on August 8, 2002
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
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Pre-Effective Amendment No. 1 /___/
Post-Effective Amendment No.__ /___/
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and/or
Amendment No. 1 /___/
(Check appropriate box or boxes)
PIONEER LARGE CAP GROWTH FUND
(Exact Name of Registrant as Specified in Charter)
60 State Street, Boston, Massachusetts 02109
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (617) 742-7825
Joseph P. Barri, Hale and Dorr LLP, 60 State Street, Boston, Massachusetts 02109
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as practicable after the effective date of this registration statement under the Securities Act of 1933.
The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to Section 8(a), may determine.
[PIONEER LOGO]
Pioneer
LARGE CAP GROWTH FUND
CLASS A, CLASS B AND CLASS C SHARES
Prospectus, August 15, 2002
CONTENTS
Basic information about the fund 1
Management 5
Buying, exchanging and selling shares 6
Dividends, capital gains and taxes 24
Neither the Securities and Exchange
Commission nor any state securities
agency has approved the fund's shares or
determined whether this prospectus is
accurate or complete. Any representation
to the contrary is a crime.
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AN INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR GUARANTEED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
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CONTACT YOUR INVESTMENT PROFESSIONAL TO DISCUSS HOW THE FUND FITS INTO YOUR
PORTFOLIO.
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BASIC INFORMATION ABOUT THE FUND
INVESTMENT OBJECTIVE
Long-term capital growth.
PRINCIPAL INVESTMENT STRATEGIES
Normally, the fund invests at least 80% of its total assets in equity securities
of large companies, that is, companies similar in size to issuers included in
the Russell 1000 Growth Index. The Russell 1000 Growth Index is a large
capitalization index that measures the performance of companies in the Russell
1000 Index with higher price-to-book ratios and higher forecasted growth values.
On June 30, 2002, the index had a median market capitalization of approximately
$3.2 billion. The size of the companies in the index may change dramatically
as a result of market conditions and the composition of the index. The fund's
investments will not be confined to securities issued by companies in the index.
Equity securities include common stocks and other equity instruments, such as convertible debt, depositary receipts, warrants, rights, interests in real estate investment trusts (REITs) and preferred stocks.
The fund uses a "growth" style of management and seeks to invest in securities
of issuers with above average potential for earnings and revenue growth. To
select growth stocks, Pioneer Investment Management, Inc., ("Pioneer") the
fund's investment adviser, employs quantitative analysis, due diligence and
fundamental research, an evaluation of the issuer based on its financial
statements and operations, utilizing a bottom-up analytic style. Pioneer relies
on the knowledge, experience and judgment of its staff who have access to a wide
variety of research. Pioneer focuses on the quality and price of individual
issuers, not on economic sector or market-timing strategies. Factors Pioneer
looks for in selecting investments include:
|X| Companies with experienced management teams, strong market positions and
the potential to support above average earnings growth
|X| A sustainable competitive advantage such as brand name, customer base,
proprietary technology or economics of scale
|X| Favorable expected returns relative to perceived risk
Pioneer generally sells a portfolio security when it believes that the issuer no longer offers the potential for above average earnings and revenue growth. Pioneer makes that determination based upon the same criteria it uses to select portfolio securities.
PRINCIPAL RISKS OF INVESTING IN THE FUND
Even though the fund seeks long term capital growth, you could lose money on
your investment or not make as much as if you invested elsewhere if:
|X| The stock market goes down (this risk may be greater in the short term)
|X| Large-size stocks or growth stocks fall out of favor with investors
|X| The fund's investments do not have the growth potential originally expected
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MARKET VALUE
A company's market value or capitalization is calculated by multiplying the
number of its outstanding shares by the current market price of a share.
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BASIC INFORMATION ABOUT THE FUND
THE FUND'S PERFORMANCE
Since the fund does not yet have a full calendar year of operations, it does not
disclose any performance information. The fund's performance will vary from year
to year. Past performance does not necessarily indicate how a fund will perform
in the future. As a shareowner, you may lose or make money on your investment.
FEES AND EXPENSES
These are the fees and expenses you may pay if you invest in the fund. Other
expenses are based on estimated amounts for the current fiscal year.
SHAREOWNER FEES PAID DIRECTLY FROM YOUR INVESTMENT CLASS A CLASS B CLASS C ------------------------------------------------------- ----------------- ----------------- ----------------- Maximum sales charge (load) when you buy shares 5.75% None 1% as a percentage of offering price ------------------------------------------------------- ----------------- ----------------- ----------------- Maximum deferred sales charge (load) as a percentage of offering price or the amount you receive when None1 4% 1% you sell shares, whichever is less ------------------------------------------------------- ----------------- ----------------- ----------------- ANNUAL FUND OPERATING EXPENSES PAID FROM THE ASSETS OF THE FUND as a percentage of average daily net assets CLASS A CLASS B CLASS C ------------------------------------------------------- ----------------- ----------------- ----------------- Management Fee2 0.75% 0.75% 0.75% ------------------------------------------------------- ----------------- ----------------- ----------------- Distribution and Service (12b-1) Fee 0.25% 1.00% 1.00% ------------------------------------------------------- ----------------- ----------------- ----------------- Other Expenses2 18.35% 18.35% 18.35% ------------------------------------------------------- ----------------- ----------------- ----------------- Total Annual Fund Operating Expenses2 19.35% 20.10% 20.10% ------------------------------------------------------- ----------------- ----------------- ----------------- |
1 Purchases of $1 million or more and purchases by participants in certain
group plans are not subject to an initial sales charge but may be
subject to a contingent deferred sales charge. See "Buying, exchanging
and selling shares."
2 Pioneer has agreed not to charge all or a portion of its management fee
and, if necessary, to limit other ordinary operating expenses to the
extent required to reduce Class A expenses to 1.30% of the fund's
average daily net assets attributable to Class A shares; the portion of
fund expenses attributable to Class B and Class C shares will be reduced
only to the extent such expenses are reduced for Class A shares. Any
differences in the fee waiver and expense limitation among classes
result from rounding in the daily calculation of a class' net assets and
expense limitation, which may exceed 0.01% annually. This agreement is
voluntary and temporary and may be revised or terminated by Pioneer at
any time. See the statement of additional information for details
regarding the expense limitation. Giving effect to the expense
limitation, estimated expenses for the fiscal year ending March 31, 2003
are:
Class A Class B Class C
Management Fee 0.75% 0.75% 0.75%
Distribution and Service (12b-1) Fee 0.25% 1.00% 1.00%
Other Expenses 0.30% 0.90% 0.90%
Total Annual Fund Operating Expenses 1.30% 2.65% 2.65%
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EXAMPLE
This example helps you compare the cost of investing in the fund with the cost
of investing in other mutual funds. It assumes that: a) you invest $10,000 in
the fund for the time periods shown, b) you reinvest all dividends and
distributions, c) your investment has a 5% return each year and d) the fund's
gross operating expenses remain the same.
Although your actual costs may be higher or lower, under these assumptions your costs would be:
IF YOU SELL YOUR SHARES IF YOU DO NOT SELL YOUR SHARES
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NUMBER OF YEARS YOU OWN YOUR SHARES
------------ ------------- ------------ ------------- -- - -------------
1 3 1 3
------------ ------------ ------------- -- ------------- -------------
Class A $ 700 $ 3,959 $ 700 $ 3,959
------------ ------------ ------------- -- ------------- -------------
Class B 668 4,085 268 3,785
------------ ------------ ------------- -- ------------- -------------
Class C 464 3,847 365 3,847
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NON-PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS
As discussed, the fund invests primarily in equity securities of large-size
companies.
This section describes additional investments that the fund may make or strategies that it may pursue to a lesser degree to achieve the fund's goal. Some of the fund's secondary investment policies also entail risks. To learn more about these investments and risks, you should obtain and read the statement of additional information (SAI).
INVESTMENTS OTHER THAN U.S. EQUITY SECURITIES
The fund may invest up to 20% of its total assets in equity and debt securities
of non-U.S. corporate issuers and debt securities of non-U.S. government
issuers. The fund will not invest more than 10% of its total assets in the
securities of emerging markets issuers. Investing in non-U.S. issuers may
involve unique risks compared to investing in securities of U.S. issuers. These
risks are more pronounced to the extent the fund invests in issuers in countries
with emerging markets or if the fund invests significantly in one country. These
risks may include:
|X| Less information about non-U.S. issuers or markets may be available due to
less rigorous disclosure or accounting standards or regulatory practices
|X| Many non-U.S. markets are smaller, less liquid and more volatile. In a
changing market, Pioneer might not be able to sell the fund's portfolio
securities at times, in amounts and at prices it considers reasonable
|X| Adverse effect of currency exchange rates or controls on the value of the
fund's investments
|X| The economies of non-U.S. countries may grow at slower rates than expected
or may experience a downturn or recession
|X| Economic, political and social developments may adversely affect the
securities markets
|X| Withholding and other non-U.S. taxes may decrease the fund's return
The fund may invest the balance of its assets in debt securities of U.S. corporate and government issuers. Generally the fund acquires debt securities that are investment grade, but the fund may invest up to 5% of its net assets in below investment grade debt securities including below investment grade convertible debt securities. The fund invests in debt securities when Pioneer believes they are consistent with the fund's investment objective, to diversify the fund's portfolio or for greater liquidity.
Debt securities are subject to the risk of an issuer's inability to meet principal or interest payments on its obligations. Factors which could contribute to a decline in the market value of debt securities in the fund's portfolio include rising interest rates or a reduction in the perceived creditworthiness of the issuer of the securities. A debt security is investment grade if it is rated in one of the top four categories by a nationally recognized securities rating organization or determined to be of equivalent credit quality by Pioneer. Debt securities rated below investment grade are commonly referred to as "junk bonds" and are considered speculative. Below investment grade debt securities involve greater risk of loss, are subject to greater price volatility and are less liquid, especially during periods of economic uncertainty or change, than higher quality debt securities.
BASIC INFORMATION ABOUT THE FUND
CASH MANAGEMENT AND TEMPORARY INVESTMENTS
Normally, the fund invests substantially all of its assets to meet its
investment objective. The fund may invest the remainder of its assets in
securities with remaining maturities of less than one year, cash equivalents or
may hold cash. For temporary defensive purposes, the fund may depart from its
principal investment strategies and invest part or all of its assets in these
securities or may hold cash. During such periods, the fund may not be able to
achieve its investment objective. The fund intends to adopt a defensive strategy
when Pioneer believes securities in which the fund normally invests have
extraordinary risks due to political or economic factors and in other
extraordinary circumstances.
SHORT-TERM TRADING
The fund usually does not trade for short-term profits. The fund will sell an
investment, however, even if it has only been held for a short time, if it no
longer meets the fund's investment criteria. The fund's annual portfolio turn-
over rate will vary based on many factors and may exceed 100%. If the fund does
a lot of trading, it may incur additional operating expenses, which would reduce
performance, and could cause shareowners to incur a higher level of taxable
income or capital gains.
DERIVATIVES
The fund may use futures and options on securities, indices and currencies,
forward foreign currency exchange contracts and other derivatives. A derivative
is a security or instrument whose value is determined by reference to the value
or the change in value of one or more securities, currencies, indices or other
financial instruments. The fund does not use derivatives as a primary investment
technique and generally limits their use to hedging. However, the fund may use
derivatives for a variety of non-principal purposes, including:
|X| As a hedge against adverse changes in stock market prices, interest rates or
currency exchange rates
|X| As a substitute for purchasing or selling securities
|X| To increase the fund's return as a non-hedging strategy that may be
considered speculative
Even a small investment in derivatives can have a significant impact on the fund's exposure to stock market values, interest rates or currency exchange rates. If changes in a derivative's value do not correspond to changes in the value of the fund's other investments, the fund may not fully benefit from or could lose money on the derivative position. In addition, some derivatives involve risk of loss if the person who issued the derivative defaults on its obligation. Certain derivatives may be less liquid and more difficult to value.
MANAGEMENT
PIONEER, THE FUND'S INVESTMENT ADVISER,
selects the fund's investments and oversees the fund's operations.
Pioneer is an indirect, wholly owned subsidiary of UniCredito Italiano S.p.A., one of the largest banking groups in Italy. Pioneer is part of the global asset management group providing investment management and financial services to mutual funds, institutional and other clients. As of June 30, 2002, assets under management were approximately $99 billion worldwide, including over $19 billion in assets under management by Pioneer.
INVESTMENT ADVISER
Pioneer's main office is at 60 State Street, Boston, Massachusetts 02109.
The firm's U.S. mutual fund investment history includes creating in 1928 one of
the first mutual funds.
Pioneer has received an order from the Securities and Exchange Commission that would permit Pioneer, subject to the approval of the fund's Board of Trustees, to hire and terminate a subadviser or to materially modify an existing subadvisory contract for the fund without shareholder approval. Pioneer retains the ultimate responsibility to oversee and recommend the hiring, termination and replacement of any subadviser. Currently, Pioneer does not intend to use a subadviser in connection with the fund, but will be able to do so in the future with the approval of the fund's trustees.
PORTFOLIO MANAGER
Day-to-day management of the fund's portfolio is the responsibility of Eric J.
Weigel (lead manager), Thomas A. Crowley and Robert C. Junkin (co-managers). The
managers are supported by the domestic equity team. The team manages other
Pioneer mutual funds investing primarily in U.S. equity securities. The managers
may draw upon the research and investment management expertise of the global
research team, which provides fundamental research on companies and includes
members from Pioneer's affiliate, Pioneer Investment Management Limited.
Mr. Weigel, a senior vice president of Pioneer, joined Pioneer in 1998 and has been an investment professional since 1989. Prior to joining Pioneer, Mr. Weigel was head of global asset allocation and portfolio manager at Chancellor LGT Asset Management from 1994 to 1997. Mr. Crowley is a vice president of Pioneer. He joined Pioneer in 1996 as an analyst. Mr. Junkin, a vice president of Pioneer, joined Pioneer in 1997 as an analyst and has been an investment professional since 1993. John A. Carey, director of portfolio management and an executive vice president of Pioneer, supervises the co-managers and the domestic equity team. Mr. Carey joined Pioneer as an analyst in 1979.
MANAGEMENT FEE
The fund pays Pioneer a fee for managing the fund and to cover the cost of
providing certain services to the fund. Pioneer's annual fee is equal to 0.75%
of the fund's average daily net assets. The fee is normally computed daily and
paid monthly.
DISTRIBUTOR AND TRANSFER AGENT
Pioneer Funds Distributor, Inc. is the fund's distributor. Pioneer
Investment Management Shareholder Services, Inc. is the fund's transfer agent.
The fund compensates the distributor and transfer agent for their services. The
distributor and the transfer agent are affiliates of Pioneer.
BUYING, EXCHANGING AND SELLING SHARES
NET ASSET VALUE
The fund's net asset value is the value of its portfolio of securities plus any other assets minus its operating expenses and any other liabilities. The fund calculates a net asset value for each class of shares every day the New York Stock Exchange is open when regular trading closes (normally 4:00 p.m. Eastern time).
The fund generally values its portfolio securities using closing market prices or readily available market quotations. When closing market prices or market quotations are not available or are considered by Pioneer to be unreliable, the fund may use a security's fair value. Fair value is the valuation of a security determined on the basis of factors other than market value in accordance with procedures approved by the fund's trustees. The fund also may use the fair value of a security, including a non-U.S. security, when Pioneer determines that the closing market price on the primary exchange where the security is traded no longer accurately reflects the value of the security due to factors affecting one or more relevant securities markets or the specific issuer. The use of fair value pricing by the fund may cause the net asset value of its shares to differ from the net asset value that would be calculated using closing market prices. International securities markets may be open on days when the U.S. markets are closed. For this reason, the value of any international securities owned by the fund could change on a day you cannot buy or sell shares of the fund. The fund may use a pricing service or a pricing matrix to value some of its assets. Debt securities with remaining maturities of 60 days or less are valued at amortized cost, which is a method of determining a security's fair value.
You buy or sell shares at the share price. When you buy Class A or Class C shares, you pay an initial sales charge unless you qualify for a waiver or reduced sales charge. When you sell Class B or Class C shares, you may pay a contingent deferred sales charge depending on how long you have owned your shares.
CHOOSING A CLASS OF SHARES
The fund offers three classes of shares through this prospectus. Each class has different sales charges and expenses, allowing you to choose the class that best meets your needs.
Factors you should consider include:
|X| How long you expect to own the shares
|X| The expenses paid by each class
|X| Whether you qualify for any reduction or waiver of sales charges
Your investment professional can help you determine which class meets your goals. Your investment firm may receive different compensation depending upon which class you choose. If you are not a U.S. citizen and are purchasing shares outside the U.S., you may pay different sales charges under local laws and business practices.
DISTRIBUTION PLANS
The fund has adopted a distribution plan for each class of shares offered
through this prospectus in accordance with Rule 12b-1 under the Investment
Company Act of 1940. Under each plan the fund pays distribution and service fees
to the distributor. Because these fees are an ongoing expense, over time they
increase the cost of your investment and your shares may cost more than shares
that are subject to other types of sales charges.
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SHARE PRICE
The net asset value per share calculated on the day of your transaction,
adjusted for any applicable sales charge.
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COMPARING CLASSES OF SHARES
CLASS A
CLASS B
CLASS C
WHY YOU MIGHT PREFER EACH CLASS
Class A shares may be your best alternative if you prefer to pay an initial
sales charge and have lower annual expenses, or if you qualify for any reduction
or waiver of the initial sales charge.
You may prefer Class B shares if you do not want to pay an initial sales charge, or if you plan to hold your investment for at least six years. Class B shares are not recommended if you are investing $250,000 or more.
You may prefer Class C shares if you would rather pay higher annual expenses over time and you wish to pay a lower initial sales charge than for Class A shares or if you qualify for a waiver of the initial sales charge.
INITIAL SALES CHARGE
Up to 5.75% of the offering price, which is reduced or waived for large
purchases and certain types of investors. At the time of your purchase, your
investment firm may receive a commission from the distributor of up to 5%,
declining as the size of your investment increases.
None
1% of the offering price, which is waived for certain investors. At the time of purchase, your investment firm receives a commission from the distributor of up to 2%.
CONTINGENT DEFERRED SALES CHARGES
None, except in certain circumstances when the initial sales charge is waived.
Up to 4% is charged if you sell your shares. The charge is reduced over time and not charged after six years. Your investment firm may receive a commission from the distributor at the time of your purchase of up to 4%.
A 1% charge if you sell your shares within one year of purchase.
DISTRIBUTION AND SERVICE FEES
Up to 0.25% of average daily net assets.
Up to 1% of average daily net assets.
Up to 1% of average daily net assets.
ANNUAL EXPENSES (INCLUDING DISTRIBUTION AND SERVICE FEES)
Lower than Class B or Class C.
Higher than Class A shares; Class B shares convert to Class A shares after eight years.
Higher than Class A shares; Class C shares do not convert to any other class of shares. You continue to pay higher annual expenses.
EXCHANGE PRIVILEGE
Class A shares of other Pioneer mutual funds.
Class B shares of other Pioneer mutual funds.
Class C shares of other Pioneer mutual funds.
BUYING, EXCHANGING AND SELLING SHARES
SALES CHARGES: CLASS A SHARES
You pay the offering price when you buy Class A shares unless you qualify to purchase shares at net asset value. You pay a lower sales charge as the size of your investment increases. You do not pay a sales charge when you reinvest dividends or distributions paid by the fund.
INVESTMENTS OF $1 MILLION OR MORE
You do not pay a sales charge when you purchase Class A shares if you are
investing $1 million or more or you are a participant in certain group plans.
However, you pay a deferred sales charge if you sell your Class A shares within
one year of purchase. The sales charge is equal to 1% of your investment or your
sale proceeds, whichever is less.
REDUCED SALES CHARGES
You may qualify for a reduced Class A sales charge if you own or are purchasing
shares of Pioneer mutual funds. If you or your investment professional notifies
the distributor of your eligibility for a reduced sales charge at the time of
your purchase, the distributor will credit you with the combined value (at the
current offering price) of all your Pioneer mutual fund shares and the shares of
your spouse and the shares of any children under 21. Certain trustees and
fiduciaries may also qualify for a reduced sales charge. For this purpose,
Pioneer mutual funds include any fund for which the distributor is principal
underwriter and, at the distributor's discretion, may include funds organized
outside the U.S. and managed by Pioneer or an affiliate.
See "Qualifying for a reduced sales charge" for more information.
SALES CHARGES FOR CLASS A SHARES
SALES CHARGE AS % OF
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OFFERING NET AMOUNT
AMOUNT OF PURCHASE PRICE INVESTED
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Less than $50,000 5.75 6.10
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$50,000 but less than $100,000 4.50 4.71
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$100,000 but less than $250,000 3.50 3.63
......................................................................
$250,000 but less than $500,000 2.50 2.56
......................................................................
$500,000 but less than $1 million 2.00 2.04
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$1 million or more -0- -0-
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OFFERING PRICE
The net asset value per share plus any initial sales charge.
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SALES CHARGES: CLASS B SHARES
You buy Class B shares at net asset value per share without paying an initial sales charge. However, if you sell your Class B shares within six years of purchase, you will pay the distributor a contingent deferred sales charge. The contingent deferred sales charge decreases as the number of years since your purchase increases.
CONTINGENT DEFERRED SALES CHARGE --------------------------------------------- ON SHARES SOLD AS A % OF BEFORE THE DOLLAR AMOUNT SUBJECT END OF YEAR TO THE SALES CHARGE --------------------------------------------- 1 4 ............................................. 2 4 ............................................. 3 3 ............................................. 4 3 ............................................. 5 2 ............................................. 6 1 ............................................. 7+ -0- --------------------------------------------- |
CONVERSION TO CLASS A SHARES
Class B shares automatically convert into Class A shares. This helps you because
Class A shares pay lower expenses.
Your Class B shares will convert to Class A shares at the beginning of the
calendar month (calendar quarter for shares purchased before October 1, 1998)
that is eight years after the date of purchase except that:
|X| Shares purchased by reinvesting dividends and capital gain distributions
will convert to Class A shares at the same time as shares on which the
dividend or distribution was paid
|X| Shares purchased by exchanging shares from another fund will convert on the
date that the shares originally acquired would have converted into Class A
shares
Currently, the Internal Revenue Service permits the conversion of shares to take place without imposing a federal income tax. Conversion may not occur if the Internal Revenue Service deems it a taxable event for federal tax purposes.
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PAYING THE CONTINGENT DEFERRED SALES CHARGE (CDSC)
Several rules apply for Class B shares so that you pay the lowest possible CDSC.
|X| The CDSC is calculated on the current market value or the original cost of
the shares you are selling, whichever is less
|X| You do not pay a CDSC on reinvested dividends or distributions
|X| In determining the number of years since your purchase, all purchases are
considered to have been made on the first day of that month (quarter for
shares purchased before October 1, 1998)
|X| If you sell only some of your shares, the transfer agent will first sell
your shares that are not subject to any CDSC and then the shares that you
have owned the longest
|X| You may qualify for a waiver of the CDSC normally charged. See "Qualifying
for a reduced sales charge"
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CONTINGENT DEFERRED SALES CHARGE
A sales charge that may be deducted from your sale proceeds.
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BUYING, EXCHANGING AND SELLING SHARES
SALES CHARGES: CLASS C SHARES
You buy Class C shares at the offering price, which includes an initial sales charge of 1% of the amount invested, unless you qualify to purchase shares at net asset value per share without paying an initial sales charge. If you sell your Class C shares within one year of purchase, you will also pay the distributor a contingent deferred sales charge of 1% of the current market value or the original cost (less any initial sales charge) of the shares you are selling, whichever is less.
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PAYING THE CONTINGENT DEFERRED SALES CHARGE (CDSC)
Several rules apply for Class C shares so that you pay the lowest possible CDSC.
|X| The CDSC is calculated on the current market value or the original cost
(less any initial sales charge) of the shares you are selling, whichever is
less
|X| You do not pay a CDSC on reinvested dividends or distributions
|X| In determining the amount of time since your purchase, all purchases are
considered to have been made on the first day of that month (quarter for
shares purchased before October 1, 1998)
|X| If you sell only some of your shares, the transfer agent will first sell
your shares that are not subject to any CDSC and then the shares that you
purchased most recently
|X| You may qualify for a waiver of the CDSC normally charged. See "Qualifying
for a reduced sales charge"
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CLASS C SALES CHARGES
You may pay a combination of initial and contingent deferred sales charges in
connection with Class C shares.
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QUALIFYING FOR A REDUCED SALES CHARGE
INITIAL CLASS A SALES CHARGE WAIVERS
You may purchase Class A shares at net asset value (without a sales charge) or
with a reduced initial sales charge as follows. If you believe you qualify for
any of the waivers discussed below, contact the distributor. You are required to
provide written confirmation of your eligibility. You may not resell these
shares except to or on behalf of the fund.
CLASS A PURCHASES AT NET ASSET VALUE ARE AVAILABLE TO:
|X| Current or former trustees and officers of the fund;
|X| Current or former partners and employees of legal counsel to the fund;
|X| Current or former directors, officers, employees or sales representatives of
Pioneer and its affiliates;
|X| Current or former directors, officers, employees or sales representatives of
any subadviser or a predecessor adviser (or their affiliates) to any
investment company for which Pioneer serves as investment adviser;
|X| Current or former officers, partners, employees or registered
representatives of broker-dealers which have entered into sales agreements
with the distributor;
|X| Members of the immediate families of any of the persons above;
|X| Any trust, custodian, pension, profit sharing or other benefit plan of the
foregoing persons;
|X| Insurance company separate accounts;
|X| Certain wrap accounts for the benefit of clients of investment professionals
or other financial intermediaries adhering to standards established by the
distributor;
|X| Other funds and accounts for which Pioneer or any of its affiliates serve as
investment adviser or manager;
|X| In connection with certain reorganization, liquidation or acquisition
transactions involving other investment companies or personal holding
companies;
|X| Certain unit investment trusts;
|X| Employer-sponsored retirement plans with 100 or more eligible employees or
at least $500,000 in total plan assets;
|X| Participants in Optional Retirement Programs if (i) your employer has
authorized a limited number of mutual funds to participate in the program,
(ii) all participating mutual funds sell shares to program participants at
net asset value, (iii) your employer has agreed in writing to actively
promote Pioneer mutual funds to program participants and (iv) the program
provides for a matching contribution for each participant contribution;
|X| Participants in an employer-sponsored 403(b) plan or employer-sponsored 457
plan if (i) your employer has made special arrangements for your plan to
operate as a group through a single broker, dealer or financial
intermediary and (ii) all participants in the plan who purchase shares of a
Pioneer mutual fund do so through a single broker, dealer or other
financial intermediary designated by your employer.
BUYING, EXCHANGING AND SELLING SHARES
CLASS A PURCHASES AT A REDUCED INITIAL SALES CHARGE OR NET ASSET VALUE ARE ALSO
AVAILABLE TO:
Group plans if the sponsoring organization
|X| recommends purchases of Pioneer mutual funds to,
|X| permits solicitation of, or
|X| facilitates purchases by
its employees, members or participants.
LETTER OF INTENT (CLASS A)
You can use a letter of intent to qualify for reduced sales charges in two
situations:
|X| If you plan to invest at least $50,000 (excluding any reinvestment of
dividends and capital gain distributions) in the fund's Class A shares
during the next 13 months
|X| If you include in your letter of intent the value -- at the current
offering price -- of all of your Class A shares of the fund and all other
Pioneer mutual fund shares held of record in the amount used to determine
the applicable sales charge for the fund shares you plan to buy
Completing a letter of intent does not obligate you to purchase additional shares, but if you do not buy enough shares to qualify for the projected level of sales charges by the end of the 13-month period (or when you sell your shares, if earlier), the distributor will recalculate your sales charge. You must pay the additional sales charge within 20 days after you are notified of the recalculation or it will be deducted from your account (or your sale proceeds). For more information regarding letters of intent, please contact your investment professional or obtain and read the statement of additional information.
INITIAL CLASS C SALES CHARGE WAIVERS
You may purchase Class C shares at net asset value without an initial sales
charge as follows. If you believe you qualify for any of the waivers discussed
below, you must let your broker-dealer know prior to purchasing shares. You will
not be entitled to the waiver unless your broker-dealer notifies the distributor
of your eligibility at the time of purchase. You may not resell these shares
except to or on behalf of the fund.
CLASS C PURCHASES AT NET ASSET VALUE ARE AVAILABLE TO:
|X| Any person purchasing Class C shares through a broker-dealer that has
entered into an agreement with the distributor waiving the initial sales
charge (reducing the commission payable to such broker-dealer at the time
of sale from 2% to 1% of the amount invested). You should determine if your
broker-dealer participates in the sale of Class C shares on this basis
before purchasing Class C shares;
|X| Any shareowner who held Class C shares of a Pioneer fund on September 28,
2001 directly or through an omnibus account with a broker-dealer;
|X| Any purchase of Class C shares by an employer-sponsored retirement plan
described in Section 401, 403 or 457 of the Internal Revenue Code. With
respect to Section 401 and 403 plans, the waiver will apply only to plans
subject to the Employee Retirement Income Security Act of 1974 (ERISA);
|X| In connection with certain reorganization, liquidation or acquisition
transactions involving other investment companies or personal holding
companies.
WAIVER OR REDUCTION OF CONTINGENT DEFERRED SALES CHARGES (CDSC)
CLASS A SHARES THAT ARE SUBJECT TO A CDSC
Purchases of Class A shares of $1 million or more, or by participants in a group
plan which were not subject to an initial sales charge, may be subject to a CDSC
upon redemption. A CDSC is payable to the distributor in the event of a share
redemption within 12 months following the share purchase at the rate of 1% 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. However, the
CDSC is waived for redemptions of Class A shares purchased by an
employer-sponsored retirement plan described under Section 401(a), 403(b) or 457
of the Internal Revenue Code that has 1,000 or more eligible employees or at
least $10 million in total plan assets.
CLASS A, CLASS B AND CLASS C SHARES
The distributor may waive or reduce the CDSC for Class A shares that are subject
to a CDSC or for Class B or Class C shares if:
|X| The distribution results from the death of all registered account owners or
a participant in an employer-sponsored plan. For UGMAs, UTMAs and trust
accounts, the waiver applies only upon the death of all beneficial owners;
|X| You become disabled (within the meaning of Section 72 of the Internal
Revenue Code) after the purchase of the shares being sold. For UGMAs, UTMAs
and trust accounts, the waiver only applies upon the disability of all
beneficial owners;
|X| The distribution is made in connection with limited automatic redemptions
as described in "Systematic withdrawal plans" (limited in any year to 10%
of the value of the account in the fund at the time the withdrawal plan is
established);
|X| The distribution is from any type of IRA, 403(b) or employer-sponsored plan
described under Section 401(a) or 457 of the Internal Revenue Code and one
of the following applies:
- It is part of a series of substantially equal periodic payments made
over the life expectancy of the participant or the joint life expectancy
of the participant and his or her beneficiary (limited in any year to
10% of the value of the participant's account at the time the
distribution amount is established);
- It is a required minimum distribution due to the attainment of age 70
1/2, in which case the distribution amount may exceed 10% (based solely
on total plan assets held in Pioneer mutual funds);
BUYING, EXCHANGING AND SELLING SHARES
- It is rolled over to or reinvested in another Pioneer mutual fund in
the same class of shares, which will be subject to the CDSC of the
shares originally held;
- It is in the form of a loan to a participant in a plan that permits
loans (each repayment will be subject to a CDSC as though a new
purchase);
|X| The distribution is to a participant in an employer-sponsored retirement
plan described under Section 401(a) of the Internal Revenue Code or to a
participant in an employer-sponsored 403(b) plan or employer-sponsored 457
plan if (i) your employer has made special arrangements for your plan to
operate as a group through a single broker, dealer or financial
intermediary and (ii) all participants in the plan who purchase shares of a
Pioneer mutual fund do so through a single broker, dealer or other
financial intermediary designated by your employer and is:
- A return of excess employee deferrals or contributions;
- A qualifying hardship distribution as described in the Internal Revenue
Code. For Class B shares, waiver is granted only on payments of up to
10% of total plan assets held by Pioneer for all participants, reduced
by the total of any prior distributions made in that calendar year;
- Due to retirement or termination of employment. For Class B shares,
waiver is granted only on payments of up to 10% of total plan assets
held in a Pioneer mutual fund for all participants, reduced by the
total of any prior distributions made in the same calendar year;
- From a qualified defined contribution plan and represents a
participant's directed transfer, provided that this privilege has been
preauthorized through a prior agreement with the distributor regarding
participant directed transfers (not available to Class B shares);
|X| The distribution is made pursuant to the fund's right to liquidate or
involuntarily redeem shares in a shareholder's account;
|X| The selling broker elects, with the distributor's approval, to waive
receipt of the commission normally paid at the time of the sale.
OPENING YOUR ACCOUNT
If your shares are held in your investment firm's name, the options and services available to you may be different from those discussed in this prospectus. Ask your investment professional for more information.
If you invest in the fund through investment professionals or other financial intermediaries, including wrap programs and fund supermarkets, additional conditions may apply to your investment in the fund, and the investment professional or intermediary may charge you a transaction-based or other fee for its services. These conditions and fees are in addition to those imposed by the fund and its affiliates. You should ask your investment professional or financial intermediary about its services and any applicable fees.
ACCOUNT OPTIONS
Use your account application to select options and privileges for your account.
You can change your selections at any time by sending a completed account
options form to the transfer agent. You may be required to obtain a signature
guarantee to make certain changes to an existing account.
Call or write to the transfer agent for account applications, account options forms and other account information:
PIONEER INVESTMENT MANAGEMENT
SHAREHOLDER SERVICES, INC.
P.O. Box 55014
Boston, Massachusetts 02205-9014
Telephone 1-800-225-6292
TELEPHONE TRANSACTION PRIVILEGES
If your account is registered in your name, you can buy, exchange or sell fund
shares by telephone. If you do not want your account to have telephone
transaction privileges, you must indicate that choice on your account
application or by writing to the transfer agent.
When you request a telephone transaction the transfer agent will try to confirm that the request is genuine. The transfer agent records the call, requires the caller to provide the personal identification number for the account and sends you a written confirmation. The fund may implement other confirmation procedures from time to time. Different procedures may apply if you have a non-U.S. account or if your account is registered in the name of an institution, broker-dealer or other third party.
ONLINE TRANSACTION PRIVILEGES
If your account is registered in your name, you may be able to buy, exchange or
sell fund shares online. Your investment firm may also be able to buy, exchange
or sell your fund shares online.
To establish online transaction privileges:
|X| For new accounts, complete the online section of the account application
|X| For existing accounts, complete an account options form, write to the
transfer agent or complete the online authorization screen on
WWW.PIONEERFUNDS.COM
To use online transactions, you must read and agree to the terms of an online transaction agreement available on the Pioneer website. When you or your investment firm requests an online transaction the transfer agent electronically records the transaction, requires an authorizing password and sends a written confirmation. The fund may implement other procedures from time to time. Different procedures may apply if you have a non-U.S. account or if your account is registered in the name of an institution, broker-dealer or other third party. You may not be able to use the online transaction privilege for certain types of accounts, including most retirement accounts.
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BY PHONE
If you want to place your telephone transaction by speaking to a shareowner
services representative, call 1-800-225-6292 between 8:00 a.m. and 9:00 p.m.
Eastern time on any weekday that the New York Stock Exchange is open. You may
use FactFoneSM at any time.
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BUYING, EXCHANGING AND SELLING SHARES
GENERAL RULES ON BUYING, EXCHANGING AND SELLING YOUR FUND SHARES
SHARE PRICE
If you place an order with your investment firm before the New York Stock
Exchange closes and your investment firm submits the order to the distributor
prior to the distributor's close of business (usually 5:30 p.m. Eastern time),
your share price will be calculated that day. Otherwise, your share price will
be calculated at the next close of the New York Stock Exchange after the
distributor receives your order. Your investment firm is responsible for
submitting your order to the distributor.
BUYING
You may buy fund shares from any investment firm that has a sales agreement with
the distributor. If you do not have an investment firm, please call
1-800-225-6292 for information on how to locate an investment professional in
your area.
You can buy fund shares at the offering price. The distributor may reject any order until it has confirmed the order in writing and received payment. The fund reserves the right to stop offering any class of shares.
You may use securities you own to purchase shares of the fund provided that Pioneer, in its sole discretion, determines that the securities are consistent with the fund's objective and policies and the in-kind transaction is in the best interests of the fund. If the fund accepts your securities, they will be valued for purposes of determining the number of fund shares acquired in the same way the fund will value the securities for purposes of determining its net asset value. Such transactions are generally treated as sales of the exchanged securities for federal and other tax purposes. Your sales charge for purchases of fund shares will be based upon the current market value of the securities that you exchange. Your broker may also impose a fee in connection with processing your purchase of fund shares with securities.
MINIMUM INVESTMENT AMOUNTS
Your initial investment must be at least $1,000. Additional investments must be
at least $100 for Class A shares and $500 for Class B or Class C shares. You may
qualify for lower initial or subsequent investment minimums if you are opening a
retirement plan account, establishing an automatic investment plan or placing
your trade through your investment firm.
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RETIREMENT PLAN ACCOUNTS
You can purchase fund shares through tax-deferred retirement plans for individuals, businesses and tax-exempt organizations.
Your initial investment for most types of retirement plan accounts must be at least $250. Additional investments for most types of retirement plans must be at least $100.
You may not use the account application accompanying this prospectus to
establish a Pioneer retirement plan. You can obtain retirement plan applications
from your investment firm or by calling the Retirement Plans Department at
1-800-622-0176.
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Consult your investment professional to learn more about buying, exchanging or
selling fund shares.
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EXCHANGING
You may exchange your shares for shares of the same class of another Pioneer
mutual fund.
Your exchange request must be for at least $1,000 unless the fund you are exchanging into has a different minimum. The fund allows you to exchange your shares at net asset value without charging you either an initial or contingent deferred sales charge at the time of the exchange. Shares you acquire as part of an exchange will continue to be subject to any contingent deferred sales charge that applies to the shares you originally purchased. When you ultimately sell your shares, the date of your original purchase will determine your contingent deferred sales charge.
Before you request an exchange, consider each fund's investment objective and policies as described in the fund's prospectus.
SELLING
Your shares will be sold at net asset value per share next calculated after the
fund receives your request in good order.
If the shares you are selling are subject to a deferred sales charge, it will be deducted from the sale proceeds. The fund generally will send your sale proceeds by check, bank wire or electronic funds transfer. Normally you will be paid within seven days. If you recently sent a check to purchase the shares being sold, the fund may delay payment of the sale proceeds until your check has cleared. This may take up to 15 calendar days from the purchase date.
If you are selling shares from a non-retirement account or certain IRAs, you may use any of the methods described below. If you are selling shares from a retirement account other than an IRA, you must make your request in writing.
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GOOD ORDER MEANS THAT:
|X| You have provided adequate instructions
|X| There are no outstanding claims against your account
|X| There are no transaction limitations on your account
|X| If you have any fund share certificates, you submit them and they are
signed by each record owner exactly as the shares are registered
|X| Your request includes a signature guarantee if you:
- Are selling over $100,000 or exchanging over $500,000 worth of shares
- Changed your account registration or address within the last 30 days
- Instruct the transfer agent to mail the check to an address different
from the one on your account
- Want the check paid to someone other than the account owner(s)
- Are transferring the sale proceeds to a Pioneer mutual fund account with a
different registration
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You may have to pay income taxes on a sale or an exchange.
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BUYING, EXCHANGING AND SELLING SHARES
BUYING SHARES
EXCHANGING SHARES
THROUGH YOUR INVESTMENT FIRM
Normally, your investment firm will send your purchase request to the fund's
transfer agent. CONSULT YOUR INVESTMENT PROFESSIONAL FOR MORE INFORMATION. Your
investment firm may receive a commission from the distributor for your purchase
of fund shares. The distributor or its affiliates may pay additional
compensation, out of their own assets, to certain investment firms or their
affiliates based on objective criteria established by the distributor.
Normally, your investment firm will send your exchange request to the fund's transfer agent. CONSULT YOUR INVESTMENT PROFESSIONAL FOR MORE INFORMATION ABOUT EXCHANGING YOUR SHARES.
BY PHONE OR ONLINE
YOU CAN USE THE TELEPHONE OR ONLINE PURCHASE PRIVILEGE IF you have an existing
non-retirement account. Certain IRAs can use the telephone purchase privilege.
If your account is eligible, you can purchase additional fund shares by phone or
online if:
|X| You established your bank account of record at least 30 days ago
|X| Your bank information has not changed for at least 30 days
|X| You are not purchasing more than $25,000 worth of shares per account per day
|X| You can provide the proper account identification information
When you request a telephone or online purchase, the transfer agent will electronically debit the amount of the purchase from your bank account of record. The transfer agent will purchase fund shares for the amount of the debit at the offering price determined after the transfer agent receives your telephone or online purchase instruction and good funds. It usually takes three business days for the transfer agent to receive notification from your bank that good funds are available in the amount of your investment.
After you establish an eligible fund account, YOU CAN EXCHANGE FUND SHARES BY
PHONE OR ONLINE IF:
|X| You are exchanging into an existing account or using the exchange to
establish a new account, provided the new account has a registration
identical to the original account
|X| The fund into which you are exchanging offers the same class of shares
|X| You are not exchanging more than $500,000 worth of shares per account per
day
|X| You can provide the proper account identification information
IN WRITING, BY MAIL OR BY FAX
You can purchase fund shares for an existing fund account by MAILING A CHECK TO
THE TRANSFER AGENT. Make your check payable to the fund. Neither initial nor
subsequent investments should be made by third party check. Your check must be
in U.S. dollars and drawn on a U.S. bank. Include in your purchase request the
fund's name, the account number and the name or names in the account
registration.
You can exchange fund shares by MAILING OR FAXING A LETTER OF INSTRUCTION TO THE
TRANSFER AGENT. You can exchange fund shares directly through the fund only if
your account is registered in your name. However, you may not fax an exchange
request for more than $500,000. Include in your letter:
|X| The name, social security number and signature of all registered owners
|X| A signature guarantee for each registered owner if the amount of the
exchange is more than $500,000
|X| The name of the fund out of which you are exchanging and the name of the
fund into which you are exchanging
|X| The class of shares you are exchanging
|X| The dollar amount or number of shares you are exchanging
SELLING SHARES
Normally, your investment firm will send your request to sell shares to the
fund's transfer agent. CONSULT YOUR INVESTMENT PROFESSIONAL FOR MORE
INFORMATION. The fund has authorized the distributor to act as its agent in the
repurchase of fund shares from qualified investment firms. The fund reserves the
right to terminate this procedure at any time.
IF YOU HAVE AN ELIGIBLE NON-RETIREMENT ACCOUNT, YOU MAY SELL UP TO $100,000 PER ACCOUNT PER DAY BY PHONE OR ONLINE. You may sell fund shares held in a retirement plan account by phone only if your account is an eligible IRA (tax penalties may apply). You may not sell your shares by phone or online if you have changed your address (for checks) or your bank information (for wires and transfers) in the last 30 days.
You may receive your sale proceeds:
|X| By check, provided the check is made payable exactly as your account is
registered
|X| By bank wire or by electronic funds transfer, provided the sale proceeds are
being sent to your bank address of record
You can sell some or all of your fund shares by WRITING DIRECTLY TO THE FUND only if your account is registered in your name. Include in your request your name, your social security number, the fund's name, your fund account number, the class of shares to be sold, the dollar amount or number of shares to be sold and any other applicable requirements as described below. The transfer agent will send the sale proceeds to your address of record unless you provide other instructions. Your request must be signed by all registered owners and be in good order. The transfer agent will not process your request until it is received in good order. You may sell up to $100,000 per account per day by fax.
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HOW TO CONTACT US
BY PHONE [telephone icon]
For information or to request a telephone transaction between 8:00 a.m. and 9:00
p.m. (Eastern time) by speaking with a shareholder services representative call
1-800-225-6292
To request a transaction using FactFoneSM call
1-800-225-4321
Telecommunications Device for the Deaf (TDD)
1-800-225-1997
BY MAIL [envelope icon]
Send your written instructions to:
PIONEER INVESTMENT MANAGEMENT
SHAREHOLDER SERVICES, INC.
P.O. Box 55014
Boston, Massachusetts 02205-9014
BY FAX [fax icon]
Fax your exchange and sale requests to:
1-800-225-4240
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EXCHANGE PRIVILEGE
You may make up to four exchange redemptions of $25,000 or more per account per
calendar year. See "Shareowner account policies."
EXCESSIVE TRADING
The fund discourages excessive and/or short-term trading practices, such as
market timing, that may disrupt portfolio management strategies and harm fund
performance. These practices consist of:
|X| selling shares purchased within the preceding 90 days;
|X| two or more purchases and redemptions in any 90-day period; or
|X| any other series of transactions indicative of a timing pattern.
If we identify an account that engages in such activity, the fund and the
distributor reserve the right to refuse or restrict any purchase order
(including exchanges) for that account and other accounts under common ownership
or control.
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BUYING, EXCHANGING AND SELLING SHARES
ACCOUNT OPTIONS
See the account application form for more details on each of the following
options.
AUTOMATIC INVESTMENT PLANS
You can make regular periodic investments in the fund by setting up monthly bank
drafts, government allotments, payroll deductions, a Pioneer Investomatic Plan
and other similar automatic investment plans. You may use an automatic
investment plan to establish a Class A share account with a small initial
investment. If you have a Class B or Class C share account and your balance is
at least $1,000, you may establish an automatic investment plan.
PIONEER INVESTOMATIC PLAN
If you establish a Pioneer Investomatic Plan, the transfer agent will make a
periodic investment in fund shares by means of a preauthorized electronic funds
transfer from your bank account. Your plan investments are voluntary. You may
discontinue your plan at any time or change the plan's dollar amount, frequency
or investment date by calling or writing to the transfer agent. You should allow
up to 30 days for the transfer agent to establish your plan.
AUTOMATIC EXCHANGES
You can automatically exchange your fund shares for shares of the same class of
another Pioneer mutual fund. The automatic exchange will begin on the day you
select when you complete the appropriate section of your account application or
an account options form. In order to establish automatic exchange:
|X| You must select exchanges on a monthly or quarterly basis
|X| Both the originating and receiving accounts must have identical
registrations
|X| The originating account must have a minimum balance of $5,000
You may have to pay income taxes on an exchange.
DISTRIBUTION OPTIONS
The fund offers three distribution options. Any fund shares you buy by
reinvesting distributions will be priced at the applicable net asset value per
share.
(1) Unless you indicate another option on your account application, any dividends and capital gain distributions paid to you by the fund will automatically be invested in additional fund shares.
(2) You may elect to have the amount of any dividends paid to you in cash and any capital gain distributions reinvested in additional shares.
(3) You may elect to have the full amount of any dividends and/or capital gain distributions paid to you in cash.
Options (2) or (3) are not available to retirement plan accounts or accounts with a current value of less than $500.
If your distribution check is returned to the transfer agent or you do not cash the check for six months or more, the transfer agent may reinvest the amount of the check in your account and automatically change the distribution option on your account to option (1) until you request a different option in writing. These additional shares will be purchased at the then current net asset value.
DIRECTED DIVIDENDS
You can invest the dividends paid by one of your Pioneer mutual fund accounts in
a second Pioneer mutual fund account. The value of your second account must be
at least $1,000 ($500 for Pioneer Fund or Pioneer Value Fund). You may direct
the investment of any amount of dividends. There are no fees or charges for
directed dividends. If you have a retirement plan account, you may only direct
dividends to accounts with identical registrations.
SYSTEMATIC WITHDRAWAL PLANS
When you establish a systematic withdrawal plan for your account, the transfer
agent will sell the number of fund shares you specify on a periodic basis and
the proceeds will be paid to you or to any person you select. You must obtain a
signature guarantee to direct payments to another person after you have
established your systematic withdrawal plan. Payments can be made either by
check or by electronic transfer to a bank account you designate.
To establish a systematic withdrawal plan:
|X| Your account must have a total value of at least $10,000 when you establish
your plan
|X| You must request a periodic withdrawal of at least $50
|X| You may not request a periodic withdrawal of more than 10% of the value of
any Class B or Class C share account (valued at the time the plan is
implemented)
Systematic sales of fund shares may be taxable transactions for you. If you purchase Class A or Class C shares while you are making systematic withdrawals from your account, you may pay unnecessary sales charges.
DIRECT DEPOSIT
If you elect to take dividends or dividends and capital gain distributions in
cash, or if you establish a systematic withdrawal plan, you may choose to have
those cash payments deposited directly into your savings, checking or NOW bank
account.
VOLUNTARY TAX WITHHOLDING
You may have the transfer agent withhold 28% of the dividends and capital gain
distributions paid from your fund account (before any reinvestment) and forward
the amount withheld to the Internal Revenue Service as a credit against your
federal income taxes. Voluntary tax withholding is not available for retirement
plan accounts or for accounts subject to backup withholding.
REINSTATEMENT PRIVILEGE FOR CLASS A AND CLASS B SHARES
If you recently sold all or part of your Class A or Class B shares, you may be
able to reinvest all or part of your sale proceeds without a sales charge in
Class A shares of any Pioneer mutual fund. To qualify for reinstatement:
|X| You must send a written request to the transfer agent no more than six
months after selling your shares and
|X| The registration of the account in which you reinvest your sale
proceeds must be identical to the registration of the account from
which you sold your shares.
When you elect reinstatement, you are subject to the provisions outlined in the selected fund's prospectus, including the fund's minimum investment requirement. Your sale proceeds will be reinvested in shares of the fund at the Class A net asset value per share determined after the transfer agent receives your written request for reinstatement.
You may realize a gain or loss for federal income tax purposes as a result of your sale of fund shares, and special tax rules may apply if you elect reinstatement. Consult your tax adviser for more information.
BUYING, EXCHANGING AND SELLING SHARES
SHAREOWNER SERVICES
PIONEER WEBSITE
WWW.PIONEERFUNDS.COM
The website includes a full selection of information on mutual fund investing.
You can also use the website to get:
|X| Your current account information
|X| Prices, returns and yields of all publicly available Pioneer mutual funds
|X| Prospectuses for all the Pioneer mutual funds
|X| A copy of Pioneer's privacy notice
If you or your investment firm authorized your account for the online transaction privilege, you may buy, exchange and sell shares online.
FACTFONESM 1-800-225-4321 You can use FactFoneSM to:
|X| Obtain current information on your Pioneer mutual fund accounts
|X| Inquire about the prices and yields of all publicly available Pioneer
mutual funds
|X| Make computer-assisted telephone purchases, exchanges and redemptions for
your fund accounts
|X| Request account statements
If you plan to use FactFoneSM to make telephone purchases and redemptions, first you must activate your personal identification number and establish your bank account of record. If your account is registered in the name of a broker-dealer or other third party, you may not be able to use FactFoneSM.
HOUSEHOLD DELIVERY OF FUND DOCUMENTS
With your consent, Pioneer may send a single proxy statement, prospectus and
shareholder report to your residence for you and any other member of your
household who has an account with the fund. If you wish to revoke your consent
to this practice, you may do so by notifying Pioneer, by phone or in writing
(see "How to contact us"). Pioneer will begin mailing separate proxy statements,
prospectuses and shareholder reports to you within 30 days after receiving your
notice.
CONFIRMATION STATEMENTS
The transfer agent maintains an account for each investment firm or individual
shareowner and records all account transactions. You will be sent confirmation
statements showing the details of your transactions as they occur, except
automatic investment plan transactions, which are confirmed quarterly. If you
have more than one Pioneer mutual fund account registered in your name, the
Pioneer combined account statement will be mailed to you each quarter.
TAX INFORMATION
In January of each year, the fund will mail you information about the tax status
of the dividends and distributions paid to you by the fund.
TDD 1-800-225-1997
If you have a hearing disability and access to TDD keyboard equipment, you can
contact our telephone representatives with questions about your account by
calling our TDD number between 8:30 a.m. and 5:30 p.m. Eastern time any weekday
that the New York Stock Exchange is open.
PRIVACY
The fund has a policy that protects the privacy of your personal information. A
copy of Pioneer's privacy notice accompanies this prospectus. The fund will send
you a copy of the privacy notice each year. You may also obtain the privacy
notice by calling the transfer agent or through Pioneer's website.
SHAREOWNER ACCOUNT POLICIES
SIGNATURE GUARANTEES AND OTHER REQUIREMENTS You are required to obtain a
signature guarantee when you are:
|X| Requesting certain types of exchanges or sales of fund shares
|X| Redeeming shares for which you hold a share certificate
|X| Requesting certain types of changes for your existing account
You can obtain a signature guarantee from most broker-dealers, banks, credit unions (if authorized under state law) and federal savings and loan associations. You cannot obtain a signature guarantee from a notary public.
Fiduciaries and corporations are required to submit additional documents to sell fund shares.
EXCHANGE LIMITATION
The fund's exchange limitation is intended to discourage short-term trading in
fund shares. Short-term trading can increase the expenses incurred by the fund
and make portfolio management less efficient. In determining whether the
exchange redemption limit has been reached, Pioneer may aggregate a series of
exchanges (each valued at less than $25,000) and/or fund accounts that appear to
be under common ownership or control. Pioneer may view accounts for which one
person gives instructions or accounts that act on advice provided by a single
source to be under common control.
The exchange limitation does not apply to automatic exchange transactions or to exchanges made by participants in employer-sponsored retirement plans qualified under Section 401(a) of the Internal Revenue Code. The exchange limitation does not apply to accounts that have a written exchange agreement with the distributor. The exchange limitation may not apply to transactions made through an omnibus account for fund shares.
MINIMUM ACCOUNT SIZE
The fund requires that you maintain a minimum account value of $500. If you hold
less than $500 in your account, the fund reserves the right to notify you that
it intends to sell your shares and close your account. You will be given 60 days
from the date of the notice to make additional investments to avoid having your
shares sold. This policy does not apply to certain qualified retirement plan
accounts.
TELEPHONE AND WEBSITE ACCESS
You may have difficulty contacting the fund by telephone or accessing
pioneerfunds.com during times of market volatility or disruption in telephone or
Internet service. On New York Stock Exchange holidays or on days when the
exchange closes early, Pioneer will adjust the hours for the telephone center
and for online transaction processing accordingly. If you are unable to access
pioneerfunds.com or reach the fund by telephone, you should communicate with the
fund in writing.
SHARE CERTIFICATES
The fund does not offer share certificates. Shares are electronically recorded.
Any existing certificated shares can only be sold by returning your certificate
to the transfer agent, along with a letter of instruction or a stock power and a
signature guarantee.
OTHER POLICIES
The fund and the distributor reserve the right to:
|X| charge a fee for exchanges or to modify, limit or suspend the exchange
privilege at any time without notice. The fund will provide 60 days' notice
of material amendments to or termination of the exchange privilege
|X| revise, suspend, limit or terminate the account options or services
available to shareowners at any time, except as required by the rules
of the Securities and Exchange Commission
The fund reserves the right to:
|X| suspend transactions in shares when trading on the New York Stock
Exchange is closed or restricted, when the Securities and Exchange
Commission determines an emergency or other circumstances exist that
make it impracticable for the fund to sell or value its portfolio
securities
|X| redeem in kind by delivering to you portfolio securities owned by the
fund rather than cash. Securities you receive this way may increase or
decrease in value while you hold them and you may incur brokerage and
transaction charges and tax liability when you convert the securities
to cash
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You may make up to four exchange redemptions of $25,000 or more per account per
calendar year out of the fund. Except as noted, you may make any number of
exchanges of less than $25,000.
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DIVIDENDS, CAPITAL GAINS AND TAXES
DIVIDENDS AND CAPITAL GAINS
The fund generally pays any distributions of net short- and long-term capital
gains in November. The fund generally pays dividends from any net investment
income in December. The fund may also pay dividends and capital gain
distributions at other times if necessary for the fund to avoid U.S. federal
income or excise tax. If you invest in the fund close to the time that the fund
makes a distribution, generally you will pay a higher price per share and you
will pay taxes on the amount of the distribution whether you reinvest the
distribution or receive it as cash.
TAXES
For U.S. federal income tax purposes, distributions from the fund's net
long-term capital gains (if any) are considered long-term capital gains and may
be taxable to you at different maximum rates depending upon their source and
other factors. Dividends and short-term capital gain distributions are taxable
as ordinary income. Dividends and distributions are taxable, whether you take
payment in cash or reinvest them to buy additional fund shares. When you sell or
exchange fund shares you will generally recognize a capital gain or capital loss
in an amount equal to the difference between the net amount of sale proceeds
(or, in the case of an exchange, the fair market value of the shares) that you
receive and your tax basis for the shares that you sell or exchange. In January
of each year the fund will mail to you information about your dividends,
distributions and any shares you sold in the previous calendar year.
You must provide your social security number or other taxpayer identification number to the fund along with the certifications required by the Internal Revenue Service when you open an account. If you do not or if it is otherwise legally required to do so, the fund will withhold 30% "backup withholding" tax from your dividends and distributions, sale proceeds and any other payments to you.
You should ask your tax adviser about any federal and state tax considerations, including possible additional withholding taxes for non-U.S. shareholders. You may also consult the fund's statement of additional information for a more detailed discussion of U.S. federal income tax considerations that may affect the fund and its shareowners.
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Sales and exchanges may be taxable transactions to shareowners.
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PIONEER
LARGE CAP GROWTH FUND
YOU CAN OBTAIN MORE FREE INFORMATION about the fund from your investment firm or by writing to Pioneer Investment Management Shareholder Services, Inc., 60 State Street, Boston, Massachusetts 02109. You may also call 1-800-225-6292.
SHAREOWNER REPORTS
Annual and semiannual reports to shareowners provide information about the
fund's investments. The annual report discusses market conditions and investment
strategies that significantly affected the fund's performance during its last
fiscal year.
STATEMENT OF ADDITIONAL INFORMATION
The statement of additional information provides more detailed information about
the fund. It is incorporated by reference into this prospectus.
VISIT OUR WEBSITE
www.pioneerfunds.com
You can also review the fund's shareowner reports, prospectus and statement of additional information at the Securities and Exchange Commission's Public Reference Room in Washington, D.C. Call 1-202-942-8090 for information. The Commission charges a fee for copies. You can get the same information free from the Commission's EDGAR database on the Internet (http://www.sec.gov). You may also e-mail requests for these documents to publicinfo@sec.gov or make a request in writing to the Commission's Public Reference Section, Washington, D.C. 20549-0102.
(Investment Company Act file no. 811-21108)
PIONEER FUNDS DISTRIBUTOR, INC.
60 STATE STREET
BOSTON, MA 02109
12284-00-0802
WWW.PIONEERFUNDS.COM (C) Pioneer Funds Distributor, Inc.
PIONEER LARGE CAP GROWTH FUND
60 State Street
Boston, Massachusetts 02109
STATEMENT OF ADDITIONAL INFORMATION
CLASS A, CLASS B AND CLASS C SHARES
AUGUST 15, 2002
This statement of additional information is not a prospectus. It should be read in conjunction with the fund's Class A, Class B and Class C shares prospectus, dated August 15, 2002, as supplemented or revised from time to time. 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. You can also obtain a copy of the prospectus from our website at: www.pioneerfunds.com.
TABLE OF CONTENTS
PAGE
1. Fund History.....................................................2
2. Investment Policies, Risks and Restrictions......................2
3. Trustees and Officers...........................................19
4. Investment Adviser..............................................23
5. Principal Underwriter and Distribution Plans....................27
6. Shareholder Servicing/Transfer Agent............................31
7. Custodian.......................................................31
8. Independent Auditors............................................32
9. Portfolio Transactions..........................................32
10. Description of Shares...........................................33
11. Sales Charges...................................................35
12. Redeeming Shares................................................38
13. Telephone and Online Transactions...............................39
14. Pricing of Shares...............................................40
15. Tax Status......................................................41
16. Investment Results..............................................46
17. Financial Statements............................................48
18. Annual Fee, Expense and Other Information.......................49
19. Appendix A - Description of Short-Term Debt, Corporate Bond
and Preferred Stock Ratings.....................................53
20. Appendix B - Performance Statistics.............................59
21. Appendix C - Other Pioneer Information..........................78
1. FUND HISTORY
|
The fund is a diversified, open-end management investment company organized as a Delaware business trust on May 7, 2002.
2. INVESTMENT POLICIES, RISKS AND RESTRICTIONS
The prospectus presents the investment objective and the principal investment strategies and risks of the fund. This section supplements the disclosure in the fund's prospectus and provides additional information on the fund's investment policies or restrictions. Restrictions or policies stated as a maximum percentage of the fund's assets are only applied immediately after a portfolio investment to which the policy or restriction is applicable (other than the limitations on borrowing and illiquid securities). Accordingly, any later increase or decrease resulting from a change in values, net assets or other circumstances will not be considered in determining whether the investment complies with the fund's restrictions and policies.
PRIMARY INVESTMENTS
Under normal circumstances, the fund invests in equity securities of large-capitalization companies, as described in the prospectus.
The fund will provide written notice to shareholders at least 60 days prior to any change to the requirement that it invest at least 80% of its net assets plus borrowings for investment purposes as described in the preceding sentence.
INVESTMENTS IN EQUITY SECURITIES
Equity securities, such as common stock, generally represent an ownership interest in a company. While equity securities have historically generated higher average returns than fixed income securities, equity securities have also experienced significantly more volatility in those returns. An adverse event, such as an unfavorable earnings report, may depress the value of a particular equity security held by the fund. Also, the price of equity securities, particularly common stocks, are sensitive to general movements in the stock market. A drop in the stock market may depress the price of equity securities held by the fund.
ILLIQUID SECURITIES
The fund will not invest more than 15% of its net assets in illiquid and other securities that are not readily marketable. Repurchase agreements maturing in more than seven days will be included for purposes of the foregoing limit. Securities subject to restrictions on resale under the Securities Act of 1933, as amended (the "1933 Act"), are considered illiquid unless they are eligible for resale pursuant to Rule 144A or another exemption from the registration requirements of the 1933 Act and are determined to be liquid by Pioneer Investment Management, Inc. ("Pioneer"), the fund's investment adviser. Pioneer determines the liquidity of Rule 144A and other restricted securities according to procedures adopted by the Board of Trustees. Under the direction of the Board of Trustees, Pioneer monitors the application of these guidelines and procedures. The inability of the fund to dispose of illiquid investments readily or at reasonable prices could impair the fund's ability to raise cash for redemptions or other purposes. If the fund sold restricted securities other than pursuant to an exception from registration under the 1933 Act such as Rule 144A, it may be deemed to be acting as an underwriter and subject to liability under the 1933 Act.
INVESTMENTS IN INITIAL PUBLIC OFFERINGS
To the extent consistent with its investment objective, the fund may invest in initial public offerings of equity securities. The market for such securities may be more volatile and entail greater risk of loss than investments in more established companies. Investments in initial public offerings may represent a significant portion of the fund's investment performance. The fund cannot assure that investments in initial public offerings will continue to be available to the fund or, if available, will result in positive investment performance. In addition, as the fund's portfolio grows in size, the impact of investments in initial public offerings on the overall performance of the fund is likely to decrease.
DEBT SECURITIES SELECTION
In selecting fixed income securities for the fund, Pioneer gives primary consideration to the fund's investment objective, the attractiveness of the market for debt securities given Pioneer's outlook for the equity markets and the fund's liquidity requirements. Once Pioneer determines to allocate a portion of the fund's assets to debt securities, Pioneer generally focuses on short-term instruments to provide liquidity and may invest in a range of fixed income securities if the fund is investing in such instruments for income or capital gains. Pioneer selects individual securities based on broad economic factors and issuer specific factors including the terms of the securities (such as yields compared to U.S. Treasuries or comparable issues), liquidity and rating, sector and issuer diversification.
CONVERTIBLE DEBT SECURITIES
The fund may invest in convertible debt securities which are debt obligations convertible at a stated exchange rate or formula into common stock or other equity securities of or owned by the issuer. Convertible securities rank senior to common stocks in an issuer's capital structure and consequently may be of higher quality and entail less risk than the issuer's common stock. As with all debt securities, the market values of convertible securities tend to increase when interest rates decline and, conversely, tend to decline when interest rates increase.
DEBT SECURITIES RATING CRITERIA
Investment grade debt securities are those rated "BBB" or higher by Standard & Poor's Ratings Group ("Standard & Poor's") or the equivalent rating of other nationally recognized securities rating organizations. Debt securities rated BBB are considered medium grade obligations with speculative characteristics, and adverse economic conditions or changing circumstances may weaken the issuer's ability to pay interest and repay principal. If the rating of an investment grade debt security falls below investment grade, Pioneer will consider if any action is appropriate in light of the fund's investment objective and policies.
Below investment grade debt securities are those rated "BB" and below by Standard & Poor's or the equivalent rating of other nationally recognized securities rating organizations. See Appendix A for a description of rating categories. The fund may invest in debt securities rated "C" or better.
Below investment grade debt securities or comparable unrated securities are commonly referred to as "junk bonds" and are considered predominantly speculative and may be questionable as to principal and interest payments. Changes in economic conditions are more likely to lead to a weakened capacity to make principal payments and interest payments. The amount of high yield securities outstanding has proliferated as an increasing number of issuers have used high yield securities for corporate financing. 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 quality securities will have an adverse effect on the fund's net asset value to the extent that 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 high yield securities 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 high yield securities could contract further, independent of any specific adverse changes in the condition of a particular issuer. As a result, the fund 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.
Since investors generally perceive that there are greater risks associated with lower quality debt securities of the type in which the fund may invest a portion of its assets, 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 debt 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 debt securities market, resulting in greater yield and price volatility.
Lower rated and comparable unrated debt 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. However, lower rated securities generally involve greater risks of loss of income and principal than higher rated securities. Pioneer will attempt to reduce these risks through portfolio diversification and by analysis of each issuer and its ability to make timely payments of income and principal, as well as broad economic trends and corporate developments.
U.S. GOVERNMENT SECURITIES
U.S. government securities in which the fund invests include debt obligations of
varying maturities issued by the U.S. Treasury or issued or guaranteed by an
agency or instrumentality of the U.S. government, including the Federal Housing
Administration, Federal Financing Bank, Farmers Home Administration,
Export-Import Bank of the U.S., Small Business Administration, Government
National Mortgage Association ("GNMA"), General Services Administration, Central
Bank for Cooperatives, Federal Farm Credit Banks, Federal Home Loan Banks,
Federal Home Loan Mortgage Corporation ("FHLMC"), Federal National Mortgage
Association ("FNMA"), Maritime Administration, Tennessee Valley Authority,
District of Columbia Armory Board, Student Loan Marketing Association,
Resolution Trust Corporation and various institutions that previously were or
currently are part of the Farm Credit System (which has been undergoing
reorganization since 1987). Some U.S. government securities, such as U.S.
Treasury bills, Treasury notes and Treasury bonds, which differ only in their
interest rates, maturities and times of issuance, are supported by the full
faith and credit of the United States. Others are supported by: (i) the right of
the issuer to borrow from the U.S. Treasury, such as securities of the Federal
Home Loan Banks; (ii) the discretionary authority of the U.S. government to
purchase the agency's obligations, such as securities of the FNMA; or (iii) only
the credit of the issuer. No assurance can be given that the U.S. government
will provide financial support in the future to U.S. government agencies,
authorities or instrumentalities that are not supported by the full faith and
credit of the United States. Securities guaranteed as to principal and interest
by the U.S. government, its agencies, authorities or instrumentalities include:
(i) securities for which the payment of principal and interest is backed by an
irrevocable letter of credit issued by the U.S. government or any of its
agencies, authorities or instrumentalities; and (ii) participations in loans
made to non-U.S. governments or other entities that are so guaranteed. The
secondary market for certain of these participations is limited and, therefore,
may be regarded as illiquid.
U.S. government securities may include zero coupon securities that may be purchased when yields are attractive and/or to enhance portfolio liquidity. Zero coupon U.S. government securities are debt obligations that are issued or purchased at a significant discount from face value. The discount approximates the total amount of interest the security will accrue and compound over the period until maturity or the particular interest payment date at a rate of interest reflecting the market rate of the security at the time of issuance. Zero coupon U.S. government securities do not require the periodic payment of interest. These investments benefit the issuer by mitigating its need for cash to meet debt service, but generally require a higher rate of return to attract investors who are willing to defer receipt of cash. These investments may experience greater volatility in market value than U.S. government securities that make regular payments of interest. The fund accrues income on these investments for tax and accounting purposes, which is distributable to shareholders and which, because no cash is received at the time of accrual, may require the liquidation of other portfolio securities to satisfy the fund's distribution obligations, in which case the fund will forego the purchase of additional income producing assets with these funds. Zero coupon U.S. government securities include STRIPS and CUBES, which are issued by the U.S. Treasury as component parts of U.S. Treasury bonds and represent scheduled interest and principal payments on the bonds.
DEBT OBLIGATIONS OF NON-U.S. GOVERNMENTS
The fund may invest in debt obligations of foreign governments. An investment in debt obligations of foreign governments and their political subdivisions (sovereign debt) involves special risks which are not present when investing in corporate debt obligations. The foreign issuer of the sovereign debt or the foreign governmental authorities that control the repayment of the debt may be unable or unwilling to repay principal or interest when due, and the fund may have limited recourse in the event of a default. During periods of economic uncertainty, the market prices of sovereign debt may be more volatile than prices of U.S. debt issues. In the past, certain foreign countries have encountered difficulties in servicing their debt obligations, withheld payments of principal and interest and declared moratoria on the payment of principal and interest on their sovereign debt.
A sovereign debtor's willingness or ability to repay principal and pay interest in a timely manner may be affected by, among other factors, its cash flow situation, the extent of its foreign currency reserves, the availability of sufficient foreign exchange, the relative size of the debt service burden, the sovereign debtor's policy toward principal international lenders and local political constraints. Sovereign debtors may also be dependent on expected disbursements from foreign governments, multilateral agencies and other entities to reduce principal and interest arrearages on their debt. The failure of a sovereign debtor to implement economic reforms, achieve specified levels of economic performance or repay principal or interest when due may result in the cancellation of third-party commitments to lend funds to the sovereign debtor, which may further impair such debtor's ability or willingness to service its debts.
OTHER ELIGIBLE INVESTMENTS
For temporary defensive or cash management purposes, the fund may invest in all types of short-term investments including, but not limited to, (a) commercial paper and other short-term commercial obligations; (b) obligations (including certificates of deposit and bankers' acceptances) of banks; (c) obligations issued or guaranteed by a governmental issuer, including governmental agencies or instrumentalities; and (d) fixed income securities of corporate issuers. These securities may be denominated in any currency and, excluding the fund's permissible investments in below investment grade debt and convertible debt securities, will be rated, at the time of investment, Prime-1, Baa or better by Moody's Investors Service, Inc. ("Moody's"), or A-1, BBB or better by Standard & Poor's or determined by Pioneer to be of equivalent credit quality. During normal market conditions, the fund will only invest in the foregoing short-term investments for cash management purposes to an extent consistent with the fund's investment objective. When the fund adopts a defensive strategy due to adverse market, economic or other such conditions, the fund may not be able to achieve its investment objective.
RISKS OF NON-U.S. INVESTMENTS
Investing in securities of non-U.S. issuers involves considerations and risks not typically associated with investing in the securities of issuers in the U.S. These risks are heightened with respect to investments in countries with emerging markets and economies. The risks of investing in securities of non-U.S. issuers generally, or in issuers with significant exposure to non-U.S. markets, may be related, among other things, to (i) differences in size, liquidity and volatility of, and the degree and manner of regulation of, the securities markets of certain non-U.S. markets compared to the securities markets in the U.S.; (ii) economic, political and social factors; and (iii) foreign exchange matters, such as restrictions on the repatriation of capital, fluctuations in exchange rates between the U.S. dollar and the currencies in which the fund's portfolio securities are quoted or denominated, exchange control regulations and costs associated with currency exchange. The political and economic structures in certain countries, particularly emerging markets, are expected to undergo significant evolution and rapid development, and such countries may lack the social, political and economic stability characteristic of more developed countries. Unanticipated political or social developments may affect the values of the fund's investments in such countries. The economies and securities and currency markets of many emerging markets have experienced significant disruption and declines. There can be no assurances that these economic and market disruptions will not continue.
INVESTMENTS IN EMERGING MARKETS. The fund may invest in securities of issuers in countries with emerging economies or securities markets. Emerging economies or securities markets will generally include, but not be limited to, countries included in the MSCI Emerging Markets Free Index. The fund will generally focus on emerging markets that do not impose unusual trading requirements which tend to restrict the flow of investments. In addition, the fund may invest in unquoted securities, including securities of emerging market issuers.
NON-U.S. SECURITIES MARKETS AND REGULATIONS. There may be less publicly available information about non-U.S. markets and issuers than is available with respect to U.S. securities and issuers. Non-U.S. companies generally are not subject to accounting, auditing and financial reporting standards, practices and requirements comparable to those applicable to U.S. companies. The trading markets for most non-U.S. securities are generally less liquid and subject to greater price volatility than the markets for comparable securities in the U.S. The markets for securities in certain emerging markets are in the earliest stages of their development. Even the markets for relatively widely traded securities in certain non-U.S. markets, including emerging market countries, may not be able to absorb, without price disruptions, a significant increase in trading volume or trades of a size customarily undertaken by institutional investors in the U.S. Additionally, market making and arbitrage activities are generally less extensive in such markets, which may contribute to increased volatility and reduced liquidity. The less liquid a market, the more difficult it may be for the fund to price its portfolio securities accurately or to dispose of such securities at the times determined by Pioneer to be appropriate. The risks associated with reduced liquidity may be particularly acute in situations in which the fund's operations require cash, such as in order to meet redemptions and to pay its expenses.
ECONOMIC, POLITICAL AND SOCIAL FACTORS. Certain countries, including emerging markets, may be subject to a greater degree of economic, political and social instability than is the case in the U.S. and Western European countries. Such instability may result from, among other things: (i) authoritarian governments or military involvement in political and economic decision making; (ii) popular unrest associated with demands for improved economic, political and social conditions; (iii) internal insurgencies; (iv) hostile relations with neighboring countries; and (v) ethnic, religious and racial disaffection and conflict. Such economic, political and social instability could significantly disrupt the financial markets in such countries and the ability of the issuers in such countries to repay their obligations. Investing in emerging market countries also involves the risk of expropriation, nationalization, confiscation of assets and property or the imposition of restrictions on foreign investments and on repatriation of capital invested. In the event of such expropriation, nationalization or other confiscation in any emerging country, the fund could lose its entire investment in that country.
Certain emerging market countries restrict or control foreign investment in their securities markets to varying degrees. These restrictions may limit the fund's investment in those markets and may increase the expenses of the fund. In addition, the repatriation of both investment income and capital from certain markets in the region is subject to restrictions such as the need for certain governmental consents. Even where there is no outright restriction on repatriation of capital, the mechanics of repatriation may affect certain aspects of the fund's operation.
Economies in individual countries may differ favorably or unfavorably from the U.S. economy in such respects as growth of gross domestic product, rates of inflation, currency valuation, capital reinvestment, resource self-sufficiency and balance of payments positions. Many countries have experienced substantial, and in some cases extremely high, rates of inflation for many years. Inflation and rapid fluctuations in inflation rates have had, and may continue to have, very negative effects on the economies and securities markets of certain emerging countries.
Unanticipated political, economic or social developments may also affect the values of the fund's investments and the availability to the fund of additional investments in such countries. During 1997 and 1998, the political stability, economies and securities and currency markets of many markets in India and the Asian subcontinent experienced significant disruption and declines. There can be no assurances that these economic and market disruptions will not continue or spread to other countries in the region.
Economies in emerging market countries generally are dependent heavily upon international trade and, accordingly, have been and may continue to be affected adversely by trade barriers, exchange controls, managed adjustments in relative currency values and other protectionist measures imposed or negotiated by the countries with which they trade. These economies also have been, and may continue to be, affected adversely by economic conditions in the countries with which they trade.
CURRENCY RISKS. The value of the securities quoted or denominated in foreign currencies may be adversely affected by fluctuations in the relative currency exchange rates and by exchange control regulations. The fund's investment performance may be negatively affected by a devaluation of a currency in which the fund's investments are quoted or denominated. Further, the fund's investment performance may be significantly affected, either positively or negatively, by currency exchange rates because the U.S. dollar value of securities quoted or denominated in another currency will increase or decrease in response to changes in the value of such currency in relation to the U.S. dollar.
CUSTODIAN SERVICES AND RELATED INVESTMENT COSTS. Custodial services and other costs relating to investment in international securities markets generally are more expensive than in the U.S. Such markets have settlement and clearance procedures that differ from those in the U.S. In certain markets there have been times when settlements have been unable to keep pace with the volume of securities transactions, making it difficult to conduct such transactions. The inability of the fund to make intended securities purchases due to settlement problems could cause the fund to miss attractive investment opportunities. Inability to dispose of a portfolio security caused by settlement problems could result either in losses to the fund due to a subsequent decline in value of the portfolio security or could result in possible liability to the fund. In addition, custodial, security settlement and clearance procedures in some emerging countries may not fully protect the fund against loss or theft of its assets.
WITHHOLDING AND OTHER TAXES. The fund will be subject to taxes, including withholding taxes, on income (possibly including, in some cases, capital gains) that are or may be imposed by certain countries with respect to the fund's investments in such countries. These taxes will reduce the return achieved by the fund. Treaties between the U.S. and such countries may not be available to reduce the otherwise applicable tax rates.
ECONOMIC MONETARY UNION (EMU). On January 1, 1999, 11 European countries adopted a single currency - the euro. The conversion to the euro was phased in over a three-year period. As of January 1, 2002, there are 15 participating countries, and 12 of these countries share the euro as a single currency and single official interest rate and are adhering to agreed upon limits on government borrowing. Budgetary decisions will remain in the hands of each participating country but will be subject to each country's commitment to avoid "excessive deficits" and other more specific budgetary criteria. A European Central Bank is responsible for setting the official interest rate to maintain price stability within the euro zone.
EMU is driven by the expectation of a number of economic benefits, including lower transaction costs, reduced exchange risk, greater competition, and a broadening and deepening of European financial markets. However, there are a number of significant risks associated with EMU. Monetary and economic union on this scale has never been attempted before. There is a significant degree of uncertainty as to whether participating countries will remain committed to EMU in the face of changing economic conditions. This uncertainty may increase the volatility of European markets. A participating country's withdrawal from the EMU could have a negative effect on the fund's non-U.S. investments.
INVESTMENTS IN DEPOSITARY RECEIPTS. The fund may hold securities of non-U.S. issuers in the form of American Depositary Receipts ("ADRs"), European Depositary Receipts ("EDRs"), Global Depositary Receipts ("GDRs") and other similar instruments. Generally, ADRs in registered form are designed for use in U.S. securities markets, and EDRs and GDRs and other similar global instruments in bearer form are designed for use in non-U.S. securities markets.
ADRs are denominated in U.S. dollars and represent an interest in the right to receive securities of non-U.S. issuers deposited in a U.S. bank or correspondent bank. ADRs do not eliminate all the risk inherent in investing in the securities of non-U.S. issuers. However, by investing in ADRs rather than directly in equity securities of non-U.S. issuers, the fund will avoid currency risks during the settlement period for either purchases or sales. EDRs and GDRs are not necessarily denominated in the same currency as the underlying securities which they represent.
For purposes of the fund's investment policies, investments in ADRs, GDRs and similar instruments will be deemed to be investments in the underlying equity securities of non-U.S. issuers. The fund may acquire depositary receipts from banks that do not have a contractual relationship with the issuer of the security underlying the depositary receipt to issue and secure such depositary receipt. To the extent the fund invests in such unsponsored depositary receipts there may be an increased possibility that the fund may not become aware of events affecting the underlying security and thus the value of the related depositary receipt. In addition, certain benefits (i.e., rights offerings) which may be associated with the security underlying the depositary receipt may not inure to the benefit of the holder of such depositary receipt.
REAL ESTATE INVESTMENT TRUSTS ("REITS") AND ASSOCIATED RISK FACTORS
REITs are companies 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. REITs are not taxed on income distributed to shareholders provided they comply with the applicable requirements of the Internal Revenue Code of 1986, as amended (the "Code"). In some cases, the fund will indirectly bear its proportionate share of any management and other expenses paid by REITs in which it invests in addition to the expenses paid by the fund. Debt securities issued by REITs are, for the most part, general and unsecured obligations and are subject to risks associated with REITs.
Investing in REITs involves certain unique risks in addition to those risks associated with investing in the real estate industry in general. An equity REIT may be affected by changes in the value of the underlying properties owned by the REIT. A mortgage REIT may be affected by changes in interest rates and the ability of the issuers of its portfolio mortgages to repay their obligations. REITs are dependent upon the skills of their managers and are not diversified. REITs are generally dependent upon maintaining cash flows to repay borrowings and to make distributions to shareholders and are subject to the risk of default by lessees or borrowers. REITs whose underlying assets are concentrated in properties used by a particular industry, such as health care, are also subject to risks associated with such 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. If the REIT invests in adjustable rate mortgage loans the interest rates on which are reset periodically, yields on a REIT's investments in such loans will gradually align themselves to reflect changes in market interest rates. This causes the value of such investments to fluctuate less dramatically in response to interest rate fluctuations than would investments in fixed rate obligations.
REITs may have limited financial resources and may trade less frequently and in a more limited volume than larger company securities. Historically REITs have been more volatile in price than the larger capitalization stocks included in Standard & Poor's 500 Stock Index.
OTHER INVESTMENT COMPANIES
The fund may invest in the securities of other investment companies to the
extent that such investments are consistent with the fund's investment objective
and policies and permissible under the Investment Company Act of 1940, as
amended (the "1940 Act"). Under the 1940 Act, the fund may not acquire the
securities of other domestic or non-U.S. investment companies if, as a result,
(i) more than 10% of the fund's total assets would be invested in securities of
other investment companies, (ii) such purchase would result in more than 3% of
the total outstanding voting securities of any one investment company being held
by the fund, or (iii) more than 5% of the fund's total assets would be invested
in any one investment company. These limitations do not apply to the purchase of
shares of any investment company in connection with a merger, consolidation,
reorganization or acquisition of substantially all the assets of another
investment company. The fund does not currently invest in other investment
companies for which Pioneer or any of its affiliates act as an investment
adviser or distributor. However, the fund has applied for, and if granted would
rely upon, an exemptive order from the Securities and Exchange Commission (the
"SEC") that would permit the fund to invest cash balances in money market funds
managed by Pioneer.
The fund, as a holder of the securities of other investment companies, will bear its pro rata portion of the other investment companies' expenses, including advisory fees. These expenses are in addition to the direct expenses of the fund's own operations.
REPURCHASE AGREEMENTS
The fund may enter into repurchase agreements with broker-dealers, member banks of the Federal Reserve System and other financial institutions. Repurchase agreements are arrangements under which the fund purchases securities and the seller agrees to repurchase the securities within a specific time and at a specific price. The repurchase price is generally higher than the fund's purchase price, with the difference being income to the fund. Under the direction of the Board of Trustees, Pioneer reviews and monitors the creditworthiness of any institution which enters into a repurchase agreement with the fund. The counterparty's obligations under the repurchase agreement are collateralized with U.S. Treasury and/or agency obligations with a market value of not less than 100% of the obligations, valued daily. Collateral is held by the fund's custodian in a segregated, safekeeping account for the benefit of the fund. Repurchase agreements afford the fund an opportunity to earn income on temporarily available cash at low risk. In the event of commencement of bankruptcy or insolvency proceedings with respect to the seller of the security before repurchase of the security under a repurchase agreement, the fund may encounter delay and incur costs before being able to sell the security. Such a delay may involve loss of interest or a decline in price of the security. If the court characterizes the transaction as a loan and the fund has not perfected a security interest in the security, the fund may be required to return the security to the seller's estate and be treated as an unsecured creditor of the seller. As an unsecured creditor, the fund would be at risk of losing some or all of the principal and interest involved in the transaction.
SHORT SALES AGAINST THE BOX
The fund may sell securities "short against the box." A short sale involves the fund borrowing securities from a broker and selling the borrowed securities. The fund has an obligation to return securities identical to the borrowed securities to the broker. In a short sale against the box, the fund at all times owns an equal amount of the security sold short or securities convertible into or exchangeable for, with or without payment of additional consideration, an equal amount of the security sold short. The fund intends to use short sales against the box to hedge. For example, when the fund believes that the price of a current portfolio security may decline, the fund may use a short sale against the box to lock in a sale price for a security rather than selling the security immediately. In such a case, any future losses in the fund's long position should be offset by a gain in the short position and, conversely, any gain in the long position should be reduced by a loss in the short position.
If the fund effects a short sale against the box at a time when it has an unrealized gain on the security, it may be required to recognize that gain as if it had actually sold the security (a "constructive sale") on the date it effects the short sale. However, such constructive sale treatment may not apply if the fund closes out the short sale with securities other than the appreciated securities held at the time of the short sale provided that certain other conditions are satisfied. Uncertainty regarding certain tax consequences of effecting short sales may limit the extent to which the fund may make short sales against the box. The fund may not engage in short sales, except short sales against the box.
ASSET SEGREGATION
The 1940 Act requires that the fund segregate assets in connection with certain types of transactions that may have the effect of leveraging the fund's portfolio. If the fund enters into a transaction requiring segregation, such as a forward commitment, the custodian or Pioneer will segregate liquid assets in an amount required to comply with the 1940 Act. Such segregated assets will be valued at market daily. If the aggregate value of such segregated assets declines below the aggregate value required to satisfy the 1940 Act, additional liquid assets will be segregated.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES
The fund may purchase securities, including U.S. government securities, on a when-issued basis or may purchase or sell securities for delayed delivery. In such transactions, delivery of the securities occurs beyond the normal settlement period, but no payment or delivery is made by the fund prior to the actual delivery or payment by the other party to the transaction. The fund will not earn income on these securities until delivered. The purchase of securities on a when-issued or delayed delivery basis involves the risk that the value of the securities purchased will decline prior to the settlement date. The sale of securities for delayed delivery involves the risk that the prices available in the market on the delivery date may be greater than those obtained in the sale transaction. The fund's obligations with respect to when-issued and delayed delivery transactions will be fully collateralized by segregating liquid assets with a value equal to the fund's obligations. See "Asset Segregation."
PORTFOLIO TURNOVER
It is the policy of the fund not to engage in trading for short-term profits although portfolio turnover rate is not considered a limiting factor in the execution of investment decisions for the fund. The fund's annual portfolio turnover rate may exceed 100%. A high rate of portfolio turnover (100% or more) involves correspondingly greater transaction costs which must be borne by the fund and its shareholders.
FOREIGN CURRENCY TRANSACTIONS
The fund may engage in foreign currency transactions. These transactions may be conducted at the prevailing spot rate for purchasing or selling currency in the foreign exchange market. The fund also has authority to enter into forward foreign currency exchange contracts involving currencies of the different countries in which the fund invests as a hedge against possible variations in the foreign exchange rates between these currencies and the U.S. dollar. This is accomplished through contractual agreements to purchase or sell a specified currency at a specified future date and price set at the time of the contract.
Transaction hedging is the purchase or sale of forward foreign currency contracts with respect to specific receivables or payables of the fund, accrued in connection with the purchase and sale of its portfolio securities quoted in foreign currencies. Portfolio hedging is the use of forward foreign currency contracts to offset portfolio security positions denominated or quoted in such foreign currencies. There is no guarantee that the fund will be engaged in hedging activities when adverse exchange rate movements occur. The fund will not attempt to hedge all of its foreign portfolio positions and will enter into such transactions only to the extent, if any, deemed appropriate by Pioneer.
Hedging against a decline in the value of a currency does not eliminate fluctuations in the prices of portfolio securities or prevent losses if the prices of such securities decline. Such transactions also limit the opportunity for gain if the value of the hedged currency should rise. Moreover, it may not be possible for the fund to hedge against a devaluation that is so generally anticipated that the fund is not able to contract to sell the currency at a price above the devaluation level it anticipates.
The cost to the fund of engaging in foreign currency transactions varies with such factors as the currency involved, the size of the contract, the length of the contract period, differences in interest rates between the two currencies and the market conditions then prevailing. Since transactions in foreign currency and forward contracts are usually conducted on a principal basis, no fees or commissions are involved. The fund may close out a forward position in a currency by selling the forward contract or by entering into an offsetting forward contract.
The precise matching of the forward contract amounts and the value of the securities involved will not generally be possible because the future value of such securities in foreign currencies will change as a consequence of market movements in the value of those securities between the date on which the contract is entered into and the date it matures. Using forward contracts to protect the value of the fund's portfolio securities against a decline in the value of a currency does not eliminate fluctuations in the underlying prices of the securities. It simply establishes a rate of exchange which the fund can achieve at some future point in time. The precise projection of short-term currency market movements is not possible, and short-term hedging provides a means of fixing the U.S. dollar value of only a portion of the fund's foreign assets.
While the fund will enter into forward contracts to reduce currency exchange rate risks, transactions in such contracts involve certain other risks. While the fund may benefit from such transactions, unanticipated changes in currency prices may result in a poorer overall performance for the fund than if it had not engaged in any such transactions. Moreover, there may be imperfect correlation between the fund's portfolio holdings of securities quoted or denominated in a particular currency and forward contracts entered into by the fund. Such imperfect correlation may cause the fund to sustain losses which will prevent the fund from achieving a complete hedge or expose the fund to risk of foreign exchange loss.
Over-the-counter markets for trading foreign forward currency contracts offer less protection against defaults than is available when trading in currency instruments on an exchange. Since a forward foreign currency exchange contract is not guaranteed by an exchange or clearinghouse, a default on the contract would deprive the fund of unrealized profits or force the fund to cover its commitments for purchase or resale, if any, at the current market price.
If the fund enters into a forward contract to purchase foreign currency, the custodian or Pioneer will segregate liquid assets. See "Asset Segregation."
OPTIONS ON FOREIGN CURRENCIES
The fund may purchase and write options on foreign currencies for hedging purposes in a manner similar to that of transactions in forward contracts. For example, a decline in the dollar value of a foreign currency in which portfolio securities are quoted or denominated will reduce the dollar value of such securities, even if their value in the foreign currency remains constant. In an attempt to protect against such decreases in the value of portfolio securities, the fund may purchase put options on the foreign currency. If the value of the currency declines, the fund will have the right to sell such currency for a fixed amount of dollars which exceeds the market value of such currency. This would result in a gain that may offset, in whole or in part, the negative effect of currency depreciation on the value of the fund's securities quoted or denominated in that currency.
Conversely, if a rise in the dollar value of a currency is projected for those securities to be acquired, thereby increasing the cost of such securities, the fund may purchase call options on such currency. If the value of such currency increases, the purchase of such call options would enable the fund to purchase currency for a fixed amount of dollars which is less than the market value of such currency. Such a purchase would result in a gain that may offset, at least partially, the effect of any currency related increase in the price of securities the fund intends to acquire. As in the case of other types of options transactions, however, the benefit the fund derives from purchasing foreign currency options will be reduced by the amount of the premium and related transaction costs. In addition, if currency exchange rates do not move in the direction or to the extent anticipated, the fund could sustain losses on transactions in foreign currency options which would deprive it of a portion or all of the benefits of advantageous changes in such rates.
The fund may also write options on foreign currencies for hedging purposes. For example, if the fund anticipated a decline in the dollar value of securities quoted or denominated in a foreign currency because of declining exchange rates, it could, instead of purchasing a put option, write a covered call option on the relevant currency. If the expected decline occurs, the option will most likely not be exercised, and the decrease in value of portfolio securities will be partially offset by the amount of the premium received by the fund.
Similarly, the fund could write a put option on the relevant currency, instead of purchasing a call option, to hedge against an anticipated increase in the dollar cost of securities to be acquired. If exchange rates move in the manner projected, the put option will expire unexercised and allow the fund to offset such increased cost up to the amount of the premium. However, as in the case of other types of options transactions, the writing of a foreign currency option will constitute only a partial hedge up to the amount of the premium, only if rates move in the expected direction. If unanticipated exchange rate fluctuations occur, the option may be exercised and the fund would be required to purchase or sell the underlying currency at a loss which may not be fully offset by the amount of the premium. As a result of writing options on foreign currencies, the fund also may be required to forgo all or a portion of the benefits which might otherwise have been obtained from favorable movements in currency exchange rates.
A call option written on foreign currency by the fund is "covered" if the fund owns the underlying foreign currency subject to the call, or if it has an absolute and immediate right to acquire that foreign currency without additional cash consideration. A call option is also covered if the fund holds a call on the same foreign currency for the same principal amount as the call written where the exercise price of the call held is (a) equal to or less than the exercise price of the call written or (b) greater than the exercise price of the call written if the amount of the difference is maintained by the fund in cash or liquid securities. See "Asset Segregation."
The fund may close out its position in a currency option by either selling the option it has purchased or entering into an offsetting option. An exchange-traded options position may be closed out only on an options exchange which provides a secondary market for an option of the same series. Although the fund will generally purchase or write only those options for which there appears to be an active secondary market, there is no assurance that a liquid secondary market on an exchange will exist for any particular option, or at any particular time. For some options no secondary market on an exchange may exist. In such event, it might not be possible to effect closing transactions in particular options, with the result that the fund would have to exercise its options in order to realize any profit and would incur transaction costs upon the sale of underlying currencies pursuant to the exercise of put options. If the fund as a covered call option writer is unable to effect a closing purchase transaction in a secondary market, it will not be able to sell the underlying currency (or security quoted or denominated in that currency) until the option expires or it delivers the underlying currency upon exercise.
The fund may purchase and write over-the-counter options to the extent consistent with its limitation on investments in illiquid securities. Trading in over-the-counter options is subject to the risk that the other party will be unable or unwilling to close out options purchased or written by the fund.
OPTIONS ON SECURITIES AND SECURITIES INDICES
The fund may purchase put and call options on any security in which it may invest or options on any securities index based on securities in which it may invest. The fund would also be able to enter into closing sale transactions in order to realize gains or minimize losses on options it has purchased.
WRITING CALL AND PUT OPTIONS ON SECURITIES. A call option written by the fund obligates the fund to sell specified securities to the holder of the option at a specified price if the option is exercised at any time before the expiration date. All call options written by the fund are covered, which means that the fund will own the securities subject to the options as long as the options are outstanding, or the fund will use the other methods described below. The fund's purpose in writing covered call options is to realize greater income than would be realized on portfolio securities transactions alone. However, the fund may forgo the opportunity to profit from an increase in the market price of the underlying security.
A put option written by the fund would obligate the fund to purchase specified securities from the option holder at a specified price if the option is exercised at any time before the expiration date. All put options written by the fund would be covered, which means that the fund would have segregated assets with a value at least equal to the exercise price of the put option. The purpose of writing such options is to generate additional income for the fund. However, in return for the option premium, the fund accepts the risk that it may be required to purchase the underlying security at a price in excess of its market value at the time of purchase.
Call and put options written by the fund will also be considered to be covered to the extent that the fund's liabilities under such options are wholly or partially offset by its rights under call and put options purchased by the fund. In addition, a written call option or put may be covered by entering into an offsetting forward contract and/or by purchasing an offsetting option or any other option which, by virtue of its exercise price or otherwise, reduces the fund's net exposure on its written option position.
WRITING CALL AND PUT OPTIONS ON SECURITIES INDICES. The fund may also write
(sell) covered call and put options on any securities index composed of
securities in which it may invest. Options on securities indices are similar to
options on securities, except that the exercise of securities index options
requires cash payments and does not involve the actual purchase or sale of
securities. In addition, securities index options are designed to reflect price
fluctuations in a group of securities or segments of the securities market
rather than price fluctuations in a single security.
The fund may cover call options on a securities index by owning securities whose price changes are expected to be similar to those of the underlying index, or by having an absolute and immediate right to acquire such securities without additional cash consideration (or for additional consideration if cash in such amount is segregated) upon conversion or exchange of other securities in its portfolio. The fund may cover call and put options on a securities index by segregating assets with a value equal to the exercise price.
PURCHASING CALL AND PUT OPTIONS. The fund would normally purchase call options in anticipation of an increase in the market value of securities of the type in which it may invest. The purchase of a call option would entitle the fund, in return for the premium paid, to purchase specified securities at a specified price during the option period. The fund would ordinarily realize a gain if, during the option period, the value of such securities exceeded the sum of the exercise price, the premium paid and transaction costs; otherwise the fund would realize either no gain or a loss on the purchase of the call option.
The fund would normally purchase put options in anticipation of a decline in the market value of securities in its portfolio ("protective puts") or in securities in which it may invest. The purchase of a put option would entitle the fund, in exchange for the premium paid, to sell specified securities at a specified price during the option period. The purchase of protective puts is designed to offset or hedge against a decline in the market value of the fund's securities. Put options may also be purchased by the fund for the purpose of affirmatively benefiting from a decline in the price of securities which it does not own. The fund would ordinarily realize a gain if, during the option period, the value of the underlying securities decreased below the exercise price sufficiently to more than cover the premium and transaction costs; otherwise the fund would realize either no gain or a loss on the purchase of the put option. Gains and losses on the purchase of protective put options would tend to be offset by countervailing changes in the value of the underlying portfolio securities.
The fund may terminate its obligations under an exchange-traded call or put option by purchasing an option identical to the one it has written. Obligations under over-the-counter options may be terminated only by entering into an offsetting transaction with the counterparty to such option. Such purchases are referred to as "closing purchase transactions."
RISKS OF TRADING OPTIONS. There is no assurance that a liquid secondary market on an options exchange will exist for any particular exchange-traded option, or at any particular time. If the fund is unable to effect a closing purchase transaction with respect to covered options it has written, the fund will not be able to sell the underlying securities or dispose of its segregated assets until the options expire or are exercised. Similarly, if the fund is unable to effect a closing sale transaction with respect to options it has purchased, it will have to exercise the options in order to realize any profit and will incur transaction costs upon the purchase or sale of underlying securities.
Reasons for the absence of a liquid secondary market on an exchange include the
following: (i) there may be insufficient trading interest in certain options;
(ii) restrictions may be imposed by an exchange on opening or closing
transactions or both; (iii) trading halts, suspensions or other restrictions may
be imposed with respect to particular classes or series of options; (iv) unusual
or unforeseen circumstances may interrupt normal operations on an exchange; (v)
the facilities of an exchange or the Options Clearing Corporation (the "OCC")
may not at all times be adequate to handle current trading volume; or (vi) one
or more exchanges could, for economic or other reasons, decide or be compelled
at some future date to discontinue the trading of options (or a particular class
or series of options), in which event the secondary market on that exchange (or
in that class or series of options) would cease to exist, although outstanding
options on that exchange, if any, that had been issued by the OCC as a result of
trades on that exchange would continue to be exercisable in accordance with
their terms.
The fund may purchase and sell both options that are traded on U.S. and non-U.S. exchanges and options traded over the counter with broker-dealers who make markets in these options. The ability to terminate over-the-counter options is more limited than with exchange-traded options and may involve the risk that broker-dealers participating in such transactions will not fulfill their obligations. Until such time as the staff of the SEC changes its position, the fund will treat purchased over-the-counter options and all assets used to cover written over-the-counter options as illiquid securities, except that with respect to options written with primary dealers in U.S. government securities pursuant to an agreement requiring a closing purchase transaction at a formula price, the amount of illiquid securities may be calculated with reference to the formula.
Transactions by the fund in options on securities and indices will be subject to limitations established by each of the exchanges, boards of trade or other trading facilities governing the maximum number of options in each class which may be written or purchased by a single investor or group of investors acting in concert. Thus, the number of options which the fund may write or purchase may be affected by options written or purchased by other investment advisory clients of Pioneer. An exchange, board of trade or other trading facility may order the liquidations of positions found to be in excess of these limits, and it may impose certain other sanctions.
The writing and purchase of options is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. The successful use of protective puts for hedging purposes depends in part on Pioneer's ability to predict future price fluctuations and the degree of correlation between the options and securities markets.
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 movements can take place in the underlying markets that cannot be reflected in the options markets.
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 the price 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 or currency exchange rates or to seek to increase total return, 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, foreign currencies and other financial instruments and indices. The fund will engage in futures and related options transactions for bona fide hedging and 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 non-U.S. 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. Similarly, the fund can sell futures contracts on a specified currency to protect against a decline in the value of such currency and a decline in the value of its portfolio securities which are denominated in such currency. The fund can purchase futures contracts on a foreign currency to establish the price in U.S. dollars of a security denominated in such currency that the fund has acquired or expects to acquire.
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. While futures contracts on securities or currency will usually be liquidated in this manner, the fund may instead make, or take, delivery of the underlying securities or currency whenever it appears economically advantageous to do so. A clearing corporation associated with the exchange on which futures on securities or currency 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, rate of return and currency exchange rate 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 or a decline in market prices or foreign currency 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. Similarly, the fund may sell futures contracts in a foreign currency in which its portfolio securities are denominated or in one currency to hedge against fluctuations in the value of securities denominated in a different currency if there is an established historical pattern of correlation between the two currencies. If, in the opinion of Pioneer, 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 strategies. Although under some circumstances prices of securities in the fund's portfolio may be more or less volatile than prices of such futures contracts, Pioneer 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 portfolio securities. 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 may 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 (if the option is exercised), 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 (if the option is exercised) 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 will engage in futures and related options transactions only for bona fide hedging or non-hedging purposes in accordance with CFTC regulations which permit principals of an investment company registered under the 1940 Act to engage in such transactions without registering as commodity pool operators. 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 the fund expects to purchase. Except as stated below, 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 (or the currency in which they are denominated) that the fund owns, or futures contracts will be purchased to protect the fund against an increase in the price of securities (or the currency in which they are denominated) 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 denominated in the related currency 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 options on futures entered into for non-hedging purposes (net of the amount the positions are "in the money") would not exceed 5% of the market value of the fund's total assets. 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 Code for maintaining its qualification as a regulated investment company for U.S. federal income tax purposes.
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 or currencies, 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, securities prices or currency exchange rates 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. It is not possible to hedge fully or perfectly against the effect of currency fluctuations on the value of non-U.S. securities because currency movements impact the value of different securities in differing degrees.
EQUITY SWAPS, CAPS, FLOORS AND COLLARS. The fund may enter into equity swaps, caps, floors and collars to hedge assets or liabilities or to seek to increase total return. Equity swaps involve the exchange by a fund with another party of their respective commitments to make or receive payments based on notional equity securities. The purchase of an equity cap entitles the purchaser, to the extent that the market value of a specified equity security or benchmark exceeds a predetermined level, to receive payments of a contractually-based amount from the party selling the cap. The purchase of an equity floor entitles the purchaser, to the extent that the market value of a specified equity security or benchmark falls below a predetermined level, to receive payments of a contractually-based amount from the party selling the floor. A collar is a combination of a cap and a floor that preserves a certain return within a predetermined range of values. Investments in swaps, caps, floors and collars are highly specialized activities which involve investment techniques and risks different from those associated with ordinary portfolio transactions. If Pioneer is incorrect in its forecast of market values, these investments could negatively impact the fund's performance. These investments also are subject to default risk of the counterparty and may be less liquid than other portfolio securities. Moreover, investments in swaps, caps, floors and collars may involve greater transaction costs than investments in other equity securities.
WARRANTS AND STOCK PURCHASE RIGHTS
The fund may invest in warrants, which are securities permitting, but not obligating, their holder to subscribe for other securities. Warrants do not carry with them the right to dividends or voting rights with respect to the securities that they entitle their holders to purchase, and they do not represent any rights in the assets of the issuer.
The fund may also invest in stock purchase rights. Stock purchase rights are instruments, frequently distributed to an issuer's shareholders as a dividend, that entitle the holder to purchase a specific number of shares of common stock on a specific date or during a specific period of time. The exercise price on the rights is normally at a discount from market value of the common stock at the time of distribution. The rights do not carry with them the right to dividends or to vote and may or may not be transferable. Stock purchase rights are frequently used outside of the United States as a means of raising additional capital from an issuer's current shareholders.
As a result, an investment in warrants or stock purchase rights may be considered more speculative than certain other types of investments. In addition, the value of a warrant or a stock purchase right does not necessarily change with the value of the underlying securities, and warrants and stock purchase rights expire worthless if they are not exercised on or prior to their expiration date.
PREFERRED SHARES
The fund may invest in preferred shares of beneficial interest of trust instruments. Preferred shares are equity securities, but they have many characteristics of fixed income securities, such as a fixed dividend payment rate and/or a liquidity preference over the issuer's common shares. However, because preferred shares are equity securities, they may be more susceptible to risks traditionally associated with equity investments than the fund's fixed income securities.
LENDING OF PORTFOLIO SECURITIES
The fund may lend portfolio securities to registered broker-dealers or other institutional investors deemed by Pioneer to be of good standing under agreements which require that the loans be secured continuously by collateral in cash, cash equivalents or U.S. Treasury bills maintained on a current basis at an amount at least equal to the market value of the securities loaned. The fund continues to receive the equivalent of the interest or dividends paid by the issuer on the securities loaned as well as the benefit of an increase and the detriment of any decrease in the market value of the securities loaned and would also receive compensation based on investment of the collateral. The fund would not, however, have the right to vote any securities having voting rights during the existence of the loan, but would call the loan in anticipation of an important vote to be taken among holders of the securities or of the giving or withholding of consent on a material matter affecting the investment.
As with other extensions of credit, there are risks of delay in recovery or even loss of rights in the collateral should the borrower of the securities fail financially. The fund will lend portfolio securities only to firms that have been approved in advance by the Board of Trustees, which will monitor the creditworthiness of any such firms. At no time would the value of the securities loaned exceed 33 1/3% of the value of the fund's total assets.
FUNDAMENTAL INVESTMENT RESTRICTIONS. The fund has adopted certain fundamental investment restrictions which, along with the fund's investment objective, may not be changed without the affirmative vote of the holders of a "majority of the outstanding voting securities" (as defined in the 1940 Act) of the fund. Statements in italics are not part of the restriction. For this purpose, a majority of the outstanding shares of the fund means the vote of the lesser of:
1. 67% or more of the shares represented at a meeting, if the holders of more than 50% of the outstanding shares are present in person or by proxy, or
2. more than 50% of the outstanding shares of the fund.
The fund may not:
(1) Issue senior securities, except as permitted by the 1940 Act and the rules and interpretive positions of the SEC thereunder. SENIOR SECURITIES THAT THE FUND MAY ISSUE IN ACCORDANCE WITH THE 1940 ACT INCLUDE BORROWING, FUTURES, WHEN-ISSUED AND DELAYED DELIVERY SECURITIES AND FORWARD FOREIGN CURRENCY EXCHANGE TRANSACTIONS.
(2) Borrow money, except the fund may: (a) borrow from banks or through reverse repurchase agreements in an amount up to 33 1/3% of the fund's total assets (including the amount borrowed); (b) to the extent permitted by applicable law, borrow up to an additional 5% of the fund's assets for temporary purposes; (c) obtain such short-term credits as are necessary for the clearance of portfolio transactions; (d) the fund may purchase securities on margin to the extent permitted by applicable law; and (e) engage in transactions in mortgage dollar rolls that are accounted for as financings.
(3) Invest in real estate, except that the fund may invest in securities of issuers that invest in real estate or interests therein, securities that are secured by real estate or interests therein, securities of real estate investment trusts and mortgage-backed securities.
(4) Make loans, except by the purchase of debt obligations, by entering into repurchase agreements or through the lending of portfolio securities.
(5) Invest in commodities or commodity contracts, except that the fund may invest in currency instruments and contracts and financial instruments and contracts that might be deemed to be commodities and commodity contracts. A FUTURES CONTRACT, FOR EXAMPLE, MAY BE DEEMED TO BE A COMMODITY CONTRACT.
(6) With respect to 75% of its total assets, purchase securities of an issuer (other than the U.S. government, its agencies or instrumentalities), if
(a) such purchase would cause more than 5% of the fund's total assets, taken at market value, to be invested in the securities of such issuer, or
(b) such purchase would at the time result in more than 10% of the outstanding voting securities of such issuer being held by the fund.
(7) Act as an underwriter, except as it may be deemed to be an underwriter in a sale of restricted securities held in its portfolio.
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 SEC, the fund's investments are concentrated in a particular industry if such investments aggregate 25% or more of the fund's total assets. The fund's policy does not apply to investments in U.S. government securities.
NON-FUNDAMENTAL INVESTMENT RESTRICTIONS. The following restrictions have been designated as non-fundamental and may be changed by a vote of the fund's Board of Trustees without approval of shareholders.
The fund may not:
(a) Purchase securities while borrowings are in excess of 5% of total assets.
(b) Purchase securities on margin, but it may obtain such short-term credits as may be necessary for the clearance of purchases and sales of securities. THE PAYMENT OF MARGIN FOR PURPOSES OF ENTERING INTO OR MAINTAINING A FUTURES CONTRACT OR OPTION THEREON SHALL NOT CONSTITUTE A PURCHASE OF SECURITIES ON MARGIN.
3. TRUSTEES AND OFFICERS
The fund's Board of Trustees provides broad supervision over the fund's affairs. The officers of the fund are responsible for the fund's operations. The fund's Trustees and officers are listed below, together with their principal occupations during the past five years. Trustees who are interested persons of the fund within the meaning of the 1940 Act are referred to as Interested Trustees. Trustees who are not interested persons of the fund are referred to as Independent Trustees. Each of the Trustees serves as a trustee of each of the 56 U.S. registered investment portfolios for which Pioneer serves as investment adviser (the "Pioneer Funds"). The address for all Interested Trustees and all officers of the fund is 60 State Street, Boston, Massachusetts 02109.
--------------------------------------------------------------------------------------------------------------------------
Term of Office
Name, Age and Position Held and Length of Principal Occupation During Past Other Directorships Held by
Address With the Fund Service Five Years this Trustee
--------------------------------------------------------------------------------------------------------------------------
Interested Trustees:
--------------------------------------------------------------------------------------------------------------------------
John F. Cogan, Chairman of the Trustee since Deputy Chairman and a Director Director of Harbor Global
Jr. (76)* Board, Trustee 2002. Serves of Pioneer Global Asset Company, Ltd.
and President until retirement Management S.p.A. ("PGAM");
or removal. Non-Executive Chairman and a
Director of Pioneer
Investment Management
USA Inc. ("PIM-USA");
Chairman and a
Director of Pioneer;
President of all of
the Pioneer Funds; and
Of Counsel (since
2000, partner prior to
2000), Hale and Dorr
LLP (counsel to
PIM-USA and the
Pioneer Funds)
--------------------------------------------------------------------------------------------------------------------------
|
--------------------------------------------------------------------------------------------------------------------------
Daniel T. Geraci Trustee and Trustee since Director and CEO-US of PGAM None
(45)** Executive Vice October, 2002. since November 2001; Director,
President Serves until Chief Executive Officer and
retirement or President of PIM-USA since
removal. October 2001; Director of
Pioneer Investment Management
Shareholder Services, Inc.
("PIMSS") since October 2001;
President and a Director of
Pioneer, Pioneer Funds
Distributor, Inc. ("PFD") and
Pioneer International
Corporation since October 2001;
Executive Vice President of all
of the Pioneer Funds since
October 2001; President of
Fidelity Private Wealth
Management Group from 2000
through October 2001; and
Executive Vice
President--Distribution and
Marketing of Fidelity
Investments Institutional
Services and Fidelity
Investments Canada Ltd. prior to
2000
22
|
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Independent Trustees:
--------------------------------------------------------------------------------------------------------------------------
Mary K. Bush (54) Trustee Trustee since President, Bush & Co. Director and/or Trustee of
4201 Cathedral Avenue, 2002. Serves (international financial Brady Corporation
NW, Washington, DC until retirement advisory firm) (industrial identification
20016 or removal. and specialty coated
material products
manufacturer), Mastec Inc.
(communications and energy
infrastructure), Mortgage
Guaranty Insurance
Corporation, R.J. Reynolds
Tobacco Holdings, Inc.
(tobacco) and Student Loan
Marketing Association
(secondary marketing of
student loans)
--------------------------------------------------------------------------------------------------------------------------
Richard H. Egdahl, Trustee Trustee since Alexander Graham Bell Professor None
M.D. (75) 2002. Serves of Health Care Entrepreneurship,
Boston University until retirement Boston University; Professor of
Healthcare or removal. Management, Boston University
Entrepreneurship School of Management; Professor
Program, 53 Bay State of Public Health, Boston
Road, Boston, MA 02215 University School of Public
Health; Professor of Surgery,
Boston University School of
Medicine; University Professor,
Boston University
--------------------------------------------------------------------------------------------------------------------------
Margaret B.W. Graham Trustee Trustee since Founding Director, The Winthrop None
(55) 2002. Serves Group, Inc. (consulting firm);
1001 Sherbrooke Street until retirement Professor of Management, Faculty
West, Montreal, or removal. of Management, McGill University
Quebec, Canada
--------------------------------------------------------------------------------------------------------------------------
Marguerite A. Piret Trustee Trustee since President, Newbury, Piret & Director, Organogenesis
(54) 2002. Serves Company, Inc. (merchant banking Inc. (tissue engineering
One Boston Place, 26th until retirement firm) company)
Floor, Boston, MA 02108 or removal.
23
|
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Stephen K. West (73) Trustee Trustee since Of Counsel, Sullivan & Cromwell Director, Dresdner RCM
125 Broad Street, New 2002. Serves (law firm) Global Strategic Income
York, NY 10004 until retirement Fund, Inc. and The Swiss
or removal. Helvetia Fund, Inc.
(closed-end investment
companies), AMVESCAP PLC
(investment managers) and
First ING Life Insurance
Company of New York
--------------------------------------------------------------------------------------------------------------------------
John Winthrop (66) Trustee Trustee since President, John Winthrop & Co., Director of NUI Corp.
One North Adgers 2002. Serves Inc. (private investment firm) (energy sales, services and
Wharf, Charleston, SC until retirement distribution)
29401 or removal.
--------------------------------------------------------------------------------------------------------------------------
Fund Officers:
--------------------------------------------------------------------------------------------------------------------------
Joseph P. Barri Secretary Since 2002. Partner, Hale and Dorr LLP; None
(55) Serves at the Secretary of all of the Pioneer
discretion of Funds
Board
--------------------------------------------------------------------------------------------------------------------------
Dorothy E. Assistant Since Secretary of PIM-USA; Senior None
Bourassa (54) Secretary 2002. Serves at Vice President- Legal of
the discretion Pioneer; and Secretary/Clerk of
of Board most of PIM-USA's subsidiaries
since October 2000; Assistant
Secretary of all of the Pioneer
Funds since November
2000; Senior Counsel,
Assistant Vice
President and Director
of Compliance of
PIM-USA from April
1998 through October
2000; Vice President
and Assistant General
Counsel, First Union
Corporation from
December 1996 through
March 1998
24
|
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Vincent Nave (56) Treasurer Since Vice President-Fund Accounting None
2002. Serves at and Custody Services of Pioneer
the discretion (Manager from September 1996 to
of Board February 1999); and Treasurer of
all of the Pioneer Funds
(Assistant Treasurer from June
1999 to November 2000)
--------------------------------------------------------------------------------------------------------------------------
Luis I. Presutti Assistant Since Assistant Vice President-Fund None
(37) Treasurer 2002. Serves at Accounting, Administration and
the discretion Custody Services of Pioneer
of Board (Fund Accounting Manager from
1994 to 1999); and Assistant
Treasurer of all of the Pioneer
Funds since November 2000
--------------------------------------------------------------------------------------------------------------------------
Gary Sullivan Assistant Since May Fund Accounting Manager-Fund None
(36) Treasurer 2002. Serves at Accounting, Administration and
the discretion Custody Services of Pioneer since 1997;
the discretion and Assistant Treasurer of
of Board all of the Pioneer Funds since May 2002
--------------------------------------------------------------------------------------------------------------------------
Allan Janson Assistant Since July Manager, Valuation Risk and None
(31) Treasurer 2002. Serves at Information Technology, Fund Accounting,
the discretion Administration and
of Board Custody Services of Pioneer since March
2002; and Assistant Treasurer of all of
the Pioneer Funds since July 2002.
Manager, Valuation Risk
and Performance Reporting
of Pioneer from June 2000 to February 2002.
Member of Pioneer Pricing Group from
1996 to 2000 (promoted to Manager
in 1998)
-----------------------------------------------------------------------------------------------------
|
*Mr. Cogan is an interested trustee because he is an officer or director of the fund's investment adviser and certain of its affiliates.
**Mr. Geraci is an interested trustee because he is an officer, director and employee of the fund's investment adviser and certain of its affiliates.
The outstanding capital stock of PFD, Pioneer and PIMSS is indirectly majority owned by UniCredito Italiano S.p.A. ("UniCredito Italiano"), one of the largest banking groups in Italy. Pioneer, the fund's investment adviser, provides investment management and financial services to mutual funds, institutional and other clients.
The table below lists all of the U.S.-registered Pioneer mutual funds currently offered to the public and the investment adviser and principal underwriter for each fund.
--------------------------------------- ------------------------- -------------
INVESTMENT ADVISER PRINCIPAL
FUND NAME UNDERWRITER
--------------------------------------- ------------------------- -------------
Pioneer America Income Trust Pioneer PFD
Pioneer Balanced Fund Pioneer PFD
Pioneer Bond Fund Pioneer PFD
Pioneer Cash Reserves Fund Pioneer PFD
Pioneer Emerging Markets Fund Pioneer PFD
Pioneer Equity Income Fund Pioneer PFD
Pioneer Europe Fund Pioneer PFD
Pioneer Europe Select Fund Pioneer PFD
Pioneer Fund Pioneer PFD
Pioneer Global High Yield Fund Pioneer PFD
Pioneer Global Value Fund Pioneer PFD
Pioneer Growth Shares Pioneer PFD
Pioneer High Income Trust Pioneer Note 2
Pioneer High Yield Fund Pioneer PFD
Pioneer Independence Fund Pioneer Note 1
Pioneer Interest Shares Pioneer Note 2
Pioneer International Equity Fund Pioneer PFD
Pioneer International Value Fund Pioneer PFD
Pioneer Large Cap Value Fund Pioneer PFD
Pioneer Market Neutral Fund Pioneer PFD
Pioneer Mid Cap Growth Fund Pioneer PFD
Pioneer Mid Cap Value Fund Pioneer PFD
Pioneer Real Estate Shares Pioneer PFD
Pioneer Science & Technology Fund Pioneer PFD
Pioneer Small Cap Value Fund Pioneer PFD
Pioneer Small Company Fund Pioneer PFD
Pioneer Strategic Income Fund Pioneer PFD
Pioneer Tax Free Income Fund Pioneer PFD
Pioneer Core Equity Fund Pioneer PFD
Pioneer Value Fund Pioneer PFD
Pioneer Variable Contracts Trust Pioneer Note 3
|
Note 1 This fund is available to the general public only through Pioneer
Independence Plans, a systematic investment plan sponsored by PFD.
Note 2 This fund is a closed-end fund.
Note 3 This is a series of 23 separate portfolios designed to provide investment
vehicles for the variable annuity and variable life insurance contracts of
various insurance companies or for certain qualified pension plans.
BOARD COMMITTEES
The Board of Trustees has an Audit Committee, which is composed of Ms. Piret (chairperson), Mr. West and Mr. Winthrop; a Nominating Committee, which is composed of Ms. Bush and Dr. Egdahl; a Valuation Committee, which is composed of Ms. Bush, Ms. Piret and Mr. Winthrop; and an Independent Trustees Committee, which is composed of all the fund's Independent Trustees. Ms. Graham is chairperson of the Independent Trustees Committee.
The Board of Trustees has adopted a charter for the Audit Committee. In accordance with its charter, the purposes of the Audit Committee are to:
|X| act as a liaison between the fund's independent auditors and the full Board of Trustees of the fund;
|X| discuss with the fund's independent auditors their judgments about the quality of the fund's accounting principles and underlying estimates as applied in the fund's financial reporting;
|X| review and assess the renewal materials of all related party contracts and agreements, including management advisory agreements, underwriting contracts, administration agreements, distribution contracts, and transfer agency contracts, among any other instruments and agreements that may be appropriate from time to time;
|X| review and assess from time to time, as it deems necessary and appropriate:
|X| brokerage and soft dollar arrangements of the fund,
|X| the utilization of any line of credit, and
|X| "as of" gain/loss activity of the fund;
|X| review and approve insurance coverage and allocations of premiums between the management and the fund and among the Pioneer Funds;
|X| review and approve expenses under the administration agreement between Pioneer and the fund and allocations of such expenses among the Pioneer Funds; and
|X| receive on a periodic basis a formal written statement delineating all relationships between the auditors and the fund or Pioneer; to actively engage in a dialogue with the independent auditors with respect to any disclosed relationships or services that may impact the objectivity and independence of the independent auditors; and to recommend that the Trustees take appropriate action in response to the independent auditors' report to satisfy itself of the independent auditors' independence.
The Nominating Committee reviews the qualifications of any candidate recommended by the Independent Trustees to serve as an Independent Trustee and makes a recommendation regarding that person's qualifications. The Committee does not accept nominations from shareholders.
The Valuation Committee reviews the valuation assigned to certain securities by Pioneer in accordance with the fund's valuation procedures.
The Independent Trustees Committee reviews the fund's management contract and other related party contracts annually and is also responsible for any other action required to be taken, under the 1940 Act, by the Independent Trustees acting alone.
The fund's Declaration of Trust provides that the fund will indemnify the Trustees and officers against liabilities and expenses incurred in connection with any litigation in which they may be involved because of their offices with the fund, unless it is determined in the manner specified in the Declaration of Trust that they have not acted in good faith in the reasonable belief that their actions were in the best interests of the fund or that such indemnification would relieve any officer or Trustee of any liability to the fund or its shareholders by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of his or her duties.
COMPENSATION OF OFFICERS AND TRUSTEES
The fund pays no salaries or compensation to any of its officers. The Pioneer Funds, including the fund, compensate their trustees as follows:
o each fund with assets greater than $250 million pays each Trustee who is not affiliated with PIM-USA, Pioneer, PFD, PIMSS or UniCredito Italiano (i.e., Independent Trustees) an annual base fee calculated on the basis of the fund's net assets.
o each fund with assets less than $250 million pays each Independent Trustee an annual fee of $1,000.
o prior to January 1, 2001, each fund, regardless of its assets, paid each Interested Trustee an annual fee of $500 (Pioneer reimburses the fund for these fees).
o as of January 1, 2001, each fund with assets greater than $50 million pays each Interested Trustee an annual fee of $500 and each fund with assets less than $50 million pays each Interested Trustee an annual fee of $200 (Pioneer reimburses the fund for these fees).
o each fund with assets greater than $250 million pays each Independent Trustee who serves on each board committee an annual committee fee based on the fund's net assets (with additional compensation for chairpersons of such committees).
See "Compensation of Officers and Trustees" in Annual Fee, Expense and Other Information.
SALES LOADS. The fund offers its shares to Trustees and officers of the fund and employees of Pioneer and its affiliates without a sales charge in order to encourage investment in the fund by individuals who are responsible for its management and because the sales to such persons do not entail any sales effort by the fund, brokers or other intermediaries.
OTHER INFORMATION
MATERIAL RELATIONSHIPS OF THE INDEPENDENT TRUSTEES. For purposes of the
statements below:
o the IMMEDIATE FAMILY MEMBERS of any person are their spouse, children in the person's household (including step and adoptive children) and any dependent of the person.
o an entity in a CONTROL RELATIONSHIP means any person who controls, is controlled by or is under common control with the named person. For example, UniCredito Italiano is an entity that is in a control relationship with Pioneer.
o a RELATED FUND is a registered investment company or an entity exempt from the definition of an investment company pursuant to Sections 3(c)(1) or 3(c)(7) of the 1940 Act, for which Pioneer or any of its affiliates act as investment adviser or for which PFD or any of its affiliates act as principal underwriter. For example, the fund's related funds include all of the Pioneer Funds and any non-U.S. funds managed by Pioneer or its affiliates.
As of December 31, 2001, none of the Independent Trustees, nor any of their immediate family members, beneficially owned any securities issued by Pioneer, UniCredito Italiano or any other entity in a control relationship to Pioneer or PFD or any person in a control relationship to PFD. During the calendar years 2000 and 2001, none of the Independent Trustees, nor any of their immediate family members, had any direct or indirect interest (the value of which exceeded $60,000), whether by contract, arrangement or otherwise, in Pioneer, UniCredito Italiano, or any other entity in a control relationship to Pioneer, PFD or any person that controls PFD. During the calendar years 2000 and 2001, none of the Independent Trustees, nor any of their immediate family members, had an interest in a transaction or a series of transactions in which the aggregate amount involved exceeded $60,000 and to which any of the following were a party (each a "fund related party"):
o the fund
o an officer of the fund
o a related fund
o an officer of any related fund
o Pioneer
o PFD
o an officer of PFD
o any affiliate of Pioneer or PFD
o an officer of any such affiliate
During the calendar years 2000 and 2001, none of the Independent Trustees, nor any of their immediate family members, had any relationship (the value of which exceeded $60,000) with any fund related party, including, but not limited to, relationships arising out of (i) the payment for property and services, (ii) the provision of legal services, (iii) the provision of investment banking services (other than as a member of the underwriting syndicate) or (iv) the provision of consulting services, except that Mr. West, an Independent Trustee, is Of Counsel to Sullivan & Cromwell and acts as counsel to the Independent Trustees and the Independent Trustees of the other Pioneer Funds. The aggregate compensation paid to Sullivan & Cromwell by the fund and the other Pioneer Funds exceeded $60,000 in each of 2000 and 2001.
During the calendar years 2000 and 2001, none of the Independent Trustees, nor any of their immediate family members, served as a member of a board of directors on which an officer of any of the following entities also serves as a director:
o Pioneer
o PFD
o UniCredito Italiano
o any other entity in a control relationship with Pioneer or PFD
None of the fund's Trustees or officers has any arrangement with any other person pursuant to which that Trustee or officer serves on the Board of Trustees. During the calendar years 2000 and 2001, none of the Independent Trustees, nor any of their immediate family members, had any position, including as an officer, employee, director or partner, with any of the following:
o the fund
o any related fund
o Pioneer
o PFD
o any affiliated person of the fund
o UniCredito Italiano
o any other entity in a control relationship to the fund
FACTORS CONSIDERED BY THE INDEPENDENT TRUSTEES IN APPROVING THE MANAGEMENT CONTRACT. The 1940 Act requires that the fund's management contract be approved annually by both the Board of Trustees and a majority of the Independent Trustees voting separately. The Independent Trustees have determined that the terms of the fund's management contract are fair and reasonable and that the contract is in the fund's best interest. The Independent Trustees believe that the management contract will enable the fund to enjoy high quality investment advisory services at a cost they deem appropriate, reasonable and in the best interests of the fund and its shareholders. In making such determinations, the Independent Trustees met independently from the Interested Trustees of the fund and any officers of Pioneer or its affiliates. The Independent Trustees also relied upon the assistance of counsel to the Independent Trustees and counsel to the fund.
In evaluating the management contract, the Independent Trustees reviewed materials furnished by Pioneer, including information regarding Pioneer, UniCredito Italiano, their respective affiliates and their personnel, operations and financial condition. The Independent Trustees discussed with representatives of Pioneer the fund's operations and Pioneer's ability to provide advisory and other services to the fund. The Independent Trustees also reviewed:
o the investment performance of other Pioneer Funds with similar investment strategies;
o the fee charged by Pioneer for investment advisory and administrative services, as well as other compensation received by PFD and PIMSS;
o the fund's projected total operating expenses;
o the investment performance, fees and total expenses of investment companies with similar objectives and strategies managed by other investment advisers;
o the experience of the investment advisory and other personnel providing services to the fund and the historical quality of the services provided by Pioneer; and
o the profitability to Pioneer of managing the fund.
The Independent Trustees considered the following as relevant to their recommendations: (1) the favorable history, reputation, qualification and background of Pioneer and UniCredito Italiano, as well as the qualifications of their personnel and their respective financial conditions; (2) that the fee and expense ratios of the fund are reasonable given the quality of services expected to be provided and are comparable to the fee and expense ratios of similar investment companies; and (3) the relative performance of similar funds advised by Pioneer since commencement of operations to comparable investment companies and unmanaged indices. The Independent Trustees deemed each of these factors to be relevant to their consideration of the fund's management contract.
SHARE OWNERSHIP. See Annual Fee, Expense and Other Information for annual information on the ownership of fund shares by the Trustees, the fund's officers and owners in excess of 5% of any class of shares of the fund and a table indicating the value of shares that each Trustee beneficially owns in the fund and in all the Pioneer Funds.
CODE OF ETHICS. The fund's Board of Trustees approved a code of ethics under Rule 17j-1 of the 1940 Act that covers the fund, Pioneer and certain of Pioneer's affiliates. The code of ethics establishes procedures for personal investing and restricts certain transactions. Employees subject to the code of ethics may invest in securities for their personal investment accounts, including securities that may be purchased or held by the fund.
4. INVESTMENT ADVISER
The fund has contracted with Pioneer to act as its investment adviser. Pioneer is an indirect, majority owned subsidiary of UniCredito Italiano. Certain Trustees or officers of the fund are also directors and/or officers of certain of UniCredito Italiano's subsidiaries (see management biographies above). Pioneer has entered into an agreement with its affiliate, Pioneer Investment Management Limited ("PIML"), pursuant to which PIML provides certain services and personnel to Pioneer.
As the fund's investment adviser, Pioneer provides the fund with investment research, advice and supervision and furnishes an investment program for the fund consistent with the fund's investment objective and policies, subject to the supervision of the fund's Trustees. Pioneer determines what portfolio securities will be purchased or sold, arranges for the placing of orders for the purchase or sale of portfolio securities, selects brokers or dealers to place those orders, maintains books and records with respect to the fund's securities transactions, and reports to the Trustees on the fund's investments and performance.
Under the terms of its management contract with the fund, Pioneer pays all the 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 paid by the fund: (a) charges and expenses for fund accounting, pricing and appraisal services and related overhead, including, to the extent such services are performed by personnel of Pioneer or its affiliates, office space and facilities and personnel compensation, training and benefits; (b) the charges and expenses of auditors; (c) the charges and expenses of any custodian, transfer agent, plan agent, dividend disbursing agent and registrar appointed by the fund; (d) issue and transfer taxes chargeable to the fund in connection with securities transactions to which the fund is a party; (e) 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; (f) fees and expenses involved in registering and maintaining registrations of the fund and/or its shares with federal regulatory agencies, state or blue sky securities agencies and foreign jurisdictions, including the preparation of prospectuses and statements of additional information for filing with such regulatory authorities; (g) 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; (h) charges and expenses of legal counsel to the fund and the Trustees; (i) any distribution fees paid by the fund in accordance with Rule 12b-1 promulgated by the SEC pursuant to the 1940 Act; (j) compensation of those Trustees of the fund who are not affiliated with or interested persons of Pioneer, the fund (other than as Trustees), PIM-USA or PFD; (k) the cost of preparing and printing share certificates; and (l) interest on borrowed money, if any. In addition, the fund shall pay all brokers' and underwriting commissions chargeable to the fund in connection with securities transactions to which the fund is a party. The Trustees' approval of and the terms, continuance and termination of the management contract are governed by the 1940 Act and the Investment Advisers Act of 1940, as applicable. Pursuant to the management contract, Pioneer 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 securities on the recommendation of Pioneer. Pioneer, however, is not protected against liability 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 the management contract.
ADVISORY FEE. As compensation for its management services and expenses incurred, the fund pays Pioneer a fee at the annual rate of 0.75% of the fund's average daily net assets. This fee is computed and accrued daily and paid monthly.
See the table in Annual Fee, Expense and Other Information for management fees paid to Pioneer during recently completed fiscal years.
EXPENSE LIMIT. Pioneer has agreed not to impose all or a portion of its management fee or to reimburse the fund for other expenses (other than extraordinary expenses) to the extent the expenses of the fund's Class A shares exceed 1.30% of average daily net assets. The portion of fund expenses attributable to Class B and Class C shares will be reduced only to the extent such expenses were reduced for the fund's Class A shares. Any differences in the fee waiver and expense limitation among classes result from rounding in the daily calculation of a class' net assets and expense limitation, which may exceed 0.01% annually. This agreement is voluntary and temporary and may be revised or terminated by Pioneer at any time.
ADMINISTRATION AGREEMENT. The fund has entered into an administration agreement with Pioneer pursuant to which certain accounting and legal services which are expenses payable by the fund under the management contract are performed by Pioneer and pursuant to which Pioneer is reimbursed for its costs of providing such services. See Annual Fee, Expense and Other Information for fees the fund paid to Pioneer for administration and related services.
POTENTIAL CONFLICT OF INTEREST. The fund is managed by Pioneer which also serves as investment adviser to other Pioneer mutual funds and other accounts with investment objectives identical or similar to those of the fund. Securities frequently meet the investment objectives of the fund, the other Pioneer mutual funds and such other accounts. In such cases, the decision to recommend a purchase to 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 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, positions 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 more than one of the Pioneer mutual funds or a private account managed by Pioneer 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 Pioneer 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 fund or account, the resulting participation in volume transactions could produce better executions for the fund. In the event 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 account. Although the other Pioneer mutual funds may have the same or similar investment objectives and policies as the fund, their portfolios do not generally consist of the same investments as the fund or each other, and their performance results are likely to differ from those of the fund.
PERSONAL SECURITIES TRANSACTIONS. The fund, Pioneer, and PFD have adopted a code of ethics under Rule 17j-1 of the 1940 Act which is applicable to officers, trustees/directors and designated employees of Pioneer and PIML. The code permits such persons to engage in personal securities transactions for their own accounts, including securities that may be purchased or held by the fund, and is designed to prescribe means reasonably necessary to prevent conflicts of interest from arising in connection with personal securities transactions. The code is on public file with and available from the SEC.
5. PRINCIPAL UNDERWRITER AND DISTRIBUTION PLANS
PRINCIPAL UNDERWRITER
PFD, 60 State Street, Boston, Massachusetts 02109, is the principal underwriter for the fund in connection with the continuous offering of its shares. PFD is an indirect wholly owned subsidiary of PIM-USA.
The fund entered into an underwriting agreement with PFD which provides that PFD will bear expenses for the distribution of the fund's shares, except for expenses incurred by PFD for which it is reimbursed or compensated by the fund under the distribution plans (discussed below). 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 and the laws of certain non-U.S. countries. Under the underwriting agreement, PFD will use its best efforts in rendering services to the fund.
See "Sales Charges" for the schedule of initial sales charge reallowed to dealers as a percentage of the offering price of the fund's Class A and Class C shares.
See the tables in Annual Fee, Expense and Other Information for commissions retained by PFD and reallowed to dealers in connection with PFD's offering of the fund's Class A and Class C shares during recently completed fiscal years.
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 a bona fide reorganization, statutory merger or other acquisition of portfolio securities.
It is the fund's general practice to repurchase its shares of beneficial interest for cash consideration in any amount; however, the redemption price of shares of the fund may, at Pioneer's discretion, be paid in portfolio securities. The fund has 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. You may incur additional costs, such as brokerage fees and taxes, and risks, including a decline in the value of the securities you receive, if the fund makes an in-kind distribution. The selection of such securities will be made in such manner as the Board of Trustees deems fair and reasonable; however, the fund will not distribute illiquid securities in kind.
DISTRIBUTION PLANS
The fund has adopted a plan of distribution pursuant to Rule 12b-1 under the 1940 Act with respect to its Class A shares (the "Class A Plan"), a plan of distribution with respect to its Class B shares (the "Class B Plan") and a plan of distribution with respect to its Class C shares (the "Class C Plan") (together, the "Plans"), pursuant to which certain distribution and service fees are paid to PFD. Because of the Plans, long-term shareholders may pay more than the economic equivalent of the maximum sales charge permitted by the National Association of Securities Dealers, Inc. (the "NASD") regarding investment companies. The Class A Plan is a reimbursement plan, and distribution expenses of PFD are expected to substantially exceed the distribution fees paid by the fund in a given year. The Class B Plan and Class C Plan are compensation plans, which means that the amount of payments under the plans are not linked to PFD's expenditures, and, consequently, PFD can make a profit under each of those plans.
CLASS A PLAN. Pursuant to the Class A Plan the fund reimburses PFD for its
actual expenditures to finance any activity primarily intended to result in the
sale of Class A shares or to provide services to holders of Class A shares,
provided the categories of expenses for which reimbursement is made are approved
by the Board of Trustees. The Board of Trustees has approved the following
categories of expenses that may be reimbursed under the Class A Plan: (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 daily net assets attributable to Class A shares;
(ii) reimbursement to PFD for its expenditures for broker-dealer commissions and
employee compensation on certain sales of the fund's Class A shares with no
initial sales charge; and (iii) reimbursement to PFD for expenses incurred in
providing services to Class A shareholders and supporting broker-dealers and
other organizations (such as banks and trust companies) in their efforts to
provide such services. The expenses of the fund pursuant to the Class A Plan are
accrued daily at a rate which may not exceed the annual rate of 0.25% of the
fund's average daily net assets attributable to Class A shares.
The Class A Plan does not provide for the carryover of reimbursable expenses beyond 12 months from the time the fund is first invoiced for an expense. The limited carryover provision in the Class A 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 Class A Plan, the fund has 12 months to 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 attributable to Class A shares during such period. See Annual Fee, Expense and Other Information for the amount, if any, of carryover of distribution expenses as of the end of the most recent calendar year.
CLASS B PLAN. PFD pays the selling broker-dealer a commission on the sale of Class B shares equal to 3.75% of the amount invested. This commission is paid at the time of sale of the Class B Shares. In order to be entitled to a commission, the selling broker-dealer must have entered into a sales agreements with PFD. At the time of the sale of a Class B share, PFD may also advance to the broker-dealer, from PFD's own assets, the first-year service fee payable under the Class B Plan at a rate up to 0.25% of the purchase price of such shares. If such an advance is made, the broker-dealer would not receive any further service fee until the 13th month following the purchase of Class B shares. As compensation for advancing the service fee, PFD may retain the service fee paid by the fund with respect to such shares for the first year after purchase.
The Class B Plan provides that the fund shall pay to PFD, as the fund's distributor for its Class B shares:
o a distribution fee equal on an annual basis to 0.75% of the fund's average daily net assets attributable to Class B shares. The distribution fee compensates PFD for its distribution services with respect to Class B shares. PFD pays the commissions to broker-dealers discussed above and also pays:
o the cost of printing prospectuses and reports used for sales purposes and the preparation and printing of sales literature and
o other distribution-related expenses, including, without limitation, the cost necessary to provide distribution-related services, or personnel, travel, office expenses and equipment.
o a service fee equal to 0.25% of the fund's average daily net assets attributable to Class B shares. PFD in turn pays the service fee to broker-dealers at a rate of up to 0.25% of the fund's average daily net assets attributable to Class B shares owned by shareholder for whom that broker-dealer is the holder or dealer of record. This service fee compensates the broker-dealer for providing personal services and/or account maintenance services rendered by the broker-dealer with respect to Class B shares. PFD may from time to time require that dealers, in addition to providing these services, meet certain criteria in order to receive service fees. PFD is entitled to retain all service fees with respect to Class B shares for which there is no dealer of record or with respect to which a dealer is not otherwise entitled to a service fee. Such service fees are paid to PFD for personal services and/or account maintenance services that PFD or its affiliates perform for shareholder accounts.
PFD also receives contingent deferred sales charges ("CDSCs") attributable to Class B shares to compensate PFD for its distribution expenses. When a broker-dealer sells Class B shares and elects, with PFD's approval, to waive its right to receive the commission normally paid at the time of the sale, PFD may cause all or a portion of the distribution fees described above to be paid to the broker-dealer.
Since PFD pays commissions to broker-dealers at the time of the sale of Class B shares but only receives compensation for such expenses over time through the distribution fee and CDSC, the Class B Plan and underwriting agreement permit PFD to finance the payment of commissions to broker-dealers. In order to facilitate such financing, the fund has agreed that the distribution fee will not be terminated or modified (including a modification in the rules relating to the conversion of Class B shares into Class A shares) with respect to Class B shares:
o issued prior to the date of any termination or modification;
o attributable to Class B shares issued through one or a series of exchanges of shares of another investment company for which PFD acts as principal underwriter which were initially issued prior to the date of such termination or modification; or
o issued as a dividend or distribution upon Class B shares initially issued or attributable to Class B shares issued prior to the date of any such termination or modification.
The foregoing limitation does not apply to Class B shares issued after the termination or modification. The foregoing limitation on terminating or modifying the Class B Plan also does not apply to a termination or modification:
o if a change in the 1940 Act, the rules or regulations under the 1940 Act, the Conduct Rules of the NASD or an order of any court or governmental agency requires such termination or modification (e.g. if the Conduct Rules were amended to establish a lower limit on the maximum aggregate sales charges that could be imposed on sales of fund shares);
o if the fund (or any successor) terminates the Class B Plan and all payments under the plan and neither the fund (nor any successor) establishes another class of shares which has substantially similar characteristics to the Class B Shares of the fund; or
o at any time by the Board of Trustees. However, the Board of Trustees may terminate or modify the Class B Plan only if the fund and Pioneer agree that none of the fund, PFD or any of their affiliates will pay, after the date of termination or modification, a service fee with respect to the fund's Class B shares and the termination or modification of the distribution fee applies equally to all Class B shares outstanding from time to time.
In the underwriting agreement, the fund agrees that subsequent to the issuance of a Class B share, the fund will not waive or change any CDSC (including a change in the rules applicable to conversion of Class B shares into another class) in respect of such Class B share, except:
o as provided in the fund's prospectus or statement of additional information; or
o as required by a change in the 1940 Act and the rules and regulations thereunder, the Conduct Rules of the NASD or any order of any court or governmental agency.
CLASS C PLAN. Commissions on the sale of Class C shares of up to 0.75% of the amount invested in Class C shares are paid to broker-dealers who have sales agreements with PFD. PFD may also advance to dealers the first-year service fee payable under the Class C Plan at a rate up to 0.25% of the purchase price of such shares. As compensation for such advance of the service fee, PFD may retain the service fee paid by the fund with respect to such shares for the first year after purchase.
The Class C Plan provides that the fund will pay PFD, as the fund's distributor for its Class C shares, a distribution fee accrued daily and paid quarterly, equal on an annual basis to 0.75% of the fund's average daily net assets attributable to Class C shares and will pay PFD a service fee equal to 0.25% of the fund's average daily net assets attributable to Class C shares. PFD will in turn pay to securities dealers which enter into a sales agreement with PFD a distribution fee and a service fee at rates of up to 0.75% and 0.25%, respectively, of the fund's average daily net assets attributable to Class C shares owned by investors for whom that securities dealer is the holder or dealer of record. The service fee is intended to be in consideration of personal services and/or account maintenance services rendered by the dealer with respect to Class C shares. PFD will advance to dealers the first-year service fee at a rate equal to 0.25% of the amount invested. As compensation therefor, PFD may retain the service fee paid by the fund with respect to such shares for the first year after purchase. Commencing in the 13th month following the purchase of Class C shares, dealers will become eligible for additional annual distribution fees and service fees of up to 0.75% and 0.25%, respectively, of the net asset value of such shares. Dealers may from time to time be required to meet certain other criteria in order to receive service fees. PFD or its affiliates are entitled to retain all service fees payable under the Class C Plan for which there is no dealer of record or for which qualification standards have not been met as partial consideration for personal services and/or account maintenance services performed by PFD or its affiliates for shareholder accounts.
The purpose of distribution payments to PFD under the Class C Plan is to compensate PFD for its distribution services with respect to Class C shares of the fund. PFD pays commissions to dealers as well as expenses of printing prospectuses and reports used for sales purposes, expenses with respect to the preparation and printing of sales literature and other distribution-related expenses, including, without limitation, the cost necessary to provide distribution-related services, or personnel, travel, office expenses and equipment. The Class C Plan also provides that PFD will receive all CDSCs attributable to Class C shares. When a broker-dealer sells Class C shares and elects, with PFD's approval, to waive its right to receive the commission normally paid at the time of the sale, PFD may cause all or a portion of the distribution fees described above to be paid to the broker-dealer.
GENERAL
In accordance with the terms of each Plan, PFD provides to the fund for review by the Trustees a quarterly written report of the amounts expended under the Plan and the purposes for which such expenditures were made. In the Trustees' quarterly review of the Plans, they will consider the continued appropriateness and the level of reimbursement or compensation the Plans provide.
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 Plans 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 Plans by the fund and except to the extent certain officers may have an interest in PFD's ultimate parent, UniCredito Italiano, or in UniCredito Italiano's subsidiaries.
Each Plan's adoption, terms, continuance and termination are governed by Rule 12b-1 under the 1940 Act. The Board of Trustees believes that there is a reasonable likelihood that the Plans will benefit the fund and its current and future shareholders. The Plans 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 affected thereby, and material amendments of the Plans must also be approved by the Trustees as provided in Rule 12b-1.
See Annual Fee, Expense and Other Information for fund expenses under the Class A Plan, Class B Plan and Class C Plan and CDSCs paid to PFD for the most recently completed fiscal year.
Upon redemption, Class A shares may be subject to a 1% CDSC, Class B shares are subject to a CDSC at a rate declining from a maximum 4% of the lower of the cost or market value of the shares and Class C shares may be subject to a 1% CDSC.
6. SHAREHOLDER SERVICING/TRANSFER AGENT
The fund has contracted with PIMSS, 60 State Street, Boston, Massachusetts 02109, to act as shareholder servicing and transfer agent for the fund.
Under the terms of its contract with the fund, PIMSS services shareholder accounts, and its duties include: (i) processing sales, redemptions and exchanges of shares of the fund; (ii) distributing dividends and capital gains associated with the fund's portfolio; and (iii) maintaining account records and responding to shareholder inquiries.
PIMSS receives an annual fee of $25.25 for each Class A, Class B and Class C shareholder account from the fund as compensation for the services described above. PIMSS is also reimbursed by the fund for its cash out-of-pocket expenditures. The fund may compensate entities which have agreed to provide certain sub-accounting services such as specific transaction processing and recordkeeping services. Any such payments by the fund would be in lieu of the per account fee which would otherwise be paid by the fund to PIMSS.
7. CUSTODIAN
Brown Brothers Harriman & Co., 40 Water Street, Boston, Massachusetts 02109, is the custodian of the fund's assets. The custodian's responsibilities include safekeeping and controlling the fund's cash and securities, handling the receipt and delivery of securities, and collecting interest and dividends on the fund's investments.
8. INDEPENDENT AUDITORS
Ernst & Young LLP, 200 Clarendon Street, Boston, Massachusetts 02116, the fund's independent auditors, provides audit services, tax return review, and assistance and consultation with respect to the preparation of filings with the SEC.
9. PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on behalf of the fund by Pioneer pursuant to authority contained in the fund's management contract. Pioneer seeks to obtain the best execution on portfolio trades. The price of securities and any commission rate paid are always factors, but frequently not the only factors, in judging best execution. In selecting brokers or dealers, Pioneer considers various relevant factors, including, but not limited to, the size and type of the transaction; the nature and character of the markets for 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. Transactions in non-U.S. equity securities are executed by broker-dealers in non-U.S. countries in which commission rates may not be negotiable (as such rates are in the U.S.).
Pioneer may select broker-dealers that provide brokerage and/or research services to the fund and/or other investment companies or other accounts managed by Pioneer. In addition, consistent with Section 28(e) of the Securities Exchange Act of 1934, as amended, if Pioneer determines in good faith that the amount of commissions charged by a broker-dealer 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-dealer in an amount greater than the amount another firm may charge. 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; providing stock quotation services, credit rating service information and comparative fund statistics; furnishing analyses, electronic information services, manuals and reports concerning issuers, industries, securities, economic factors and trends, portfolio strategy, and performance of accounts and particular investment decisions; and effecting securities transactions and performing functions incidental thereto (such as clearance and settlement). Pioneer maintains a listing of broker-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 Pioneer are placed with broker-dealers (including broker-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. Pioneer believes that no exact dollar value can be calculated for such services.
The research received from broker-dealers may be useful to Pioneer in rendering investment management services to the fund as well as other investment companies or other accounts managed by Pioneer, although not all 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 Pioneer in carrying out its obligations to the fund. The receipt of such research has not reduced Pioneer's normal independent research activities; however, it enables Pioneer to avoid the additional expenses which might otherwise be incurred if it were to attempt to develop comparable information through its own staff.
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 managed by Pioneer. This policy does not imply a commitment to execute all portfolio transactions through all broker-dealers that sell shares of the fund.
The Pioneer funds have entered into third-party brokerage and/or expense offset arrangements to reduce the funds' total operating expenses. Pursuant to third-party brokerage arrangements, certain of the funds that invest primarily in U.S. equity securities may incur lower custody fees by directing brokerage to third-party broker-dealers. Pursuant to expense offset arrangements, the funds incur lower transfer agency expenses by maintaining their cash balances with the custodian. See "Financial highlights" in the prospectus.
See the table in Annual Fee, Expense and Other Information for aggregate brokerage and underwriting commissions paid by the fund in connection with its portfolio transactions during recently completed fiscal years. The Board of Trustees periodically reviews Pioneer's performance of its responsibilities in connection with the placement of portfolio transactions on behalf of the fund.
10. DESCRIPTION OF SHARES
As an open-end management investment company, the fund continuously offers its shares to the public and under normal conditions must redeem its shares upon the demand of any shareholder at the next determined net asset value per share less any applicable CDSC. See "Sales Charges." When issued and paid for in accordance with the terms of the prospectus and statement of additional information, shares of the fund are fully paid and non-assessable. Shares will remain on deposit with the fund's transfer agent and certificates will not normally be issued.
The fund's Agreement and Declaration of Trust, dated as of March 12, 2002 (the "Declaration"), permits the Board of Trustees to authorize the issuance of an unlimited number of full and fractional shares of beneficial interest which may be divided into such separate series as the Trustees may establish. Currently, the fund consists of only one series. The Trustees may, however, 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. The Declaration further authorizes the Trustees to classify or reclassify any series of the shares into one or more classes. Pursuant thereto, the Trustees have authorized the issuance of Class A shares, Class B shares, Class C shares and Class Y shares. Each share of a class of the fund represents an equal proportionate interest in the assets of the fund allocable to that class. Upon liquidation of the fund, shareholders of each class of the fund are entitled to share pro rata in the fund's net assets allocable to such class available for distribution to shareholders. The fund reserves the right to create and issue additional series or classes of shares, in which case the shares of each class of a series would participate equally in the earnings, dividends and assets allocable to that class of the particular series.
The shares of each class represent an interest in the same portfolio of investments of the fund. Each class has equal rights as to voting, redemption, dividends and liquidation, except that each class bears different distribution and transfer agent fees and may bear other expenses properly attributable to the particular class. Class A, Class B and Class C shareholders have exclusive voting rights with respect to the Rule 12b-1 Plans adopted by holders of those shares in connection with the distribution of shares.
Shareholders are entitled to one vote for each share held and may vote in the election of Trustees and on other matters submitted to a meeting of shareholders. Although Trustees are not elected annually by the shareholders, shareholders have, under certain circumstances, the right to remove one or more Trustees. The fund is not required, and does not intend, to hold annual shareholder meetings although special meetings may be called for the purpose of electing or removing Trustees, changing fundamental investment restrictions or approving a management contract.
The shares of each series of the fund are entitled to vote separately to approve investment advisory agreements or changes in investment restrictions, but shareholders of all series vote together in the election and selection of Trustees and accountants. Shares of all series of the fund vote together as a class on matters that affect all series of the fund in substantially the same manner. As to matters affecting a single series or class, shares of such series or class will vote separately. No amendment adversely affecting the rights of shareholders may be made to the Declaration without the affirmative vote of a majority of the fund's shares. Shares have no preemptive or conversion rights, except that under certain circumstances Class B shares may convert to Class A shares.
As a Delaware business trust, the fund's operations are governed by the Declaration. 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 Declaration expressly provides that the fund is organized under the Delaware Act and that the Declaration is to be governed by Delaware law. There is nevertheless a possibility 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 fund's shareholders could become subject to personal liability.
To guard against this risk, the Declaration (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 or 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 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.
In addition to the requirements under Delaware law, the Declaration 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.
The Declaration 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 Declaration 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.
The Declaration provides that any Trustee who is not an "interested person" of Pioneer shall be considered to be independent for purposes of Delaware law notwithstanding the fact that such Trustee receives compensation for serving as a trustee of the fund or other investment companies for which Pioneer acts as investment adviser.
11. SALES CHARGES
The fund continuously offers three classes of shares designated as Class A, Class B and Class C as described in the prospectus. The fund offers its shares at a reduced sales charge to investors who meet certain criteria that permit the fund's shares to be sold with low distribution costs. These criteria are described below or in the prospectus.
CLASS A SHARE SALES CHARGES
You may buy Class A shares at the public offering price, including a sales charge, as follows:
SALES CHARGE AS A % OF
OFFERING NET AMOUNT DEALER
AMOUNT OF PURCHASE PRICE INVESTED REALLOWANCE
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
$1,000,000 or more 0.00 0.00 see below
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The schedule of sales charges above is applicable to purchases of Class A shares of the fund by (i) an individual, (ii) an individual and 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 Sections 401 or 408 of the Code although more than one beneficiary is involved. The sales charges applicable to a current purchase of Class A 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 the then current offering price) of shares of any of the other Pioneer mutual funds previously purchased and then owned, provided PFD is notified by such person or his or her broker-dealer each time a purchase is made which would qualify. Pioneer mutual funds include all mutual funds for which PFD serves as principal underwriter. At the sole discretion of PFD, holdings of funds domiciled outside the U.S., but which are managed by affiliates of Pioneer, may be included for this purpose.
No sales charge is payable at the time of purchase on investments of $1 million or more, or for purchases by participants in certain group plans described below subject to a CDSC of 1% which may be imposed in the event of a redemption of Class A shares within 12 months of purchase. PFD may, in its discretion, pay a commission to broker-dealers who initiate and are responsible for such purchases as follows: 1% on the first $5 million invested; 0.50% on the next $45 million invested; and 0.25% on the excess over $50 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 Class A share 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.
LETTER OF INTENT ("LOI"). Reduced sales charges are available for purchases of $50,000 or more of Class A shares (excluding any reinvestments of dividends and capital gain distributions) made within a 13-month period pursuant to an LOI which may be established by completing the Letter of Intent section of the Account Application. The reduced sales charge will be the charge that would be applicable to the purchase of the specified amount of Class A shares as if the shares had all been purchased at the same time. A purchase not made pursuant to an LOI may be included if the LOI is submitted to PIMSS within 90 days of such purchase. You may also obtain the reduced sales charge by including the value (at current offering price) of all your Class A shares in the fund and all other Pioneer mutual funds held of record as of the date of your LOI in the amount used to determine the applicable sales charge for the Class A shares to be purchased under the LOI. Five percent of your total intended purchase amount will be held in escrow by PIMSS, registered in your name, until the terms of the LOI are fulfilled. When you sign the Account Application, you agree to irrevocably appoint PIMSS your attorney-in-fact to surrender for redemption any or all shares held in escrow with full power of substitution. An LOI is not a binding obligation upon the investor to purchase, or the fund to sell, the amount specified in the LOI.
If the total purchases, less redemptions, exceed the amount specified under the LOI and are in an amount which would qualify for a further quantity discount, all transactions will be recomputed on the expiration date of the LOI to effect the lower sales charge. Any difference in the sales charge resulting from such recomputation will be either delivered to you in cash or invested in additional shares at the lower sales charge. The dealer, by signing the Account Application, agrees to return to PFD, as part of such retroactive adjustment, the excess of the commission previously reallowed or paid to the dealer over that which is applicable to the actual amount of the total purchases under the LOI.
If the total purchases, less redemptions, are less than the amount specified under the LOI, you must remit to PFD any difference between the sales charge on the amount actually purchased and the amount originally specified in the LOI. When the difference is paid, the shares held in escrow will be deposited to your account. If you do not pay the difference in sales charge within 20 days after written request from PFD or your dealer, PIMSS, after receiving instructions from PFD, will redeem the appropriate number of shares held in escrow to realize the difference and release any excess.
CLASS B SHARES
You may buy Class B shares at the net asset value per share next computed after receipt of a purchase order without the imposition of an initial sales charge; however, Class B shares redeemed within six years of purchase will be subject to a CDSC at the rates shown in the table below. The charge will be assessed on the amount equal to the lesser of the current market value or the original purchase cost of the shares being redeemed. No CDSC will be imposed on increases in account value above the initial purchase price, including shares derived from the reinvestment of dividends or capital gain distributions.
The amount of the CDSC, if any, will vary depending on the number of years from the time of purchase until the time of redemption of Class B shares. For the purpose of determining the number of years from the time of any purchase after September 30, 1998, all payments during a month will be aggregated and deemed to have been made on the first day of that month. For the purpose of determining the number of years from the time of any purchase made prior to October 1, 1998, all payments during a quarter will be aggregated and deemed to have been made on the first day of that quarter. In processing redemptions of Class B shares, the fund will first redeem shares not subject to any CDSC and then shares held longest during the six-year period. As a result, you will pay the lowest possible CDSC.
The CDSC for Class B shares subject to a CDSC upon redemption will be determined as follows:
CDSC AS A % OF DOLLAR
YEAR SINCE PURCHASE AMOUNT SUBJECT TO CDSC
First 4.0
Second 4.0
Third 3.0
Fourth 3.0
Fifth 2.0
Sixth 1.0
Seventh and thereafter 0.0
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Proceeds from the CDSC are paid to PFD and are used in whole or in part to defray PFD's expenses related to providing distribution-related services to the fund in connection with the sale of Class B shares, including the payment of compensation to broker-dealers.
Class B shares will automatically convert into Class A shares at the beginning of the calendar month (or the calendar quarter for purchases made prior to October 1, 1998) that is eight years after the purchase date, except as noted below. Class B shares acquired by exchange from Class B shares of another Pioneer mutual fund will convert into Class A shares based on the date of the initial purchase and the applicable CDSC. Class B shares acquired through reinvestment of distributions will convert into Class A shares based on the date of the initial purchase to which such shares relate. For this purpose, Class B shares acquired through reinvestment of distributions will be attributed to particular purchases of Class B shares in accordance with such procedures as the Trustees may determine from time to time. The conversion of Class B shares to Class A shares is subject to the continuing availability of a ruling from the Internal Revenue Service (the "IRS") or an opinion of counsel that such conversions will not constitute taxable events for U.S. federal income tax purposes. The conversion of Class B shares to Class A shares will not occur if such ruling or opinion is not available and, therefore, Class B shares would continue to be subject to higher expenses than Class A shares for an indeterminate period.
CLASS C SHARES
You may buy Class C shares at the public offering price, which includes a sales charge of 1% of the amount invested. Class C shares redeemed within one year of purchase will also be subject to a CDSC of 1%.
SALES CHARGE AS A % OF
OFFERING NET AMOUNT DEALER
AMOUNT OF PURCHASE PRICE* INVESTED REALLOWANCE
All amounts 1.00 1.01 1.00
*If you established your Class C share account directly or through an omnibus account with a broker-dealer on or before September 28, 2001, your shares will not be subject to the 1% initial sales charge on exchanges or additional purchases of Class C shares. Your broker-dealer must inform PFD of your eligibility for a waiver at the time of sale.
The CDSC will be assessed on the amount equal to the lesser of the current market value or the original purchase cost (less any initial sales charge) of the shares being redeemed. No CDSC will be imposed on increases in account value above the initial purchase price or on shares purchased through the reinvestment of dividends or capital gain distributions. Class C shares do not convert to any other class of fund shares.
The initial and contingent deferred sales charges are subject to waiver in certain circumstances as described in the prospectus. As of October 1, 2001, the following are broker-dealers which have entered into agreements with PFD to receive a reduced commission at the time of purchase and whose clients are entitled to a waiver of the initial sales charge:
Merrill Lynch Pierce Fenner & Smith
Mutual of Omaha Investor Services
Kirkpatrick Pettis Smith
Dain Rauscher Incorporated
Capital Financial Services
Securities America, Inc.
A. G. Edwards
Morgan Stanley Dean Witter
Stifel Nicolas & Co. Inc.
Shareholders who held Class C shares of a Pioneer fund on September 28, 2001 directly or through an omnibus account with a broker-dealer ("Grandfathered Shareholders") are only entitled to a waiver of the initial sales charge if their broker informs PFD at the time of purchase that the shares are being purchased for the account of a Grandfathered Shareholder. If you are a Grandfathered Shareholder you should notify your broker-dealer before purchasing Class C shares.
For the purpose of determining the time of any purchase after September 30, 1998, all payments during a month will be aggregated and deemed to have been made on the first day of that month. For the purpose of determining the time of any purchase made prior to October 1, 1998, all payments made during a calendar quarter will be aggregated and deemed to have been made on the first day of that quarter. In processing redemptions of Class C shares, the fund will first redeem shares not subject to any CDSC and then shares held for the shortest period of time during the one-year period. As a result, you will pay the lowest possible CDSC.
Proceeds from the CDSC are paid to PFD and are used in whole or in part to defray PFD's expenses related to providing distribution-related services to the fund in connection with the sale of Class C shares, including the payment of compensation to broker-dealers.
ADDITIONAL PAYMENTS TO DEALERS
From time to time, PFD or its affiliates may elect to make payments to broker-dealers in addition to the commissions described above. PFD may elect to reallow the entire initial sales charge to participating dealers for all Class A sales with respect to which orders are placed during a particular period. Dealers to whom substantially the entire sales charge is reallowed may be deemed to be underwriters under federal securities laws. Contingent upon the achievement of certain sales objectives, PFD may pay to Mutual of Omaha Investor Services, Inc. a fee of up to 0.20% on qualifying sales of the fund's Class A, Class B or Class C shares through such dealer. In addition, PFD or its affiliates may elect to pay broker-dealers an additional commission based on the net asset value of all of the fund's Class B or Class C shares sold by a dealer during a particular period. PFD may elect to pay, at its own expense, additional cash or other incentives to dealers that sell or arrange for the sale of shares of the fund. Such cash or other incentives may take the form of payment for attendance at preapproved conferences or seminars, sales or training programs for invited registered representatives and other employees, payment for travel expenses, including lodging, incurred by registered representatives and other employees for such seminars or training programs, seminars for the public, advertising and preapproved sales campaigns or dealer-sponsored events. PFD may also elect to make expense reimbursements for special training of a dealer's registered representatives and other employees in group meetings or to help pay the expenses of sales contests. PFD will offer such cash and other incentives only to the extent permitted by applicable law or by a self-regulatory agency such as the NASD.
12. REDEEMING SHARES
Redemptions may be suspended or payment postponed during any period in which any of the following conditions exist: the New York Stock Exchange (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.
Redemptions and repurchases are taxable transactions for shareholders that are subject to U.S. federal income tax. 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 on the market value of the portfolio at the time of redemption or repurchase.
SYSTEMATIC WITHDRAWAL PLAN(S) ("SWP"). A SWP is designed to provide a convenient method of receiving fixed payments at regular intervals from fund share accounts having a total value of not less than $10,000. You must also be reinvesting all dividends and capital gain distributions to use the SWP option.
Periodic payments of $50 or more will be deposited monthly, quarterly, semiannually or annually directly into a bank account designated by the applicant or will be sent by check to the applicant, or any person designated by the applicant. Payments can be made either by check or electronic funds transfer to a bank account designated by you. Class B accounts must meet the minimum initial investment requirement prior to establishing a SWP. Withdrawals from Class B and Class C share accounts are limited to 10% of the value of the account at the time the SWP is established. See "Qualifying for a reduced sales charge" in the prospectus. If you direct that withdrawal payments be paid to another person, want to change the bank where payments are sent or designate an address that is different from the account's address of record after you have opened your account, a signature guarantee must accompany your instructions. Withdrawals under the SWP are redemptions that may have tax consequences for you.
Purchases of Class A or Class C shares of the fund at a time when you have a SWP in effect may result in the payment of unnecessary sales charges and may, therefore, be disadvantageous. SWP redemptions reduce and may ultimately exhaust the number of shares in your account. In addition, the amounts received by a shareholder cannot be considered as yield or income on his or her investment because part of such payments may be a return of his or her investment.
A SWP may be terminated at any time (1) by written notice to PIMSS or from PIMSS to the shareholder; (2) upon receipt by PIMSS of appropriate evidence of the shareholder's death; or (3) when all shares in the shareholder's account have been redeemed.
You may obtain additional information by calling PIMSS at 1-800-225-6292.
REINSTATEMENT PRIVILEGE (CLASS A AND CLASS B SHARES). Subject to the provisions outlined in the prospectus, you may reinvest all or part of your sale proceeds from Class A or Class B shares without a sales charge into Class A shares of a Pioneer mutual fund. However, the distributor will not pay your investment firm a commission on any reinvested amount.
13. TELEPHONE AND ONLINE TRANSACTIONS
You may purchase, exchange or sell Class A, Class B or Class C shares by
telephone or online. See the prospectus for more information. For personal
assistance, call 1-800-225-6292 between 8:00 a.m. and 9:00 p.m. Eastern time on
weekdays. Computer-assisted telephone transactions may be available to
shareholders who have prerecorded certain bank information (see "FactFoneSM").
YOU ARE STRONGLY URGED TO CONSULT WITH YOUR INVESTMENT PROFESSIONAL PRIOR TO
REQUESTING ANY TELEPHONE OR ONLINE TRANSACTION.
TELEPHONE TRANSACTION PRIVILEGES. 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. The fund may implement other procedures from time to time. In all other cases, neither the fund, PIMSS 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.
ONLINE TRANSACTION PRIVILEGES. If your account is registered in your name, you may be able buy, exchange or sell fund shares online. Your investment firm may also be able to buy, exchange or sell your fund shares online.
To establish online transaction privileges:
|X| For new accounts, complete the online section of the account application
|X| For existing accounts, complete an account options form, write to the
transfer agent or complete the online authorization screen on
WWW.PIONEERFUNDS.COM
To use online transactions, you must read and agree to the terms of an online transaction agreement available on the Pioneer website. When you or your investment firm requests an online transaction the transfer agent electronically records the transaction, requires an authorizing password and sends a written confirmation. The fund may implement other procedures from time to time. Different procedures may apply if you have a non-U.S. account or if your account is registered in the name of an institution, broker-dealer or other third party. You may not be able to use the online transaction privilege for certain types of accounts, including most retirement accounts.
TELEPHONE AND WEBSITE ONLINE ACCESS. You may have difficulty contacting the fund by telephone or accessing pioneerfunds.com during times of market volatility or disruption in telephone or Internet services. On Exchange holidays or on days when the Exchange closes early, Pioneer will adjust the hours for the telephone center and for online transaction processing accordingly. If you are unable to access pioneerfunds.com or to reach the fund by telephone, you should communicate with the fund in writing.
FACTFONESM. FactFoneSM is an automated inquiry and telephone transaction system available to Pioneer mutual fund shareholders by dialing 1-800-225-4321. FactFoneSM allows shareholder access to current information on Pioneer mutual fund accounts and to the prices and yields of all publicly available Pioneer mutual funds. In addition, you may use FactFoneSM to make computer-assisted telephone purchases, exchanges or redemptions from your Pioneer mutual fund accounts, access your account balances and last three transactions and order a duplicate statement if you have activated your PIN. Telephone purchases or redemptions require the establishment of a bank account of record. YOU ARE STRONGLY URGED TO CONSULT WITH YOUR INVESTMENT PROFESSIONAL PRIOR TO REQUESTING ANY TELEPHONE TRANSACTION. Shareholders whose accounts are registered in the name of a broker-dealer or other third party may not be able to use FactFoneSM. Call PIMSS for assistance.
FactFoneSM allows shareholders to hear the following recorded fund information:
o net asset value prices for all Pioneer mutual funds;
o annualized 30-day yields on Pioneer's fixed income funds;
o annualized 7-day yields and 7-day effective (compound) yields for Pioneer's money market fund; and
o dividends and capital gain distributions on all Pioneer mutual funds.
Yields are calculated in accordance with SEC mandated standard formulas.
All performance numbers communicated through FactFoneSM represent past performance, and figures include the maximum applicable sales charge. A shareholder's actual yield and total return will vary with changing market conditions. The value of Class A, Class B and Class C shares (except for Pioneer Cash Reserves Fund, which seeks to maintain a stable $1.00 share price) will also vary, and such shares may be worth more or less at redemption than their original cost.
14. PRICING OF SHARES
The net asset value per share of each class of the fund is determined as of the close of regular trading on the Exchange (normally 4:00 p.m. Eastern time) on each day on which the Exchange is open for 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, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The net asset value per share of each class of the fund is also determined on any other day on which the level of trading in its portfolio securities is sufficiently high 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 on which no purchase orders in good order for fund shares are received and no shares are tendered and accepted for redemption.
The fund generally values its portfolio securities using closing market prices or readily available market quotations. 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 non-U.S. securities is substantially completed each day at various times prior to the close of regular trading 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 on the Exchange. When closing market prices or market quotations are not available or are considered by Pioneer to be unreliable, the fund may use a security's fair value. Fair value is the valuation of a security determined on the basis of factors other than market value in accordance with procedures approved by the fund's Trustees. The fund also may use the fair value of a security, including a non-U.S. security, when Pioneer determines that the closing market price on the primary exchange where the security is traded no longer accurately reflects the value of the security due to factors affecting one or more relevant securities markets or the specific issuer. The use of fair value pricing by the fund may cause the net asset value of its shares to differ from the net asset value that would be calculated using closing market prices. International securities markets may be open on days when the U.S. markets are closed. For this reason, the value of any international securities owned by the fund could change on a day you cannot buy or sell shares of the fund. The fund may use a pricing service or a pricing matrix to value some of its assets. Debt securities with remaining maturities of 60 days or less are valued at amortized cost, which is a method of estimating market value.
The net asset value per share of each class of the fund is computed by taking the value of all of the fund's assets attributable to a class, less the fund's liabilities attributable to that class, and dividing the result by the number of outstanding shares of that class. For purposes of determining net asset value, expenses of the classes of the fund are accrued daily and taken into account. The fund's maximum offering price per Class A share is determined by adding the maximum sales charge to the net asset value per Class A share. The fund's maximum offering price per Class C share is determined by adding the maximum sales charge to the net asset value per Class C share (Class C shares may be subject to a CDSC). Class B shares are offered at net asset value without the imposition of an initial sales charge (Class B shares may be subject to a CDSC).
15. TAX STATUS
The fund has elected to be treated and intends to qualify each year as a "regulated investment company" under Subchapter M of the Code so that it will not pay U.S. federal income tax on income and capital gains distributed to shareholders. If the fund did not qualify as a regulated investment company, it would be treated as a U.S. corporation subject to U.S. federal income tax. 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 fund generally distributes any net short- and long-term capital gains in November. The fund generally pays dividends from any net investment income in December. Dividends from income and/or capital gains may also be paid at such other times as may be necessary for the fund to avoid U.S. federal income or excise tax.
In order to qualify as a regulated investment company under Subchapter M of the Code, the fund must, among other things, derive at least 90% of its gross income for each taxable year from dividends, interest, payments with respect to securities loans, 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") and satisfy certain annual distribution and quarterly diversification requirements. For purposes of the 90% income test, the character of income earned by certain entities in which the fund invests that are not treated as corporations (e.g., partnerships or trusts) for U.S. federal income tax purposes will generally pass through to the fund. Consequently, the fund may be required to limit its equity investments in such entities that earn fee income, rental income or other nonqualifying income.
Unless shareholders specify otherwise, all distributions will be automatically reinvested in additional full and fractional shares of the fund. For U.S. federal income tax purposes, all dividends are taxable whether a shareholder takes them in cash or reinvests them in additional shares of the fund. Dividends from investment company taxable income, which includes net investment income, net short-term capital gain in excess of net long-term capital loss and certain net foreign exchange gains, are taxable as ordinary income. Dividends from net long-term capital gain in excess of net short-term capital loss ("net capital gain"), if any, are taxable as long-term capital gains for U.S. federal income tax purposes without regard to the length of time the shareholder has held shares of the fund. The U.S. federal income tax status of all distributions will be reported to shareholders annually.
Any dividend declared by the fund as of a record date in October, November or December and paid during the following January will be treated for U.S. federal income tax purposes as received by shareholders on December 31 of the calendar year in which it is declared.
Foreign exchange gains and losses realized by the fund in connection with certain transactions involving foreign currency-denominated debt securities, certain options and futures contracts relating to foreign currency, foreign currency forward contracts, 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. Under future Treasury regulations, any such transactions that are not directly related to the fund's investments in stock or securities (or its options contracts or futures contracts with respect to stock or securities) may have to be limited in order to enable the fund to satisfy the 90% income test. If the net foreign exchange loss for a year were to exceed the fund's investment company taxable income (computed without regard to such loss), the resulting ordinary loss for such year would not be deductible by the fund or its shareholders in future years.
If the fund acquires any equity interest (under future Treasury regulations, generally including not only stock but also an option to acquire stock such as is inherent in a convertible bond) in certain foreign corporations that receive at least 75% of their annual gross income from passive sources (such as interest, dividends, certain rents and royalties, or capital gains) or that hold at least 50% of their assets in investments producing such passive income ("passive foreign investment companies"), the fund could be subject to U.S. federal income tax and additional interest charges on "excess distributions" received from such companies or on 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. An election may generally be available that would ameliorate these adverse tax consequences, but any such election could require the fund to recognize taxable income or gain (subject to tax distribution requirements) without the concurrent receipt of cash. These investments could also result in the treatment of associated capital gains as ordinary income. The fund may limit and/or manage its holdings in passive foreign investment companies to limit its tax liability or maximize its return from these investments.
The fund may invest to a limited extent in debt obligations that are in the lowest rating categories or are unrated, including debt obligations of issuers not currently paying interest or who are in default. Investments in debt obligations that are at risk of or in default present 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 seek to ensure that it distributes sufficient income to preserve its status as a regulated investment company and does not become subject to U.S. federal income or excise tax.
If the fund invests in certain pay-in-kind securities, zero coupon securities, deferred interest securities or, in general, any other securities with original issue discount (or with market discount if the fund elects to include market discount in income currently), the fund must accrue income on such investments for each taxable year, which generally will be prior to the receipt of the corresponding cash payments. However, the fund must distribute, at least annually, all or substantially all of its net income, including such accrued income, to shareholders to qualify as a regulated investment company under the Code and avoid U.S. federal income and excise taxes. Therefore, the fund may have to dispose of its portfolio securities under disadvantageous circumstances to generate cash, or may have to leverage itself by borrowing the cash, to satisfy distribution requirements.
For U.S. federal income tax purposes, the fund is permitted to carry forward a net capital loss for any year to offset its capital gains, if any, during the eight years following the year of the loss. To the extent subsequent capital gains are offset by such losses, they would not result in U.S. federal income tax liability to the fund and are not expected to be distributed as such to shareholders. See Annual Fee, Expense and Other Information for the fund's available capital loss carryforwards.
At the time of an investor's purchase of fund shares, a portion of the purchase price may be attributable to realized or unrealized appreciation in the fund's portfolio or undistributed taxable income of the fund. Consequently, subsequent distributions by the fund with respect to these shares from such appreciation or income may be taxable to such investor even if the net asset value of the investor's shares is, as a result of the distributions, reduced below the investor's cost for such shares and the distributions economically represent a return of a portion of the investment.
Redemptions and exchanges are taxable events for shareholders that are subject to tax. Shareholders should consult their own tax advisers with reference to their individual circumstances to determine whether any particular transaction in fund shares is properly treated as a sale for tax purposes, as the following discussion assumes, and the tax treatment of any gains or losses recognized in such transactions. Any loss realized by a shareholder upon the redemption, exchange or other disposition 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 Class A or Class B shares that have been held for less than 91 days are redeemed and the proceeds are reinvested in Class A shares of the fund or in Class A shares of another mutual fund at net asset value pursuant to the reinstatement privilege, or if Class A or Class C shares in the fund that have been held for less than 91 days are exchanged for the same class of shares in another fund at net asset value pursuant to the exchange privilege, all or a portion of the sales charge paid on the shares that are redeemed or exchanged will not be included in the tax basis of such shares under the Code to the extent a sales charge that would otherwise apply to the shares received is reduced pursuant to the reinstatement or 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 redemptions or other dispositions of shares may be disallowed under "wash sale" rules in the event of other investments in the fund (including those made pursuant to reinvestment of dividends and/or capital gain distributions) within a period of 61 days beginning 30 days before and ending 30 days after a redemption or other disposition of shares. In such a case, the disallowed portion of any loss generally would be included in the U.S. federal tax basis of the shares acquired in the other investments.
Options written or purchased and futures contracts entered into by the fund on certain securities, indices and foreign currencies, as well as certain forward foreign currency contracts, may cause the fund to recognize gains or losses from marking-to-market even though such options may not have lapsed, been closed out, or exercised, or such futures or forward contracts may not have been performed or closed out. The tax rules applicable to these contracts may affect the characterization of some capital gains and losses realized by the fund as long-term or short-term. Certain options, futures and forward contracts relating to foreign currency may be subject to Section 988 of the Code, as described above, and accordingly may produce ordinary income or loss. Additionally, the fund may be required to recognize gain if an option, futures contract, forward contract, short sale or other transaction that is not subject to the mark-to-market rules is treated as a "constructive sale" of an "appreciated financial position" held by the fund under Section 1259 of the Code. Any net mark-to-market gains and/or gains from constructive sales may also have to be distributed to satisfy the distribution requirements referred to above even though the fund may receive no corresponding cash amounts, possibly requiring the disposition of portfolio securities or borrowing to obtain the necessary cash. Losses on certain options, futures or forward 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, futures or forward 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. Certain tax elections may be available that would enable the fund to ameliorate some adverse effects of the tax rules described in this paragraph. The tax rules applicable to options, futures, forward contracts and straddles may affect the amount, timing and character of the fund's income and gains or losses and hence of its distributions to shareholders.
Dividends received by the fund from U.S. 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) extending before and after each dividend held in an unleveraged position and distributed and designated by the fund (except for capital gain dividends received from a regulated investment company) may be eligible for the 70% dividends-received deduction generally available to corporations under the Code. Any corporate shareholder should consult its tax adviser regarding the possibility that its tax basis in its shares may be reduced, for U.S. federal income tax purposes, by reason of "extraordinary dividends" received with respect to the shares and, to the extent such basis would be reduced below zero, current recognition of income may be required. In order to qualify for the deduction, corporate shareholders must meet the minimum holding period requirement stated above with respect to their fund shares, taking into account any holding period reductions from certain hedging or other transactions or positions that diminish their risk of loss with respect to their fund shares, and, if they borrow to acquire or otherwise incur debt attributable to fund shares, they may be denied a portion of the dividends-received deduction. The entire 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, including taxes on interest, dividends and capital gains with respect to its investments in those countries, which would, if imposed, reduce the yield on or return from those investments. Tax conventions between certain countries and the U.S. may reduce or eliminate such taxes in some cases. The fund does not expect to satisfy the requirements for passing through to its shareholders their pro rata shares of qualified foreign taxes paid by the fund, with the result that 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.
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.
Federal law requires that the fund withhold (as "backup withholding") 30% of reportable payments, including dividends, capital gain distributions and the proceeds of redemptions and exchanges or repurchases of fund shares, paid 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 IRS Forms W-9, that the Social Security Number 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.
If, as anticipated, the fund continues to qualify as a regulated investment company under the Code, it will not be required to pay any Massachusetts income, corporate excise or franchise taxes or any Delaware corporation income tax.
The description of certain federal tax provisions 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 tax. This description does not address the special tax rules that may be applicable to particular types of investors, such as financial institutions, insurance companies, securities dealers, or tax-exempt or tax-deferred plans, accounts or entities. Investors other than U.S. persons may be subject to different U.S. tax treatment, including a non-resident alien U.S. withholding tax at the rate of 30% or at a lower treaty rate on amounts treated as ordinary dividends from the fund and, unless an effective IRS Form W-8BEN, or other authorized withholding certificate is on file, to backup withholding at the rate of 30% on certain other payments from the fund. Shareholders should consult their own tax advisers on these matters and on state, local and other applicable tax laws.
16. INVESTMENT RESULTS
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, total return of the fund's classes may be compared to averages or rankings prepared by Lipper, Inc., a widely recognized independent service which monitors mutual fund performance; the Standard & Poor's 500 Stock Index; the Dow Jones Industrial Average; the Russell U.S. Equity Indexes or the Wilshire Total Market Value Index; or any other appropriate index.
In addition, the performance of the classes of the fund may be compared to alternative investment or savings vehicles and/or to indices or indicators of economic activity, e.g., inflation or interest rates. The fund may also include securities industry or comparative performance information generally and in advertising or materials marketing the fund's shares. Performance rankings and listings reported in newspapers or national business and financial publications, such as BARRON'S, BUSINESS WEEK, CONSUMERS DIGEST, CONSUMER REPORTS, FINANCIAL WORLD, FORBES, FORTUNE, INVESTORS BUSINESS DAILY, KIPLINGER'S PERSONAL FINANCE MAGAZINE, MONEY MAGAZINE, NEW YORK TIMES, SMART MONEY, USA TODAY, U.S. NEWS AND WORLD REPORT, THE WALL STREET JOURNAL 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 Markets, CDA/Wiesenberger, Donoghue's Mutual Fund Almanac, Ibbotson Associates, Investment Company Data, Inc., Johnson's Charts, Kanon Bloch Carre and Co., Lipper, Inc., Micropal, Inc., Morningstar, Inc., Schabacker Investment Management and Towers Data Systems, Inc.
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.
The fund may also present, from time to time, historical information depicting the value of a hypothetical account in one or more classes of the fund since inception.
In presenting investment results, the fund may also include references to
certain financial planning concepts, including (a) an investor's need to
evaluate his financial assets and obligations to determine how much to invest;
(b) his need to analyze the objectives of various investments to determine where
to invest; and (c) his need to analyze his time frame for future capital needs
to determine how long to invest. The investor controls these three factors, all
of which affect the use of investments in building assets.
One of the primary methods used to measure the performance of a class of the fund is "total return." Total return will normally represent the percentage change in value of an account, or of a hypothetical investment in a class of the fund, over any period up to the lifetime of that class of the fund. Total return calculations will usually assume the reinvestment of all dividends and capital gain 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 average annual total return quotations for each of its classes as that information may appear in the fund's prospectuses, this statement of additional information or in advertising are calculated by standard methods prescribed by the SEC.
STANDARDIZED AVERAGE ANNUAL TOTAL RETURN QUOTATIONS
Average annual total return quotations for each class of shares are computed by finding the average annual compounded rates of return that would cause a hypothetical investment in the class 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 $1,000, less the
maximum sales load of $57.50 for Class A shares or
the maximum sales load of $10.00 for Class C shares
or the deduction of the CDSC for Class B and Class C
shares at the end of the period
T = average annual total return
n = number of years
ERV = ending redeemable value of the hypothetical $1,000
initial payment made at the beginning of the
designated period (or fractional portion thereof)
|
For purposes of the above computation, it is assumed 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 of a particular class of shares 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 a class' mean account size.
See Annual Fee, Expense and Other Information for the annual total returns for each class of fund shares as of the most recently completed fiscal year.
STANDARDIZED AVERAGE ANNUAL TOTAL RETURN QUOTATIONS (AFTER TAXES ON DISTRIBUTIONS)
Average annual total return quotations (after taxes on distributions) are computed by finding the average annual compounded rate of return (after taxes on distributions) that would cause a hypothetical investment in the class made on the first day of the 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 = ATVD
Where:
P = a hypothetical initial payment of $1,000
T = average annual total return (after taxes on
distributions)
n = number of years
ATVD = ending value of a hypothetical $1,000 payment made
at the beginning of the 1-, 5-, or 10-year periods at
the end of the 1-, 5-, or 10-year periods (or
fractional portion), after taxes on fund
distributions but not after taxes on redemption
|
The taxes due on any distributions by the fund are calculated by applying the highest historical individual federal income tax rates and do not reflect the impact of state or local taxes. Actual after tax returns depend upon an investors tax situation and may differ from those used to compute the quotations. After tax returns will vary by class of shares. The taxable amount and tax character of each distribution specified by the fund on the dividend declaration date are generally used in these calculations but may be adjusted to reflect subsequent recharacterizations of distributions. The distributions are adjusted to reflect the federal tax impact the distribution would have on an individual taxpayer on the reinvestment date. The calculation disregards any potential tax liabilities other than federal tax liabilities (e.g., state and local taxes); the effect of phaseouts of certain exemptions, deductions and credits at various income levels; and the impact of the federal alternative minimum tax.
For purposes of the above computation, it is assumed 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 of a particular class of shares 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 a class' mean account size.
See Annual Fee, Expense and Other Information for the annual total returns (after taxes on distributions) for each class of fund shares as of the most recently completed fiscal year.
STANDARDIZED AVERAGE ANNUAL TOTAL RETURN QUOTATIONS (AFTER TAXES ON DISTRIBUTIONS AND REDEMPTION)
Average annual total return quotations (after taxes on distributions and redemptions) are computed by finding the average annual compounded rate of return (after taxes on distributions and redemptions) that would cause a hypothetical investment in the class made on the first day of the 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 =........ATVDR
Where:
P = a hypothetical initial payment of $1,000
T = average annual total return (after taxes on
distributions and redemption)
n = number of years
ATVDR = ending value of a hypothetical $1,000 payment made
at the beginning of the 1-, 5-, or 10-year periods at
the end of the 1-, 5-, or 10-year periods (or
fractional portion), after taxes on fund
distributions and redemption
|
The taxes due on any distributions by the fund and redemptions are calculated by applying the highest historical individual federal income tax rates and do not reflect the impact of state or local taxes. Actual after tax returns depend upon an investors tax situation and may differ from those used to compute the quotations. After tax returns will vary by class of shares. The taxable amount and tax character of each distribution specified by the fund on the dividend declaration date are generally used in these calculations but may be adjusted to reflect subsequent recharacterizations of distributions. The distributions are adjusted to reflect the federal tax impact the distribution would have on an individual taxpayer on the reinvestment date. The calculation disregards any potential tax liabilities other than federal tax liabilities (e.g., state and local taxes); the effect of phaseouts of certain exemptions, deductions and credits at various income levels; and the impact of the federal alternative minimum tax.
The amount and character (e.g., short-term or long-term) of capital gain or loss upon redemption are separately determined for shares acquired through the $1,000 initial investment and each subsequent purchase through reinvested distributions. The calculations does not assume that shares acquired through reinvestment of distributions have the same holding period as the initial $1,000 investment. The tax character is determined by the length of the measurement period in the case of the initial $1,000 investment and the length of the period between reinvestment and the end of the measurement period in the case of reinvested distributions. Capital gains taxes (or the benefit resulting from tax losses) are calculated using the highest federal individual capital gains tax rate for gains of the appropriate character in effect on the redemption date and in accordance with federal tax law applicable on the redemption date. For example, applicable federal tax laws are used to determine whether and how gains and losses from the sale of shares with different holding periods should be netted, as well as the tax character (e.g., short-term or long-term) of any resulting gains or losses. The calculations assume that a shareholder has sufficient capital gains of the same character from other investments to offset any capital losses from the redemption so that the taxpayer may deduct the capital losses in full.
For purposes of the above computation, it is assumed 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 of a particular class of shares 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 a class' mean account size.
See Annual Fee, Expense and Other Information for the annual total returns (after taxes on distributions and redemptions) for each class of fund shares as of the most recently completed fiscal year.
17. FINANCIAL STATEMENTS
Ernst & Young LLP, independent auditors, have audited the balance sheet at July 26, 2002, as set forth in their report dated August 7, 2002. We have included the balance sheet in this statement of additional information in reliance on Ernst & Young LLP's report, given on their authority as experts in accounting and auditing.
Pioneer Large Cap Growth Fund
Balance Sheet
July 26, 2002
ASSETS:
Cash $ 100,000
---------------
Total assets $ 100,000
----------------
|
LIABILITIES: $ -
----------------
NET ASSETS:
Total net assets (consisting of paid-in capital for
10,000 shares outstanding) $ 100,000
----------------
|
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized with no par value)
Class A (based on $100,000/10,000 shares) $ 10.00
Pioneer Large Cap Growth Fund
Notes to Balance Sheet
July 26, 2002
1. Organization Pioneer Large Cap Growth Fund (the Fund), organized as a Delaware business trust on May 7, 2002, is being registered with the Securities and Exchange Commission under the Investment Company Act of 1940 (the 1940 Act) as a diversified, open-end management investment company. Since May 7, 2002, the Fund's activities have been limited to organizational matters with no operating activities. The Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. The initial fund shares outstanding at July 26, 2002, are owned by Pioneer Funds Distributor, Inc. (PFD), the principal underwriter for the Fund and a wholly owned indirect subsidiary of UniCredito Italiano S.p.A (UniCredito Italiano). In addition, PFD has agreed to pay all organizational costs of the Fund. The investment objective of the Fund is to seek long-term capital growth.
2. Accounting Policies The preparation of the financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements. Actual results could differ from these estimates.
3. Fund Shares The Board of Trustees has authorized the issuance of three classes of shares, designated as Class A, Class B and Class C shares. Class A, Class B and Class C shares will be offered for sale to the public commencing on or about August 15, 2002. Shares of each class represent an interest in the same portfolio of investments of the Fund and have equal rights as to voting, redemptions, dividends and liquidation, except that the level of transfer agent and distribution fees may differ among classes. Class A, Class B and Class C shareowners have exclusive voting rights with respect to distribution plans for each class (See Note 6).
The Fund will record sales and repurchases of Fund shares as of trade date.
4. Management Agreement Pioneer Investment Management, Inc. (PIM), a wholly owned indirect subsidiary of UniCredito Italiano, is the Fund's investment |
adviser, and will manage the Fund's portfolio. Management fees will be calculated daily at the annual rate of 0.85% of the Fund's average daily net assets. In addition, under the management and administration agreements, certain other services and costs, including accounting, regulatory reporting and insurance premiums, will be paid by the Fund.
PIM has agreed not to impose all or a portion of its management fee and, if necessary, to assume other operating expenses of the Fund to the extent necessary to limit Class A expenses to 1.50% of the average daily net assets attributable to Class A shares; the portion of the Fund-wide expenses attributable to Class B, Class C and Class Y shares will be reduced only to the extent that such expenses are reduced for Class A shares.
5. Transfer Agent Pioneer Investment Management Shareholder Services, Inc. (PIMSS), a wholly owned indirect subsidiary of UniCredito Italiano, will provide substantially all transfer agent and shareowner services to the Fund at negotiated rates.
6. Distribution Plans The Fund has adopted Plans of Distribution with respect to Class A, Class B and Class C shares (Class A Plan, Class B Plan and Class C Plan, respectively) in accordance with Rule 12b-1 of the 1940 Act. Pursuant to the Class A Plan, the Fund will pay PFD a service fee of up to 0.25% of the Fund's average daily net assets in reimbursement of its actual expenditures to finance activities primarily intended to result in the sale of Class A shares. Pursuant to the Class B Plan and the Class C Plan, the Fund will pay PFD 1.00% of the average daily net assets attributable to each class of shares. The fee consists of a 0.25% service fee and a 0.75% distribution fee paid as compensation for personal services and/or account maintenance services or distribution services with regard to Class B and Class C shares.
In addition, redemptions of each class of shares may be subject to a contingent deferred sales charge (CDSC). A CDSC of 1.00% may be imposed on redemptions of certain net asset value purchases of Class A shares within one year of purchase. Class B shares that are redeemed within six years of purchase will be subject to a CDSC at declining rates beginning at 4.00%, based on the lower of cost or market value of shares being redeemed. Redemptions of Class C shares within one year of purchase are subject to a CDSC of 1.00%.
7. Federal Income Taxes The Fund intends to qualify as a "regulated investment company" and to comply with the applicable provisions of the Internal Revenue Code of 1986, as amended, such that it will not be subject to Federal income tax on taxable income (including realized capital gains) that is distributed to shareowners.
Pioneer Large Cap Growth Fund
REPORT OF INDEPENDENT AUDITORS
To the Shareowner and the Board of Trustees of Pioneer Large Cap Growth Fund:
We have audited the accompanying balance sheet of Pioneer Large Cap Growth Fund (a Delaware business trust) as of July 26, 2002. This financial statement is the responsibility of the Fund's management. Our responsibility is to express an opinion on this financial statement based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the balance sheet is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the balance sheet. 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 audit provides a reasonable basis for our opinion.
In our opinion, the balance sheet referred to above presents fairly, in all material respects, the financial position of Pioneer Large Cap Growth Fund as of July 26, 2002, in conformity with accounting principles generally accepted in the United States.
.........
ERNST & YOUNG LLP
Boston, Massachusetts .........
August 7, 2002
18. ANNUAL FEE, EXPENSE AND OTHER INFORMATION
PORTFOLIO TURNOVER
Not applicable.
SHARE OWNERSHIP
As of July 31, 2002, the Trustees and officers of the fund owned beneficially in the aggregate less than 1% of the outstanding shares of the fund. The following is a list of the holders of 5% or more of any class of the fund's outstanding shares as of July 31, 2002:
--------------------- ------------------- -------------------- -------------- RECORD HOLDER SHARE CLASS NUMBER OF SHARES % OF CLASS --------------------- ------------------- -------------------- -------------- Pioneer Funds Class A 10,000 100% Distributor, Inc. Class B N/A 60 State Street Class C N/A Boston, MA 02109 |
TRUSTEE OWNERSHIP OF SHARES OF THE FUND AND OTHER PIONEER FUNDS
The following table indicates the value of shares that each Trustee beneficially owned in the fund and Pioneer Funds in the aggregate as of December 31, 2001. Beneficial ownership is determined in accordance with SEC rules. The share value of any closed-end fund is based on its closing market price on December 31, 2001. The share value of any open-end Pioneer Fund is based on the net asset value of the class of shares on December 31, 2001. The dollar ranges in this table are in accordance with SEC requirements.
------------------------------------ --------------------------- -------------------------------------------
AGGREGATE DOLLAR RANGE OF EQUITY
DOLLAR RANGE OF EQUITY SECURITIES IN ALL REGISTERED INVESTMENT
NAME OF TRUSTEE SECURITIES IN THE FUND COMPANIES IN THE PIONEER FAMILY OF FUNDS
------------------------------------ --------------------------- -------------------------------------------
------------------------------------ --------------------------- -------------------------------------------
INTERESTED TRUSTEES
------------------------------------ --------------------------- -------------------------------------------
------------------------------------ --------------------------- -------------------------------------------
John F. Cogan, Jr. none over $100,000
------------------------------------ --------------------------- -------------------------------------------
------------------------------------ --------------------------- -------------------------------------------
Daniel T. Geraci none none
------------------------------------ --------------------------- -------------------------------------------
------------------------------------ --------------------------- -------------------------------------------
INDEPENDENT TRUSTEES
------------------------------------ --------------------------- -------------------------------------------
------------------------------------ --------------------------- -------------------------------------------
Mary K. Bush none $10,001-$50,000
------------------------------------ --------------------------- -------------------------------------------
------------------------------------ --------------------------- -------------------------------------------
Richard H. Egdahl, M.D. none $10,001-$50,000
------------------------------------ --------------------------- -------------------------------------------
------------------------------------ --------------------------- -------------------------------------------
Margaret B.W. Graham none $10,001-$50,000
------------------------------------ --------------------------- -------------------------------------------
------------------------------------ --------------------------- -------------------------------------------
Marguerite A. Piret none $50,001-$100,000
------------------------------------ --------------------------- -------------------------------------------
------------------------------------ --------------------------- -------------------------------------------
Stephen K. West none $50,001-$100,000
------------------------------------ --------------------------- -------------------------------------------
------------------------------------ --------------------------- -------------------------------------------
John Winthrop none over $100,000
------------------------------------ --------------------------- -------------------------------------------
|
COMPENSATION OF OFFICERS AND TRUSTEES
The following table sets forth certain information with respect to the
compensation of each Trustee of the fund.
---------------------------------- --------------------- ---------------------- ----------------------------
PENSION OR
RETIREMENT BENEFITS TOTAL COMPENSATION FROM
AGGREGATE ACCRUED AS PART OF THE FUND AND OTHER PIONEER
COMPENSATION FROM FUND EXPENSES FUNDS***
NAME OF TRUSTEE FUND**
---------------------------------- --------------------- ---------------------- ----------------------------
---------------------------------- --------------------- ---------------------- ----------------------------
INTERESTED TRUSTEES:
---------------------------------- --------------------- ---------------------- ----------------------------
---------------------------------- --------------------- ---------------------- ----------------------------
John F. Cogan, Jr.* $150.00 $0.00 $18,000.00
---------------------------------- --------------------- ---------------------- ----------------------------
---------------------------------- --------------------- ---------------------- ----------------------------
Daniel T. Geraci*+ $150.00 0.00 4,500.00
---------------------------------- --------------------- ---------------------- ----------------------------
---------------------------------- --------------------- ---------------------- ----------------------------
David D. Tripple++ $0.00 0.00 13,500.00
---------------------------------- --------------------- ---------------------- ----------------------------
---------------------------------- --------------------- ---------------------- ----------------------------
INDEPENDENT TRUSTEES:
---------------------------------- --------------------- ---------------------- ----------------------------
---------------------------------- --------------------- ---------------------- ----------------------------
Mary K. Bush $750.00 0.00 91,250.00
---------------------------------- --------------------- ---------------------- ----------------------------
---------------------------------- --------------------- ---------------------- ----------------------------
Richard H. Egdahl, M.D. $750.00 0.00 91,250.00
---------------------------------- --------------------- ---------------------- ----------------------------
---------------------------------- --------------------- ---------------------- ----------------------------
Margaret B.W. Graham $750.00 0.00 99,750.00
---------------------------------- --------------------- ---------------------- ----------------------------
---------------------------------- --------------------- ---------------------- ----------------------------
Marguerite A. Piret $750.00 0.00 116,750.00
---------------------------------- --------------------- ---------------------- ----------------------------
---------------------------------- --------------------- ---------------------- ----------------------------
Stephen K. West $750.00 0.00 108,250.00
---------------------------------- --------------------- ---------------------- ----------------------------
---------------------------------- --------------------- ---------------------- ----------------------------
John Winthrop $750.00 0.00 104,000.00
---- ----------
---------------------------------- --------------------- ---------------------- ----------------------------
---------------------------------- --------------------- ---------------------- ----------------------------
$4800.00 $0.00 $647,250.00
-----
---------------------------------- --------------------- ---------------------- ----------------------------
* Under the management contract, Pioneer reimburses the fund for
any interested Trustees fees paid by the fund.
** Estimated for the fiscal year ended March 31, 2002. There are
56 funds in the Pioneer Family of Funds.
*** For the calendar year ended December 31, 2001.
+ Mr. Geraci became a Trustee effective October 26, 2001.
++ Mr. Tripple resigned as Trustee effective September 30, 2001.
|
APPROXIMATE MANAGEMENT FEES THE FUND PAID OR OWED PIONEER
Not applicable.
FEES THE FUND PAID TO PIONEER UNDER THE ADMINISTRATION AGREEMENT
Not applicable.
CARRYOVER OF DISTRIBUTION EXPENSES
Not applicable.
APPROXIMATE NET UNDERWRITING COMMISSIONS RETAINED BY PFD (CLASS A SHARES)
Not applicable.
APPROXIMATE COMMISSIONS REALLOWED TO DEALERS (CLASS A SHARES)
Not applicable.
APPROXIMATE COMMISSIONS REALLOWED TO DEALERS (CLASS C SHARES)
Not applicable.
FUND EXPENSES UNDER THE DISTRIBUTION PLANS
Not applicable.
CDSCS
Not applicable.
APPROXIMATE BROKERAGE AND UNDERWRITING COMMISSIONS (PORTFOLIO TRANSACTIONS)
Not applicable.
CAPITAL LOSS CARRYFORWARDS AS OF DECEMBER 31, 2001
Not applicable.
AVERAGE ANNUAL TOTAL RETURNS
Not applicable.
1 As of the date of this statement of additional information, the fund had not yet completed a fiscal year.
19. APPENDIX A - DESCRIPTION OF SHORT-TERM DEBT, CORPORATE BOND AND PREFERRED STOCK RATINGS1
MOODY'S INVESTORS SERVICE, INC. ("MOODY'S") PRIME RATING SYSTEM
Moody's short-term ratings are opinions of the ability of issuers to honor senior financial obligations and contracts. Such obligations generally have an original maturity not exceeding one year, unless explicitly noted.
Moody's employs the following designations, all judged to be investment grade, to indicate the relative repayment ability of rated issuers:
Prime-1: Issuers rated Prime-1 (or supporting institutions) have a superior ability for repayment of senior short-term debt obligations. Prime-1 repayment ability will often be evidenced by many of the following characteristics:
Leading market positions in well-established industries. High rates of return on
funds employed.
Conservative capitalization structure with moderate reliance on debt and ample
asset protection. Broad margins in earnings coverage of fixed financial charges
and high internal cash generation. Well-established access to a range of
financial markets and assured sources of alternate liquidity.
Prime-2: Issuers (or supporting institutions) rated Prime-2 have a strong ability to repay senior short-term debt obligations. This will normally be evidenced by many of the characteristics cited above, but to a lesser degree. Earnings trends and coverage ratios, while sound, may be more subject to variation than is the case for Prime-2 securities. Capitalization characteristics, while still appropriate, may be more affected by external conditions. Ample alternate liquidity is maintained.
Prime-3: Issuers (or supporting institutions) rated Prime-3 have an acceptable ability for repayment of senior short-term obligations. The effect of industry characteristics and market compositions may be more pronounced. Variability in earnings and profitability may result in changes in the level of debt-protection measurements and may require relatively high financial leverage. Adequate alternate liquidity is maintained.
Not Prime: Issuers rated Not Prime do not fall within any of the Prime rating categories.
In addition, in certain countries the prime rating may be modified by the issuer's or guarantor's senior unsecured long-term debt rating.
MOODY'S DEBT RATINGS
Aaa: Bonds and preferred stock 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 edged." 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 and preferred stock 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 risk appear somewhat larger than the Aaa securities.
A: Bonds and preferred stock 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 some time in the future.
Baa: Bonds and preferred stock 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 and preferred stock 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 and preferred stock 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 and preferred stock 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 and preferred stock 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 and preferred stock 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.
Moody's assigns ratings to individual debt securities issued from medium-term note (MTN) programs, in addition to indicating ratings to MTN programs themselves. Notes issued under MTN programs with such indicated ratings are rated at issuance at the rating applicable to all pari passu notes issued under the same program, at the program's relevant indicated rating, provided such notes do not exhibit any of the characteristics listed below. For notes with any of the following characteristics, the rating of the individual note may differ from the indicated rating of the program:
1) Notes containing features which link the cash flow and/or market value to the
credit performance of any third party or parties. 2) Notes allowing for negative
coupons, or negative principal.
3) Notes containing any provision which could obligate the investor to make any
additional payments.
Market participants must determine whether any particular note is rated, and if so, at what rating level.
Note: Moody's applies numerical modifiers 1, 2, and 3 in each generic rating classification from Aa through Caa. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category.
STANDARD & POOR'S SHORT-TERM ISSUE CREDIT RATINGS
A-1: A short-term obligation rated A-1 is rated in the highest category by Standard & Poor's. The obligor's capacity to meet its financial commitment on the obligation is strong. Within this category, certain obligations are designated with a plus sign (+). This indicates that the obligor's capacity to meet its financial commitment on these obligations is extremely strong.
A-2: A short-term obligation rated A-2 is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rating categories. However, the obligor's capacity to meet its financial commitment on the obligation is satisfactory.
A-3: A short-term obligation rated A-3 exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.
B: A short-term obligation rated B is regarded as having significant speculative characteristics. The obligor currently has the capacity to meet its financial commitment on the obligation; however, it faces major ongoing uncertainties which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation.
C: A short-term obligation rated C is currently vulnerable to nonpayment and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation.
D: A short-term obligation rated D is in payment default. The D rating category is used when payments on an obligation 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. The D rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are jeopardized.
STANDARD & POOR'S LONG-TERM ISSUE CREDIT RATINGS
Issue credit ratings are based, in varying degrees, on the following considerations:
o Likelihood of payment-capacity and willingness of the obligor to meet its financial commitment on an obligation in accordance with the terms of the obligation;
o Nature of and provisions of the obligation;
o Protection afforded by, and relative position of, the obligation in the event of bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other laws affecting creditors' rights.
The issue rating definitions are expressed in terms of default risk. As such, they pertain to senior obligations of an entity. Junior obligations are typically rated lower than senior obligations, to reflect the lower priority in bankruptcy, as noted above. (Such differentiation applies when an entity has both senior and subordinated obligations, secured and unsecured obligations, or operating company and holding company obligations.) Accordingly, in the case of junior debt, the rating may not conform exactly with the category definition.
AAA: An obligation rated AAA has the highest rating assigned by Standard & Poor's. The obligor's capacity to meet its financial commitment on the obligation is extremely strong.
AA: An obligation rated AA differs from the highest rated obligations only in small degree. The obligor's capacity to meet its financial commitment on the obligation is very strong.
A: An obligation rated A is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rated categories. However, the obligor's capacity to meet its financial commitment on the obligation is still strong.
BBB: An obligation rated BBB exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.
Obligations rated BB, B, CCC, CC, and C are regarded as having significant speculative characteristics. BB indicates the least degree of speculation and C the highest. While such obligations will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions.
BB: An obligation rated BB is less vulnerable to nonpayment than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation.
B: An obligation rated B is more vulnerable to nonpayment than obligations rated BB, but the obligor currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial, or economic conditions will likely impair the obligor's capacity or willingness to meet its financial commitment on the obligation.
CCC: An obligation rated CCC is currently vulnerable to nonpayment, and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation.
CC: An obligation rated CC is currently highly vulnerable to nonpayment.
C: A subordinated debt or preferred stock obligation rated C is CURRENTLY HIGHLY VULNERABLE to nonpayment. The C rating may be used to cover a situation where a bankruptcy petition has been filed or similar action taken, but payments on this obligation are being continued. A C also will be assigned to a preferred stock issue in arrears on dividends or sinking fund payments, but that is currently paying.
D: An obligation rated D is in payment default. The D rating category is used when payments on an obligation 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. The D rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are jeopardized.
Plus (+) or minus (-): The ratings from AA to CCC may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories.
r: This symbol is attached to the ratings of instruments with significant noncredit risks. It highlights risks to principal or volatility of expected returns which are not addressed in the credit rating.
N.R.: This indicates that no 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 obligation as a matter of policy.
LOCAL CURRENCY AND FOREIGN CURRENCY RISKS
Country risk considerations are a standard part of Standard & Poor's analysis for credit ratings on any issuer or issue. Currency of repayment is a key factor in this analysis. An obligor's capacity to repay foreign currency obligations may be lower than its capacity to repay obligations in its local currency due to the sovereign government's own relatively lower capacity to repay external versus domestic debt. These sovereign risk considerations are incorporated in the debt ratings assigned to specific issues. Foreign currency issuer ratings are also distinguished from local currency issuer ratings to identify those instances where sovereign risks make them different for the same issuer.
20. APPENDIX B - PERFORMANCE STATISTICS
Not applicable1.
1 As of the date of this statement of additional information, the fund had not yet completed a fiscal year.
COMPARATIVE PERFORMANCE INDEX DESCRIPTIONS
The following securities indices are well known, unmanaged measures of market performance. Advertisements and sales literature for the fund may refer to these indices or may present comparisons between the performance of the fund and one or more of the indices. Other indices may also be used if appropriate. The indices are not available for direct investment. The data presented are not meant to be indicative of the performance of the fund, do not reflect past performance and do not guarantee future results.
STANDARD &POOR'S 500 INDEX. The Standard & Poor's 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.
DOW JONES INDUSTRIAL AVERAGE. This is a total return index based on the performance of stocks of 30 blue chip companies widely held by individuals and institutional investors. The index serves as a measure of the entire U.S. market, covering such diverse industries as financial services, technology, retail, entertainment and consumer goods.
U.S. 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. Prior to January 1978, the Consumer Price Index (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.
MERRILL LYNCH HIGH YIELD MASTER II INDEX. The Merrill Lynch High Yield Master II Index is a broad-based measure of the performance of the non-investment grade U.S. domestic bond market.
MERRILL LYNCH INDEX OF CONVERTIBLE BONDS (SPECULATIVE QUALITY). The Merrill
Lynch Index of Convertible Bonds (Speculative Quality) is a
market-capitalization weighted index including mandatory and non-mandatory
domestic corporate convertible securities.
MERRILL LYNCH GLOBAL HIGH YIELD INDEX. The Merrill Lynch Global High Yield Index is a broad-based measure of the performance of the U.S. and non-U.S. non-investment grade bond markets.
LONG-TERM U.S. GOVERNMENT BONDS. The total returns on long-term government bonds after 1977 are constructed with data from The Wall Street Journal and are calculated as the change in the flat price or and-interest price. From 1926 to 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.
INTERMEDIATE-TERM U.S. GOVERNMENT BONDS. Total returns of intermediate-term government bonds after 1987 are calculated from The Wall Street Journal prices, using the change in flat price. Returns from 1934 to 1986 are obtained from the CRSP government bond file.
MORGAN STANLEY CAPITAL INTERNATIONAL ("MSCI") INDICES: These unmanaged indices are in U.S. dollar terms with or without dividends reinvested and measure the performance of developed and emerging stock markets in individual countries and regions around the world.
MSCI EUROPE, AUSTRALASIA, FAR EAST (EAFE) INDEX. The MSCI EAFE Index is a widely
recognized capitalization-weighted measure of 22 international stock markets.
MSCI EMERGING MARKETS FREE INDEX. The MSCI Emerging Markets Free Index is an unmanaged, capitalization-weighted measure of securities trading in emerging markets; it reflects only those securities available to foreign investors.
MSCI WORLD INDEX. The MSCI World Index is a widely recognized capitalization-weighted index of stocks traded in the United States and in the 22 countries represented in the MSCI EAFE Index.
MSCI ALL COUNTRY (AC) WORLD FREE EX USA INDEX. The MSCI AC World Free ex USA Index is a widely recognized capitalization-weighted index of stocks traded in securities markets outside of the U.S.
MSCI EUROPE INDEX. The MSCI Europe Index is a capitalization-weighted index of the 15 European country indexes included in the MSCI EAFE Index. These countries are: Austria, Belgium Denmark, Finland, France, Germany, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom.
MSCI WORLD TELECOMMUNICATION SERVICES INDEX. The MSCI World Telecommunication Services Index is a global index that measures the performance of a group of related industries that comprise the telecommunications sector in developed markets.
MSCI WORLD HEALTH CARE INDEX. The MSCI World Health Care Index is a global index that measures the performance of a group of related industries that comprise the health care sector in developed markets.
MSCI WORLD FINANCIALS INDEX. The MSCI World Financials Index is a global index that measures the performance of a group of related industries that comprise the financial sector in developed markets.
MSCI WORLD ENERGY INDEX. The MSCI World Energy Index is a global index that measures the performance of a group of related industries that comprise the energy sector in developed markets.
MSCI WORLD UTILITIES INDEX. The MSCI World Utilities Index is a global index that measures the performance of a group of related industries that comprise the utilities sector in developed markets.
MSCI WORLD INDUSTRIALS INDEX. The MSCI World Industrials Index is a global index that measures the performance of a group of related industries that comprise the industrials sector in developed markets.
MSCI WORLD MATERIALS INDEX. The MSCI World Materials Index is a global index that measures the performance of a group of related industries that comprise the materials sector in developed markets.
MSCI WORLD CONSUMER DISCRETIONARY INDEX. The MSCI World Consumer Discretionary Index is a global index that measures the performance of a group of related industries that comprise the consumer discretionary sector in developed markets.
MSCI WORLD CONSUMER STAPLES INDEX. The MSCI World Consumer Staples Index is a global index that measures the performance of a group of related industries that comprise the consumer staples sector in developed markets.
6-MONTH CDS. Data sources include the Federal Reserve Bulletin and The Wall Street Journal.
LONG-TERM U.S. CORPORATE BONDS. Since 1969, corporate bond total returns are represented by the Salomon Brothers Long-Term High-Grade Corporate Bond Index. As 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 with at least 10 years to maturity.
LEHMAN BROTHERS GOVERNMENT/CREDIT BOND INDEX. The Lehman Brothers Government/Credit Bond Index is an unmanaged, composite index of the U.S. bond market. It contains all Treasury and government agency securities, investment grade corporate bonds and Yankee bonds.
LEHMAN BROTHERS GOVERNMENT BOND INDEX. The Lehman Brothers Government Bond Index is an unmanaged measure of the performance of U.S. Treasury debt, all publicly issued debt of U.S. government agencies and quasi-federal corporations, and corporate debt guaranteed by the U.S. government.
LEHMAN BROTHERS MORTGAGE-BACKED INDEX. The Lehman Brothers Mortgage-Backed Index is an unmanaged index including 15- and 30-year fixed rate securities backed by mortgage pools of the Government National Mortgage Association (GNMA), Federal Home Loan Mortgage Corporation (FHLMC) and Federal National Mortgage Association (FNMA).
LEHMAN BROTHERS MUNICIPAL BOND INDEX. The Lehman Brothers Municipal Bond Index is an unmanaged measure of approximately 15,000 municipal bonds. Bonds in the index have a minimum credit rating of BBB, were part of at least a $50 million issuance made within the past five years and have a maturity of at least two years.
LEHMAN BROTHERS U.S. UNIVERSAL INDEX. The Lehman Brothers U.S. Universal Index is the union of the U.S. Aggregate Index, the U.S. High Yield Corporate Index, the 144A Index, the Eurodollar Index, the Emerging Markets Index, the non-ERISA portion of the CMBS Index, and the CMBS High Yield Index. Municipal debt, private placements and non-dollar-denominated issues are excluded.
U.S. (30-DAY) TREASURY BILLS. For the U.S. Treasury Bill Index, data from The Wall Street Journal are used after 1977; the CRSP government bond file is the source until 1976.
NATIONAL ASSOCIATION OF REAL ESTATE INVESTMENT TRUSTS ("NAREIT") EQUITY REIT INDEX. All of the data are based upon the last closing price of the month for all tax-qualified REITs listed on the NYSE, AMEX and Nasdaq. The data are market-value-weighted.
RUSSELL U.S. EQUITY INDEXES:
RUSSELL 3000(R)INDEX. Measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market.
RUSSELL 1000(R) INDEX. Measures the performance of the 1,000 largest companies in the Russell 3000 Index, which represents approximately 92% of the total market capitalization of the Russell 3000 Index.
RUSSELL 2000(R) INDEX. Measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represents approximately 8% of the total market capitalization of the Russell 3000 Index.
RUSSELL MIDCAP(R) INDEX. Measures the performance of the 800 smallest companies in the Russell 1000 Index, which represent approximately 25% of the total market capitalization of the Russell 1000 Index.
RUSSELL 3000(R) GROWTH INDEX. Measures the performance of those Russell 3000 Index companies with higher price-to-book ratios and higher forecasted growth values. The stocks in this index are also members of either the Russell 1000 Growth or the Russell 2000 Growth indexes.
RUSSELL 3000(R) VALUE INDEX. Measures the performance of those Russell 3000 Index companies with lower price-to-book ratios and lower forecasted growth values. The stocks in this index are also members of either the Russell 1000 Value or the Russell 2000 Value indexes.
RUSSELL 1000(R) GROWTH INDEX. Measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values.
RUSSELL 1000(R) VALUE INDEX. Measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values.
RUSSELL 2000(R) GROWTH INDEX. Measures the performance of those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values.
RUSSELL 2000(R) VALUE INDEX. Measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values.
RUSSELL MIDCAP(R) GROWTH INDEX. Measures the performance of those Russell Midcap companies with higher price-to-book ratios and higher forecasted growth values. The stocks are also members of the Russell 1000(R) Growth index.
RUSSELL MIDCAP(R) VALUE INDEX. Measures the performance of those Russell Midcap companies with lower price-to-book ratios and lower forecasted growth values. The stocks are also members of the Russell 1000(R) Value index.
WILSHIRE REAL ESTATE SECURITIES INDEX. The Wilshire Real Estate Securities Index is a broad measure of the performance of publicly traded real estate securities, such as real estate investment trusts (REITs) and real estate operating companies (REOCs). The index is capitalization-weighted and is rebalanced monthly. Returns are calculated on a buy and hold basis.
STANDARD & POOR'S MIDCAP 400 INDEX. The Standard & Poor's MidCap 400 Index is an unmanaged measure of 400 domestic stocks chosen for market size, liquidity and industry group representation.
LIPPER INDEXES: These indexes represent equally weighted performance, adjusted for capital gain distributions and income dividends, of mutual funds that are considered peers of the Pioneer mutual funds. Lipper, Inc. is an independent firm that tracks mutual fund performance.
LIPPER GROWTH AND INCOME FUND INDEX. The Lipper Growth and Income Fund Index is a measure of the investment performance of mutual funds with a growth and income investment objective.
LIPPER GROWTH FUND INDEX. The Lipper Growth Fund Index is a measure of the investment performance of mutual funds with a growth investment objective.
LEHMAN BROTHERS AGGREGATE BOND INDEX. The Lehman Brothers Aggregate Bond Index is a widely recognized market value-weighted measure of government and corporate securities, agency mortgage pass-through securities, asset-backed securities and commercial mortgage-based securities.
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 to 1987; and The Wall
Street Journal thereafter.
NASDAQ COMPOSITE INDEX. The Nasdaq Composite Index is a capitalization-weighted index based on the total market value of all the issues that compose it. It reflects the performance of more than 4,000 companies.
Sources: Dow Jones & Company, Inc., Ibbotson Associates, Morgan Stanley Capital International, NAREIT, Frank Russell Company, Wilshire Associates Incorporated, Towers Data Systems, Lipper, Inc. and PIM-USA
21. APPENDIX C - OTHER PIONEER INFORMATION
The Pioneer group of mutual funds was established in 1928 with the creation of Pioneer Fund. Pioneer is one of the oldest and most experienced money managers in the U.S.
As of June 30, 2002, Pioneer and its investment management affiliate, Pioneer Investment Management Limited, employed a professional investment staff of approximately 180.
Total assets of all Pioneer U.S. mutual funds at June 30, 2002, were approximately $20 billion representing 1,257,787 shareholder accounts, including 732,385 non-retirement accounts and 525,402 retirement accounts.
PART C - OTHER INFORMATION
Item 23. Exhibits
(a)(1) Agreement and Declaration of Trust.(1)
(a)(2) Certificate of Trust.(1)
(b) By-Laws.(1)
(c) None.
(d) Management Contract with Pioneer Investment
Management, Inc.(2)
(e)(1) Underwriting Agreement with Pioneer Funds
Distributor, Inc.(2)
(e)(2) Dealer Sales Agreement.(3)
(f) None.
(g) Custodian Agreement with Brown Brothers
Harriman & Co.(2)
(h)(1) Investment Company Service Agreement with
Pioneer Investment Management Shareholder Services, Inc.(2)
(h)(2) Administration Agreement with Pioneer Investment
Management, Inc. (formerly Pioneering Management
Corporation).(2)
(h)(3) Expense Limit and Reimbursement Agreement.(2)
(i) Opinion of Counsel.(2)
(j) Consent of Independent Auditors.(2)
(k) None.
(l) Share Purchase Agreement.(2)
(m)(1) Class A Distribution Plan.(2)
(m)(2) Class B Distribution Plan.(2)
(m)(3) Class C Distribution Plan.(2)
(n) Multiple Class Plan Pursuant to Rule 18f-3.(2)
(o) Not applicable.
(p) Code of Ethics.(2)
N/A Powers of Attorney.(1)
(1) Previously filed. Incorporated herein by reference from the exhibits included with the Registration Statement as filed with the Securities and Exchange Commission (the "SEC") on May 30, 2002 (Accession No.0001174520-02-000007).
(2) Filed herewith.
(3) To be filed at a later date.
Item 24. Persons Controlled by or Under Common Control with the Fund
None.
Item 25. Indemnification
Except for the Agreement and Declaration of Trust, dated May 7, 2002, the "Declaration"), establishing the Fund as a business trust under Delaware law, there is no contract, arrangement or statute under which any Trustee, officer, underwriter or affiliated person of the Fund is insured or indemnified. The Declaration provides that every person who is, or has been, a Trustee or an officer, employee or agent of the Fund shall be indemnified by the Fund or the appropriate Fund 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 Trustee, officer, employee or agent and against amounts paid or incurred by him in the settlement thereof.
Insofar as indemnification for liability arising under the Securities Act of 1933, as amended (the "1933 Act"), may be available to Trustees, officers and controlling persons of the Fund pursuant to the foregoing provisions, or otherwise, the Fund has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the 1933 Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Fund of expenses incurred or paid by a Trustee, officer or controlling person of the Fund in the successful defense of any action, suit or proceeding) is asserted by such Trustee, officer or controlling person in connection with the securities being registered, the Fund 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 1933 Act and will be governed by the final adjudication of such issue.
Item 26. Business and Other Connections of Investment Adviser
Pioneer Investment Management, Inc. ("Pioneer Investments") is a registered investment adviser under the Investment Advisers Act of 1940, as amended, and is an indirect, wholly owned subsidiary of UniCredito Italiano S.p.A. ("UniCredito"). Pioneer Investments manages investment companies, pension and profit sharing plans, trusts, estates or charitable organizations and other corporations or business entities.
To the knowledge of the Fund, none of Pioneer Investments' directors or executive officers is or has been during their employment with Pioneer Investments engaged in any other business, profession, vocation or employment of a substantial nature for the past two fiscal years, except as noted below. Certain directors and officers, however, may hold or may have held various positions with, and engage or have engaged in business for, the investment companies that Pioneer Investments manages and/or other UniCredito subsidiaries.
OTHER BUSINESS, PROFESSION, VOCATION OR
EMPLOYMENT OF SUBSTANTIAL NATURE WITHIN LAST TWO
NAME OF DIRECTOR/OFFICER FISCAL YEARS
John F. Cogan, Jr. Of Counsel, Hale and Dorr LLP, 60 State
Street, Boston, Massachusetts 02109
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Item 27. Principal Underwriters
(a) See "Management of the Fund" in the Statement of Additional Information.
(b) Directors and officers of Pioneer Funds Distributor, Inc.:
POSITIONS AND OFFICES WITH POSITIONS AND OFFICES WITH
NAME UNDERWRITER FUND
Daniel T. Geraci Chairman, Director and Executive Vice President and
President Trustee
Steven M. Graziano Director and Executive Vice
President None
William F. O'Grady Director and Executive Vice
President None
Marcy L. Supovitz Executive Vice President None
Jennifer Brountas Senior Vice President None
Philip Haley Senior Vice President None
Barry Knight Senior Vice President None
William A. Misata Senior Vice President None
Natale Algiere Senior Vice President None
Michael B. Glenn Senior Vice President None
Marc Rappaport Senior Vice President None
Richard L. Sardelli Senior Vice President None
Jeffrey Saunders Senior Vice President None
Timothy J. Stegner Senior Vice President None
Kristine Swanson Senior Vice President None
Mark D. Goodwin Treasurer None
Dorothy E. Bourassa Clerk Assistant Secretary
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The principal business address of each of these individuals is 60 State Street, Boston, Massachusetts 02109-1820.
(c) Not applicable.
Item 30. Undertakings
Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Fund has duly caused this registration statement to be signed on its behalf by the undersigned, duly authorized, in the City of Boston and The Commonwealth of Massachusetts on the 6th day of August, 2002.
PIONEER LARGE CAP GROWTH FUND
By: /s/ Daniel T. Geraci
Daniel T. Geraci
Executive Vice President
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Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities and on the date indicated:
Signature Title
John F. Cogan, Jr.* Chairman of the Board )
John F. Cogan, Jr. and President )
(Principal Executive )
Officer) )
)
)
Vincent Nave* Chief Financial Officer )
Vincent Nave and Treasurer (Principal )
Financial and Accounting )
Officer) )
)
)
Trustees: )
)
)
Mary K. Bush* )
Mary K. Bush )
)
)
John F. Cogan, Jr.* )
John F. Cogan, Jr. )
)
)
)
Richard H. Egdahl* )
Richard H. Egdahl )
)
)
Margaret B. W. Graham* )
Margaret B. W. Graham )
)
)
Marguerite A. Piret* )
Marguerite A. Piret )
)
)
/s/ Daniel T. Geraci )
Daniel T. Geraci )
)
)
Stephen K. West* )
Stephen K. West )
)
)
John Winthrop* )
John Winthrop )
)
)
*By: /s/ Daniel T. Geraci Dated: August 6, 2002)
Daniel T. Geraci
Attorney-in-fact
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EXHIBIT INDEX
Exhibit
Number Document Title
(d) Management Contract with Pioneer Investment
Management, Inc.
(e)(1) Underwriting Agreement with Pioneer Funds
Distributor, Inc.
(g) Custodian Agreement with Brown Brothers
Harriman & Co
(h)(1) Investment Company Service Agreement with
Pioneer Investment Management Shareholder Services, Inc.
(h)(2) Administration Agreement with Pioneer Investment
Management, Inc. (formerly Pioneering Management
Corporation).
(h)(3) Expense Limit and Reimbursement Agreement
(i) Opinion of Counsel
(j) Consent of Independent Auditors
(l) Share Purchase Agreement
(m)(1) Class A Distribution Plan
(m)(2) Class B Distribution Plan
(m)(3) Class C Distribution Plan
(n) Multiple Class Plan Pursuant to Rule 18f-3
(p) Code of Ethics
N/A Powers of Attorney
MANAGEMENT CONTRACT
THIS AGREEMENT dated as of this 1st day of August, 2002 between Pioneer Large Cap Growth Fund, a Delaware business trust (the "Trust"), and Pioneer Investment Management, Inc., a Delaware corporation (the "Manager").
W I T N E S S E T H
WHEREAS, the Trust is registered as an open-end 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 for the purpose of registering its shares for public offering under the Securities Act of 1933, as amended (the "1933 Act").
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 Trust.
NOW, THEREFORE, in consideration of the mutual covenants and benefits set forth herein, the Trust and the Manager do hereby agree as follows:
1. The Manager will regularly provide the Trust with investment research, advice and supervision and will furnish continuously an investment program for the Trust, consistent with the investment objectives and policies of the Trust. The Manager will determine from time to time what securities shall be purchased for the Trust, what securities shall be held or sold by the Trust and what portion of the Trust's assets shall be held uninvested as cash, subject always to the provisions of the Trust's Certificate of Trust, Agreement and Declaration of Trust, By-Laws and its registration statements under the 1940 Act and under the 1933 Act covering the Trust's shares, as filed with the Commission, and to the investment objectives, policies and restrictions of the Trust, 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 Trust 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.
2. The Manager will, to the extent reasonably required in the conduct of the business of the Trust and upon the Trust's request, furnish to the Trust research, statistical and advisory reports upon the industries, businesses, corporations or securities as to which such requests shall be made, whether or not the Trust 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 securities.
3. The Manager will maintain all books and records with respect to the Trust's securities transactions required by subparagraphs (b)(5), (6), (9) and (10) and paragraph (f) of Rule 31a-1 under the 1940 Act (other than those records being maintained by the custodian or transfer agent appointed by the Trust) and preserve such records for the periods prescribed therefor by Rule 31a-2 under the 1940 Act. The Manager will also provide to the Board of Trustees such periodic and special reports as the Board may reasonably request.
4. 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 Trust's affairs and investments, and shall arrange, if desired by the Trust, for members of the Manager's organization to serve as officers or agents of the Trust.
5. 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" (as defined in the 1940 Act) of, the Manager and all officers of the Trust as such; and (ii) all expenses not hereinafter specifically assumed by the Trust where such expenses are incurred by the Manager or by the Trust in connection with the management of the affairs of, and the investment and reinvestment of the assets of, the Trust.
6. 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; (iv) 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 federal regulatory agencies, state or blue sky securities agencies and foreign jurisdictions, including the preparation of prospectuses and statements of additional information for filing with such regulatory authorities; (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 and the Trustees; (ix) any distribution fees paid by the Trust in accordance with Rule 12b-1 promulgated by the Commission pursuant to the 1940 Act; (x) compensation of those Trustees of the Trust who are not affiliated with, or "interested persons" of, the Manager, the Trust (other than as Trustees), or Pioneer Funds Distributor, Inc.; (xi) the cost of preparing and printing share certificates; and (xii) interest on borrowed money, if any.
7. In addition to the expenses described in Section 6 above, the Trust shall pay all brokers' and underwriting commissions chargeable to the Trust in connection with securities transactions to which the Trust is a party.
8. The Trust shall pay to the Manager, as compensation for the Manager's Services and expenses assumed hereunder, a fee at the rate of 0.75% per annum of the Trust's average daily net assets.
9. 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
Section 8 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.
10. 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.
11. It is understood that the Manager may employ one or more sub-investment advisers (each a "Subadviser") to provide investment advisory services to the Trust by entering into a written agreement with each such Subadviser; provided, that any such agreement first shall be approved by the vote of a majority of the Trustees, including a majority of the Trustees who are not "interested persons" (as defined in the 1940 Act) of the Trust, the Manager or any such Subadviser, and otherwise approved in accordance with the requirements of the 1940 Act or an exemption therefrom. The authority given to the Manager in Sections 1 through 13 hereof may be delegated by it under any such agreement; provided, that any Subadviser shall be subject to the same restrictions and limitations on investments and brokerage discretion as the Manager. The Trust agrees that the Manager shall not be accountable to the Trust or the Trust's shareholders for any loss or other liability relating to specific investments directed by any Subadviser, even though the Manager retains the right to reverse any such investment because, in the event a Subadviser is retained, the Trust and the Manager will rely almost exclusively on the expertise of such Subadviser for the selection and monitoring of specific investments.
12. 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 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.
13. 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 adviser 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 the 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.
14. In connection with purchases or sales of securities for the account of the Trust, 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 securities for the Trust'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 Trust the most favorable execution and net price available except as described herein. It is also understood that it is desirable for the Trust 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 Trust 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 Trust 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. In addition, subject to the Manager's obligation to seek the most favorable execution and net price available, the Manager may consider the sale of the Trust's shares in selecting brokers and dealers.
15. On occasions when the Manager deems the purchase or sale of a security to be in the best interest of the Trust as well as other clients, the Manager may, to the extent permitted by applicable laws and regulations, 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 Trust and to such clients.
16. This Agreement shall become effective on the date hereof and shall remain in force until July 31, 2004 and from year to year thereafter, but only so long as its continuance is approved in accordance with the requirements of the 1940 Act or an exemption therefrom, subject to the right of the Trust and the Manager to terminate this contract as provided in Section 17 hereof.
17. Either party hereto may, without penalty, terminate this Agreement by vote of its Board of Trustees or Directors, as the case may be, or by vote of a "majority of the outstanding voting securities" (as defined in the 1940 Act) of the Trust or the Manager, as the case may be, and the giving of 60 days' written notice to the other party.
18. 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.
19. The Trust agrees that in the event that neither the Manager nor any of its affiliates acts as an investment adviser to the Trust, the name of the Trust will be changed to one that does not contain the name "Pioneer" or otherwise suggest an affiliation with the Manager.
20. The Manager is an independent contractor and not an employee of the Trust for any purpose. If any occasion should arise in which the Manager gives any advice to its clients concerning the shares of the Trust, the Manager will act solely as investment counsel for such clients and not in any way on behalf of the Trust.
21. 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.
22. This Agreement and all performance hereunder shall be governed by and construed in accordance with the laws of The Commonwealth of Massachusetts.
23. 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.
24. 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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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 LARGE CAP GROWTH FUND /s/ Dorothy E. Bourassa /s/ Daniel T. Geraci Dorothy E. Bourassa Daniel T. Geraci Assistant Secretary Executive Vice President ATTEST: PIONEER INVESTMENT MANAGEMENT, INC. /s/ Dorothy E. Bourassa /s/ Daniel T. Geraci Dorothy E. Bourassa Daniel T. Geraci Secretary President |
UNDERWRITING AGREEMENT
THIS UNDERWRITING AGREEMENT, dated this 1st day of August 2002, by and between Pioneer Large Cap Growth Fund, a Delaware business trust ("Trust"), and Pioneer Funds Distributor, Inc., a Massachusetts corporation (the "Underwriter")
WITNESSETH
WHEREAS, the Trust is registered as an open-end 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 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 the Trust 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, the Trust and the Underwriter do hereby agree as follows:
1. The Trust hereby grants to the Underwriter the right and option to purchase shares of beneficial interest of each class of each Portfolio of the Trust (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 the Trust 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 for each class of Shares as described in the Registration Statement, including the Prospectus(es), 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 the Trust and as further outlined in the Trust's Prospectus(es). The offering price shall be subject to any provisions set forth in the Prospectus(es) 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 the Trust 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 the Trust on 60 days' written notice to the Underwriter, or by the Underwriter upon similar notice to the Trust. 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 the Shares. Finally, this Agreement may also be terminated by the Trust 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 Shares during the most recent 12-month period exceeded 10% of all Shares 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:
With respect to Class A Shares (i) that part of the sales charge which is retained by the Underwriter after allowance of discounts to dealers as set forth, if required, 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 the Trust which may be in effect.
With respect to Class B Shares (i) the Underwriter's Allocable Portion (as defined in Section 9) of the Distribution Fee, if any, payable from time to time to the Underwriter under the Trust's Class B Distribution Plan and (ii) the contingent deferred sales charge payable with respect to Class B Shares sold through the Underwriter as set forth in the Registration Statement, including the Prospectus, filed with the Commission and in effect at the time of the sale of such Class B Shares.
With respect to Class C Shares (i) that part of the front-end sales charge which is retained by the Underwriter after allowance of discounts to dealers as set forth, if required, in the Registration Statement, including the Prospectus, filed with the Commission and in effect at the time of the offering, as amended, (ii) the Distribution Fee, if any, payable from time to time to the Underwriter under the Trust's Class C Distribution Plan and (iii) the contingent deferred sales charge payable with respect to Class C Shares sold through the Underwriter as set forth in the Registration Statement, including the Prospectus, filed with the Commission and in effect at the time of the sale of such Class C Shares.
With respect to Class Y Shares, the Underwriter shall not be entitled to any compensation.
With respect to any future class of Shares, the Underwriter shall be entitled to such consideration as the Trust and the Underwriter shall agree at the time such class of Shares is established.
Notwithstanding anything to the contrary herein, subsequent to the issuance of a Class B Share, the Trust agrees not to take any action to waive or change any contingent deferred sales charge (including, without limitation, by change in the rules applicable to conversion of Class B Shares into another class) in respect of such Class B Shares, except (i) as provided in the Trust's Prospectus or Statement of Additional Information in effect on August 15, 2002 (if any) or the Trust's Prospectus or Statement of Additional Information in effect on the date of the Trust's initial public offering of such Shares, if later, or (ii) as required by a change in the 1940 Act and the rules and regulations thereunder, the Conduct Rules of the NASD or any order of any court or governmental agency enacted, issued or promulgated after the date of the Trust's Prospectus and Statement of Additional Information determined in clause (i) above. Neither the termination of the Underwriter's role as principal underwriter of the Class B Shares nor the termination of this Agreement nor the termination or modification of the Class B Distribution Plan shall terminate the Underwriter's right to the contingent deferred sales charge with respect to Class B Shares sold through said Underwriter or Class B Shares issued through one or a series of exchanges of shares of another investment company for which the Underwriter acts as principal underwriter, in each case with respect to Class B Shares or their predecessors initially issued prior to such termination or modification ("Pre-Amendment Class B Shares"). Except as provided in the preceding sentences and notwithstanding any other provisions of the Agreement or the Class B Distribution Plan, the Underwriter's entitlement to its Allocable Portion of the contingent deferred sales charge payable in respect of the Pre-Amendment Class B Shares shall be absolute and unconditional and shall not be subject to dispute, offset, counterclaim or any defense whatsoever, at law or equity, including, without limitation, any of the foregoing based on the insolvency or bankruptcy of such Underwriter.
6. Notwithstanding anything to the contrary set forth in the Distribution Plan or this Agreement, the Trust agrees to comply with respect to Pre-Amendment Class B Shares (as such term is defined in the Distribution Plan) with the provision of Sections 1(b), (d), (g) and (h) and Section 4 and Section 6 of the Trust's Class B Distribution Plan as though such provision were set forth in this Agreement.
7. Nothing contained herein shall relieve the Trust of any obligation under its management contract or any other contract with any affiliate of the Underwriter.
8. Notwithstanding anything to the contrary set forth in the Class B Distribution Plan or this Agreement, the Trust acknowledges that the Underwriter may assign, sell or pledge (collectively, "Transfer") its rights to Distribution Fees and contingent deferred sales charges with respect to Class B Shares. Upon receipt of notice of such Transfer, the Trust shall pay to the assignee, purchaser or pledgee (collectively with their subsequent transferees, "Transferees"), as third party beneficiaries, such portion of the Distribution Fees and contingent deferred sales charges payable to the Underwriter as provided in written instructions (the "Allocation Instructions") from the Underwriter to the Trust and shall pay the balance, if any, to the Underwriter. In the absence of Allocation Instructions, the Trust shall have no obligations to a Transferee.
9. Payments of the Distribution Fee and contingent deferred sales charges with respect to Class B Shares shall be allocated between the Underwriter (or its Transferee) and such co- or successor principal underwriter (each an "Allocable Portion"), as provided in the Allocation Procedures attached hereto.
10. 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 the Trust 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 the Trust and that no Trustee, officer or holder of Shares shall be personally liable for any of the foregoing liabilities. The Trust's Agreement and Declaration of Trust describes in detail the respective responsibilities and limitations on liability of the Trustees, officers and holders of Shares.
11. This Agreement shall automatically terminate in the event of its assignment (as that term is defined in the 1940 Act).
12. 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 seals to be hereto affixed as of the day and year first above written.
ATTEST: PIONEER LARGE CAP GROWTH FUND
/s/ Dorothy E. Bourassa By: /s/ Daniel T. Geraci Dorothy E. Bourassa Daniel T. Geraci Assistant Secretary Executive Vice President ATTEST: PIONEER FUNDS DISTRIBUTOR, INC. /s/ Dorothy E. Bourassa By: /s/ Steven M/ Graziano Dorothy E. Bourassa Steven M. Graziano Clerk President |
CUSTODIAN AGREEMENT
THIS AGREEMENT, dated as of July 1, 2001 between each of the open-end management investment companies listed on Appendix A hereto each a Fund (as amended from time to time) severally and not jointly, (each a FUND), and BROWN BROTHERS HARRIMAN & CO., a limited partnership formed under the laws of the State of New York (BBH&CO. or the CUSTODIAN). Each Fund is organized under either the laws of the State of Delaware or the Commonwealth of Massachusetts and registered with the Commission under the 1940 Act, as amended.
W I T N E S S E T H:
WHEREAS, the Fund wishes to employ BBH&Co. to act as custodian for the Fund and to provide related services, all as provided herein, and BBH&Co. is willing to accept such employment, subject to the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the Fund and BBH&Co. hereby agree, as follows:
1. APPOINTMENT OF CUSTODIAN. The Fund hereby appoints and employs BBH&Co. as the Fund's custodian for the term and subject to the conditions of this Agreement, including the related 17f-5 Delegation Schedule, and BBH&Co. hereby accepts such appointment. All Investments of the Fund delivered to the Custodian or its agents or Subcustodians shall be dealt with as provided in this Agreement. The duties of the Custodian with respect to the Fund's Investments shall be only as set forth expressly in this Agreement which duties are generally comprised of safekeeping and various administrative duties that will be performed in accordance with Instructions and as reasonably required to effect Instructions.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE FUND. The Fund hereby represents, warrants and covenants each of the following:
2.1 This Agreement has been, and at the time of delivery of each Instruction such Instruction will have been, duly authorized, executed and delivered by the Fund. This Agreement does not conflict with or constitute a default under the Fund's prospectus, Certificate of Trust and By-Laws, or any other agreement, judgment, order or decree to which the Fund is a party or by which it is bound.
2.2 The Fund shall safeguard and shall be responsible for the safekeeping of any testkeys, identification codes, passwords, other security devices or statements of account with which the Custodian provides it. In furtherance and not in limitation of the foregoing, in the event the Fund utilizes any on-line service offered by the Custodian, the Fund shall be fully responsible for the security of its connecting terminal, access thereto and the proper and authorized use thereof and the initiation and application of continuing effective safeguards in respect thereof. Additionally, unless otherwise agreed in connection with the provision of such (service) (software) if the Fund uses any on-line or similar communications service made available by the Custodian, the Fund shall be responsible for ensuring the security of its access to the service and for its use of the service, and shall only attempt to access the service and the Custodian's computer systems as directed by the Custodian. Unless otherwise agreed in connection with the provision of such (service) (software). If the Custodian provides any computer software to the Fund relating to the services described in this Agreement, the Fund will only use the software for the purposes for which the Custodian provided the software to the Fund, and will abide by the license agreement accompanying the software and any other security policies which the Custodian provides to the Fund.
3. REPRESENTATION AND WARRANTY OF BBH&CO. BBH&Co. hereby represents and warrants that this Agreement has been duly authorized, executed and delivered by BBH&Co. and does not and will not violate any Applicable Law or conflict with or constitute a default under BBH&Co.'s limited partnership agreement or any agreement, instrument, judgment, order or decree to which BBH&Co. is a party or by which it is bound.
4. INSTRUCTIONS. Unless otherwise explicitly indicated herein, the Custodian shall perform its duties pursuant to Instructions. As used herein, the term INSTRUCTION shall mean a directive initiated by the Fund, acting directly or through its board of trustees, officers or other Authorized Persons, which directive shall conform to the requirements of this Section 4.
4.1 AUTHORIZED PERSONS. For purposes hereof, an AUTHORIZED PERSON shall be a person or entity authorized to give Instructions for or on behalf of the Fund by written notices to the Custodian or otherwise in accordance with procedures delivered to and acknowledged by the Custodian. Such Authorized Persons may be identified by the Board of Trustees of the Fund by name, title or positions, may include officers of the Fund authorized by the Board of Trustees to name additional Authorized Persons and may include officers or employees of the Fund's investment adviser or its affiliates. The Custodian may treat any Authorized Person as having full authority of the Fund to issue Instructions hereunder unless the notice of authorization contains explicit limitations as to said authority. The Custodian may not
treat any Instruction from an Authorized Person directing the delivery of securities or payment to such Authorized Person to be valid for purposes of this Agreement. The Custodian shall be entitled to rely upon the authority of Authorized Persons until it receives appropriate written notice from the Fund to the contrary.
4.2 FORM OF INSTRUCTION. Each Instruction shall be transmitted by such
secured or authenticated electro-mechanical means as the Custodian shall make
available to the Fund from time to time unless the Fund shall elect to transmit
such Instruction in accordance with Subsections 4.2.1 through 4.2.3 of this
Section.
4.2.1 FUND DESIGNATED SECURED-TRANSMISSION METHOD.
Instructions may be transmitted through a secured or tested
electro-mechanical means identified by the Fund or by an Authorized
Person entitled to give Instruction and acknowledged and accepted by
the Custodian; it being understood that such acknowledgment shall
authorize the Custodian to receive and process such means of delivery
but shall not represent a judgment by the Custodian as to the
reasonableness or security of the method determined by the Authorized
Person.
4.2.2 WRITTEN INSTRUCTIONS. Instructions may be transmitted in a writing that bears the manual signature or initials of Authorized Persons.
4.2.3 OTHER FORMS OF INSTRUCTION. Instructions may also be transmitted by another means determined by the Fund or Authorized Persons and acknowledged and accepted by the Custodian (subject to the same limits as to acknowledgements as is contained in Subsection 4.2.1, above) including Instructions given orally or by SWIFT, telex or telefax (whether tested or untested).
When an Instruction is given by means established under Subsections 4.2.1 through 4.2.3, it shall be the responsibility of the Custodian to use reasonable care to adhere to any security or other procedures established in writing between the Custodian and the Authorized Person (and such other procedures as are customarily adhered to by custodians to protect client assets) with respect to such means of Instruction, but such Authorized Person shall be solely responsible for determining that the particular means chosen is reasonable under the circumstances. Telephonic or oral instructions shall be considered proper Instructions if the Custodian reasonably believes them to have been given by an Authorized Person. Telephonic or oral instructions shall be confirmed by methods established in accordance with Section 4.2.1. With respect to telefax instructions, the parties agree and acknowledge that receipt of legible instructions cannot be assured, that the Custodian cannot verify that authorized signatures on telefax instructions are original or properly affixed, and that the Custodian shall not be liable for losses or expenses incurred through actions taken in reliance on inaccurately stated, illegible or unauthorized telefax instructions; provided that if the Custodian receives Instructions that it determines to be illegible, the Custodian shall promptly seek confirmation of such Instructions from the Authorized Person sending such Instruction. The provisions of Section 4A of the Uniform Commercial Code shall apply to Funds Transfers performed in accordance with Instructions. The Funds Transfer Services Schedule to this Agreement shall comprise a designation of form of a means of delivering Instructions selected by the Custodian for purposes of this Section 4.2.
4.3 COMPLETENESS AND CONTENTS OF INSTRUCTIONS. The Authorized Person shall be responsible for assuring the adequacy and accuracy of Instructions. Particularly, upon any acquisition or disposition or other dealing in the Fund's Investments and upon any delivery and transfer of any Investment or monies, the person initiating such Instruction shall give the Custodian an Instruction with appropriate detail, including, without limitation:
4.3.1 The transaction date and the date and location of
settlement;
4.3.2 The specification of the type of transaction;
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4.3.3 A description of the Investments or monies in question, including, as appropriate, quantity, price per unit, amount of money to be received or delivered and currency information; and
4.3.4 The name of the broker or similar entity concerned with execution of the transaction.
If the Custodian shall determine that an Instruction is either unclear or incomplete, the Custodian shall give prompt notice of such determination to the Fund, and the Fund shall thereupon amend or otherwise reform such Instruction.
4.4 TIMELINESS OF INSTRUCTIONS. In giving an Instruction, the Fund shall take into consideration delays which may occur due to the involvement of a Subcustodian or agent, differences in time zones, and other factors particular to a given market, exchange or issuer. When the Custodian has established specific timing requirements or deadlines with respect to particular classes of Instructions and adequate notice thereof has been provided to the Fund, or when an Instruction is received by the Custodian at such a time that it could not reasonably be expected to have acted on such Instruction due to time zone differences or other factors beyond its reasonable control, the Custodian shall not be responsible for any increased risk or failure to timely complete any settlement to the extent that such risk arises out of such delay.
5. SAFEKEEPING OF FUND ASSETS. The Custodian shall hold Investments delivered to it or Subcustodians for the Fund in accordance with the provisions of this Section. The Custodian shall not be responsible for the safekeeping of Investments not delivered or that are not caused to be issued to it or its Subcustodians or pre-existing faults or defects in Investments that are delivered to the Custodian, or its Subcustodians. The Custodian is hereby authorized to hold with itself or a Subcustodian, and to record in one or more accounts, all Investments delivered to and accepted by the Custodian, any Subcustodian or their respective agents pursuant to an Instruction or in consequence of any corporate
action. The Custodian shall hold Investments for the account of the Fund and shall segregate Investments from assets belonging to the Custodian and shall cause its Subcustodians to segregate Investments from assets belonging to the Subcustodian in an account held for the Fund or in an account maintained by the Subcustodian generally for non-proprietary assets of the Custodian.
5.1 USE OF SECURITIES DEPOSITORIES. The Custodian may deposit and maintain Investments in any Securities Depository, either directly or through one or more Subcustodians appointed by the Custodian. Investments held in a Securities Depository shall be held (a) subject to the agreement, rules, statement of terms and conditions or other document or conditions effective between the Securities Depository and the Custodian or the Subcustodian, as the case may be, and (b) in an account for the Fund or in bulk segregation in an account maintained for the non-proprietary assets of the entity holding such Investments in the Securities Depository. If the rules and regulations of the Securities Depository prevent the Custodian, the Subcustodian or (any agent of either) from holding its clients' assets in such a separate account, the Custodian, the Subcustodian or other agent shall as appropriate segregate such Investments for benefit of the Fund or for benefit of clients of the Custodian generally on its own books.
5.2 CERTIFICATED ASSETS. Investments which are certificated may be held in registered or bearer form: (a) in the Custodian's vault; (b) in the vault of a Subcustodian or agent of the Custodian or a Subcustodian; or (c) in an account maintained by the Custodian, Subcustodian or agent at a Securities Depository; all in accordance with customary market practice in the jurisdiction in which any Investments are held provided that Securities are held in the name of the Fund or in an account of the Custodian containing only the assets of the Fund or only assets held as fiduciary or custodian for customers..
5.3 REGISTERED ASSETS. Investments which are registered may be registered in the name of the Custodian, a Subcustodian, or in the name of the Fund or a nominee for any of the foregoing, and may be held in any manner set forth in paragraph 5.2 above with or without any identification of fiduciary capacity in such registration.
5.4 BOOK ENTRY ASSETS. Investments which are represented by book-entry may be so held in an account maintained by the Book-entry Agent on behalf of the Custodian, a Subcustodian or another agent of the Custodian, or a Securities Depository.
5.5 REPLACEMENT OF LOST INVESTMENTS. In the event of a loss of Investments for which the Custodian is responsible under the terms of this Agreement, the Custodian shall replace such Investment, or in the event that such replacement cannot be effected, the Custodian shall pay to the Fund the fair market value of such Investment based on
the last available price as of the close of business in the relevant market on the date that a claim was first made to the Custodian with respect to such loss, or, if less, such other amount as shall be agreed by the parties as the date for settlement.
6. ADMINISTRATIVE DUTIES OF THE CUSTODIAN. The Custodian shall perform the following administrative duties with respect to Investments of the Fund.
6.1 PURCHASE OF INVESTMENTS. Pursuant to Instruction, Investments purchased for the account of the Fund shall be paid for (a) against delivery thereof to the Custodian or a Subcustodian, as the case may be, either directly or through a Clearing Corporation or a Securities Depository (in accordance with the rules of such Securities Depository or such Clearing Corporation), or (b) otherwise in accordance with an Instruction or Applicable Law. However, (i) in the case of repurchase agreements entered into by the Fund, the Custodian 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 of the Custodian 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, 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 for 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, 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.
6.2 SALE OF INVESTMENTS. Pursuant to Instruction, Investments sold for
the account of the Fund shall be delivered (a) against payment therefor in cash,
by certified check, bank cashiers check, bank credit or by bank wire transfer,
(b) by credit to the account of the Custodian or the applicable Subcustodian, as
the case may be, with a Clearing Corporation or a Securities Depository (in
accordance with the rules of such Securities Depository or such Clearing
Corporation), or (c) otherwise in accordance with an Instruction, Applicable Law
or the terms of the instrument representing such Investment; 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 the last sentence of Section 6.1, 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.
6.3 DELIVERY AND RECEIPT IN CONNECTION WITH BORROWINGS OF THE FUND OR OTHER COLLATERAL AND MARGIN REQUIREMENTS. Pursuant to Instruction, the Custodian may deliver or receive Investments or cash of the Fund in connection with borrowings or loans by the Fund and other collateral and margin requirements.
6.4 FUTURES AND OPTIONS. If, pursuant to an Instruction, the Custodian
shall become a party to an agreement with the Fund and a futures commission
merchant regarding margin accounts (TRI-PARTY AGREEMENT), the Custodian shall
(a) receive and retain, to the extent the same are provided to the Custodian,
confirmations or other documents evidencing the purchase or sale by the Fund of
exchange-traded futures contracts and commodity options, (b) when required by
such Tri-Party Agreement, deposit and maintain in an account opened pursuant to
such Agreement (MARGIN ACCOUNT), segregated either physically or by book-entry
in a Securities Depository for the benefit of any futures commission merchant,
such Investments as the Fund shall have designated as initial, maintenance or
variation "margin" deposits or other collateral intended to secure the Fund's
performance of its obligations under the terms of any exchange-traded futures
contracts and commodity options; and (c) thereafter pay, release or transfer
Investments into or out of the margin account in accordance with the provisions
of such Agreement. Alternatively, the Custodian may deliver Investments, in
accordance with an Instruction, to a futures commission merchant for purposes of
margin requirements in accordance with Rule 17f-6. The Custodian shall in no
event be responsible for the acts and omissions of any futures commission
merchant to whom Investments are delivered pursuant to this Section; for the
sufficiency of Investments held in any Margin Account; or, for the performance
of any terms of any exchange-traded futures contracts and commodity options.
6.5 CONTRACTUAL OBLIGATIONS AND SIMILAR INVESTMENTS. From time to time, the Fund's Investments may include Investments that are not ownership interests as may be represented by certificate (whether registered or bearer), by entry in a Securities Depository or by book entry agent, registrar or similar agent for recording ownership interests in the relevant Investment. If the Fund shall at any time acquire such Investments, including without limitation deposit obligations, loan participations, repurchase agreements and derivative arrangements, the Custodian shall (a) receive and
retain, to the extent the same are provided to the Custodian, confirmations or other documents evidencing the arrangement; and (b) perform on the Fund's account in accordance with the terms of the applicable arrangement, but only to the extent directed to do so by Instruction. The Custodian shall have no responsibility for agreements running to the Fund as to which it is not a party other than to retain, to the extent the same are provided to the Custodian, documents or copies of documents evidencing the arrangement and, in accordance with Instruction, to include such arrangements in reports made to the Fund.
6.6 EXCHANGE OF SECURITIES. Unless otherwise directed by Instruction, the Custodian shall: after prior notice of such action to the Fund: (a) exchange securities held for the account of the Fund for other securities in connection with any reorganization, recapitalization, conversion, split-up, change of par value of shares or similar event: and (b) deposit any such securities in accordance with the terms of any reorganization or protective plan.
6.7 SURRENDER OF SECURITIES. Unless otherwise directed by Instruction, the Custodian may surrender securities after prior notice of such action to the Fund: (a) in temporary form for definitive securities; (b) for transfer into the name of an entity allowable under Section 5.3; and (c) for a different number of certificates or instruments representing the same number of shares or the same principal amount of indebtedness.
6.8 RIGHTS, WARRANTS, ETC. Pursuant to Instruction, the Custodian shall
(a) deliver warrants, puts, calls, rights or similar securities to the issuer or
trustee thereof, or to any agent of such issuer or trustee, for purposes of
exercising such rights or selling such securities, and (b) deposit securities in
response to any invitation for the tender thereof.
6.9 MANDATORY CORPORATE ACTIONS. Unless otherwise directed by Instruction, the Custodian shall after prior notice of such action to the Fund: (a) comply with the terms of all mandatory or compulsory exchanges, calls, tenders, redemptions or similar rights of securities ownership affecting securities held on the Fund's account and promptly notify the Fund of such action; and (b) collect all stock dividends, rights and other items of like nature with respect to such securities.
6.10 INCOME COLLECTION. Unless otherwise directed by Instruction, the
Custodian shall collect any amount due and payable to the Fund with respect to
Investments and promptly credit the amount collected to a Principal or Agency
Account; provided, however, that the Custodian shall not be responsible for:
(a) the collection of amounts due and payable with respect to Investments that
are in default; or (b) the collection of cash or share entitlements with
respect to Investments that are not registered in the name of the Custodian or
its Subcustodians. The Custodian is hereby authorized to endorse and deliver
any instrument required to be so endorsed and delivered to effect collection
of any amount due and payable to the Fund with respect to Investments.
6.11 OWNERSHIP CERTIFICATES AND DISCLOSURE OF THE FUND'S INTEREST. The Custodian is hereby authorized to execute on behalf of the Fund ownership certificates, affidavits or other disclosure required under Applicable Law or established market practice in connection with the receipt of income, capital gains or other payments by the Fund with respect to Investments, or in connection with the sale, purchase or ownership of Investments.
With respect to securities issued in the United States of America, the Custodian [ ] may [ ] may not release the identity of the Fund to an issuer which requests such information pursuant to the Shareholder Communications Act of 1985 for the specific purpose of direct communications between such issuer and the Fund. IF NO BOX IS CHECKED, THE CUSTODIAN SHALL RELEASE SUCH INFORMATION UNTIL IT RECEIVES CONTRARY INSTRUCTIONS FROM THE FUND. With respect to securities issued outside of the United States of America, information shall be released in accordance with law or custom of the particular country in which such security is located.
6.12 PROXY MATERIALS. The Custodian shall deliver, or cause to be delivered, to the Fund proxy forms, notices of meeting, and any other notices or announcements affecting or relating to Investments received by the Custodian or any nominee. Unless authorized to do so by Instructions or proxy, neither the Custodian nor any Subcustodian shall vote any securities held for the Fund pursuant to this Agreement.
6.13. TAXES. The Custodian shall, where applicable, assist the Fund in the reclamation of taxes withheld on dividends and interest payments received by the Fund. In the performance of its duties with respect to tax withholding and reclamation, the Custodian shall be entitled to rely on the advice of counsel and upon information and advice regarding the Fund's tax status that is received from or on behalf of the Fund without duty of separate inquiry.
6.14. USE OF SEGREGATED ACCOUNTS. Upon receipt of Instructions, the
Custodian shall establish and maintain on its books a segregated account or
accounts on behalf of the Fund into which account or accounts may be transferred
cash and/or securities of the Fund (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 and (iv) as mutually agreed from time to time between the
Fund and the Custodian.
6.15 OTHER DEALINGS. The Custodian shall otherwise act as directed by Instruction, including without
limitation effecting the free payments of moneys or the free delivery of securities, provided that such Instruction shall indicate the purpose of such payment or delivery and that the Custodian shall record the party to whom such payment or delivery is made.
The Custodian shall attend to all nondiscretionary details in connection with the sale, exchange, substitution, transfer or purchase or other administration of Investments, except as otherwise directed by an Instruction.
In fulfilling the duties set forth in Sections 6.6 through 6.10 above, the Custodian shall promptly provide to the Fund all information pertaining to a corporate action which the Custodian actually receives; provided that the Custodian shall not be responsible for the completeness or accuracy of any information it receives. Any advance credit of cash or shares expected to be received as a result of any corporate action shall be subject to actual collection and may, when the Custodian deems collection unlikely, be reversed by the Custodian.
The Custodian may at any time or times in its discretion appoint (and may at any time remove) agents (other than Subcustodians) to carry out some or all of the administrative provisions of this Agreement (AGENTS), provided, however, that the appointment of such agent shall not relieve the Custodian of its administrative obligations under this Agreement.
7. CASH ACCOUNTS, DEPOSITS AND MONEY MOVEMENTS. Subject to the terms and conditions set forth in this Section 7, the Fund hereby authorizes the Custodian to open and maintain, with itself or with Subcustodians, cash accounts in United States Dollars, in such other currencies as are the currencies of the countries in which the Fund maintains Investments or in such other currencies as the Fund shall from time to time request by Instruction.
7.1 TYPES OF CASH ACCOUNTS. Cash accounts opened on the books of the Custodian (PRINCIPAL ACCOUNTS) shall be opened in the name of the Fund. Such accounts collectively shall be a deposit obligation of the Custodian and shall be subject to the terms of this Section 7 and the general liability provisions contained in Section 9. Cash accounts opened on the books of a Subcustodian may be opened in the name of the Fund or the Custodian or in the name of the Custodian for its customers generally (AGENCY ACCOUNTS). Such deposits shall be obligations of the Subcustodian and shall be treated as an Investment of the Fund. Accordingly, the responsibility of the Custodian with respect to cash accounts shall be the same as and no greater than other Investments. Accordingly, the Custodian shall not be liable for
their repayment in the event such Subcustodian, by reason of its bankruptcy, insolvency or otherwise, fails to make repayment.
7.2 PAYMENTS AND CREDITS WITH RESPECT TO THE CASH ACCOUNTS. The Custodian shall make payments from or deposits to any of said accounts in the course of carrying out its administrative duties, including but not limited to income collection with respect to the Fund's Investments, and otherwise in accordance with Instructions. The Custodian and its Subcustodians shall be required to credit amounts to the cash accounts only when moneys are actually received in cleared funds in accordance with banking practice in the country and currency of deposit. Any credit made to any Principal or Agency Account before actual receipt of cleared funds shall be provisional and may be reversed by the Custodian in the event such payment is not actually collected. Unless otherwise specifically agreed in writing by the Custodian or any Subcustodian, all deposits shall be payable only at the branch of the Custodian or Subcustodian where the deposit is made or carried.
7.3 CURRENCY AND RELATED RISKS. The Fund bears risks of holding or
transacting in any currency. The Custodian shall not be liable for any loss or
damage arising from the applicability of any law or regulation now or hereafter
in effect, or from the occurrence of any event, which may delay or affect the
transferability, convertibility or availability of any currency in the country
(a) in which such Principal or Agency Accounts are maintained or (b) in which
such currency is issued, and in no event shall the Custodian be obligated to
make payment of a deposit denominated in a currency during the period during
which its transferability, convertibility or availability has been affected by
any such law, regulation or event. Without limiting the generality of the
foregoing, neither the Custodian nor any Subcustodian shall be required to repay
any deposit made at a foreign branch of either the Custodian or Subcustodian if
such branch cannot repay the deposit due to a cause for which the Custodian
would not be responsible in accordance with the terms of Section 9 of this
Agreement unless the Custodian or such Subcustodian expressly agrees in writing
to repay the deposit under such circumstances. All currency transactions in any
account opened pursuant to this Agreement are subject to exchange control
regulations of the United States and of the country where such currency is the
lawful currency or where the account is maintained. Any taxes, costs, charges or
fees imposed on the convertibility of a currency held by the Fund shall be for
the account of the Fund.
7.4 FOREIGN EXCHANGE TRANSACTIONS. The Custodian shall, subject to the terms of this Section, settle foreign exchange transactions (including contracts, futures, options and options on futures) on behalf and for the account of the Fund with such currency brokers or banking institutions, including Subcustodians, as the Fund may direct pursuant to Instructions. The Custodian may act as principal in any foreign exchange transaction with the Fund in accordance with
Section 7.4.2 of this Agreement. The obligations of the Custodian in respect of all foreign exchange transactions (whether or not the Custodian shall act as principal in such transaction) shall be contingent on the free, unencumbered transferability of the currency transacted on the actual settlement date of the transaction.
7.4.1 THIRD PARTY FOREIGN EXCHANGE TRANSACTIONS. The Custodian shall process foreign exchange transactions (including without limitation contracts, futures, options, and options on futures), where any third party acts as principal counterparty to the Fund on the same basis it performs duties as agent for the Fund with respect to any other of the Fund's Investments. Accordingly the Custodian shall only be responsible for delivering or receiving currency on behalf of the Fund in respect of such contracts pursuant to Instructions. The Custodian shall not be responsible for the failure of any counterparty (including any Subcustodian) in such agency transaction to perform its obligations thereunder. The Custodian (a) shall transmit cash and Instructions to and from the currency broker or banking institution with which a foreign exchange contract or option has been executed pursuant hereto, (b) may make free outgoing payments of cash in the form of U.S. Dollars or foreign currency without receiving confirmation of a foreign exchange contract or option or confirmation that the countervalue currency completing the foreign exchange contract has been delivered or received or that the option has been delivered or received, and (c) shall hold all confirmations, certificates and other documents and agreements received by the Custodian and evidencing or relating to such foreign exchange transactions in safekeeping. Subject to the Custodian's Standard of Care under this Agreement, the Fund accepts full responsibility for its use of third-party foreign exchange dealers and for execution of said foreign exchange contracts and options and understands that the Fund shall be responsible for any and all costs and interest charges which may be incurred by the Fund or the Custodian as a result of the failure or delay of third parties to deliver foreign exchange.
7.4.2 FOREIGN EXCHANGE WITH THE CUSTODIAN AS PRINCIPAL. The Custodian may undertake foreign exchange transactions with the Fund as principal as the Custodian and the Fund may agree from time to time. In such event, the foreign exchange transaction will be performed in accordance with the particular agreement of the parties, or in the event a principal foreign exchange transaction is initiated by Instruction in the absence of specific agreement, such transaction will be performed in accordance with the usual commercial terms of the Custodian.
7.5 DELAYS. If no event of Force Majeure shall have occurred and be continuing and in the event that a delay shall have been caused by the negligence or willful misconduct of the Custodian in carrying out an Instruction to credit or transfer cash, the Custodian, without limiting the Custodian's obligations under Section 9. shall be liable to the Fund: (a) with respect to Principal Accounts, for interest to be calculated at the rate customarily paid on such deposit and currency by the Custodian on overnight deposits at the time the delay occurs for the period from the day when the transfer should have been effected until the day it is in fact effected; and, (b) with respect to Agency Accounts, for interest to be calculated at the rate customarily paid on such deposit and currency by the Subcustodian on overnight deposits at the time the delay occurs for the period from the day when the transfer should have been effected until the day it is in fact effected. The Custodian shall not be liable for delays in carrying out such Instructions to transfer cash which are not due to the Custodian's own negligence or willful misconduct.
7.6 ADVANCES. If, for any reason in the conduct of its safekeeping duties pursuant to Section 5 hereof or its administration of the Fund's assets pursuant to Section 6 hereof, the Custodian or any Subcustodian advances monies to facilitate settlement or otherwise for the benefit of the Fund (whether or not any Principal or Agency Account shall be overdrawn either during, or at the end of, any Business Day), (collectively, an "Advance"), then in such event any Investment at any time held for the account of the Fund by the Custodian or a Subcustodian shall be security for such Advance and if the Fund shall fail to repay the Custodian promptly, the Custodian shall be entitled to utilize available cash and to dispose of the Fund's Investments to the extent necessary to obtain reimbursement.
Neither the Custodian nor any Subcustodian shall be obligated to advance monies to the Fund, and in the event that such Advance occurs, any transaction giving rise to an Advance shall be for the account and risk of the Fund and shall not be deemed to be a transaction undertaken by the Custodian for its own account and risk. If such Advance shall have been made by a Subcustodian or any other person, the Custodian may assign any rights granted or arising to the Custodian hereunder to such Subcustodian or other person. The Custodian may assign any rights it has hereunder to a Subcustodian or third party.
7.7 INTEGRATED ACCOUNT. For purposes hereof, deposits maintained in all Principal Accounts (whether or not denominated in Dollars) of each series of the Fund shall collectively constitute a single and indivisible current account with respect to the series' obligations to the Custodian, or its assignee, and balances in such Principal Accounts shall be available for satisfaction of the series' obligations under this Section 7.
8. SUBCUSTODIANS AND SECURITIES DEPOSITORIES. Subject to the provisions hereinafter set forth in this Section 8, the Fund hereby authorizes the Custodian to utilize Securities Depositories to act on behalf of the Fund and to appoint from time to time and to utilize Subcustodians. With respect to securities and funds held by a Subcustodian, either directly or indirectly (including by a Securities Depository or Clearing Corporation), notwithstanding any provisions of this Agreement to the contrary, payment for securities purchased and delivery of securities sold may be made prior to receipt of securities or payment, respectively, and securities or payment may be received in a form, in accordance with
(a) governmental regulations, (b) rules of Securities Depositories and clearing agencies, (c) generally accepted trade practice in the applicable local market, (d) the terms and characteristics of the particular Investment, or (e) the terms of Instructions.
8.1 DOMESTIC SUBCUSTODIANS AND SECURITIES DEPOSITORIES. The Custodian may deposit and/or maintain, either directly or through one or more agents appointed by the Custodian, Investments of the Fund in any Securities Depository in the United States, including The Depository Trust Company, provided such Depository meets applicable requirements of the Federal Reserve Bank or of the Securities and Exchange Commission. The Custodian may, at any time and from time to time, appoint any bank as defined in Section 2(a)(5) of the 1940 Act meeting the requirements of a custodian under Section 17(f) of the 1940 Act and the rules and regulations thereunder, to act on behalf of the Fund as a Subcustodian for purposes of holding Investments of the Fund in the United States.
8.2 FOREIGN SUBCUSTODIANS AND SECURITIES DEPOSITORIES. Unless instructed otherwise by the Fund, the Custodian may deposit and/or maintain non-U.S. Investments of the Fund in any non-U.S. Securities Depository provided such Securities Depository meets the requirements of an "eligible securities depository" under Rule 17f-7 promulgated under the 1940 Act, or any successor rule or regulation ("Rule 17f-7") or which by order of the Securities and Exchange Commission is exempted therefrom. Prior to the time that securities are placed with such depository, but subject to the provisions of Section 8.2.4 below, the Custodian shall have prepared an assessment of the custody risks associated with maintaining assets with the Securities Depository and shall have established a system to monitor such risks on a continuing basis in accordance with Subsection 8.2.3 of this Section and Rule 17f-7. Additionally, the Custodian may, at any time and from time to time, appoint (a) any bank, trust company or other entity meeting the requirements of an "eligible foreign custodian" under Rule 17f-5 or which by order of the Securities and Exchange Commission is exempted therefrom, or (b) any bank as defined in Section 2(a)(5) of the 1940 Act meeting the requirements of a custodian under Section 17(f) of the 1940 Act and the rules and regulations thereunder, to act on behalf of the Fund as a Subcustodian for purposes of holding Investments of the Fund outside the United States. Such appointment of foreign Subcustodians shall be subject to approval of the Fund or the Foreign Custody Manager in accordance with Subsections 8.2.1 and 8.2.2 hereof, and use of non-U.S. Securities Depositories shall be subject to the terms of Subsections 8.2.3 and 8.2.4 hereof. An Instruction to open an account in a given country shall comprise authorization of the Custodian to hold assets in such country in accordance with the terms of this Agreement. The Custodian shall not be required to make independent inquiry as to the authorization of the Fund to invest in such country.
8.2.1 BOARD APPROVAL OF FOREIGN SUBCUSTODIANS. Unless and except to the extent that the Board has delegated to and the Custodian has accepted delegation of review of certain matters concerning the appointment of Subcustodians pursuant to Subsection 8.2.2, the Custodian shall, prior to the appointment of any Subcustodian for purposes of holding Investments of the Fund outside the United States, obtain written confirmation of the approval of the Board of Trustees of the Fund with respect to (a) the identity of a Subcustodian, and (b) the Subcustodian agreement which shall govern such appointment, such approval to be signed by an Authorized Person.
8.2.2 DELEGATION OF BOARD REVIEW OF SUBCUSTODIANS. From time to time, the Custodian may agree to perform certain reviews of Subcustodians and of Subcustodian Contracts as delegate of the Fund's Board. In such event, the Custodian's duties and obligations with respect to this delegated review will be performed in accordance with the terms of the attached 17f-5 Delegation Schedule to this Agreement.
8.2.3 MONITORING AND RISK ASSESSMENT OF SECURITIES DEPOSITORIES. Prior to the placement of any assets of the Fund with a non-U.S. Securities Depository, the Custodian: (a) shall provide to the Fund or its authorized representative an assessment of the custody risks associated with maintaining assets within such Securities Depository; and (b) shall have established a system to monitor the custody risks associated with maintaining assets with such Securities Depository on a continuing basis and to promptly notify the Fund or its Investment Adviser of any material changes in such risk. In performing its duties under this subsection, the Custodian shall use reasonable care and may rely on such reasonable sources of information. It is acknowledged that information procured through some sources may not be independently verifiable by the Custodian and that direct access to Securities Depositories is limited under most circumstances. Accordingly, the Custodian shall not be responsible for errors or omissions in its duties hereunder provided that it has performed its monitoring and assessment duties with reasonable care, prudence and diligence. The risk assessment shall be provided to the Fund or its Investment Adviser by such means as the Custodian shall reasonably establish. Advices of material change in such assessment may be provided by the Custodian in the manner established as customary between the Fund and the Custodian for transmission of material market information.
8.3 RESPONSIBILITY FOR 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, the 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 connection with the delivery of any securities or funds held by it to any Subcustodian.
8.4 NEW COUNTRIES. The Fund shall be responsible for informing the Custodian sufficiently in advance of a
proposed investment which is to be held in a country in which no Subcustodian is authorized to act in order that the Custodian shall, if it deems appropriate to do so, have sufficient time to establish a subcustodial arrangement in accordance herewith. In the event, however, the Custodian is unable to establish such arrangements prior to the time such investment is to be acquired, the Custodian is authorized to designate at its discretion a local safekeeping agent, and the use of such local safekeeping agent shall be at the sole risk of the Fund, and accordingly the Custodian shall be responsible 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. The Custodian shall provide the Fund prompt notice if it receives Instruction with respect to a security to be settled in a country for which a Subcustodian has not been appointed or if the Custodian has appointed such an agent and at the request of the Fund, the Custodian agrees to remove any security held on behalf of the Fund by such an agent to a Subcustodian. Under such circumstances, the Custodian shall collect income and respond to corporate developments on a best efforts basis.
9. RESPONSIBILITY OF THE CUSTODIAN. In performing its duties and obligations hereunder, the Custodian shall use reasonable care, prudence and diligence in carrying out the provisions of this Agreement, provided that the Custodian shall not be required to take any action that would be in contravention of Applicable Law. Subject to the specific provisions of this Section, the Custodian shall be liable for any direct damage or expense incurred by the Fund in consequence of the Custodian's negligence, bad faith or willful misconduct. In no event shall the Custodian be liable hereunder for any special or punitive damages or for losses attributable to the diminution in the enterprise value of the Fund or damage to reputation arising out of, pursuant to or in connection with this Agreement even if the Custodian has been advised of the possibility of such damages. It is agreed that the Custodian shall have no duty to assess the risks inherent in the Fund's Investments or to provide investment advice with respect to such Investments and that the Fund as principal shall bear any risks attendant to particular Investments such as failure of counterparty or issuer.
9.1 LIMITATIONS OF PERFORMANCE. The Custodian shall not be responsible under this Agreement for any failure to perform its duties, and shall not be liable hereunder for any loss or damage in association with such failure to perform, for or in consequence of the following causes:
9.1.1 FORCE MAJEURE. FORCE MAJEURE shall mean any
circumstance or event which is beyond the reasonable control
of the Custodian, a Subcustodian or any agent of the Custodian
or a Subcustodian and which adversely affects the performance
by the Custodian of its obligations hereunder, by the
Subcustodian of its obligations under its Subcustody Agreement
or by any other agent of the Custodian or the Subcustodian,
including any event caused by, arising out of or involving (a)
an act of God, (b) accident, fire, water damage or explosion,
(c) any computer, system or other equipment failure or
malfunction caused by any computer virus or the malfunction or
failure of any communications medium, (d) any interruption of
the power supply or other utility service, (e) any strike or
other work stoppage, whether partial or total, (f) any delay
or disruption resulting from or reflecting the occurrence of
any Sovereign Risk, (g) any disruption of, or suspension of
trading in, the securities, commodities or foreign exchange
markets, whether or not resulting from or reflecting the
occurrence of any Sovereign Risk, (h) any encumbrance on the
transferability of a currency or a currency position on the
actual settlement date of a foreign exchange transaction,
whether or not resulting from or reflecting the occurrence of
any Sovereign Risk, or (i) any other cause similarly beyond
the reasonable control of the Custodian.
9.1.2 COUNTRY RISK. COUNTRY RISK shall mean, with respect to the acquisition, ownership, settlement or custody of Investments in a jurisdiction, all risks relating to, or arising in consequence of, systemic and markets factors affecting the acquisition, payment for or ownership of Investments including (a) the prevalence of crime and corruption, (b) the inaccuracy or unreliability of business and financial information, (c) the instability or volatility of banking and financial systems, or the absence or inadequacy of an infrastructure to support such systems, (d) custody and settlement infrastructure of the market in which such Investments are transacted and held, (e) the acts, omissions and operation of any Securities Depository, (f) the risk of the bankruptcy or insolvency of banking agents, counterparties to cash and securities transactions, registrars or transfer agents, and (g) the existence of market conditions which prevent the orderly execution or settlement of transactions or which affect the value of assets.
9.1.3 SOVEREIGN RISK. SOVEREIGN RISK shall mean, in respect of any jurisdiction, including the United States of America, where Investments are acquired or held hereunder or under a Subcustody Agreement, (a) any act of war, terrorism, riot, insurrection or civil commotion, (b) the imposition of any investment, repatriation or exchange control restrictions by any Governmental Authority, (c) the confiscation, expropriation or nationalization of any Investments by any Governmental Authority, whether de facto or de jure, (iv) any devaluation or revaluation of the currency, (d) the imposition of taxes, levies or other charges affecting Investments, (vi) any change in the Applicable Law, or (e) any other economic or political risk incurred or experienced beyond the Custodian's control.
9.2. LIMITATIONS ON LIABILITY. The Custodian shall not be liable for any loss, claim, damage or other liability arising from the following causes:
9.2.1 FAILURE OF THIRD PARTIES. The failure of any third party including: (a) any issuer of Investments or book-entry or other agent of an issuer; (b) any counterparty with respect to any Investment, including any issuer of exchange-traded or other futures, option, derivative or commodities contract; (c) failure of an Investment Adviser, Foreign Custody Manager (if not the Custodian) or other agent of the Fund; or (d) failure of other third parties similarly beyond the control or choice of the Custodian.
9.2.2 INFORMATION SOURCES. The Custodian may rely upon information received from issuers of Investments or agents of such issuers, information received from Subcustodians and from other commercially reasonable sources such as commercial data bases and the like, but shall not be responsible for specific inaccuracies in such information, provided that the Custodian has, complied with its standard of care under this Agreement and relied upon such information in good faith, or for the failure of any commercially reasonable information provider.
9.2.3 RELIANCE ON INSTRUCTION. Action by the Custodian or the Subcustodian in accordance with an Instruction, even when such action conflicts with, or is contrary to any provision of, the Fund's Declaration of Trust, Certificate of Trust By-laws, Applicable Law, or actions by the trustees, directors or shareholders of the Fund.
9.2.4 RESTRICTED SECURITIES. The limitations inherent in the rights, transferability or similar investment characteristics of a given Investment of the Fund.
10. INDEMNIFICATION. The Fund hereby indemnifies the Custodian and each Subcustodian, and their respective agents, nominees and the partners, employees, officers and directors, and agrees to hold each of them harmless from and against all claims and liabilities, including counsel fees and taxes, incurred or assessed against any of them in connection with the performance of this Agreement and any Instruction, except such as may arise from its or any of its agent's breach of the relevant standard of care set forth in this Agreement. If a Subcustodian or any other person indemnified under the preceding sentence gives written notice of a claim to the Custodian, the Custodian shall promptly give written notice to the Fund.
11. REPORTS AND RECORDS. The Custodian shall:
11.1 create and maintain records relating to the performance of its obligations under this Agreement and as required by the 1940 Act and rules and regulations thereunder and under applicable federal and state laws. All such records shall be the property of the Fund and, in the event of the termination of this Agreement, shall be delivered to the successor custodian;
11.2 make available to the Fund, its auditors, counsel, agents and employees, during regular business hours of the Custodian, upon reasonable request , all records maintained by the Custodian pursuant to paragraph 11.1 above, subject, however, to all reasonable security requirements of the Custodian then applicable to the records of its custody customers generally; and
11.3 make available to the Fund all Electronic Reports; it being understood that the Custodian shall not be liable hereunder for the inaccuracy or incompleteness thereof or for errors in any information included therein.
12. MISCELLANEOUS.
12.1 PROXIES, ETC. The Fund will promptly execute and deliver, upon request, such proxies, powers of attorney or other instruments as may be reasonable and necessary or desirable for the Custodian to provide, or to cause
any Subcustodian to provide, in its performance of custody services.
12.2 ENTIRE AGREEMENT. Except as specifically provided herein, this Agreement constitutes the entire agreement between each Fund listed from an Appendix A hereto, as amended from time to time, severally and not jointly, and the Custodian with respect to the subject matter hereof. Accordingly, this Agreement supersedes any custody agreement or other oral or written agreements heretofore in effect between the Fund and the Custodian with respect to the custody of the Fund's Investments. Appendix A may be amended by Pioneer Investment Management, Inc. from time to time to add any additional Funds with the consent of the Custodian
12.3 WAIVER AND AMENDMENT. No provision of this Agreement may be waived, amended or modified, and no addendum or appendix to this Agreement shall be or become effective, or be waived, amended or modified, except by an instrument in writing executed by the party against which enforcement of such waiver, amendment or modification is sought; provided, however, that an Instruction shall, whether or not such Instruction shall constitute a waiver, amendment or modification for purposes hereof, be deemed to have been accepted by the Custodian when it commences actions pursuant thereto or in accordance therewith.
12.4 GOVERNING LAW AND JURISDICTION. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND BE GOVERNED BY THE LAWS OF, THE COMMONWEALTH OF MASSACHUSETTS, WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAW OF SUCH STATE. THE PARTIES HERETO IRREVOCABLY CONSENT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS AND THE FEDERAL COURTS LOCATED IN THE COMMONWEALTH OF MASSACHUSETTS.
12.5 NOTICES. Notices and other writings contemplated by this
Agreement, other than Instructions, shall be delivered (a) by hand, (b) by first
class registered or certified mail, postage prepaid, return receipt requested,
(c) by a nationally recognized overnight courier, or (d) by facsimile
transmission, provided that any notice or other writing sent by facsimile
transmission shall also be mailed, postage prepaid, to the party to whom such
notice is addressed. All such notices shall be addressed, as follows:
If to the Fund:
c/o Pioneer Investment Management, Inc.
60 State Street
Boston, MA 02109
Attention: General Counsel
Telephone: (617) 422-4980
Facsimile: (617) 422-4223
and
[Fund Name]
60 State Street
Boston, MA 02109
Attention: Vin____________ Treasurer
Telephone: (781)
Facsimile: (781)
If to the Custodian:
Brown Brothers Harriman & Co.
40 Water Street
Boston, Massachusetts 02109
Attn: Manager, Securities Department
Telephone: (617) 772-1818
Facsimile: (617) 772-2263,
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or such other address as the Fund or the Custodian may have designated in writing to the other.
12.6 HEADINGS. Paragraph headings included herein are for convenience of reference only and shall not modify, define, expand or limit any of the terms or provisions hereof.
12.7 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 the Fund and the Custodian.
12.8 CONFIDENTIALITY. The parties hereto agree that each shall treat confidentially the terms and conditions of this Agreement and all information provided by each party to the other regarding its business and operations. All confidential information provided by a party hereto shall be used by any other party hereto solely for the purpose of rendering or obtaining services pursuant to this Agreement and, except as may be required in carrying out this Agreement, shall not be disclosed to any third party without the prior consent of such providing party. The foregoing shall not be applicable to any information that is publicly available when provided or thereafter becomes publicly available other than through a breach of this Agreement, or that is required to be disclosed by or to any bank examiner of the Custodian or any Subcustodian, any Regulatory Authority, any auditor of the parties hereto, or by judicial or administrative process or otherwise by Applicable Law.
12.9 COUNSEL. In fulfilling its duties hereunder, the Custodian shall be entitled to receive and act upon the
advice of (i) counsel regularly retained by the Custodian in respect of such matters, (ii) counsel for the Fund or (iii) such 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.
12.10 CONFLICT. Nothing contained in this Agreement shall prevent the
Custodian and its associates from (i) dealing as a principal or an intermediary
in the sale, purchase or loan of the Fund's Investments to, or from the
Custodian or its associates; (ii) acting as a custodian, a subcustodian, a
trustee, an agent, securities dealer, an investment manager or in any other
capacity for any other client whose interests may be adverse to the interests of
the Fund; or (iii) buying, holding, lending, and dealing in any way in any
assets for the benefit of its own account, or for the account of any other
client whose interests may be adverse to the Fund notwithstanding that the same
or similar assets may be held or dealt in by, or for the account of the Fund by
the Custodian. The Fund hereby voluntarily consents to, and waives any potential
conflict of interest between the Custodian and/or its associates and the Fund,
and agrees that:
(a) the Custodian's and/or its associates' engagement in
any such transaction shall not disqualify the Custodian
from continuing to perform as the custodian of the Fund
under this Agreement;
(b) the Custodian and/or its associates shall not be under any
duty to disclose any information in connection with any such
transaction to the Fund;
(c) the Custodian and/or its associates shall not be liable to account to the Fund for any profits or benefits made or derived by or in connection with any such transaction; and
(d) the Fund shall use all reasonable efforts to disclose this provision, among other provisions in this Agreement, to its shareholders.
13. DEFINITIONS. The following defined terms will have the respective meanings set forth below.
13.1 ADVANCE shall mean any extension of credit by or through the Custodian or by or through any Subcustodian and shall include amounts paid to third parties for account of the Fund or in discharge of any expense, tax or other item payable by the Fund.
13.2 AGENCY ACCOUNT(S) shall mean any deposit account opened on the
books of a Subcustodian or other banking institution in accordance with Section
7.1.
13.3 AGENT(S) shall have the meaning set forth in the last sentence of
Section 6.
13.4 APPLICABLE LAW shall mean with respect to each jurisdiction, all
(a) laws, statutes, treaties, regulations, guidelines (or their equivalents);
(b) orders, interpretations licenses and permits; and (c) judgments, decrees,
injunctions
writs, orders and similar actions by a court of competent jurisdiction; compliance with which is required or customarily observed in such jurisdiction.
13.5 AUTHORIZED PERSON(S) shall mean any person or entity authorized to give Instructions on behalf of the Fund in accordance with Section 4.1.
13.6 BOOK-ENTRY AGENT(S) shall mean an entity acting as agent for the issuer of Investments for purposes of recording ownership or similar entitlement to Investments, including without limitation a transfer agent or registrar.
13.7 CLEARING CORPORATION shall mean any entity or system established for purposes of providing securities settlement and movement and associated functions for a given market.
13.8 DELEGATION AGREEMENT shall mean any separate agreement entered into between the Custodian and the Fund or its authorized representative with respect to certain matters concerning the appointment and administration of Subcustodians delegated to the Custodian pursuant to Rule 17f-5. 13.9 FOREIGN CUSTODY MANAGER shall mean the Fund's foreign custody manager appointed pursuant to Rule 17f-5 of the 1940 Act.
13.10 FOREIGN FINANCIAL REGULATORY AUTHORITY shall have the meaning given by Section 2(a)(50) of the 1940 Act.
13.11 FUNDS TRANSFER SERVICES SCHEDULE shall mean any separate schedule entered into between the Custodian and the Fund or its authorized representative with respect to certain matters concerning the processing of payment orders from Principal Accounts of the Fund.
13.12 GLOBAL CUSTODY NETWORK LISTING shall mean the Countries and Subcustodians approved for Investments in non-U.S. Markets.
13.13 INSTRUCTION(S) shall have the meaning assigned in Section 4.
13.14 INVESTMENT ADVISER shall mean any person or entity who is an Authorized Person to give Instructions with respect to the investment and reinvestment of the Fund's Investments.
13.15 INVESTMENT(S) shall mean any investment asset of the Fund, including without limitation securities, bonds, notes, and debentures as well as receivables, derivatives, contractual rights or entitlements and other intangible assets.
13.16 MARGIN ACCOUNT shall have the meaning set forth in Section 6.4 hereof.
13.17 PRINCIPAL ACCOUNT(S) shall mean deposit accounts of the Fund carried on the books of BBH&Co. as principal in accordance with Section 7.
13.18 SAFEKEEPING ACCOUNT shall mean an account established on the books of the Custodian or any Subcustodian for purposes of segregating the interests of the Fund (or clients of the Custodian or Subcustodian) from the assets of the Custodian or any Subcustodian.
13.19 SECURITIES DEPOSITORY shall mean a central or book entry system or agency established under Applicable Law for purposes of recording the ownership and/or entitlement to investment securities for a given market that, if a foreign Securities Depository, meets the definitional requirements of Rule 17f-7 under the 1940 Act.
13.20 SUBCUSTODIAN(S) shall mean each foreign bank appointed by the Custodian pursuant to Section 8, but shall not include Securities Depositories.
13.21 TRI-PARTY AGREEMENT shall have the meaning set forth in
Section 6.4 hereof.
13.22 1940 ACT shall mean the Investment Company Act of 1940, as amended..
14. COMPENSATION. The Fund agrees to pay to the Custodian (a) a fee in an
amount set forth in the fee letter between the Fund and the Custodian in
effect on the date hereof or as amended from time to time, and (b) all
out-of-pocket expenses incurred by the Custodian in connection with this
Agreement, including the fees and expenses of all Subcustodians, and payable
from time to time. Amounts payable by the Fund under and pursuant to this
Section 14 shall be payable by wire transfer to the Custodian at BBH&Co. in New
York, New York.
15. TERMINATION. This Agreement may be terminated by either party in accordance with the provisions of this Section. The provisions of this Agreement and any other rights or obligations incurred or accrued by any party hereto prior to termination of this Agreement shall survive any termination of this Agreement.
15.1 NOTICE AND EFFECT. This Agreement may be terminated by either party by written notice effective no sooner than seventy-five (75) consecutive calendar days following the date that notice to such effect shall be delivered to other party at its address set forth in paragraph 12.5 hereof.
15.2 SUCCESSOR CUSTODIAN. In the event of the appointment of a successor custodian, it is agreed that the Investments of the Fund held by the Custodian or any Subcustodian shall be delivered to the successor custodian in
accordance with reasonable Instructions. The Custodian agrees to cooperate with the Fund in the execution of documents and performance of other actions necessary or desirable in order to facilitate the succession of the new custodian. If no successor custodian shall be appointed, the Custodian shall in like manner transfer the Fund's Investments in accordance with Instructions.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly executed as of the date first above written.
BROWN BROTHERS HARRIMAN & CO. EACH FUND LISTED ON APPENDIX A HERETO,
SEVERALLY AND NOT JOINTLY
By: /s/ Stokley P. Towles By: /s/ David D. Tripple
Name: Stokley P. Towles Name: David D. Tripple
Title: Partner Title: Executive Vice President of
each Fund
Date: August 20, 2001 Date:
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FUNDS TRANSFER SERVICES SCHEDULE TO CUSTODIAN AGREEMENT
1. EXECUTION OF PAYMENT ORDERS. Brown Brothers Harriman & Co. (the Custodian) is hereby instructed by Pioneer Investment Management, Inc. (the Company) to execute each payment order, whether denominated in United States dollars or other applicable currencies, received by the Custodian in the Company's name as sender and authorized and confirmed by an Authorized Person as defined in a Custodian Agreement dated as of July 1, 2001 by and between the Custodian and the Company, as amended or restated from time thereafter (the Agreement), provided that the Company has sufficient available funds on deposit in a Principal Account as defined in the Agreement and provided that the order (i) is received by the Custodian in the manner specified in this Funds Transfer Services Schedule or any amendment hereafter; (ii) complies with any written instructions and restrictions of the Company as set forth in this Funds Transfer Services Schedule or any amendment hereafter; (iii) is authorized by the Company or is verified by the Custodian in compliance with a security procedure set forth in Paragraph 2 below for verifying the authenticity of a funds transfer communication sent to the Custodian in the name of the Company or for the detection of errors set forth in any such communication; and (iv) contains sufficient data to enable the Custodian to process such transfer.
2. SECURITY PROCEDURE. The Company hereby elects to use the procedure selected below as its security procedure (the Security Procedure). The Security Procedure will be used by the Custodian to verify the authenticity of a payment order or a communication amending or canceling a payment order. The Custodian will act on instructions received provided the instruction is authenticated by the Security Procedure. The Company agrees and acknowledges in connection with (i) the size, type and frequency of payment orders normally issued or expected to be issued by the Company to the Custodian, (ii) all of the security procedures offered to the Company by the Custodian, and (iii) the usual security procedures used by customers and receiving banks similarly situated, that authentication through the Security Procedure shall be deemed commercially reasonable for the authentication of all payment orders submitted to the Custodian. The Company hereby elects (PLEASE CHOOSE ONE) the following Security Procedure as described below:
[ ] BIDS AND BIDS WORLDVIEW PAYMENT PRODUCTS. BIDS and BIDS Worldview
Payment Products, are on-line payment order authorization facilities with built-in authentication procedures. The Custodian and the Company shall each be responsible for maintaining the confidentiality of passwords or other codes to be used by them in connection with BIDS. The Custodian will act on instructions received through BIDS without duty of further confirmation unless the Company notifies the Custodian that its password is not secure.
[X] SWIFT. Primary Method the Custodian and the Company shall comply with SWIFT's authentication procedures. The Custodian will act on instructions received via SWIFT provided the instruction is authenticated by the SWIFT system.
[ ] TESTED TELEX. The Custodian will accept payment orders sent by tested telex, provided the test key matches the algorithmic key the Custodian and Company have agreed to use.
[ ] COMPUTER TRANSMISSION. The Custodian is able to accept transmissions sent from the Company's computer facilities to the Custodian's computer facilities provided such transmissions are encrypted and digitally certified or are otherwise authenticated in a reasonable manner based on available technology. Such procedures shall be established in an operating protocol between the Custodian and the Company.
[X] TELEFAX INSTRUCTIONS. Back-Up Method A payment order transmitted to the Custodian by telefax transmission shall transmitted by the Company to a telephone number specified from time to time by the Custodian for such purposes. If it detects no discrepancies, the Custodian will then either:
1. If the telefax requests a repetitive payment order, the Custodian may call the Company at its last known telephone number, request to speak to the Company or Authorized Person, and confirm the authorization and the details of the payment order (a "Callback"); or
2. If the telefax requests a non-repetitive order, the Custodian will perform a Callback.
All faxes must be accompanied by a fax cover sheet which indicates the sender's name, company name, telephone number, fax number, number of pages, and number of transactions or instructions attached.
[ ] TELEPHONIC. Alternative Back-Up Method A telephonic payment order shall be called into the Custodian at the telephone number designated from time to time by the Custodian for that purpose. The caller shall identify herself/himself as an Authorized Person. The Custodian shall obtain the payment order data from the caller. The Custodian shall then:
1. If a telephonic repetitive payment order, the Custodian may perform a Callback; or
2. If a telephonic non-repetitive payment order, the Custodian will perform a Callback.
In the event the Company chooses a procedure which is not a Security Procedure as described above, the Company agrees to be bound by any payment order (whether or not authorized) issued in its name and accepted by the Custodian in compliance with the procedure selected by the Company.
3. REJECTION OF PAYMENT ORDERS. The Custodian shall give the Company timely notice of the Custodian's rejection of a payment order. Such notice may be given in writing or orally by telephone, each of which is hereby deemed commercially reasonable. In the event the Custodian fails to execute a properly executable payment order and fails to give the Company notice of the Custodian's non-execution, the Custodian shall be liable only for the Company's actual damages and only to the extent that such damages are recoverable under UCC 4A (as defined in Paragraph 7 below). Notwithstanding anything in this Funds Transfer Services Schedule and the Agreement to the contrary, the Custodian shall in no event be liable for any consequential or special damages under this Funds Transfer Services Schedule, whether or not such damages relate to services covered by UCC 4A, even if the Custodian has been advised of the possibility of such damages. Whenever compensation in the form of interest is payable by the Custodian to the Company pursuant to this Funds Transfer Services Schedule, such compensation will be payable at the rate specified in UCC 4A.
4. CANCELLATION OF PAYMENT ORDERS. The Company may cancel a payment order but the Custodian shall have no liability for the Custodian's failure to act on a cancellation instruction unless the Custodian has received such cancellation instruction at a time and in a manner affording the Custodian reasonable opportunity to act prior to the Custodian's execution of the order. Any cancellation shall be sent and confirmed in the manner set forth in Paragraph 2 above.
5. RESPONSIBILITY FOR THE DETECTION OF ERRORS AND UNAUTHORIZED PAYMENT ORDERS.
Except as may be provided, the Custodian is not responsible for detecting any
Company error contained in any payment order sent by the Company to the
Custodian. In the event that the Company's payment order to the Custodian either
(i) identifies the beneficiary by both a name and an identifying or bank account
number and the name and number identify different persons or entities, or (ii)
identifies any bank by both a name and an identifying number and the number
identifies a person or entity different from the bank identified by name,
execution of the payment order, payment to the beneficiary, cancellation of the
payment order or actions taken by any bank in respect of such payment order may
be made solely on the basis of the number. The Custodian shall not be liable for
interest on the amount of any payment order that was not authorized or was
erroneously executed unless the Company so notifies the Custodian within thirty
(30) business days following the Company's receipt of notice that such payment
order had been processed. If a payment order in the name of the Company and
accepted by the Custodian was not authorized by the Company, the liability of
the parties will be governed by the applicable provisions of UCC 4A.
6. LAWS AND REGULATIONS. The rights and obligations of the Custodian and the Company with respect to any payment order executed pursuant to this Funds Transfer Services Schedule will be governed by any applicable laws, regulations, circulars and funds transfer system rules, the laws and regulations of the United States of America and of other relevant countries including exchange control regulations and limitations on dealings or other sanctions, and including without limitation those sanctions imposed under the law of the United States of America by the Office of Foreign Assets Control. Any taxes, fines, costs, charges or fees imposed by relevant authorities on such transactions shall be for the account of the Company.
7. MISCELLANEOUS. All accounts opened by the Company or its authorized agents at the Custodian subsequent to the date hereof shall be governed by this Funds Transfer Schedule. All terms used in this Funds Transfer Services Schedule shall have the meaning set forth in Article 4A of the Uniform Commercial Code as currently in effect in the State of New York (UCC 4A) unless otherwise set forth herein. The terms and conditions of this Funds Transfer Services Schedule are in addition to, and do not modify or otherwise affect, the terms and conditions of the Agreement and any other agreement or arrangement between the parties hereto.
8. INDEMNIFICATION. The Custodian does not recommend the sending of instructions by telefax or telephonic means as provided in Paragraph 2. BY ELECTING TO SEND INSTRUCTIONS BY TELEFAX OR TELEPHONIC MEANS, THE COMPANY AGREES TO INDEMNIFY THE CUSTODIAN AND ITS PARTNERS, OFFICERS AND EMPLOYEES FOR ALL LOSSES THEREFROM.
OPTIONAL: The Custodian will perform a Callback if instructions are sent by telefax or telephonic means as provided in Paragraph 2. THE COMPANY MAY, AT ITS OWN RISK AND BY HEREBY AGREEING TO INDEMNIFY THE CUSTODIAN AND ITS PARTNERS, OFFICERS AND EMPLOYEES FOR ALL LOSSES THEREFROM OTHER THAN LOSSES RESULTING FROM THE CUSTODIANS OWN NEGLIGENCE OR WILLFUL DEFAULT, ELECT TO WAIVE A CALLBACK BY THE CUSTODIAN BY INITIALLING HERE:____
Pioneer Investment Management, Inc. is a member of the UniCredit Italian Banking Group, register of banking groups.
Accepted and agreed:
BROWN BROTHERS HARRIMAN & CO. EACH OF THE FUNDS LISTED ON
APPENDIX A HERETO, AS AMENDED FROM
TIME TO TIME
By: /s/ Stokley P. Towles By: /s/ David D. Tripple
Name: Stokley P. Towles Name: David D. Tripple
Title: Partner Title: Executive Vice President
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Date: August 20, 2001 Date:
17F-5 DELEGATION SCHEDULE
By its execution of this Delegation Schedule dated as of July 1, 2001. Each Fund listed on Appendix A hereto, as amended from time to time, severally and not jointly, each of which is a management investment company registered with the Securities and Exchange Commission (the "Commission") under the Investment Company Act of 1940, as amended, (the "1940 Act"), acting through its Board of Trustees or its duly appointed representative (each a "Fund"), hereby appoints BROWN BROTHERS HARRIMAN & CO., a New York limited partnership with an office in Boston, Massachusetts (the "Delegate") as its delegate to perform certain functions with respect to the custody of Fund's Assets outside the United States.
1. MAINTENANCE OF FUND'S ASSETS ABROAD. The Fund, acting through its Board of Trustees or its duly authorized representative, hereby instructs Delegate pursuant to the terms of the Custodian Agreement dated as of the date hereof executed by and between the Fund and the Delegate (the "Custodian Agreement") to place and maintain the Fund's Assets in countries outside the United States in accordance with Instructions received from the Fund's Investment Adviser. Such instruction shall represent a Proper Instruction under the terms of the Custodian Agreement. The Fund acknowledges that: (a) the Delegate shall perform services hereunder only with respect to the countries where it accepts delegation as Foreign Custody Manager as indicated on your Global Custody Network Listing; (b) depending on conditions in the particular country, advance notice may be required before the Delegate shall be able to perform its duties hereunder in or with respect to such country (such advance notice to be reasonable in light of the specific facts and circumstances attendant to performance of duties in such country); and (c) nothing in this Delegation Schedule shall require the Delegate to provide delegated or custodial services in any country, and there may from time to time be countries as to which the Delegate determines it will not provide delegation services.
2. DELEGATION. Pursuant to the provisions of Rule 17f-5 under the 1940 Act as amended, the Board hereby delegates to the Delegate, and the Delegate hereby accepts such delegation and agrees to
perform, only those duties set forth in this Delegation Schedule concerning the safekeeping of the Fund's Assets in each of the countries as to which it acts as the Board's delegate. The Fund appoints the Delegate as the Fund's "Foreign Custody Manager" as such term is used in Rule 17f-5 under the 1940 Act. The Delegate is hereby authorized to take such actions on behalf of or in the name of the Fund as are reasonably required to discharge its duties under this Delegation Schedule, including, without limitation, to cause the Fund's Assets to be placed with a particular Eligible Foreign Custodian in accordance herewith.
3. SELECTION OF ELIGIBLE FOREIGN CUSTODIAN AND CONTRACT ADMINISTRATION. The Delegate shall perform the following duties with respect to the selection of Eligible Foreign Custodians and administration of certain contracts governing the Fund's foreign custodial arrangements:
(a) SELECTION OF ELIGIBLE FOREIGN CUSTODIAN. The Delegate shall place and maintain the Fund's Assets with an Eligible Foreign Custodian; PROVIDED that the Delegate shall have determined that the Fund's Assets will be subject to reasonable care based on the standards applicable to custodians in the relevant market after considering all factors relevant to the safekeeping of such assets including without limitation:
(i) The Eligible Foreign Custodian's practices, procedures, and
internal controls, including, but not limited to, the physical
protections available for certificated securities (if applicable), the
controls and procedures for dealing with any Securities Depository, the
method of keeping custodial records, and the security and data
protection practices;
(ii) Whether the Eligible Foreign Custodian has the requisite
financial strength to provide reasonable care for the Fund's Assets;
(iii) The Eligible Foreign Custodian's general reputation and
standing; and
(iv) Whether the Fund will have jurisdiction over and be able to
enforce judgments against the Eligible Foreign Custodian, such as by
virtue of the existence of any offices of such Eligible Foreign
Custodian in the United States or such Eligible Foreign Custodian's
appointment of an agent for service of process in the United States or
consent to jurisdiction in the United States.
(b) CONTRACT ADMINISTRATION. The Delegate shall cause that the foreign custody arrangements with an Eligible Foreign Custodian shall be governed by a written contract that the Delegate
has determined will provide reasonable care for Fund assets based on the standards specified in paragraph (c)(1) of Rule 17f-5 under the 1940 Act . Each such contract shall, except as set forth in the last paragraph of this subsection (b), include provisions that provide:
(i) For indemnification or insurance arrangements (or any
combination of the foregoing) that will adequately protect the Fund
against the risk of loss of assets held in accordance with such
contract;
(ii) That the Fund's Assets will not be subject to any right,
charge, security interest, lien or claim of any kind in favor of the
Eligible Foreign Custodian or its creditors except a claim of payment
for their safe custody or administration or, in the case of cash
deposits, liens or rights in favor of creditors of such Custodian
arising under bankruptcy, insolvency or similar laws;
(iii) That beneficial ownership of the Fund's Assets will be
freely transferable without the payment of money or value other than
for safe custody or administration;
(iv) That adequate records will be maintained identifying the
Fund's Assets as belonging to the Fund or as being held by a third
party for the benefit of the Fund;
(v) That the Fund's independent public accountants will be given
access to those records described in (iv) above or confirmation of the
contents of such records; and
(vi) That the Delegate will receive sufficient and timely
periodic reports with respect to the safekeeping of the Fund's Assets,
including, but not limited to, notification of any transfer to or from
the Fund's account or a third party account containing the Fund's
Assets.
Such contract may contain, in lieu of any or all of the provisions specified in this Section 3 (b), such other provisions that the Delegate determines will provide, in their entirety, the same or a greater level of care and protection for the Fund's Assets as the specified provisions, in their entirety.
(c) LIMITATION TO DELEGATED SELECTION. Notwithstanding anything in this Delegation Schedule to the contrary, the duties under this Section 3 shall apply only to Eligible Foreign Custodians selected by the Delegate and shall not apply to Securities Depositories or to any Eligible Foreign Custodian that the Delegate is directed to use pursuant to Section 7.
4. MONITORING. The Delegate shall establish a system to monitor at reasonable
intervals (but at least annually) the appropriateness of maintaining the Fund's Assets with each Eligible Foreign Custodian that has been selected by the Delegate pursuant to Section 3 of this Delegation Schedule. The Delegate shall monitor the continuing appropriateness of placement of the Fund's Assets in accordance with the criteria established under Section 3(a) of this Delegation Schedule. The Delegate shall monitor the continuing appropriateness of the contract governing the Fund's arrangements in accordance with the criteria established under Section 3(b) of this Delegation Schedule.
5. REPORTING. At least annually and more frequently as mutually agreed between the parties, the Delegate shall provide to the Board written reports specifying placement of the Fund's Assets with each Eligible Foreign Custodian selected by the Delegate pursuant to Section 3 of this Delegation Schedule and shall promptly report as to any material changes to such foreign custody arrangements. Delegate will prepare such a report with respect to any Eligible Foreign Custodian that the Delegate has been instructed to use pursuant to Section 7 only to the extent specifically agreed with respect to the particular situation.
6. WITHDRAWAL OF FUND'S ASSETS. If the Delegate determines that an arrangement
with a specific Eligible Foreign Custodian selected by the Delegate under
Section 3 of this Delegation Schedule no longer meets the requirements of said
Section, Delegate shall withdraw the Fund's Assets from the non-complying
arrangement as soon as reasonably practicable; PROVIDED, however, that if in the
reasonable judgment of the Delegate, such withdrawal would require liquidation
of any of the Fund's Assets or would materially impair the liquidity, value or
other investment characteristics of the Fund's Assets, it shall be the duty of
the Delegate to provide information regarding the particular circumstances and
to act only in accordance with Proper Instructions with respect to such
liquidation or other withdrawal.
7. DIRECTION AS TO ELIGIBLE FOREIGN CUSTODIAN. Notwithstanding this Delegation Schedule, the Fund, acting through its Board, its Investment Adviser or its other authorized representative, may direct the Delegate to place and maintain the Fund's Assets with a particular Eligible Foreign Custodian, including without limitation with respect to investment in countries as to which the Custodian will not provide delegation services. In such event, the Delegate shall be entitled to rely on any such instruction as a Proper Instruction under the terms of the Custodian Agreement and shall have no duties under this Delegation Schedule with respect to such arrangement save those that it may undertake specifically in writing with respect to each particular instance.
8. STANDARD OF CARE. In carrying out its duties under this Delegation Schedule, the Delegate agrees to exercise reasonable care, prudence and diligence such as a person having responsibility for safekeeping the Fund's Assets would exercise.
9. REPRESENTATIONS.The Delegate hereby represents and warrants that it is a U.S. Bank and that this Delegation Schedule has been duly authorized, executed and delivered by the Delegate and is a legal, valid and binding agreement of the Delegate.
The Fund hereby represents and warrants that its Board of Trustees has determined that it is reasonable to rely on the Delegate to perform the delegated responsibilities provided for herein and that this Delegation Schedule has been duly authorized, executed and delivered by the Fund and is a legal, valid and binding agreement of the Fund.
10. EFFECTIVENESS; TERMINATION. This Delegation Schedule shall be effective as of the date on which this Delegation Schedule shall have been accepted by the Delegate, as indicated by the date set forth below the Delegate's signature. This Delegation Schedule may be terminated at any time, without penalty, by written notice from the terminating party to the non-terminating party. Such termination shall be effective on the 30th day following the date on which the non-terminating party shall receive the foregoing notice. The foregoing to the contrary notwithstanding, this Delegation Schedule shall be deemed to have been terminated concurrently with the termination of the Custodian Agreement.
11. NOTICES.Notices and other communications under this Delegation Schedule are to be made in accordance with the arrangements designated for such purpose under the Custodian Agreement unless otherwise indicated in a writing referencing this Delegation Schedule and executed by both parties.
12. DEFINITIONS. Capitalized terms in this Delegation Schedule have the following meanings:
a. ELIGIBLE FOREIGN CUSTODIAN - shall have the meaning set forth in Rule 17f-5(a)(1) and shall also include a U.S. Bank.
b. FUND'S ASSETS - shall mean any of the Fund's investments (including foreign currencies) for which the primary market is outside the United States, and such cash and cash equivalents as are reasonably necessary to effect the Fund's transactions in such investments.
c. PROPER INSTRUCTIONS - shall have the meaning set forth in the Custodian Agreement.
d. SECURITIES DEPOSITORY - shall have the meaning set forth in Rule 17f-7.
e. SOVEREIGN RISK - shall have the meaning set forth in
Section [6.3] of the Custodian Agreement.
f . U.S. BANK - shall mean a bank which qualifies to serve as a custodian of assets of investment companies under Section 17(f) of the Act.
13. GOVERNING LAW AND JURISDICTION. This Delegation Schedule shall be construed in accordance with the laws of the Commonwealth of Massachusetts. The parties hereby submit to the exclusive jurisdiction of the Federal courts sitting in the Commonwealth of Massachusetts or of the state courts of such Commonwealth.
14. FEES. Delegate shall perform its functions under this Delegation Schedule for the compensation determined under the Custodian Agreement.
15. INTEGRATION. This Delegation Schedule sets forth all of the Delegate's duties with respect to the selection and monitoring of Eligible Foreign Custodians, the administration of contracts with Eligible Foreign Custodians, the withdrawal of assets from Eligible Foreign Custodians and the issuance of reports in connection with such duties. The terms of the Custodian Agreement shall apply generally as to matters not expressly covered in this Delegation Schedule, including dealings with the Eligible Foreign Custodians in the course of discharge of the Delegate's obligations under the Custodian Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly executed as of the date first above written.
BROWN BROTHERS HARRIMAN & CO. EACH FUND LISTED ON APPENDIX A By: /s/ Stokley P. Towles By: /s/ David D. Tripple Name: Stokley P. Towles Name: David D. Tripple Title: Partner Title: Executive Vice President |
APPENDIX A
TO
CUSTODIAN AGREEMENT
BETWEEN
BROWN BROTHERS HARRIMAN & CO.
AND
EACH OF THE OPEN-END MANAGEMENT INVESTMENT COMPANIES
LISTED ON APPENDIX "A" THERETO
Dated as of July 1, 2001
The following is a list of Funds for which the Custodian shall serve under a Custodian Agreement dated as of July 1, 2001.
PIONEER AMERICA INCOME TRUST
PIONEER BALANCED FUND
PIONEER BOND FUND
PIONEER CASH RESERVES FUND
PIONEER EMERGING MARKETS FUND
PIONEER EQUITY-INCOME FUND
PIONEER EUROPE FUND
PIONEER EUROPE SELECT FUND
PIONEER FUND
PIONEER GLOBAL FINANCIALS FUND
PIONEER GLOBAL HEALTH CARE FUND
PIONEER GLOBAL TELECOMS FUND
PIONEER GROWTH SHARES
PIONEER HIGH YIELD FUND
PIONEER VALUE FUND
PIONEER INDEPENDENCE FUND
PIONEER INDO-ASIA FUND
PIONEER INTEREST SHARES
PIONEER INTERNATIONAL VALUE FUND
PIONEER LARGE-CAP VALUE FUND
PIONEER LIMITED MATURITY BOND FUND
PIONEER MICRO-CAP FUND
PIONEER MID-CAP FUND
PIONEER MID-CAP VALUE FUND
PIONEER REAL ESTATE SHARES
PIONEER SCIENCE & TECHNOLOGY FUND
PIONEER SMALL COMPANY FUND
PIONEER STRATEGIC INCOME FUND
PIONEER TAX-FREE INCOME FUND
PIONEER TAX-MANAGED FUND
PIONEER AMERICA INCOME VCT PORTFOLIO
PIONEER BALANCED VCT PORTFOLIO
PIONEER EMERGING MARKETS VCT PORTFOLIO
PIONEER EQUITY-INCOME VCT PORTFOLIO
PIONEER EUROPE SELECT VCT PORTFOLIO
PIONEER EUROPE VCT PORTFOLIO
PIONEER FUND VCT PORTFOLIO
PIONEER GLOBAL FINANCIALS VCT PORTFOLIO
PIONEER GLOBAL HEALTH CARE VCT PORTFOLIO
PIONEER GLOBAL TELECOMS VCT PORTFOLIO
PIONEER GROWTH SHARES VCT PORTFOLIO
PIONEER HIGH YIELD VCT PORTFOLIO
PIONEER INTERNATIONAL VALUE VCT PORTFOLIO
PIONEER MID-CAP VALUE VCT PORTFOLIO
PIONEER MONEY MARKET VCT PORTFOLIO
PIONEER REAL ESTATE GROWTH VCT PORTFOLIO
PIONEER SCIENCE & TECHNOLOGY VCT PORTFOLIO
PIONEER SMALL COMPANY VCT PORTFOLIO
PIONEER STRATEGIC INCOME VCT PORTFOLIO
PIONEER SWISS FRANC BOND VCT PORTFOLIO
PIONEER INTERNATIONAL EQUITY FUND
IN WITNESS WHEREOF, each of the parties hereto has caused this Appendix to be executed in its name and on behalf of each such open-end management investment company.
Each of the open-end management BROWN BROTHERS HARRIMAN & CO. investment companies listed on this Appendix "A" By: /s/ David D. Trippel By: /s/ D.A. Donahue Name: David D. Tripple Name: D.A. Donahue Title: Executive Vice President Title: Partner |
APPENDIX A
TO
CUSTODIAN AGREEMENT
BETWEEN
BROWN BROTHERS HARRIMAN & CO.
AND
EACH OF THE OPEN-END MANAGEMENT INVESTMENT COMPANIES
LISTED ON APPENDIX "A" THERETO
Dated as of August 21, 2001
The following is a list of Funds for which the Custodian shall serve under a Custodian Agreement dated as of July 1, 2001.
PIONEER AMERICA INCOME TRUST
PIONEER BALANCED FUND
PIONEER BOND FUND
PIONEER CASH RESERVES FUND
PIONEER EMERGING MARKETS FUND
PIONEER EQUITY-INCOME FUND
PIONEER EUROPE FUND
PIONEER EUROPE SELECT FUND
PIONEER FUND
PIONEER GLOBAL FINANCIALS FUND
PIONEER GLOBAL HEALTH CARE FUND
PIONEER GLOBAL TELECOMS FUND
PIONEER GROWTH SHARES
PIONEER HIGH YIELD FUND
PIONEER VALUE FUND
PIONEER INDEPENDENCE FUND
PIONEER INDO-ASIA FUND
PIONEER INTEREST SHARES
PIONEER INTERNATIONAL VALUE FUND
PIONEER LARGE-CAP VALUE FUND
PIONEER LIMITED MATURITY BOND FUND
PIONEER MICRO-CAP FUND
PIONEER MID-CAP FUND
PIONEER MID-CAP VALUE FUND
PIONEER REAL ESTATE SHARES
PIONEER SCIENCE & TECHNOLOGY FUND
PIONEER SMALL COMPANY FUND
PIONEER STRATEGIC INCOME FUND
PIONEER TAX-FREE INCOME FUND
PIONEER TAX-MANAGED FUND
PIONEER AMERICA INCOME VCT PORTFOLIO
PIONEER BALANCED VCT PORTFOLIO
PIONEER EMERGING MARKETS VCT PORTFOLIO
PIONEER EQUITY-INCOME VCT PORTFOLIO
PIONEER EUROPE SELECT VCT PORTFOLIO
PIONEER EUROPE VCT PORTFOLIO
PIONEER FUND VCT PORTFOLIO
PIONEER GLOBAL FINANCIALS VCT PORTFOLIO
PIONEER GLOBAL HEALTH CARE VCT PORTFOLIO
PIONEER GLOBAL TELECOMS VCT PORTFOLIO
PIONEER GROWTH SHARES VCT PORTFOLIO
PIONEER HIGH YIELD VCT PORTFOLIO
PIONEER INTERNATIONAL VALUE VCT PORTFOLIO
PIONEER MID-CAP VALUE VCT PORTFOLIO
PIONEER MONEY MARKET VCT PORTFOLIO
PIONEER REAL ESTATE GROWTH VCT PORTFOLIO
PIONEER SCIENCE & TECHNOLOGY VCT PORTFOLIO
PIONEER SMALL COMPANY VCT PORTFOLIO
PIONEER STRATEGIC INCOME VCT PORTFOLIO
PIONEER SWISS FRANC BOND VCT PORTFOLIO
PIONEER INTERNATIONAL EQUITY FUND
PIONEER LONG/SHORT FUND
PIONEER GLOBAL HIGH YIELD FUND
PIONEER GLOBAL VALUE FUND
IN WITNESS WHEREOF, each of the parties hereto has caused this Appendix to be executed in its name and on behalf of each such open-end management investment company.
Each of the open-end management BROWN BROTHERS HARRIMAN & CO. investment companies listed on this Appendix "A" By: /s/ David D. Tripple By: /s/ D.A. Donahue Name: David D. Tripple Name: D.A. Donahue Title: Executive Vice President Title: Partner |
APPENDIX A
TO
CUSTODIAN AGREEMENT
BETWEEN
BROWN BROTHERS HARRIMAN & CO.
AND
EACH OF THE OPEN-END MANAGEMENT INVESTMENT COMPANIES
LISTED ON APPENDIX "A" THERETO
Dated as of November 13, 2001
The following is a list of Funds for which the Custodian shall serve under the
Custodian Agreement dated as of July 1, 2001 (the "Agreement"):
PIONEER AMERICA INCOME TRUST
PIONEER BALANCED FUND
PIONEER BOND FUND
PIONEER CASH RESERVES FUND
PIONEER EMERGING MARKETS FUND
PIONEER EQUITY INCOME FUND
PIONEER EUROPE FUND
PIONEER EUROPE SELECT FUND
PIONEER FUND
PIONEER GLOBAL FINANCIALS FUND
PIONEER GLOBAL HEALTH CARE FUND
PIONEER GLOBAL HIGH YIELD FUND
PIONEER GLOBAL TELECOMS FUND
PIONEER GLOBAL VALUE FUND
PIONEER GROWTH SHARES
PIONEER HIGH YIELD FUND
PIONEER INDEPENDENCE FUND
PIONEER INDO-ASIA FUND
PIONEER INTEREST SHARES
PIONEER INTERNATIONAL EQUITY FUND
PIONEER INTERNATIONAL VALUE FUND
PIONEER LARGE CAP VALUE FUND
PIONEER LIMITED MATURITY BOND FUND
PIONEER LONG/SHORT FUND
PIONEER MID CAP GROWTH FUND
PIONEER MID CAP VALUE FUND
PIONEER REAL ESTATE SHARES
PIONEER SCIENCE & TECHNOLOGY FUND
PIONEER SMALL CAP VALUE FUND
PIONEER SMALL COMPANY FUND
PIONEER STRATEGIC INCOME FUND
PIONEER TAX FREE INCOME FUND
PIONEER TAX MANAGED FUND
PIONEER VALUE FUND
PIONEER WORLD EQUITY FUND
PIONEER AMERICA INCOME VCT PORTFOLIO
PIONEER BALANCED VCT PORTFOLIO
PIONEER EMERGING MARKETS VCT PORTFOLIO
PIONEER EQUITY INCOME VCT PORTFOLIO
PIONEER EUROPE SELECT VCT PORTFOLIO
PIONEER EUROPE VCT PORTFOLIO
PIONEER FUND VCT PORTFOLIO
PIONEER GLOBAL FINANCIALS VCT PORTFOLIO
PIONEER GLOBAL HEALTH CARE VCT PORTFOLIO
PIONEER GLOBAL TELECOMS VCT PORTFOLIO
PIONEER GROWTH SHARES VCT PORTFOLIO
PIONEER HIGH YIELD VCT PORTFOLIO
PIONEER INTERNATIONAL VALUE VCT PORTFOLIO
PIONEER MID CAP VALUE VCT PORTFOLIO
PIONEER MONEY MARKET VCT PORTFOLIO
PIONEER REAL ESTATE GROWTH VCT PORTFOLIO
PIONEER SCIENCE & TECHNOLOGY VCT PORTFOLIO
PIONEER SMALL CAP VALUE VCT PORTFOLIO
PIONEER SMALL COMPANY VCT PORTFOLIO
PIONEER STRATEGIC INCOME VCT PORTFOLIO
PIONEER SWISS FRANC BOND VCT PORTFOLIO
IN WITNESS WHEREOF, each of the parties hereto has caused this Appendix to be executed in its name and on behalf of each such open-end management investment company.
Each of the open-end management BROWN BROTHERS HARRIMAN & CO. investment companies listed on this Appendix "A" By: /s/ Dorothy E. Bourassa By: /s/ Stokley P. Towles Name: Dorothy E. Bourassa Name: Stokley P. Towles Title: Assistant [Secretary] Title: Partner |
APPENDIX A
TO
CUSTODIAN AGREEMENT
BETWEEN
BROWN BROTHERS HARRIMAN & CO.
AND
EACH OF THE OPEN-END MANAGEMENT INVESTMENT COMPANIES
LISTED ON APPENDIX "A" THERETO
Dated as of December 14, 2001
The following is a list of Funds for which the Custodian shall serve under the Custodian Agreement dated as of July 1, 2001 (the "Agreement"):
PIONEER AMERICA INCOME TRUST
PIONEER BALANCED FUND
PIONEER BOND FUND
PIONEER CASH RESERVES FUND
PIONEER EMERGING MARKETS FUND
PIONEER EQUITY INCOME FUND
PIONEER EUROPE FUND
PIONEER EUROPE SELECT FUND
PIONEER FUND
PIONEER GLOBAL CONSUMERS FUND
PIONEER GLOBAL ENERGY & UTILITIES FUND
PIONEER GLOBAL FINANCIALS FUND
PIONEER GLOBAL HEALTH CARE FUND
PIONEER GLOBAL HIGH YIELD FUND
PIONEER GLOBAL INDUSTRIALS FUND
PIONEER GLOBAL TELECOMS FUND
PIONEER GLOBAL VALUE FUND
PIONEER GROWTH SHARES
PIONEER HIGH YIELD FUND
PIONEER INDEPENDENCE FUND
PIONEER INTEREST SHARES
PIONEER INTERNATIONAL EQUITY FUND
PIONEER INTERNATIONAL VALUE FUND
PIONEER LARGE CAP VALUE FUND
PIONEER LONG/SHORT FUND
PIONEER MID CAP GROWTH FUND
PIONEER MID CAP VALUE FUND
PIONEER REAL ESTATE SHARES
PIONEER SCIENCE & TECHNOLOGY FUND
PIONEER SMALL CAP VALUE FUND
PIONEER SMALL COMPANY FUND
PIONEER STRATEGIC INCOME FUND
PIONEER TAX FREE INCOME FUND
PIONEER TAX MANAGED FUND
PIONEER VALUE FUND
PIONEER AMERICA INCOME VCT PORTFOLIO
PIONEER BALANCED VCT PORTFOLIO
PIONEER EMERGING MARKETS VCT PORTFOLIO
PIONEER EQUITY INCOME VCT PORTFOLIO
PIONEER EUROPE SELECT VCT PORTFOLIO
PIONEER EUROPE VCT PORTFOLIO
PIONEER FUND VCT PORTFOLIO
PIONEER GLOBAL CONSUMERS VCT PORTFOLIO
PIONEER GLOBAL ENERGY & UTILITIES VCT PORTFOLIO
PIONEER GLOBAL FINANCIALS VCT PORTFOLIO
PIONEER GLOBAL HEALTH CARE VCT PORTFOLIO
PIONEER GLOBAL INDUSTRIALS VCT PORTFOLIO
PIONEER GLOBAL TELECOMS VCT PORTFOLIO
PIONEER GROWTH SHARES VCT PORTFOLIO
PIONEER HIGH YIELD VCT PORTFOLIO
PIONEER INTERNATIONAL VALUE VCT PORTFOLIO
PIONEER MID CAP VALUE VCT PORTFOLIO
PIONEER MONEY MARKET VCT PORTFOLIO
PIONEER REAL ESTATE GROWTH VCT PORTFOLIO
PIONEER SCIENCE & TECHNOLOGY VCT PORTFOLIO
PIONEER SMALL CAP VALUE VCT PORTFOLIO
PIONEER SMALL COMPANY VCT PORTFOLIO
PIONEER STRATEGIC INCOME VCT PORTFOLIO
PIONEER SWISS FRANC BOND VCT PORTFOLIO
IN WITNESS WHEREOF, each of the parties hereto has caused this Appendix to be executed in its name and on behalf of each such open-end management investment company.
Each of the open-end management BROWN BROTHERS HARRIMAN & CO. investment companies listed on this Appendix "A" By: /s/ Dorothy E. Bourassa By: /s/ Stokley P. Towles Name: Dorothy E. Bourassa Name: Stokley P. Towles Title: Assistant Secretary Title: Partner |
APPENDIX A
TO
CUSTODIAN AGREEMENT
BETWEEN
BROWN BROTHERS HARRIMAN & CO.
AND
EACH OF THE OPEN-END MANAGEMENT INVESTMENT COMPANIES
LISTED ON APPENDIX "A" THERETO
Dated as of March 12, 2002
The following is a list of Funds for which the Custodian shall serve under the Custodian Agreement dated as of July 1, 2001 (the "Agreement"):
PIONEER AGGRESSIVE GROWTH FUND
PIONEER AMERICA INCOME TRUST
PIONEER BALANCED FUND
PIONEER BOND FUND
PIONEER CASH RESERVES FUND
PIONEER EMERGING GROWTH FUND
PIONEER EMERGING MARKETS FUND
PIONEER EQUITY INCOME FUND
PIONEER EUROPE FUND
PIONEER EUROPE SELECT FUND
PIONEER FUND
PIONEER GLOBAL CONSUMERS FUND
PIONEER GLOBAL ENERGY & UTILITIES FUND
PIONEER GLOBAL FINANCIALS FUND
PIONEER GLOBAL HEALTH CARE FUND
PIONEER GLOBAL HIGH YIELD FUND
PIONEER GLOBAL INDUSTRIALS FUND
PIONEER GLOBAL TECHNOLOGY FUND
PIONEER GLOBAL TELECOMS FUND
PIONEER GLOBAL VALUE FUND
PIONEER GROWTH SHARES
PIONEER HIGH INCOME TRUST
PIONEER HIGH YIELD FUND
PIONEER INDEPENDENCE FUND
PIONEER INDO-ASIA FUND
PIONEER INTEREST SHARES
PIONEER INTERNATIONAL EQUITY FUND
PIONEER INTERNATIONAL VALUE FUND
PIONEER LARGE CAP GROWTH FUND
PIONEER LARGE CAP VALUE FUND
PIONEER LONG/SHORT FUND
PIONEER MID CAP GROWTH FUND
PIONEER MID CAP VALUE FUND
PIONEER REAL ESTATE SHARES
PIONEER SCIENCE & TECHNOLOGY FUND
PIONEER SMALL CAP GROWTH FUND
PIONEER SMALL COMPANY FUND
PIONEER SMALL CAP VALUE FUND
PIONEER STRATEGIC INCOME FUND
PIONEER TAX FREE INCOME FUND
PIONEER TAX MANAGED FUND (To be renamed PIONEER CORE EQUITY FUND)
PIONEER VALUE FUND
PIONEER AMERICA INCOME VCT PORTFOLIO
PIONEER BALANCED VCT PORTFOLIO
PIONEER EMERGING MARKETS VCT PORTFOLIO
PIONEER EQUITY INCOME VCT PORTFOLIO
PIONEER FUND VCT PORTFOLIO
PIONEER GLOBAL CONSUMERS VCT PORTFOLIO
PIONEER GLOBAL ENERGY & UTILITIES VCT PORTFOLIO
PIONEER GLOBAL FINANCIALS VCT PORTFOLIO
PIONEER GLOBAL HEALTH CARE VCT PORTFOLIO
PIONEER GLOBAL INDUSTRIALS VCT PORTFOLIO
PIONEER GLOBAL TELECOMS VCT PORTFOLIO
PIONEER GROWTH SHARES VCT PORTFOLIO
PIONEER GLOBAL VALUE VCT PORTFOLIO
PIONEER HIGH YIELD VCT PORTFOLIO
PIONEER INTERNATIONAL VALUE VCT PORTFOLIO
PIONEER MID CAP VALUE VCT PORTFOLIO
PIONEER MONEY MARKET VCT PORTFOLIO
PIONEER REAL ESTATE GROWTH VCT PORTFOLIO (To be renamed
PIONER REAL ESTATE SHARES VCT PORTFOLIO)
PIONEER SCIENCE & TECHNOLOGY VCT PORTFOLIO
PIONEER SMALL CAP VALUE VCT PORTFOLIO
PIONEER SMALL COMPANY VCT PORTFOLIO
PIONEER STRATEGIC INCOME VCT PORTFOLIO
PIONEER SWISS FRANC BOND VCT PORTFOLIO
IN WITNESS WHEREOF, each of the parties hereto has caused this Appendix to be executed in its name and on behalf of each such open-end management investment company.
Each of the open-end management BROWN BROTHERS HARRIMAN & CO. investment companies listed on this Appendix "A" By: /s/ Dorothy Bourassa By: /s/ Stokley P. Towles Name: Dorothy E. Bourassa Name: Stokley P. Towles Title: Assistant Secretary Title: Partner |
INVESTMENT COMPANY SERVICE AGREEMENT
PIONEER LARGE CAP GROWTH FUND
July 26, 2002
Pioneer Large Cap Growth Fund, a Delaware business trust with its principal place of business at 60 State Street, Boston, Massachusetts 02109 ("Customer"), and Pioneer Investment Management Shareholder Services, Inc., a Massachusetts corporation with its principal place of business at 60 State Street, Boston, Massachusetts 02109 ("PIMSS"), hereby agree as follows:
1. SERVICES TO BE PROVIDED BY PIMSS. During the term of this Agreement, PIMSS will provide to each series of shares of beneficial interest 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 PIMSS may subcontract any of such services to one or more firms designated by PIMSS, provided that PIMSS (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 PIMSS 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 OF DOCUMENTATION, MATERIALS AND DATA. Customer shall, from time to time, while this Agreement is in effect deliver all such documentation, materials and data as may be necessary or desirable to enable PIMSS to perform its services hereunder.
4. REPORTS AND MAINTENANCE OF RECORDS BY PIMSS. PIMSS 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. PIMSS may at its option at any time, and shall forthwith upon Customer's demand, turn over to Customer and cease to retain in PIMSS' files, any and all records and documents created and maintained by PIMSS pursuant to this Agreement which are no longer needed by PIMSS 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 PIMSS for six years from the year of creation, during the first two of which the same shall be in readily accessible form. At the end of six years, such records and documents will be turned over to Customer by PIMSS unless Customer authorizes their destruction.
5. PIMSS' DUTY OF CARE. PIMSS shall at all time use reasonable care and act in good faith in performing its duties hereunder. PIMSS 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.
PIMSS 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. PIMSS 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 PIMSS is unable to meet the terms of this Agreement, PIMSS 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, PIMSS 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. PIMSS will keep confidential all records and information provided by Customer or by the shareholders of the Account to PIMSS, 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, PIMSS 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 agents, including inspecting PIMSS' operation facilities. PIMSS shall not be liable for injury to or responsible in any way for the safety of any individual visiting PIMSS' 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 PIMSS' premises. Confidential information shall include (1) any information of whatever nature regarding PIMSS' operations, security procedures, and data processing capabilities, (2) financial information regarding PIMSS, its affiliates, or subsidiaries, and (3) any
information of whatever kind or description regarding any customer of PIMSS, its affiliates or subsidiaries.
8. RELIANCE BY PIMSS ON INSTRUCTIONS AND ADVICE; INDEMNITY. PIMSS shall be entitled to seek advice of Customer's legal counsel with respect to PIMSS' 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 PIMSS would result in a conflict of interest.
Whenever PIMSS is authorized to take action hereunder pursuant to proper instructions from Customer, PIMSS shall be entitled to rely upon any certificate, letter or other instrument or telephone call or Internet transaction reasonably believed by PIMSS 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 Section 13 of this Agreement, Customer agrees to indemnify and hold PIMSS, 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 PIMSS' action or non-action upon information, instructions or requests given or made to PIMSS by Customer with respect to the Account.
Notwithstanding the above, whenever Customer may be asked to indemnify or hold PIMSS harmless, Customer shall be advised of all pertinent facts arising from the situation in question. Additionally, PIMSS 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 PIMSS against any claim for which PIMSS is entitled to indemnification from Customer under the terms hereof, and in the event Customer so elects, it will notify PIMSS and, thereupon, Customer shall take over complete defense of the claim and PIMSS shall sustain no further legal or other expenses in such a situation for which indemnification shall be sought or entitled. PIMSS may in no event confess any claim or make any compromise in any case in which Customer will be asked to indemnify PIMSS except with Customer's prior written consent.
9. MAINTENANCE OF DEPOSIT ACCOUNTS. PIMSS shall maintain on behalf of Customer such deposit accounts as are necessary or desirable from time to time to enable PIMSS to carry out the provisions of this Agreement.
10. COMPENSATION AND REIMBURSEMENT TO PIMSS. For the services rendered by PIMSS under this Agreement, Customer agrees to pay to PIMSS an
annual fee of $25.25 per open account and an annual fee of $7.30 per closed account, such fees to be payable in equal monthly installments. Customer shall reimburse PIMSS monthly for out-of-pocket expenses, including but not limited to, forms, postage, mail service, telephone charges, including internet access charges, archives, microfiche and other records storage services, mailing and tabulating proxies, sub account recordkeeper fees relating to omnibus accounts, and miscellaneous. In addition, the Customer will reimburse any other expenses incurred by PIMSS at the request of or with the consent of the Customer.
11. TERMINATION. Either PIMSS 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 PIMSS in fact continues to perform any one or more of the services contemplated by this Agreement or the Exhibits, 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. REPRESENTATIONS AND WARRANTIES; REQUIRED DOCUMENTS.
12.1 REPRESENTATIONS AND WARRANTIES OF PIMSS.
PIMSS represents and warrants to the Customer that:
(a) It is a corporation duly organized and existing and in good standing under the laws of The Commonwealth of Massachusetts.
(b) It is duly qualified to carry on its business in The Commonwealth of Massachusetts and the State of Nebraska.
(c) All requisite corporate proceedings have been taken to authorize it to enter into this Agreement.
(d) It is empowered under all applicable laws and by its Articles of Organization and By Laws to enter into and perform this Agreement.
12.2 REPRESENTATIONS AND WARRANTIES OF CUSTOMER.
Customer represents and warrants to PIMSS that:
(a) It is a business trust duly organized and existing and in good standing under the laws of its governing jurisdiction.
(b) All requisite corporate proceedings have been taken to authorize it to enter into this Agreement.
(c) It is empowered under all applicable laws and by its Agreement and Declaration of Trust and By Laws to enter into and perform this Agreement.
(d) It is an open-end management investment company registered under the Investment Company Act of 1940, as amended.
(e) A registration statement under the Securities Act of 1933, as amended (the "Registration Statement"), has been filed with the Securities and Exchange Commission and is currently effective and will remain effective, and appropriate state securities law filings have been made and will continue to be made, with respect to all shares of beneficial interest of the Customer to be offered for sale.
12.3 CUSTOMER DOCUMENT DELIVERY.
Customer shall promptly furnish to PIMSS the following:
(a) A copy of Customer's Agreement and Declaration of Trust and By Laws and all amendments related thereto.
(b) A certified copy of the resolution of the Customer's Board of Trustees authorizing the appointment of PIMSS and the execution and delivery of this Agreement.
(c) A copy of the Customer's Registration Statement and all amendments thereto.
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 Agreement and Declaration of Trust describes 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, PIMSS 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 constitutes the entire agreement between the parties hereto and supersedes any prior agreement with respect to the subject matter hereof whether written or oral.
If any provision or provisions of this Agreement shall be held invalid, unlawful or unenforceable, the validity, legality, and enforceability of the remaining provisions of the Agreement shall not in any way be affected or impaired.
This Agreement shall be construed in accordance with the laws of The Commonwealth of Massachusetts.
IN WITNESS WHEREOF, Customer and PIMSS 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.
PIONEER INVESTMENT MANAGMENT
SHAREHOLDER SERVICES, INC.
By: /s/ Peggy Schooley
Peggy Schooley
Chief Executive Officer and President
|
PIONEER LARGE CAP GROWTH FUND
By: /s/ Vincent Nave
Vincent Nave
Treasurer
|
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 and Statement of Additional Information, PIMSS 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 bi-monthly basis.
4. Redeem shares by systematic withdrawal orders. (SEE EXHIBIT B).
5. Reinvest or disburse dividends and other distributions upon direction of shareholder.
6. Establish the proper registration of ownership of shares.
7. 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.
8. Make transfers from time to time upon the books of the Customer in accordance with properly executed transfer instructions furnished to PIMSS.
9. 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.
10. Respond to shareholder inquiries in a timely manner.
11. Maintain dealer and salesperson records.
12. 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.
13. Mail confirmations of transactions to shareholders in a timely fashion (confirmations of Automatic Investment Plan transactions will be mailed quarterly).
14. Provide Customer with such information regarding correspondence as well as enable Customer to comply with related Form N-SAR (semi-annual report) requirements.
15. Maintain continuous proof of the outstanding shares of Customer.
16. Solicit taxpayer identification numbers.
17. 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.
18. Maintain bank accounts and reconcile same on a monthly basis.
19. Provide management information reports on a quarterly basis to Customer's Board of Trustees outlining the level of service provided.
20. Provide sale/statistical reporting for purposes of providing Customer's 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 and Statement of Additional Information, as servicing agent for the redemptions, PIMSS will:
1. Where applicable, establish accounts payable based on information furnished to PIMSS on behalf of Customer (i.e., copies of trade confirmations and other documents deemed necessary or desirable by PIMSS on the first business day following the trade date).
2. Receive shares for redemption through written, telephone or Internet authorization.
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, Statement of Additional Information and Agreement and Declaration of Trust on or before the seventh calendar day succeeding any receipt of requests for redemption or repurchase in "good order" as defined in the prospectus and Statement of Additional Information.
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 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 PIMSS 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 Form N-SAR (semi-annual report) filing.
EXHIBIT C - TO INVESTMENT COMPANY SERVICE AGREEMENT
EXCHANGE SERVICE:
1. Receive and process exchanges in accordance with a duly executed exchange authorization. PIMSS 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 and Statement of Additional Information. 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 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.
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 PIMSS 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.
ADMINISTRATION AGREEMENT
THIS ADMINISTRATION AGREEMENT dated this 9th day of October, 1998 between the Pioneer Funds, listed on Exhibit 1 hereto (the "Funds"), and Pioneering Management Corporation, a Delaware corporation (the "Manager").
W I T N E S S E T H
WHEREAS, the Funds are registered as open-end, diversified, management investment companies 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 (the "1933 Act");
WHEREAS, the parties hereto are parties to Management Contracts (the "Management Contracts");
WHEREAS, the Management Contracts provide that the Manager will bear all of the Funds' expenses other than those provided in Section 2(c) and 2(d) of the Management Contracts;
WHEREAS, Section 2(c)(i) provides that the Funds shall pay charges and expenses for Fund accounting, pricing and appraisal services and, for those Funds noted with an asterisk on Exhibit 2 hereto, related overhead, including, to the extent that such services were performed by personnel of the Manager or its affiliates, office space and facilities, and personnel compensation, training and benefits;
WHEREAS, Section 2(c)(vi) and (vii) provide that the Funds shall pay
(i) fees and expenses involved in registering and maintaining registrations of
the Funds and/or their 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 and (ii) 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; and
WHEREAS, certain of these activities, as set forth on Exhibit 3 hereto, can be performed by members of the Manager's legal, accounting and administrative staff working at the direction and under the supervision of the Board of Trustees and Fund counsel.
NOW THEREFORE, in consideration of the mutual covenants and benefits set forth herein, the Funds and the Manager do hereby agree as follows:
1. The Funds authorize the Manager to perform fund accounting services on behalf of the Funds, subject to the supervision and direction of the Board of Trustees. Such services, determined as of the date of this Agreement, are set forth on Exhibit 2 hereto. These services (the "Bookkeeping Services") may be revised from time to time on mutual agreement of the parties.
2. The Funds authorize the Manager to assist with the performance of the legal services listed on Exhibit 3 hereto (the "Legal Services"). The Legal Services shall at all times be subject to the supervision and direction of the Board of Trustees and Fund counsel.
3. The Trustees recognize that the Bookkeeping Services and the Legal Services can be performed efficiently by the Manager. The Funds are entering into this Agreement to achieve the operating and expense benefits of such efficiency. In authorizing such activities on behalf of the Funds, the Funds expressly do not delegate to the Manager or its personnel the authority to render legal advice to, or legal judgments on behalf of, the Funds. Between meetings of the Trustees, Fund counsel is authorized to determine the services that may appropriately be provided by the Manager pursuant to this Agreement.
4. In consideration of its services under this Agreement, the Manager shall be entitled to be reimbursed for the allocable portion of the direct costs of the Bookkeeping Services and the Legal Expenses (collectively, the "Services"). Such allocation shall be based upon the proportion of personnel time devoted to the Services authorized to be performed on behalf of the Funds to the total time worked by such personnel, in each case as estimated in good faith by the Manager and reviewed and approved annually by the Board of Trustees. Direct costs shall include any out-of-pocket expenses of the Manager incurred in connection with the Services, the salaries and benefits of personnel of the Manager who are engaged in the Services pursuant to this Agreement and, with respect to the Services, a reasonable allocation of overhead (to the extent permitted under the Management Contracts) associated with the performance of the Bookkeeping Services. The Manager shall estimate such direct costs and overhead (as appropriate) in good faith and the Funds shall be entitled to such supporting information as the Trustees shall reasonably request from time to time. Allocations of reimbursements paid hereunder among the Funds shall be subject to annual approval of the Board of Trustees.
5. The Manager will not be liable for any error of judgment or mistake of law in the performance of its services under the Agreement, but nothing contained herein will be construed to protect the Manager against any liability to the Funds 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.
6. Either party hereto may, without penalty, terminate this Agreement by the giving of 60 days' written notice to the other party.
7. The Manager is an independent contractor and not an employee of the Funds for any purpose. If any occasion should arise in which the Manager gives any advice to its clients concerning the shares of the Funds, the Manager will act solely as investment counsel for such clients and not in any way on behalf of the Funds or any series thereof.
8. This Agreement states the entire agreement of the parties hereto with respect to the subject matter of this Agreement and its 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.
9. This Agreement and all performance hereunder shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts.
10. 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.
11. 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 this duly authorized officers and their seal to be hereto affixed as of the day and year first above written.
Attest: The Pioneer Funds Listed on Exhibit 1 hereto
By: /s/ John F. Cogan, Jr.
/s/ Joseph P. Barri John F. Cogan, Jr.
Joseph P. Barri President
Secretary
PIONEERING MANAGEMENT CORPORATION
|
Attest:
/s/ Joseph P. Barri By: /s/ David D. Tripple Joseph P. Barri David D. Tripple Secretary President |
Exhibit 1
Pioneer Aggressive Growth Fund
Pioneer America Income Trust
Pioneer Balanced Fund
Pioneer Bond Fund
Pioneer Emerging Growth Fund
Pioneer Emerging Markets Fund
Pioneer Equity Income Fund
Pioneer Europe Fund
Pioneer Europe Select Fund
Pioneer Fund
Pioneer Global Consumers Fund
Pioneer Global Energy & Utilities Fund
Pioneer Global Financials Fund
Pioneer Global Health Care Fund
Pioneer Global Industrials Fund
Pioneer Global Telecoms Fund
Pioneer Global High Yield Fund
Pioneer Global Technology Fund
Pioneer Global Value Fund
Pioneer Growth Shares
Pioneer High Yield Fund
Pioneer Independence Fund
Pioneer Indo-Asia Fund
Pioneer Interest Shares
Pioneer International Value Fund
Pioneer Large Cap Value Fund
Pioneer Limited Maturity Bond Fund
Pioneer Market Neutral Fund
Pioneer Large Cap Growth Fund
Pioneer Small Cap Growth Fund
Pioneer Small Cap Value Fund
Pioneer Mid Cap Growth Fund
Pioneer Mid Cap Value Fund
Pioneer Money Market Trust
Pioneer Real Estate Shares
Pioneer Science & Technology Fund
Pioneer Small Company Fund
Pioneer Strategic Income Fund
Pioneer Tax-Free Income Fund
Pioneer Tax Managed/Core Equity Fund
Pioneer Value Fund
Pioneer Variable Contracts Trust:
Pioneer International Value VCT Portfolio
Pioneer Mid Cap Value VCT Portfolio
Pioneer Emerging Markets VCT Portfolio
Pioneer Europe VCT Portfolio
Pioneer Real Estate Growth/Shares VCT Portfolio
Pioneer Equity Income VCT Portfolio
Pioneer Balanced VCT Portfolio
Pioneer America Income VCT Portfolio
Pioneer Money Market VCT Portfolio
Pioneer Strategic Income VCT Portfolio
Pioneer Swiss Franc Bond VCT Portfolio
Pioneer Fund VCT Portfolio
Pioneer Growth Shares VCT Portfolio
Pioneer High Yield VCT Portfolio
Pioneer Science & Technology VCT Portfolio
Pioneer Small Company VCT Portfolio
Pioneer Europe Select VCT Portfolio
Pioneer Global Financials VCT Portfolio
Pioneer Global Health Care VCT Portfolio
Pioneer Global Telecoms VCT Portfolio
Pioneer Small Cap Value VCT Portfolio
Pioneer Global Value VCT Portfolio
Pioneer Global Consumers VCT Portfolio
Pioneer Global Energy & Utilities VCT Portfolio
Pioneer Global Industrials VCT Portfolio
Pioneer International Equity Fund
Updated as of July 10, 2001 and March 12, 2002
/s/ Vincent Nave Vincent Nave Treasurer |
EXHIBIT 2
PIONEERING MANAGEMENT CORP.
Fund Accounting, Administration and Custody Services (FAACS)
LIST OF SERVICES PROVIDED TO PIONEER MUTUAL FUNDS
SERVICES LISTED BY FAACS TEAM, OR FUNCTIONAL AREA. PLEASE SEE
ATTACHED CHART FOR ORGANIZATIONAL STRUCTURE.
PERCENTAGES FOLLOWING FAACS TEAM NAMES INDICATE EACH TEAM'S
AGGREGATE COMPENSATION AND BENEFITS PERCENTAGE BILLABLE TO THE FUNDS.
FAACS Administration (70%):
. Provide direction, supervision and administrative support to all FAACS
teams
. Prepare or review and submit all tax reports for Funds
+ Oversee fund distributions for regulatory compliance
+ Assist in planning for new product introductions
Fund Accounting (91%):
. Maintain all accounting records for Funds
. Calculate and report daily net asset values per share and yields
. Recommend income and capital gains distribution rates
. Prepare funds' financial statements and assist in fund audits
+ Maintain accounting records for institutional portfolios
+ Perform periodic tests to verify each Fund's compliance with its prospectus
and applicable regulations
GlobalCustody and Settlements Division (20%):
. Enter portfolio trades into Fund Accounting records
. Support corporate actions analyses
+ Validate trade data and communicate them
to Custodian Banks
+ Act as liaison with Custodian Banks for trade settlements, security
position reconciliations and relaying global market updates to Investment
Advisor
+ Provide daily cash reporting to portfolio managers
+ Resolve trade disputes with counter-parties
Pricing and Corporate Actions (95%):
. Ensure accuracy and timeliness of prices supplied by external sources to
provide daily valuations of all security positions held by every Fund
. Validate and communicate corporate/class action information to Fund
Accounting
. Present monthly valuation report to Funds' Board of Trustees
+ Provide valuation and corporate actions services for securities held by
institutional portfolios, but not by Funds
FAACS Systems (51%):
. Provide systems support to users of fund accounting and portfolio pricing
software, and manage relationships with applicable software and hardware
vendors
. Develop and maintain custom applications and systems interfaces for FAACS
teams
. Manage Year 2000 project
+ Provide user support and vendor liaison for trading, compliance and
analysis systems
+ Implement and manage systems interfaces with Investment Advisor, Custodian
Banks and other service providers
Shareholder Reporting and Audit Liaison (82%):
. Review and complete Funds' financial statements
. Manage the Fund Audit process to ensure timely completion of shareholder
reports
. Prepare reports related to contract renewals and soft dollar payments for
Board of Trustees' review
. Provide financial information to Legal Department for prospectus updates
and other regulatory filings
. Prepare regulatory reports such as N-SAR, Form S and EDGAR filings
+ Provide financial information to Pioneer management and industry trade
groups
+ Provide liquidity, commission and soft dollar reporting to Pioneer
management
Funds Controller (93%):
. Manage fund expense payment cycles (e.g., timeliness and accuracy of
payments, allocation of costs among portfolios)
. Coordinate and standardize fund expense accruals and forecasting
. Provide expense reporting to Fund Accounting, FAACS management and auditors
. Compile daily reports of shareholder transactions from all sources (e.g.,
PSC, PMIL, BFDS, variable annuity agents, 401(k) administrators, third
party record keepers) for entry into fund records
. Provide daily reconciliation of receivable, payable and share accounts
between fund records and entities listed above
. Manage the daily estimating process to minimize "as of" gains and losses
to Funds
. Communicate daily fund prices and yields to PSC, PMIL, etc.
+ Provide fund-related analyses to Pioneer management
EXHIBIT 3 [updated fall 2001]
THE INVESTMENT MANAGEMENT USA INC. - LEGAL DEPARTMENT
I. LIST OF REIMBURSABLE LEGAL SERVICES PROVIDED TO PIONEER MUTUAL FUNDS
Filings under Investment Company Act of 1940 and Securities Act of 1933
o Prepare and File (via EDGAR) Rule 24f-2 Notices (coordination with Pioneer Fund Accounting and Hale and Dorr LLP as necessary)
o SEC Electronic Filing (EDGAR) Responsibilities
o Prepare Fund Registration Statements and Related Filings
for filing on EDGAR and complete filings
o Maintain and develop enhancements to Pioneer's EDGAR
systems and procedures, including contingency planning
o Maintain EDGAR related databases and document archives
o Liaison with third party EDGAR agents when necessary
o Prepare proxy statements and related materials for filing
on EDGAR and complete filings
Blue Sky Administration (State Registration)
o Principal liaison with Blue Sky vendor (Automated Business
Development Corporation)
o Coordinate SEC filing schedule and fund documentation with Blue Sky
vendor
o Monitor status of state filings with Blue Sky vendor
o Transfer Agent coordination
o Review vendor statements and invoices
o Conduct vendor due diligence, as appropriate
Hiring oversight
In-person meetings
Arthur Andersen audit
Miscellaneous Services
o Assist Pioneer Fund Accounting in the preparation of Fund Form N-SARs
o Managing internal participation in prospectus simplification
project. Charge Funds only for portion that relates to Funds--this
excludes work on behalf of distribution or management companies,
including coordination internally.
II. LIST OF NON-REIMBURSABLE LEGAL SERVICES PROVIDED TO PIONEER MUTUAL FUNDS
Filings under Investment Company Act of 1940 and Securities Act of 1933
o Maintain Pioneer Mutual Funds SEC Filing Calendar
o Interact as necessary with the staff of the investment adviser,
distribution company and transfer agent to ensure awareness of
Fund disclosure requirements
o Coordinate internal review of Prospectuses and SAIs
o Coordinate Hale and Dorr LLP review and internal review of Hale and
Dorr LLP material
o Identify business and other situations that trigger requirement to
supplement Prospectuses and SAIs
Proxy Statements
o Assist Hale and Dorr LLP in the preparation of proxy statements
o Coordinate internal review of proxy statements and related documents
o Review proxy related materials prepared by the distribution
company to ensure compliance with regulatory requirements
o Review the transfer agent's proxy solicitation efforts to ensure
compliance with regulatory requirements
o Act as liaison between Hale and Dorr LLP and transfer agency staff
with respect to the proxy solicitation process
Miscellaneous Services
o Monitor the preparation of shareholder reports by the distribution
company
o Prepare and File (via EDGAR) Section 16 filings (re: Pioneer
Interest Shares)
o Maintain Officer and Trustee Securities Holdings (Fund and non-Fund
related)
o Code of Ethics Administration (as it relates to Disinterested
Trustees)
Regulatory Oversight
o Monitor proposed changes in applicable regulation and inform
appropriate Pioneer personnel of the proposals and impact on Funds
o Act as liaison with Hale and Dorr LLP in the implementation of
changes
Special Projects
o Coordinate implementation of Text Manager (formerly Document
Directions software system) for prospectus production
o Prospectus simplification efforts on behalf of distribution or
management companies, including internal coordination
o Privacy procedures required by Gramm, Leach, Bliley and Regulation
S-P
Pioneer Large Cap Growth Fund
August 5, 2002
WWW.HALEDORR.COM
60 STATE STREET BOSTON, MA 02109
617-526-6000 FAX 617-526-5000
August 5, 2002
Pioneer Large Cap Growth Fund
60 State Street
Boston, Massachusetts 02109
Ladies and Gentlemen:
Pioneer Large Cap Growth Fund (the "Trust") was established as a Delaware business trust under an Agreement and Declaration of Trust dated March 12, 2002 (the "Declaration of Trust"). The beneficial interests thereunder are represented by transferable shares of beneficial interest, no par value.
The Trustees have the powers set forth in the Declaration of Trust, subject to the terms, provisions and conditions therein provided. Pursuant to Article V, Section 2 of the Declaration of Trust, the number of shares of beneficial interest authorized to be issued under the Declaration of Trust is unlimited and the Trustees are authorized to divide the shares into one or more series of shares and one or more classes thereof as they deem necessary or desirable. Pursuant to Article V, Sections 2 and 3 of the Declaration of Trust, the Trustees are empowered in their discretion to issue shares of any series for such amount and type of consideration, including cash or securities, and on such terms as the Trustees may authorize, all without action or approval of the shareholders. As of the date of this opinion, the Trustees have divided the shares of the Trust into four classes, designated as Class A, Class B, Class C and Class Y.
We have examined the Declaration of Trust and By-Laws, each as amended from time to time, of the Trust, and such other documents as we have deemed necessary or appropriate for the purposes of this opinion, including, but not limited to, originals, or copies certified or otherwise identified to our satisfaction, of such documents, Trust records and other instruments. In our examination of the above documents, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity to original documents of all documents submitted to us as certified of photostatic copies.
Any reference to "our knowledge", to any matter "known to us", "coming to our attention" or "of which we are aware" or any variation of any of the foregoing shall mean the conscious awareness of the attorneys in this firm who have rendered substantive attention to the preparation of the Trust's Registration Statement on Form N-1A or any amendments thereto, of the existence or absence of any facts which would contradict the opinions set forth below. We have not undertaken any independent investigation to determine the existence or absence of such facts, and no inference as to our knowledge of the existence or absence of such facts should be drawn from the fact of our representation of the Trust. Without limiting the foregoing, we have not examined any dockets or records of any court, administrative tribunal or other similar entity, or any electronic or computer databases, in connection with our opinions expressed below.
Our opinions below are qualified to the extent that they may be subject to or affected by (i) applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting the rights and remedies of creditors generally, (ii) statutory or decisional law concerning recourse by creditors to security in the absence of notice or hearing and (iii) duties and standards imposed on creditors and parties to contracts, including, without limitation, requirements of good faith, reasonableness and fair dealing. Further, we do not express any opinion as to (i) the availability of the remedy of specific performance or any other equitable remedy upon breach of any provision of any agreement whether applied by a court of law or equity, (ii) the successful assertion of any equitable defense, or (iii) the right of any party to enforce the indemnification or contribution provisions of any agreement.
In rendering the opinion below, insofar as it relates to the good standing and valid existence of the Trust, we have relied solely on a certificate of the Secretary of State of the State of Delaware, dated as of a recent date, and such opinion is limited accordingly and is rendered as of the date of such certificate.
This opinion is limited to the Delaware Business Trust Act, and we express no opinion with respect to the laws of any other jurisdiction or to any other laws of the State of Delaware. Further, we express no opinion as to compliance with any state or federal securities laws, including the securities laws of the State of Delaware.
Our opinion below, as it relates to the non-assessability of the shares of the Trust, is qualified to the extent that any shareholder is, was or may become a named Trustee of the Trust. It is also qualified to the extent that, pursuant to Section 2 of Article VIII of the Declaration of Trust, 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).
Subject to the foregoing, we are of the opinion that the Trust is a duly organized and validly existing business trust in good standing under the laws of the State of Delaware and that the shares of beneficial interest of the Trust, when issued in accordance with the terms, conditions, requirements and procedures set forth in the Declaration of Trust, the Trust's Registration Statement on Form N-1A and the Underwriting Agreement between the Trust and Pioneer Funds Distributor, Inc., will constitute legally and validly issued, fully paid and non-assessable shares of beneficial interest in the Trust, subject to compliance with the Securities Act of 1933, as amended, the Investment Company Act of 1940, as amended, and the applicable state laws regulating the sale of securities.
We are opining only as to the specific legal issues expressly set forth herein, and no opinion should be inferred as to any other matters. We are opining on the date hereof as to the law in effect on the date hereof, and we disclaim any obligation to advise you of any change in any of these sources of law or subsequent legal or factual developments that might affect any matters or opinions set forth herein.
This opinion is furnished to you solely for your use and may not be quoted to or relied upon by any other person or entity or used for any other purpose, without our prior written consent.
We consent to your filing this opinion with the Securities and Exchange Commission (the "Commission") as an exhibit to any amendments to the Trust's registration statement with the Commission. Except as provided in this paragraph, this opinion may not be relied upon by, or filed with, any other parties or for any other purpose.
Very truly yours,
/s/ Hale and Dorr LLP |
Hale and Dorr LLP
Consent of Ernst & Young LLP, Independent Auditors
We consent to the reference to our firm under the captions "Independent Auditors" and "Financial Statements" and to the use of our report, dated August 7, 2002, in Pre-Effective Amendment Number 1 to the Registration Statement (Form N-1A No. 333-89354) of Pioneer Large Cap Growth Fund.
ERNST & YOUNG LLP
Boston, Massachusetts
August 7, 2002
SHARE PURCHASE AGREEMENT
This Agreement is made as of the 25th day of July, 2002 between Pioneer Funds Distributor, Inc., a Delaware corporation ("PFD"), and Pioneer Large Cap Growth Fund, a Delaware business trust (the "Fund").
WHEREAS, the Fund wishes to sell to PFD, and PFD wishes to purchase from the Fund, $100,000 of shares of beneficial interest of the Fund (10,000 shares at a purchase price of $10.00 per share (collectively, the "Shares")); and
WHEREAS, PFD is purchasing the Shares for the purpose of providing the initial capitalization of the Fund as required by the Investment Company Act of 1940;
NOW, THEREFORE, the parties hereto agree as follows:
1. Simultaneously with the execution of this Agreement, PFD is delivering to the Fund a check in the amount of $100,000 in full payment for the Shares.
2. PFD agrees that it is purchasing the Shares for investment and has no present intention of redeeming or reselling the Shares.
3. PFD further agrees that it may not withdraw the Shares from the Fund for the first two years and at a rate, which at any time during the Fund's next three years of operations, exceeds in the aggregate $2,777.78 per month.
Executed as of the date first set forth above.
PIONEER FUNDS DISTRIBUTOR, INC.
/s/ Steven M. Graziano By: Steven M. Graziano Its: President |
PIONEER LARGE CAP GROWTH FUND
/s/ Daniel T. Geraci By: Daniel T. Geraci Its: Executive Vice President |
CLASS A SHARES DISTRIBUTION PLAN
PIONEER LARGE CAP GROWTH FUND
CLASS A SHARES DISTRIBUTION PLAN, dated as of August 1, 2002, of PIONEER LARGE CAP GROWTH FUND, a Delaware business trust (the "Fund")
WITNESSETH
WHEREAS, the Fund is engaged in business as an open-end 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 Fund intends to distribute shares of beneficial interest (the "Class A Shares") in accordance with Rule 12b-l promulgated by the Securities and Exchange Commission under the 1940 Act ("Rule 12b- 1"), and desires to adopt this Class A distribution plan (the "Class A Plan") as a plan of distribution pursuant to Rule 12b-1;
WHEREAS, the Fund desires that Pioneer Funds Distributor, Inc., a Massachusetts corporation ("PFD"), provide certain distribution services for the Fund's Class A Shares in connection with the Class A Plan;
WHEREAS, the Fund has entered into an underwriting agreement with PFD, whereby PFD provides facilities and personnel and renders services to the Fund in connection with the offering and distribution of Class A Shares (the "Underwriting Agreement");
WHEREAS, the Fund 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 Class A Shares in connection with the offering of Class A Shares, (b) PFD may compensate any Dealer that sells Class A 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, any deferred sales charges imposed by PFD in connection with the repurchase of Class A Shares, its profits or any other source available to it;
WHEREAS, the Board of Trustees of the Fund, in considering whether the Fund should adopt and implement this Class A Plan, has evaluated such information as it deemed necessary to an informed determination whether this Class A 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 Fund for such purposes, and has determined that there is a reasonable likelihood that the adoption and implementation of this Class A Plan will benefit the Fund and its Class A shareholders;
NOW, THEREFORE, the Board of Trustees of the Fund hereby adopts this Class A Plan for the Fund as a plan of distribution of Class A Shares in accordance with Rule 12b-l, on the following terms and conditions:
1. The Fund may expend pursuant to this Class A Plan amounts not to exceed 0.25 of 1% of the average daily net assets attributable to Class A Shares of the Fund per annum.
2. Subject to the limit in paragraph 1, the Fund shall reimburse PFD for amounts expended by PFD to finance any activity which is primarily intended to result in the sale of Class A Shares of the Fund or the provision of services to Class A shareholders of the Fund, 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 Fund 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 0.25% per annum of each Portfolio's daily net assets attributable to Class A Shares; (ii) reimbursement to PFD for its expenditures for broker-dealer commissions and employee compensation on certain sales of the Fund's Class A Shares with no initial sales charge; and (iii) reimbursement to PFD for expenses incurred in providing services to Class A shareholders and supporting broker-dealers and other organizations, such as banks and trust companies, in their efforts to provide such services (any addition of such categories shall be subject to the approval of the Qualified Trustees, as defined below, of the Fund). 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 Fund acknowledges that PFD will charge an initial sales load or a contingent sales load in connection with certain sales of Class A Shares of the Fund and that PFD will reallow to Dealers all or a portion of such sales loads, as described in the Fund'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 loads or to reallow all or any portion thereof to Dealers.
3. The Fund understands that agreements between PFD and Dealers may provide for payment of fees to Dealers in connection with the sale of Class A Shares and the provision of services to Class A shareholders of the Fund. Nothing in this Class A Plan shall be construed as requiring the Fund to make any payment to any Dealer or to have any obligations to any Dealer in connection with services as a dealer of the Class A 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 Fund.
4. Nothing herein contained shall be deemed to require the Fund to take any action contrary to its Agreement and 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 Fund's Board of Trustees of the responsibility for and control of the conduct of the affairs of the Fund.
5. This Class A Plan shall become effective upon approval by (i) a vote of the Board of Trustees, and (ii) a vote of a majority of the Trustees who are not "interested persons" of the Fund and who have no direct or indirect financial interest in the operation of the Class A Plan or in any agreement related to the Class A Plan (the "Qualified Trustees"), such votes to be cast in person at a meeting called for the purpose of voting on this Class A Plan.
6. This Class A 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 Fund and a majority of the Qualified Trustees. If such annual approval is not obtained, this Class A Plan shall expire on the annual anniversary of the adoption of the Class A Plan following the last such approval.
7. This Class A Plan may be amended at any time by the Board of Trustees, PROVIDED that this Class A 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 Class A of the Fund 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 Class A 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 Class A 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 Fund.
8. In the event of termination or expiration of this Class A Plan, the Fund 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 Fund during such twelve-month period shall not exceed 0.25% of the Fund's average daily net assets attributable to Class A Shares 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 Fund and PFD shall provide to the Fund's Board of Trustees, and the Board of Trustees shall review, at least quarterly, a written report of the amounts expended under this Class A Plan and the purposes for which such expenditures were made.
10. While this Class A 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 Fund.
11. For the purposes of this Class A 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 Fund shall preserve copies of this Class A 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 Class A Plan shall be governed by and 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 Class A 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.
CLASS B SHARES DISTRIBUTION PLAN
PIONEER LARGE CAP GROWTH FUND
CLASS B SHARES DISTRIBUTION PLAN, dated as of August 1, 2002 of PIONEER LARGE CAP GROWTH FUND, a Delaware business trust (the "Trust")
WITNESSETH
WHEREAS, the Trust is engaged in business as an open-end, 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 shares of beneficial interest (the "Class B Shares") of the Trust 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 Class B Shares distribution plan (the "Class B Plan") as a plan of distribution pursuant to Rule12b-1;
WHEREAS, the Trust desires that Pioneer Funds Distributor, Inc., a Massachusetts corporation ("PFD") or such other persons as may be appointed principal underwriter from time to time, provide certain distribution services for the Trust's Class B Shares in connection with the Class B Plan (PFD and any successor principal underwriter of the Trust's shares being referred to as an "Underwriter");
WHEREAS, the Trust has entered into an underwriting agreement (in a form approved by the Trust's Board of Trustees in a manner specified in Rule 12b-1) with the Underwriter, whereby the Underwriter provides facilities and personnel and renders services to the Trust in connection with the offering and distribution of Class B Shares (the "Underwriting Agreement");
WHEREAS, the Trust also recognizes and agrees that (a) the Underwriter may retain the services of firms or individuals to act as dealers or wholesalers (collectively, the "Dealers") of the Class B Shares in connection with the offering of Class B Shares, (b) the Underwriter may compensate any Dealer that sells Class B Shares in the manner and at the rate or rates to be set forth in an agreement between the Underwriter and such Dealer and (c) the Underwriter may make such payments to the Dealers for distribution services out of the fee paid to the Underwriter hereunder, any deferred sales charges imposed by the Underwriter in connection with the repurchase of Class B Shares, its profits or any other source available to it;
WHEREAS, the Trust recognizes and agrees that the Underwriter may impose certain deferred sales charges in connection with the repurchase of Class B Shares by the Trust, and the Underwriter may retain (or receive from the Trust, as the case may be) all such deferred sales charges; and
WHEREAS, the Board of Trustees of the Trust, in considering whether the Trust should adopt and implement this Class B Plan, has evaluated such information as it deemed necessary to an informed determination whether this Class B 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 Class B Plan will benefit the Trust and its Class B shareholders;
NOW, THEREFORE, the Board of Trustees of the Trust hereby adopts this Class B Plan for the Trust as a plan of distribution of Class B Shares in accordance with Rule 12b-1, on the following terms and conditions:
1. (a) The Trust is authorized to compensate the Underwriter for (1) distribution services and (2) personal and account maintenance services performed and expenses incurred by the Underwriter in connection with the Trust's Class B Shares. Such compensation shall be calculated and accrued daily and paid monthly or at such other intervals as the Board of Trustees may determine.
(b) The amount of compensation payable to the Underwriter during any one year for distribution services with respect to Class B Shares shall be its Allocable Portion (as defined in Section 14 below) of .75% of the Trust's average daily net assets attributable to Class B Shares for such year (the "Distribution Fee"). Notwithstanding anything to the contrary set forth in this Class B Plan or any Underwriting Agreement, the Distribution Fee shall not be terminated or modified (including a modification by change in the rules relating to the conversion of Class B Shares into Class A shares of the Trust) with respect to Class B shares (or the assets of the Trust attributable to such Class B Shares) either (x) issued prior to the date of any termination or modification or (y) attributable to Class B shares issued through one or a series of exchanges of shares of another investment company for which the Underwriter acts as principal underwriter which were initially issued prior to the date of such termination or modification or (z) issued as a dividend or distribution upon Class B Shares initially issued or attributable to Class B Shares issued prior to the date of any such termination or modification (the "Pre-Amendment Class B Shares") except:
(i) to the extent required by a change in the 1940 Act, the rules or regulations under the 1940 Act, the Conduct Rules of the National Association of Securities Dealers, Inc., (the "NASD") or an order of any court or governmental agency, in each case enacted, issued or promulgated after September 30, 1998,
(ii) in connection with a "Complete Termination" of this Class B Plan. For purposes of this Class B Plan, a "Complete Termination" shall have occurred if: (x) this Class B Plan and the distribution plan for Class B Shares of any successor trust or fund or any trust or fund acquiring substantially all of the assets of the Trust (collectively, the "Affected Funds") is terminated with respect to all Class B Shares of the Trust and each Affected Fund then outstanding or subsequently issued, (y) the payment by the Trust of Distribution Fees with respect to all Class B Shares of the Trust and each Affected Fund is terminated and (z) neither the Trust nor any Affected Fund establishes concurrently with or subsequent to such termination of this Class B Plan another class of shares which has substantially similar characteristics to the current Class B Shares of the Trust, including the manner of payment and amount of contingent deferred sales charge paid directly or indirectly by the holders of such shares (all of such classes of shares "Class B Shares"), or
(iii) on a basis, determined by the Board of Trustees, including a majority of the Qualified Trustees (as hereinafter defined), acting in good faith, so long as from and after the effective date of such modification or termination: (x) neither (1) the Trust, (2) any Affected Fund nor (3) the investment advisor or any other sponsor entity (or their affiliates) of the Trust or any Affected Fund pay, directly or indirectly, a fee, a trailer fee, or expense reimbursement to any person for the provision of personal and account maintenance services (as such terms are used in the Conduct Rules of the NASD) to the holder of Class B Shares of the Trust or any Affected Fund (but the forgoing shall not prevent payments for transfer agency or subaccounting services), and (y) the termination or modification of the Distribution Fee applies with equal effect to both Pre-Amendment Class B Shares and Post-Amendment Class B Shares (as defined in Section 7) outstanding from time to time of the Trust and all Affected Funds.
(c) Distribution services and expenses for which an Underwriter may be compensated pursuant to this Class B Plan include, without limitation: compensation to and expenses (including allocable overhead, travel and telephone expenses) of (i) Dealers, brokers and other dealers who are members of the NASD or their officers, sales representatives and employees, (ii) the Underwriter and any of its affiliates and any of their respective officers, sales representatives and employees, (iii) banks and their officers, sales representatives and employees, who engage in or support distribution of the Trust's Class B Shares; printing of reports and prospectuses for other than existing shareholders; and preparation, printing and distribution of sales literature and advertising materials.
(d) The Underwriter shall be deemed to have performed all
services required to be performed in order to be entitled to receive
its Allocable Portion of the Distribution Fee, if any, payable with
respect to Class B Shares sold through such Underwriter upon the
settlement date of the sale of such Class B Share or in the case of
Class B Shares issued through one or a series of exchanges of shares of
another investment company for which the Underwriter acts as principal
underwriter or issued as a dividend or distribution upon Class B
Shares, on the settlement date of the first sale on a commission basis
of a Class B Share from which such Class B share was derived. The
Trust's obligation to pay an Underwriter its Allocable Portion of the
Distribution Fees payable in respect of the Class B Shares shall be
absolute and unconditional and shall not be subject to dispute, offset,
counterclaim or any defense whatsoever, at law or equity, including,
without limitation, any of the foregoing based on the insolvency or
bankruptcy of such Underwriter. The foregoing provisions of this
Section 1(d) shall not limit the rights of the Trust to modify or
terminate payments under this Class B Plan as provided in Section 1(b)
with respect to Pre-Amendment Class B Shares or Section 7 with respect
to Post-Amendment Class B Shares.
(e) The amount of compensation paid during any one year for personal and account maintenance services and expenses shall be .25% of the Trust's average daily net assets attributable to Class B Shares for such year. As partial consideration for personal services and/or account maintenance services provided by the Underwriter to the Class B Shares, the Underwriter shall be entitled to be paid any fees payable under this clause (e) with respect to Class B Shares for which no dealer of record exists, where less than all consideration has been paid to a dealer of record or where qualification standards have not been met.
(f) Personal and account maintenance services for which the
Underwriter or any of its affiliates, banks or Dealers may be
compensated pursuant to this Class B Plan include, without limitation:
payments made to or on account of the Underwriter or any of its
affiliates, banks, other brokers and dealers who are members of the
NASD, or their officers, sales representatives and employees, who
respond to inquiries of, and furnish assistance to, shareholders
regarding their ownership of Class B Shares or their accounts or who
provide similar services not otherwise provided by or on behalf of the
Trust.
(g) The Underwriter may impose certain deferred sales charges in connection with the repurchase of Class B Shares by the Trust and the Underwriter may retain (or receive from the Trust as the case may be) all such deferred sales charges.
(h) The Trust has agreed in the Underwriting Agreement to certain restrictions on the Trust's ability to modify or waive certain terms of the Trust's Class B Shares or the contingent deferred sales charge with respect to Pre-Amendment Class B Shares.
(i) Appropriate adjustments to payments made pursuant to clauses (b) and (d) of this paragraph 1 shall be made whenever necessary to ensure that no payment is made by the Trust in excess of the applicable maximum cap imposed on asset based, front-end and deferred sales charges by Section 2830(d) of the Conduct Rules of the NASD.
2. The Trust understands that agreements between the Underwriter and Dealers may provide for payment of fees to Dealers in connection with the sale of Class B Shares and the provision of services to shareholders of the Trust. Nothing in this Class B 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 Class B Shares. The Underwriter shall agree and undertake that any agreement entered into between the Underwriter and any Dealer shall provide that such Dealer shall look solely to the Underwriter for compensation for its services thereunder and that in no event shall such Dealer seek any payment from the Trust.
3. Notwithstanding anything to the contrary in this Class B Plan or any Underwriting Agreement, the Underwriter may assign, sell or pledge (collectively, "Transfer") its rights to its Allocable Portion of any Distribution Fees under this Class B Plan. Upon receipt of notice of such Transfer, the Trust shall pay to the assignee, purchaser or pledgee (collectively with their subsequent transferees, "Transferees"), as third party beneficiaries, such portion of the Distribution Fees payable to the Underwriter as provided in written instructions (the "Allocation Instructions") from the Underwriter and said Transferee to the Trust. In the absence of Allocation Instructions, the Trust shall have no obligations to a Transferee.
4. Nothing herein contained shall be deemed to require the Trust to take any action contrary to its Agreement and Declaration of Trust, as it may be amended or restated from time to time, 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; it being understood that actions taken pursuant to Section 1(b) shall not be considered such an action described above.
5. This Class B Plan shall become effective upon approval by a vote of the Board of Trustees, including 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 Class B Plan or in any agreements related to the Class B Plan (the "Qualified Trustees"), such votes to be cast in person at a meeting called for the purpose of voting on this Class B Plan.
6. All of the terms of this Class B Plan are intended to apply in respect of all Pre-Amendment Class B Shares and to the Distribution Fees payable in respect of any thereof. This Class B 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 Class B Plan shall expire on the annual anniversary of the adoption of this Class B Plan following the last such approval.
7. Subject to the limitation set forth in Section 1(b) with respect to Pre-Amendment Class B shares, this Class B Plan may be amended at any time by the Board of Trustees with respect to Class B Shares (and the assets attributable to such Class B Shares) which are not Pre-Amendment Class B Shares ("Post-Amendment Class B Shares"); PROVIDED that this Class B Plan may not be amended to increase materially the limitations 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 Class B 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. This Class B Plan may be terminated at any time, subject to Section 1(b), 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 Class B of the Trust.
8. The Trust and the Underwriter 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 Class B Plan and the purposes for which such expenditures were made.
9. While this Class B 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.
10. For the purposes of this Class B 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.
11. The Trust shall preserve copies of this Class B Plan, and each agreement related hereto and each report referred to in Paragraph 7 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.
12. This Class B Plan shall be construed in accordance with the laws of The Commonwealth of Massachusetts and the applicable provisions of the 1940 Act.
13. If any provision of this Class B Plan shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of the Class B Plan shall not be affected thereby.
14. Payments under this Class B Plan shall be allocated between PFD and any successor Underwriter or co-Underwriter (each an Underwriter's "Allocable Portion") as provided in the Allocation Procedures appended hereto.
CLASS C SHARES DISTRIBUTION PLAN
PIONEER LARGE CAP GROWTH FUND
CLASS C SHARES DISTRIBUTION PLAN, dated as of August 1, 2002 of PIONEER LARGE CAP GROWTH FUND, a Delaware business trust (the "Trust").
WITNESSETH
WHEREAS, the Trust is engaged in business as an open-end 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 shares of beneficial interest (the "Class C Shares") of the Trust 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 Class C Shares distribution plan (the "Class C Plan") as a plan of distribution pursuant to Rule 12b-1;
WHEREAS, the Trust desires that Pioneer Funds Distributor, Inc., a Massachusetts corporation ("PFD"), provide certain distribution services for the Trust's Class C Shares in connection with the Class C Plan;
WHEREAS, the Trust has entered into an underwriting agreement (in a form approved by the Trust's Board of Trustees in a manner specified in Rule 12b-1) with PFD, whereby PFD provides facilities and personnel and renders services to the Trust in connection with the offering and distribution of Class C 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 Class C Shares in connection with the offering of Class C Shares, (b) PFD may compensate any Dealer that sells Class C 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, any deferred sales charges imposed by PFD in connection with the repurchase of Class C shares, its profits or any other source available to it;
WHEREAS, the Trust recognizes and agrees that PFD may impose certain deferred sales charges in connection with the repurchase of Class C Shares by the Trust, and PFD may retain (or receive from the Trust, as the case may be) all such deferred sales charges; and
WHEREAS, the Board of Trustees of the Trust, in considering whether the Trust should adopt and implement this Class C Plan, has evaluated such information as it deemed necessary to an informed determination whether this Class C 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 Class C Plan will benefit the Trust and its Class C shareholders;
NOW, THEREFORE, the Board of Trustees of the Trust hereby adopts this Class C Plan for the Trust as a plan of distribution of Class C Shares in accordance with Rule 12b-1, on the following terms and conditions:
1. (a) The Trust is authorized to compensate PFD for (1) distribution services and (2) personal and account maintenance services performed and expenses incurred by PFD in connection with the Trust's Class C Shares. Such compensation shall be calculated and accrued daily and paid monthly or at such other intervals as the Board of Trustees may determine.
(b) The amount of compensation paid during any one year for distribution services with respect to Class C Shares shall be .75% of the Trust's average daily net assets attributable to Class C Shares for such year.
(c) Distribution services and expenses for which PFD may be compensated pursuant to this Class C Plan include, without limitation: compensation to and expenses (including allocable overhead, travel and telephone expenses) of (i) Dealers, brokers and other dealers who are members of the National Association of Securities Dealers, Inc. ("NASD") or their officers, sales representatives and employees, (ii) PFD and any of its affiliates and any of their respective officers, sales representatives and employees, (iii) banks and their officers, sales representatives and employees, who engage in or support distribution of the Trust's Class C Shares; printing of reports and prospectuses for other than existing shareholders; and preparation, printing and distribution of sales literature and advertising materials.
(d) The amount of compensation paid during any one year for personal and account maintenance services and expenses shall be .25% of the Trust's average daily net assets attributable to Class C Shares for such year. As partial consideration for personal services and/or account maintenance services provided by PFD to the Class C Shares, PFD shall be entitled to be paid any fees payable under this clause (d) with respect to Class C shares for which no dealer of record exists, where less than all consideration has been paid to a dealer of record or where qualification standards have not been met.
(e) Personal and account maintenance services for which PFD or
any of its affiliates, banks or Dealers may be compensated
pursuant to this Class C Plan include, without limitation:
payments made to or on account of PFD or any of its
affiliates, banks, other brokers and dealers who are members
of the NASD, or their officers, sales representatives and
employees, who respond to inquiries of, and furnish assistance
to, shareholders regarding their ownership of Class C Shares
or their accounts or who provide similar services not
otherwise provided by or on behalf of the Trust.
(f) PFD may impose certain deferred sales charges in connection with the repurchase of Class C Shares by the Trust and PFD may retain (or receive from the Trust as the case may be) all such deferred sales charges.
(g) Appropriate adjustments to payments made pursuant to clauses (b) and (d) of this paragraph 1 shall be made whenever necessary to ensure that no payment is made by the Trust in excess of the applicable maximum cap imposed on asset based, front-end and deferred sales charges by Section 2830(d) of the Conduct Rules of the NASD.
2. The Trust understands that agreements between PFD and Dealers may provide for payment of fees to Dealers in connection with the sale of Class C Shares and the provision of services to shareholders of the Trust. Nothing in this Class C 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 Class C 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.
3. Nothing herein contained shall be deemed to require the Trust to take any action contrary to its Declaration of Trust, as it may be amended or restated from time to time, 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.
4. This Class C Plan shall become effective upon approval by (i) a vote of the Board of Trustees, and (ii) 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 Class C Plan or in any agreements related to the Class C Plan (the "Qualified Trustees"), such votes to be cast in person at a meeting called for the purpose of voting on this Class C Plan.
5. This Class C 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 Class C Plan shall expire on the first anniversary of the adoption of this Class C Plan following the last such approval.
6. This Class C Plan may be amended at any time by the Board of Trustees, PROVIDED that this Class C Plan may not be amended to increase materially the limitations 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 Class C 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. This Class C 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 Class C of the Trust.
7. 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 Class C Plan and the purposes for which such expenditures were made.
8. While this Class C 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.
9. For the purposes of this Class C 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.
10. The Trust shall preserve copies of this Class C Plan, and each agreement related hereto and each report referred to in Paragraph 7 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.
11. This Class C Plan shall be construed in accordance with the laws of The Commonwealth of Massachusetts and the applicable provisions of the 1940 Act.
12. If any provision of this Class C Plan shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of the Class C Plan shall not be affected thereby.
PIONEER LARGE CAP GROWTH FUND
Multiple Class Plan Pursuant to Rule 18f-3 Class A Shares, Class B Shares, Class C Shares and Class Y Shares August 2002
Each class of shares of Pioneer Large Cap Growth Fund (the "Fund") will have the same relative rights and privileges and be subject to the same sales charges, fees and expenses, except as set forth below. The Board of Trustees may determine in the future that other distribution arrangements, allocations of expenses (whether ordinary or extraordinary) or services to be provided to a class of shares are appropriate and amend this Plan accordingly without the approval of shareholders of any class. Except as set forth in the Fund's prospectus(es), shares may be exchanged only for shares of the same class of another Pioneer mutual fund.
Article I. Class A Shares
Class A Shares are sold at net asset value and subject to the initial sales charge schedule or contingent deferred sales charge ("CDSC") and minimum purchase requirements as set forth in the Fund's prospectus. Class A Shares shall be entitled to the shareholder services set forth from time to time in the Fund's prospectus with respect to Class A Shares. Class A Shares are subject to fees calculated as a stated percentage of the net assets attributable to Class A Shares under the Fund's Class A Rule 12b-1 Distribution Plan as set forth in such Distribution Plan. The Class A Shareholders have exclusive voting rights, if any, with respect to the Class A Rule 12b-1 Distribution Plan. Transfer agency fees are allocated to Class A Shares on a per account basis except to the extent, if any, such an allocation would cause the Fund to fail to satisfy any requirement necessary to obtain or rely on a private letter ruling from the Internal Revenue Service ("IRS") relating to the issuance of multiple classes of shares. Class A Shares shall bear the costs and expenses associated with conducting a shareholder meeting for matters relating to Class A Shares.
The initial purchase date for Class A Shares acquired through (i) reinvestment of dividends on Class A Shares or (ii) exchange from another Pioneer mutual fund will be deemed to be the date on which the original Class A shares were purchased.
Article II. Class B Shares
Class B Shares are sold at net asset value per share without the imposition of an initial sales charge. However, Class B Shares redeemed within a specified number of years of purchase will be subject to a CDSC as set forth in the Fund's prospectus. Class B Shares are sold subject to the minimum purchase requirements set forth in the Fund's prospectus. Class B Shares shall be entitled to the shareholder services set forth from time to time in the Fund's prospectus with respect to Class B Shares. Class B Shares are subject to fees calculated as a stated percentage of the net assets attributable to Class B Shares under the Class B Rule 12b-1 Distribution Plan as set forth in such Distribution Plan. The Class B Shareholders of the Fund have exclusive voting rights, if any, with respect to the Fund's Class B Rule 12b-1 Distribution Plan. Transfer agency fees are allocated to Class B Shares on a per account basis except to the extent, if any, such an allocation would cause the Fund to fail to satisfy any requirement necessary to obtain or rely on a private letter ruling from the IRS relating to the issuance of multiple classes of shares. Class B Shares shall bear the costs and expenses associated with conducting a shareholder meeting for matters relating to Class B Shares.
Class B Shares will automatically convert to Class A Shares of the Fund at the end of a specified number of years after the initial purchase date of Class B Shares, except as provided in the Fund's prospectus. Such conversion will occur at the relative net asset value per share of each class without the imposition of any sales charge, fee or other charge. The conversion of Class B Shares to Class A Shares may be suspended if it is determined that the conversion constitutes or is likely to constitute a taxable event under federal income tax law.
The initial purchase date for Class B Shares acquired through (i) reinvestment of dividends on Class B Shares or (ii) exchange from another Pioneer mutual fund will be deemed to be the date on which the original Class B shares were purchased.
Article III. Class C Shares
Class C Shares are sold at net asset value and subject to the initial sales charge schedule as set forth in the Fund's prospectus. Class C Shares redeemed within one year of purchase will be subject to a CDSC as set forth in the Fund's prospectus. Class C Shares are sold subject to the minimum purchase requirements set forth in the Fund's prospectus. Class C Shares shall be entitled to the shareholder services set forth from time to time in the Fund's prospectus with respect to Class C Shares. Class C Shares are subject to fees calculated as a stated percentage of the net assets attributable to Class C Shares under the Class C Rule 12b-1 Distribution Plan as set forth in such Distribution Plan. The Class C Shareholders of the Fund have exclusive voting rights, if any, with respect to the Fund's Class C Rule 12b-1 Distribution Plan. Transfer agency fees are allocated to Class C Shares on a per account basis except to the extent, if any, such an allocation would cause the Fund to fail to satisfy any requirement necessary to obtain or rely on a private letter ruling from the IRS relating to the issuance of multiple classes of shares. Class C Shares shall bear the costs and expenses associated with conducting a shareholder meeting for matters relating to Class C Shares.
The initial purchase date for Class C Shares acquired through (i) reinvestment of dividends on Class C Shares or (ii) exchange from another Pioneer mutual fund will be deemed to be the date on which the original Class C shares were purchased.
Article IV. Class Y Shares
Class Y Shares are sold at net asset value per share without the imposition of an initial sales charge. Class Y Shares are not subject to a CDSC upon redemption regardless of the length of the period of time such shares are held. Class Y Shares are sold subject to the minimum purchase requirements set forth in the Fund's prospectus. Class Y Shares shall be entitled to the shareholder services set forth from time to time in the Fund's prospectus with respect to Class Y Shares.
Class Y Shares are not subject to fees payable under a distribution or other plan adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended (the "Act"). The Class Y Shareholders of the Fund have exclusive voting rights, if any, with respect to the Fund's possible future adoption of a Class Y Rule 12b-1 Distribution Plan. Transfer agency fees are allocated to Class Y Shares on a per account basis except to the extent, if any, such an allocation would cause the Fund to fail to satisfy any requirement necessary to obtain or rely on a private letter ruling from the IRS relating to the issuance of multiple classes of shares. Class Y Shares shall bear the costs and expenses associated with conducting a shareholder meeting for matters relating to Class Y Shares.
The initial purchase date for Class Y Shares acquired through (i) reinvestment of dividends on Class Y Shares or (ii) exchange from another Pioneer mutual fund will be deemed to be the date on which the original Class Y shares were purchased.
Article V. Approval by Board of Trustees
This Plan shall not take effect until it has been approved by the vote of a majority (or whatever greater percentage may, from time to time, be required under Rule 18f-3 under the Act) of (a) all of the Trustees of the Fund and (b) those of the Trustees who are not "interested persons" (as such term may be from time to time defined under the Act) of the Fund.
Article VI. Amendments
No material amendment to the Plan shall be effective unless it is approved by the Board of Trustees in the same manner as is provided for approval of this Plan in Article V.
THE PIONEER COMPLEX OF FUNDS
CODE OF ETHICS AND INSIDER TRADING PROCEDURES
The following procedures have been adopted by each registered investment company (individually an "Investment Company" and collectively the "Investment Companies") for which Pioneer Investment Management, Inc. ("Pioneer Investments") serves as an investment adviser or for which Pioneer Funds Distributor, Inc. ("PFD") serves as principal underwriter, by Pioneer Investments and PFD for purposes of implementing the Code of Ethics (the "Code") adopted by each entity pursuant to Rule 17j-1 of the Investment Company Act of 1940, as amended (the "Rule"). Pioneer Investment Management, Ltd is a participating affiliate of Pioneer Investment Management, Inc. Therefore under the Investment Company Act of 1940, is subject to the Code of Ethics. Unless indicated otherwise, capitalized terms used herein shall have the meanings contained in the Code.
Administration of the procedures and reviews of all reports required to be made pursuant to these procedures will be the responsibility of Dorothy Bourassa, General Counsel of Pioneer Investment Management USA Inc., Martin J. Wolin, Director of Compliance, and David Rule, Regulatory Compliance Administrator.
I. IDENTIFICATION OF AND NOTIFICATION TO ACCESS PERSONS
The Compliance Department within Pioneer Investment Management USA Inc., working with the Human Resources Department, will identify those employees who meet the definition of "Access Person" as defined in Rule 17j-1.
Each employee designated as an Access Person and/or Advisory Person will be notified by the Compliance Department and/or the Human Resources Department at the time of hire or promotion of his/her designation as an Access Person and/or Advisory Person and informed of the following policies and procedures. The failure of the Compliance Department and/or the Human Resources Department to so notify such employee shall not affect such person's status as an Access Person and/or Advisory Person under the Code.
II. REPORTS BY ACCESS PERSONS
INITIAL REPORTS - DISCLOSURE OF PERSONAL HOLDINGS
All Access Persons (other than Independent Trustees) shall submit to the Review Officer within ten days of becoming an Access Person a report in the form of EXHIBIT A.
MONTHLY REPORTS - BROKERAGE ACCOUNTS
All Access Person (other than Independent Trustees) are required to direct their brokers to provide to the Review Officer the following:
o within ten days of the end of a calendar month, duplicate copies of confirmations of all Covered Securities transactions in which the Access Person has a Beneficial Ownership interest;
o within ten days following the end of a calendar quarter, related periodic account statements.
In the alternative, if an Access Person is unable to arrange for duplicate copies of confirmations and periodic account statements to be sent to the Review Officer, he/she must immediately notify the Review Officer and provide to the Review Officer within ten days following the end of a month in which a transaction occurs a report in the form of EXHIBIT B.
All Access Persons (other than Independent Trustees) also shall provide to the Review Officer within ten days of the end of a calendar month a report on EXHIBIT B of any Covered Securities transactions which would not be reported on a brokerage or other account statement.
Any report required to be filed by the Review Officer shall be filed with the Alternative Review Officer.
Prior to opening a brokerage account, each Access Person (other than Independent Trustees) must notify the Review Officer to allow the Review Officer an opportunity to notify the broker that Pioneer requires duplicate confirmations and period account statements to be sent directly to the Review Officer.
An Independent Trustee shall provide to the Review Officer within ten days of the end of a calendar month in which a transaction occurs a report in the form of EXHIBIT B of any Covered Securities transaction in which the Independent Trustee acquires or disposes of any Beneficial Ownership interest in a Covered Security if, at the time of the transaction in the Covered Security, the Independent Trustee knew, or, in the ordinary course of fulfilling his/her official duties as an Independent Trustee, should have know, that during the fifteen-day period immediately before or after the date of such transaction, such Covered Security was purchased or sold by an Investment Company or such Covered Security was considered by Pioneer Investments for purchase or sale by an Investment Company.
ANNUAL REPORTS
All Access Persons (other than Independent Trustees) shall provide to the Review Officer within thirty days following the end of a calendar year a report in the form of EXHIBIT C, the information on which must be current as of a date no more than thirty days before the report is submitted.
ANNUAL CERTIFICATIONS
Each Access Person shall certify annually on EXHIBIT D within thirty days following the end of a calendar year that he/she:
o has read and understands the Code and recognizes that he/she is subject thereto;
o has complied with the requirements of the Code;
o has disclosed or reported all Covered Securities transactions and accounts required to be disclosed or reported under the Code;
o has read and understands Pioneer's Procedures to Prevent Insider Trading Violations and recognizes that he/she is subject thereto; and
o has complied with the requirements of Pioneer's Procedures to Prevent Insider Trading Violations.
Failure to comply with the periodic reporting requirements and/or the Annual Certification procedure will result in the denial of any preclearance requests as well as any other sanction that may be deemed appropriate.
III. MONITORING OF PERSONAL TRADING ACTIVITY
PRECLEARANCE PROCEDURES FOR ACCESS PERSONS WHO ARE NOT INDEPENDENT TRUSTEES
All transactions in Covered Securities by Access Persons shall be precleared in advance by receiving written approval from the Preclearance Officer. The Preclearance Officer must preclear his/her Covered Securities transactions with the Alternative Preclearance Officer. Each request for preclearance must be submitted to the Preclearance Officer on either EXHIBIT E ("Preclearance Form for Access Persons") or EXHIBIT F ("Preclearance Form for Portfolio Managers and Investment Analysts") prior to 2:00 pm. in order to receive a response on the following day.. Verbal approvals of Covered Securities transactions are not permitted.
Any approval by the Preclearance Officer is valid for three business days, including the day on which the approval is granted. If an Access Person is unable to effect the Covered Securities transaction during such period, he/she must resubmit a completed EXHIBIT E or F and reobtain approval from the Preclearance Officer prior to effecting the Covered Securities transaction.
The Preclearance Officer will base his/her decision whether to approve a Covered Securities transaction for an Access Person after considering the specific restrictions and limitations set forth in, and the spirit of, the Code, including whether the Covered Security at issue is being considered for purchase or sale by an Investment Company or Institutional Account. The Preclearance Officer is not required to give any explanation for refusing to approve a requested Covered Securities transaction.
PRECLEARANCE PROCEDURES FOR ACCESS PERSONS WHO ARE INDEPENDENT TRUSTEES
Independent Trustees are encouraged to preclear Covered Securities transactions only when there is a question as to the then current trading activities of an Investment Company; otherwise preclearance by an Independent Trustee is neither encouraged nor required.
DE MINIMUS EXCEPTIONS
The Preclearance Officer has discretion to approve transactions by Access Persons (other than Advisory Persons) of trades of 500 shares or fewer in companies with market capitalizations of $20 billion or greater.
The Preclearance Officer has discretion to determine the DE MINIMUS value of gifts and other personal benefits under the Code. Currently, the following may be accepted:
o gifts with reasonable values of no more than $100 annually from any single person or entity;
o customary business lunches, dinners and entertainment at which both the Advisory Person and the giver are present; and
o promotional items of DE MINIMUS value.
REVIEW OF REPORTS
The Review Officer shall compare the reported personal Covered Securities transactions of each Access Person with completed and contemplated portfolio transactions of the Investment Companies and Institutional Accounts to determine whether a violation of the Code may have occurred. The Review Officer shall also compare reported personal securities transactions during the year with the annual report submitted by the person. In the case of reports of personal Covered Securities transactions of the Review Officer, the Alternative Review Officer shall perform such comparison. Before making any determination that a violation has been committed by an Access Person, the Review Officer or Alternative Review Officer, as the case may be, shall provide such person with an opportunity to supply additional explanatory information or material.
If the Review Officer or Alternative Review Officer, as the case may be, determines that a violation of the Code has or may have occurred, he/she shall submit a written determination, together with the related information or material provided by the Access Person, to the President of Pioneer Investments who shall make an independent determination of whether a violation has occurred.
On a monthly basis, the Review Officer shall prepare a summary of his/her review of all preclearance forms submitted during the month with the monthly confirmations and/or periodic account statements of such Access Persons and provide such report to the President of Pioneer Investments and such other persons as the President shall deem appropriate, including, but not limited to, the Chief Investment Officer of Pioneer, the General Counsel of Pioneer and counsel to the Pioneer Funds.
On an annual basis, the Review Officer shall prepare and submit to the Board of Trustees of the Investment Companies, as well as other relevant parties, a summary of the level of compliance by all Access Persons of the Code during the previous year, including, without limitation, the number and nature of all material violations and the sanctions imposed. The report shall certify that the Investment Companies, Pioneer Investments and PFD have adopted procedures reasonably necessary to prevent Access Persons from violating the Code. The report may also include any recommended changes to existing Code restrictions or procedures based upon Pioneer's experience with the Code, evolving industry practices and developments in applicable laws or regulations. The Alternative Review Officer shall prepare reports with respect to compliance by the Review Officer.
IV. SANCTIONS
VIOLATIONS BY ACCESS PERSONS
Any violation of the Code by an Access Person who is not an Independent Trustee shall result in the imposition of such sanctions as Pioneer may deem appropriate under the circumstances, which may include, but are not limited to, removal or suspension from office, termination of
employment, a letter of censure and/or restitution to the affected Investment Company or Institutional Account of an amount equal to the advantage the offending person shall have gained by reason of such violation. In addition, as part of any sanction, Pioneer may require the Access Person to reverse the trade(s) at issue and forfeit any profit or absorb any loss from the trade. Violations of the Code by an Access Person also may result in criminal prosecution or civil action. The Board of Trustees of any Investment Company shall have the power to modify or increase any sanction as it deems appropriate.
VIOLATIONS BY INDEPENDENT TRUSTEES
Any violation of the Code by an Independent Trustee shall result in the imposition of such sanctions as the other members of the Board of Trustees may deem appropriate under the circumstances, which may include, but are not limited to, removal from office.
V. RECORDKEEPING REQUIREMENTS
Pioneer shall maintain and preserve in an easily accessible place:
o a copy of the Code (and any prior code of ethics that was in effect at any time during the past five years) for a period of not less than five years;
o a record of any violation of the Code and of any action taken as a result of such violation for a period of not less than five years following the end of the fiscal year in which the violation occurs;
o a copy of each preclearance request and any report submitted under the Code by an Access Person for a period of not less than five years following the end of the fiscal year in which the preclearance request or report is made, the first two years in an easily accessible place;
o a record of all persons who are, or within the past five years were, required to make reports pursuant to the Code and who are or were responsible for reviewing such reports;
o a copy of each report submitted to the Boards of Trustees of the Investment Companies under the Code for a period of not less than five years following the end of the fiscal year in which such report is made, the first two years in an easily accessible place; and
o a record of any decision, and the reasons supporting such decision, to approve the acquisition by Investment Personnel of Initial Public Offerings or Limited Offerings for at least five years after the end of the fiscal year in which such approvals are granted.
VI. PIONEER'S POLICIES AND PROCEDURES TO PREVENT INSIDER TRADING
Every employee of Pioneer is subject to Pioneer's Policies and Procedures to Prevent Insider Trading. Pioneer's Policy Statement on Insider Trading is attached as EXHIBIT G. Each employee is required to acknowledge annually that he/she has read and complied with the Policies. The Review Officer oversees administration of the annual certification.
[May 2001]
POWER OF ATTORNEY
I, the undersigned officer or trustee of the Pioneer mutual funds listed on Annex A, do hereby constitute and appoint John F. Cogan, Jr., Daniel T. Geraci, Joseph P. Barri, Dorothy E. Bourassa, John Carey and Vincent Nave, and each of them acting singly, to be my true, sufficient and lawful attorneys, with full power to each of them and each of them acting singly, to sign for me, in my name and the capacities indicated below, (i) any Registration Statement on Form N-1A, Form N-14 or any other applicable registration form and any and all amendments thereto filed by any of the Pioneer mutual funds (each a "Trust") of which I am now or on the date of such filing a Trustee or officer of the Trust under the Investment Company Act of 1940, as amended, and under the Securities Act of 1933, as amended, with respect to the offering of its shares of beneficial interest, (ii) any application, notice or other filings with the Securities and Exchange Commission, and (iii) any and all other documents and papers relating thereto, and generally to do all such things in my name and on behalf of me in the capacities indicated to enable each Trust to comply with the Investment Company Act of 1940, as amended, and the Securities Act of 1933, as amended, and thereunder, hereby ratifying and confirming my signature as it may be signed by said attorneys or each of them to any and all Registration Statements and amendments to said Registration Statement.
IN WITNESS WHEREOF, I have hereunder set my hand on this 13th day of November, 2001.
/s/ Mary K. Bush /s/ John F. Cogan, Jr. Mary K. Bush John F. Cogan, Jr. /s/ Richard H. Egdahl /s/ Daniel T. Geraci Richard H. Egdahl, M.D. Daniel T. Geraci /s/ Margaret B.W. Graham /s/ Marguerite A. Piret Margaret B.W. Graham Marguerite A. Piret /s/ Stephen K. West /s/ John Winthrop Stephen K. West John Winthrop /s/ Vincent Nave Vincent Nave |
POWER OF ATTORNEY
ANNEX A
Pioneer International Value Fund
Pioneer Europe Fund
Pioneer International Equity Fund
Pioneer Emerging Markets Fund
Pioneer Indo-Asia Fund
Pioneer Mid-Cap Value Fund
Pioneer Mid-Cap [Growth] Fund
Pioneer Growth Shares
Pioneer Small Company Fund
Pioneer Independence Fund
Pioneer Small-Cap Value Fund
Pioneer Balanced Fund
Pioneer Equity-Income Fund
Pioneer Fund
Pioneer Value Fund
Pioneer Real Estate Shares
Pioneer Limited Maturity Bond Fund
Pioneer America Income Trust
Pioneer Bond Fund
Pioneer Tax-Free Income Fund
Pioneer Money Market Trust
Pioneer Strategic Income Fund
Pioneer Tax-Managed Fund
Pioneer High Yield Fund
Pioneer Science & Technology Fund
Pioneer Large-Cap Value Fund
Pioneer Market Neutral Fund
Pioneer Global Telecoms Fund
Pioneer Global Financials Fund
Pioneer Global Health Care Fund
Pioneer Europe Select Fund
Pioneer Global High Yield Fund
Pioneer Global Value Fund
Pioneer Global Consumer Products & Services Fund
Pioneer Global Energy & Utilities Fund
Pioneer Global Industrial Products & Services Fund
Pioneer Interest Shares
Pioneer Variable Contracts Trust