File No. 333-_____
File No. 811-_____
As Filed with the Securities and Exchange Commission on December 23,1996.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /_X__/
Pre-Effective Amendment No. __ /____/
Post-Effective Amendment No. ___ /____/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT
OF 1940 /_X__/
Amendment No. __ /____/
(Check appropriate box or boxes)
PIONEER MICRO-CAP FUND
----------------------
(Exact name of registrant as specified in charter)
60 State Street, Boston, Massachusetts 02109
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(Address of principal executive office) Zip Code
(617) 742-7825
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(Registrant's Telephone Number, including Area Code)
Joseph P. Barri, Hale and Dorr, 60 State Street, Boston, MA 02109
-----------------------------------------------------------------
(Name and address of agent for service)
Approximate Date of Proposed Public Offering: As soon as practicable after the
effectiveness of the registration 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.
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, as amended,
Registrant hereby elects to register an indefinite number of shares of
Registrant and any series thereof hereinafter created.
<PAGE>
PIONEER MICRO-CAP FUND
Cross-Reference Sheet Showing Location in Prospectus
and Statement of Additional Information of
Information Required by Items of the Registration Form
Location in
Prospectus or
Statement of
Additional
Form N-1A Item Number and Caption Information
- --------------------------------- -----------
1. Cover Page........................................Prospectus - Cover Page
2. Synopsis..........................................Prospectus - Expense
Information
3. Condensed Financial Information...................Not Applicable
4. General Description of Registrant.................Prospectus - Investment
Objective and Policies;
Management of the Fund;
Fund Share Alternatives;
Share Price; How to Buy
Fund Shares; How to
Sell Fund Shares; How to
Exchange Fund Shares;
The Fund
5. Management of the Fund............................Prospectus - Management
of the Fund
6. Capital Stock and Other Securities................Prospectus - Investment
Objective and Policies;
Management of the Fund;
Fund Share Alternatives;
Share Price; How to Buy
Fund Shares; How to Sell
Fund Shares; How to
Exchange Fund Shares;
Dividends, Distributions
and Taxation; The Fund
7. Purchase of Securities Being
Offered.....................................Prospectus - Fund Share
Alternatives; Share
Price; How to Buy Fund
Shares; How to Sell Fund
Shares; How to Exchange
Fund Shares; Distribution
Plans; Shareholder
Services; The Fund
8. Redemption or Repurchase..........................Prospectus - Fund Share
Alternatives; Share
Price; How to Buy Fund
<PAGE>
Location in
Prospectus or
Statement of
Additional
Form N-1A Item Number and Caption Information
- --------------------------------- -----------
Shares; How to Sell Fund
Shares; How to Exchange
Fund Shares; Shareholder
Services; The Fund
9. Pending Legal Proceedings.........................Not Applicable
10. Cover Page........................................Statement of Additional
Information - Cover Page
11. Table of Contents.................................Statement of Additional
Information - Cover Page
12. General Information and History...................Statement of Additional
Information - Description
of Shares
13. Investment Objectives and Policies................Statement of Additional
Information - Investment
Policies and Restrictions
14. Management of the Fund............................Statement of Additional
Information - Management
of the Fund; Investment
Adviser
15. Control Persons and Principle Holders
of Securities...............................Statement of Additional
Information - Management
of the Fund
16. Investment Advisory and Other
Services....................................Statement of Additional
Information - Management
of the Fund; Investment
Adviser; Underwriting
Agreement and
Distribution Plans;
Shareholder Servicing/
Transfer Agent;Custodian;
Principal Underwriter;
Independent Public
Accountants
17. Brokerage Allocation and Other
Practices...................................Statement of Additional
Information - Portfolio
Transactions
18. Capital Stock and Other Securities................Statement of Additional
Information - Description
of Shares
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<PAGE>
Location in
Prospectus or
Statement of
Additional
Form N-1A Item Number and Caption Information
- --------------------------------- -----------
19. Purchase, Redemption and Pricing of
Securities Being Offered....................Statement of Additional
Information - Letter of
Intention; Systematic
Withdrawal Plan;
Determination of Net
Asset Value
20. Tax Status........................................Statement of Additional
Information - Tax Status
and Dividends
21. Underwriters......................................Statement of Additional
Information -Underwriting
Agreement and
Distribution Plans;
Principal Underwriter
22. Calculation of Performance Data...................Statement of Additional
Information - Investment
Results
23. Financial Statements..............................To be supplied
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<PAGE>
[PIONEER LOGO]
PIONEER
MICRO-CAP
FUND
Class A and Class B Shares
Prospectus
March 1, 1997
PIONEER MICRO-CAP FUND (the "Fund") seeks capital appreciation by investing in a
diversified portfolio of securities consisting primarily of common stocks. Any
current income generated from these securities is incidental to the investment
objective of the Fund.
In seeking to achieve its investment objective, the Fund will invest at least
80% of its total assets in common stocks and common stock equivalents (such as
convertible bonds and preferred stock) of companies with a market capitalization
of less than $300 million. See "Investment Objective and Policies" in this
Prospectus. There is no assurance that the Fund will achieve its investment
objective.
PROSPECTIVE INVESTORS SHOULD BE AWARE THAT MANAGEMENT INTENDS TO CLOSE THE FUND
TO NEW INVESTMENTS WHEN THE FUND REACHES $150 MILLION IN TOTAL ASSETS.
MANAGEMENT RESERVES THE RIGHT TO MODIFY OR ELIMINATE RESTRICTIONS ON THE SALE OF
FUND SHARES. A NUMBER OF FACTORS WILL BE CONSIDERED IN MAKING SUCH DECISIONS
INCLUDING, BUT NOT LIMITED TO, TOTAL ASSETS UNDER MANAGEMENT. SEE "HOW TO BUY
FUND SHARES - SPECIAL RESTRICTIONS" FOR MORE INFORMATION.
FUND RETURNS AND SHARE PRICES FLUCTUATE AND THE VALUE OF YOUR ACCOUNT UPON
REDEMPTION MAY BE MORE OR LESS THAN YOUR PURCHASE PRICE. SHARES IN THE FUND ARE
NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK OR OTHER
DEPOSITORY INSTITUTION, AND THE SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENT
AGENCY. INVESTMENTS IN THE SECURITIES OF MICRO-CAPITALIZATION ("MICRO-CAP")
COMPANIES MAY OFFER GREATER CAPITAL APPRECIATION POTENTIAL THAN INVESTMENTS IN
SECURITIES OF LARGER COMPANIES, BUT MAY BE SUBJECT TO GREATER SHORT-TERM PRICE
FLUCTUATIONS. THE FUND IS INTENDED FOR INVESTORS WHO CAN ACCEPT THE RISKS
ASSOCIATED WITH ITS INVESTMENTS AND MAY NOT BE SUITABLE FOR ALL INVESTORS. SEE
"INVESTMENT OBJECTIVES AND POLICIES" FOR A DISCUSSION OF THESE RISKS.
This Prospectus provides information about the Fund that you should know before
investing. Please read and retain it for your future reference. More information
about the Fund is included in the Statement of Additional Information, also
dated March 1, 1997, which is incorporated into this Prospectus by reference. A
copy of the Statement of Additional Information may be obtained
<PAGE>
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. Additional
information about the Fund has been filed with the Securities and Exchange
Commission (the "SEC") and is available upon request and without charge.
TABLE OF CONTENTS PAGE
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I. EXPENSE INFORMATION...........................................
II. INVESTMENT OBJECTIVE AND POLICIES.............................
III. MANAGEMENT OF THE FUND........................................
IV. FUND SHARE ALTERNATIVES.......................................
V. SHARE PRICE...................................................
VI. HOW TO BUY FUND SHARES........................................
VII. HOW TO SELL FUND SHARES
VIII. HOW TO EXCHANGE FUND SHARES
IX. DISTRIBUTION PLANS ..............................
X. DIVIDENDS, DISTRIBUTIONS AND TAXATION
XI. SHAREHOLDER SERVICES
Account and Confirmation Statements
Additional Investments
Financial Reports and Tax Information
Distribution Options
Direct Deposit
Voluntary Tax Withholding
Telephone Transactions and Related Liabilities
FactFone(SM)
Retirement Plans
Telecommunications Device for the Deaf (TDD)
Systematic Withdrawal Plans
XII. THE FUND.
XIII. INVESTMENT RESULTS
APPENDIX--CERTAIN INVESTMENT PRACTICES
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
END OF COVER PAGE
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<PAGE>
I. EXPENSE INFORMATION
This table is designed to help you understand the charges and expenses that you,
as a shareholder, will bear directly or indirectly when you invest in the Fund.
The table reflects shareholder transactions and annual operating expenses.
"Other Expenses" are based on estimates for the fiscal period ending November
30, 1997.
Class A Class B
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Initial Sales Charge on Purchases
(as a percentage of offering price) 5.75% None
Maximum Sales Charge on Reinvestment of
Dividends None None
Maximum Deferred Sales Charge None 4.00%
Redemption fee None(1) None
Exchange fee None None
ANNUAL OPERATING EXPENSES
(as a percentage of average net assets):
Management fee (after fee reduction) (2) 0.85% 0.85%
12b-1 fees 0.25%(3) 1.00%
Other Expenses (including accounting and
transfer agent fees, custodian fees and
printing expenses)(2) 0.65% 0.65%
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Total Operating Expenses:(2) 1.75% 2.50%
==== ====
(1) Separate fees (currently $10 and $20, respectively) apply to domestic and
international wire transfers of redemption proceeds.
(2) Pioneering Management Corporation ("PMC") has agreed not to impose all or a
portion of its management fee and to make other arrangements, if necessary, to
limit the operating expenses of the Class A shares of the Fund to 1.75% of the
average daily net assets attributable to the Class A Shares; the portion of
fund-wide expenses attributable to Class B shares will be reduced only to the
extent they are reduced for Class A shares. This agreement is voluntary and
temporary and may be revised or terminated at any time. The agreement is
expected to remain in effect for the current fiscal year.
ANNUAL OPERATING EXPENSES ABSENT FEE REDUCTION
(as a percentage of average net assets) Class A Class B
Management Fee 1.10% 1.10%
Total Operating Expenses 2.00% 2.75%
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<PAGE>
(3) This is the maximum annual fee and assumes that the Plan of Distribution is
in effect for an entire year; actual expenses are expected to be lower.
EXAMPLE:
You would pay the following expenses on a $1,000 investment in the Fund,
assuming 5% annual return with or without redemption at the end of each time
period:
1 YEAR 3 YEARS
------ -------
Class A Shares $74 $109
Class B Shares *
- --Assuming complete redemption at end of period $65 $108
- --Assuming no redemption $25 $ 78
- ---------------------------
* Class B shares convert to Class A shares eight years after purchase.
The example above assumes the reinvestment of all dividends and distributions
and that the percentage amounts listed under "Annual Operating Expenses" remain
the same each year.
THE EXAMPLE IS DESIGNED FOR INFORMATION PURPOSES ONLY, AND SHOULD NOT BE
CONSIDERED A REPRESENTATION OF FUTURE EXPENSES OR RETURN. ACTUAL FUND EXPENSES
AND RETURN WILL VARY FROM YEAR TO YEAR AND MAY BE HIGHER OR LOWER THAN THOSE
SHOWN.
For further information regarding management fees, 12b-1 fees and other expenses
of the Fund, see "Management of the Fund," "Distribution Plans" and "How To Buy
Fund Shares" in this Prospectus and "Management of the Fund" and "Underwriting
Agreement and Distribution Plans" in the Statement of Additional Information.
The Fund's payment of a Rule 12b-1 fee may result in long-term shareholders
paying more than the economic equivalent of the maximum sales charge permitted
under the Conduct Rules of the National Association of Securities Dealers, Inc.
("NASD").
The maximum initial sales charge is reduced on purchases of specified larger
amounts of Class A shares and the value of shares owned in other Pioneer mutual
funds is taken into account in determining the applicable initial sales charge.
See "How to Buy Fund Shares." No sales charge is applied to exchanges of shares
of the Fund for shares of other publicly available Pioneer mutual funds. See
"How to Exchange Shares."
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<PAGE>
II. INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Fund is to seek capital appreciation by
investing in a diversified portfolio of securities consisting primarily of
common stocks. Any current income produced by a security is not a primary factor
in the selection of investments.
Under normal circumstances, at least 80% of the Fund's total assets are invested
in common stocks of companies with a market capitalization of less than $300
million determined at the time the security is purchased ("micro-cap
companies"). The typical capitalization of issuers of securities purchased by
the Fund is expected to be approximately $100 million. While micro-cap company
securities may offer a greater capital appreciation potential than investments
in securities of larger companies, they may also present greater risks.
Micro-cap companies may have limited product lines, market and financial
resources, or may be dependent on small or less experienced management groups.
In addition, the trading volume of micro-cap companies may be limited.
Historically, the market price for securities of micro-cap companies has been
more volatile than for securities of companies with greater capitalization.
The Fund is managed in accordance with the value philosophy of PMC, the
investment adviser to the Fund. This approach consists of developing a
diversified portfolio of securities consistent with the Fund's investment
objective and selected primarily on the basis of PMC's judgment that the
securities have an underlying value, or potential value, which exceeds their
current prices. The analysis and quantification of the economic worth, or basic
value, of individual companies reflects PMC's assessment of a company's assets
and the company's prospects for earnings growth over the next 1 1/2-to-3 years.
PMC relies primarily on the knowledge, experience and judgment of its own
research staff, but also receives and uses information from a variety of outside
sources, including brokerage firms, electronic data bases, specialized research
firms and technical journals.
The Fund's investments in common stocks may include common stock equivalents,
that is, securities with common stock characteristics such as convertible bonds
and preferred stocks. Up to 5% of the Fund's total assets may be invested in the
securities of real estate investment trusts ("REITs"). REITs are pooled
investment vehicles which invest primarily in income producing real estate or
real estate related loans or interests. Investing in REITs involves risks
similar to those associated with investing in small capitalization companies.
The Fund intends to be substantially fully invested at all times. If suitable
investments are not immediately available, the Fund may hold a portion of its
investments in cash and cash-equivalents. For temporary defensive purposes,
however, the Fund may invest up to 100% of its assets in short-term investments.
The Fund will assume a defensive posture only when political and economic
factors affect common stock markets to such an extent that PMC believes there to
be extraordinary risks in being substantially invested in common stocks. A
short-term investment is considered to be an investment with a maturity of one
year or less from the date of issuance. Short-term investments will not normally
represent more than 10% of the Fund's assets.
-5-
<PAGE>
It is the policy of the Fund not to engage in trading for short-term profits.
Nevertheless, changes in the portfolio will be made promptly when determined to
be advisable by reason of developments not foreseen at the time of the initial
investment decision, and usually without reference to the length of time a
security has been held. Accordingly, portfolio turnover rate is not considered a
limiting factor in the execution of investment decisions. The Fund's portfolio
often includes a number of securities which are owned by other equity mutual
funds managed by PMC. See "Investment Policies and Restrictions" in the
Statement of Additional Information for more information.
Portfolio turnover is not expected to exceed 150% in the coming year. A high
rate of portfolio turnover (100% or more) involves correspondingly greater
transaction costs which must be borne by the Fund and its shareholders. Under
certain circumstances, a high turnover rate may make it more difficult for the
Fund to qualify as a regulated investment company under the Internal Revenue
Code of 1986, as amended (the "Code"). See "Dividends, Distributions and
Taxation."
The Fund may enter into repurchase agreements, not to exceed seven days, with
broker-dealers and any member bank of the Federal Reserve System. The Board of
Trustees of the Fund will review and monitor the creditworthiness of any
institution which enters into a repurchase agreement with the Fund. Such
repurchase agreements will be fully collateralized with United States ("U.S.")
Treasury and/or agency obligations with a market value of not less than 100% of
the obligations, valued daily. Collateral will be 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 that a repurchase agreement is not
fulfilled, the Fund could suffer a loss to the extent that the value of the
collateral falls below the repurchase price.
The Fund may lend portfolio securities to member firms of the New York Stock
Exchange (the "Exchange"). 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 which 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 30% of the value of the Fund's
total assets. These investment strategies are also described in the Statement of
Additional Information.
In pursuit of its objective, the Fund may employ certain active investment
management techniques including options contracts on securities and securities
indices, futures contracts on securities indices and options on such futures
contracts. These techniques may be employed in an attempt to hedge risks
associated with the Fund's portfolio securities. See the Appendix to this
Prospectus and the Statement of Additional Information for a description of
these investment practices and associated risks.
-6-
<PAGE>
The Fund's fundamental investment objective and the fundamental investment
restrictions set forth in the Statement of Additional Information may not be
changed without shareholder approval. Certain other investment policies,
strategies and restrictions on investment are noted throughout the Prospectus
and are set forth in the Statement of Additional Information. These
non-fundamental investment policies, strategies and restrictions may be changed
at any time by a vote of the Board of Trustees.
III. MANAGEMENT OF THE FUND
The Board of Trustees of the Fund has overall responsibility for management and
supervision of the Fund. There are currently eight Trustees, six of whom are not
"interested persons" of the Fund as defined in the Investment Company Act of
1940, as amended (the "1940 Act"). The Board meets at least quarterly. By virtue
of the functions performed by PMC as investment adviser, the Fund requires no
employees other than its executive officers, all of whom receive their
compensation from PMC or other sources. The Statement of Additional Information
contains the names and general business and professional background of each
Trustee and executive officer of the Fund.
Investment advisory services are provided to the Fund by PMC pursuant to a
management contract between PMC and the Fund. PMC serves as investment adviser
to the Fund and is responsible for the overall management of the Fund's business
affairs, subject only to the authority of the Board of Trustees. PMC is a
wholly-owned subsidiary of The Pioneer Group, Inc. ("PGI"), a publicly-traded
Delaware corporation. Pioneer Funds Distributor, Inc. ("PFD"), an indirect
wholly-owned subsidiary of PGI, is the principal underwriter of the Fund.
Mr. David Tripple, President and Chief Investment Officer of PMC and Executive
Vice President of each Pioneer mutual fund, has general responsibility for PMC's
investment operations. Each domestic equity portfolio managed by PMC, including
the Fund, is the general responsibility of a committee of PMC's equity portfolio
managers. Mr. Tripple chairs the committee, which meets regularly to review the
investment operations of Pioneer's domestic equity mutual funds. Mr. Tripple
joined PMC in 1974.
Research and management for the Fund is the responsibility of a team of
portfolio managers and analysts focusing on special equities and smaller
companies. Mr. Warren Isabelle, a Senior Vice President of PMC, is the senior
portfolio manager on that team. Mr. Isabelle joined PMC in 1984.
Day-to-day management of the Fund is the responsibility of Mr. _________ , a
Vice President of PMC. Mr. ________ joined PMC in 19__ and has xx years of
investment experience.
-7-
<PAGE>
In addition to the Fund, PMC also manages and serves as the investment adviser
for other mutual funds and is an investment adviser to certain other
institutional accounts. PMC's and PFD's executive offices are located at 60
State Street, Boston, Massachusetts 02109. In an effort to avoid conflicts of
interest with the Fund, the Fund and PMC have adopted a Code of Ethics that is
designed to maintain a high standard of personal conduct by directing that all
personnel defer to the interests of the Fund and its shareholders in making
personal securities transactions.
Under the terms of its contract with the Fund, PMC assists in the management of
the Fund and is authorized in its discretion to buy and sell securities for the
account of the Fund. PMC pays all the expenses, including executive salaries and
the rental of certain office space, related to its services for the Fund, with
the exception of the following which are to be 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
PMC 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 regulatory agencies, individual states or blue sky securities
agencies, territories and foreign countries, including the preparation of
Prospectuses and Statements of Additional Information for filing with the SEC;
(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) 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 PMC, the Fund (other than as Trustees), PGI or PFD; (k)
the cost of preparing and printing share certificates; and (l) interest on
borrowed money, if any. In addition to the expenses described above, 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
Orders for the Fund's portfolio securities transactions are placed by PMC, which
strives to obtain the best price and execution for each transaction. In
circumstances in which two or more broker-dealers are in a position to offer
comparable prices and execution, consideration may be given to whether the
broker-dealer provides investment research or brokerage services or sells shares
of any Pioneer mutual fund. See the Statement of Additional Information for a
further description of PMC's brokerage allocation practices.
-8-
<PAGE>
As compensation for its management services and certain expenses which PMC
incurs, PMC is entitled to a management fee equal to 1.10% per annum of the
Fund's average daily net assets. The fee is normally computed daily and paid
monthly.
John F. Cogan, Jr., Chairman and President of the Fund, Chairman of PFD,
President and a Director of PGI and Chairman and a Director of PMC, owned
approximately 14% of the outstanding capital stock of PGI as of the date of this
Prospectus.
IV. FUND SHARE ALTERNATIVES
The Fund offers two Classes of shares designated as Class A and Class B shares,
as described more fully in "How to Buy Fund Shares." If you do not specify in
your instructions to the Fund which Class of shares you wish to purchase,
exchange or redeem, the Fund will assume that your instructions apply to Class A
shares. YOU MAY NOT BUY FUND SHARES iF THE VALUE OF YOUR FUND ACCOUNT (ALONE OR
IN COMBINATION WITH ANY RELATED ACCOUNTS) IS $500,000 OR MORE. SEE "HOW TO BUY
FUND SHARES - SPECIAL RESTRICTIONS" FOR MORE INFORMATION.
CLASS A SHARES. If you invest in Class A shares, you will pay an initial sales
charge. Certain purchases may qualify for reduced initial sales charges. Class A
shares are subject to distribution and service fees at a combined annual rate of
up to 0.25% of the Fund's average daily net assets attributable to Class A
shares.
CLASS B SHARES. If you plan to invest up to $250,000, Class B shares are
available to you. Class B shares are sold without an initial sales charge, but
are subject to a contingent deferred sales charge ("CDSC") of up to 4% if
redeemed within six years. Class B shares are subject to distribution and
service fees at a combined annual rate of 1% of the Fund's average daily net
assets attributable to Class B shares. Your entire investment in Class B shares
is available to work for you from the time you make your investment, but the
higher distribution fee paid by Class B shares will cause your Class B shares
(until conversion) to have a higher expense ratio and to pay lower dividends, to
the extent dividends are paid, than Class A shares. Class B shares will
automatically convert to Class A shares, based on relative net asset value,
eight years after the initial purchase.
PURCHASING CLASS A OR CLASS B SHARES. The decision as to which Class to purchase
depends on the amount you invest, the intended length of the investment and your
personal situation. Consult your financial representative for more information.
Investment dealers or their representatives may receive different compensation
depending on which Class of shares they sell. Shares sold outside the U.S. to
persons who are not U.S. citizens may be subject to different sales charges,
CDSCs and dealer compensation arrangements in accordance with local laws and
business practices.
-9-
<PAGE>
V. SHARE PRICE
Shares of the Fund are sold at the public offering price, which is the net asset
value per share plus any applicable sales charge. Net asset value per share of a
Class of the Fund is determined by dividing the value of its assets, less
liabilities attributable to that Class, by the number of shares of that Class
outstanding. The net asset value is computed once daily, on each day the
Exchange is open, as of the close of regular trading on the Exchange.
Securities are valued at the last sale price on the principal exchange or market
where they are traded. Securities which have not traded on the date of valuation
or securities for which sales prices are not generally reported are valued at
the mean between the current bid and asked prices. All assets of the Fund for
which there is no other readily available valuation method are valued at their
fair value as determined in good faith by the Trustees.
VI. HOW TO BUY FUND SHARES
YOU MAY BUY FUND SHARES, UNLESS THE PURCHASE OF FUND SHARES HAS BEEN RESTRICTED
BY MANAGEMENT AS DESCRIBED BELOW IN "SPECIAL RESTRICTIONS," FROM ANY SECURITIES
BROKER-DEALER WHICH HAS A SALES AGREEMENT WITH PFD. IF YOU DO NOT HAVE A
SECURITIES BROKER-DEALER, PLEASE CALL 1-800-225-6292. SHARES WILL BE PURCHASED
AT THE PUBLIC OFFERING PRICE, THAT IS, THE NET ASSET VALUE PER SHARE PLUS ANY
APPLICABLE SALES CHARGE, NEXT COMPUTED AFTER RECEIPT OF A PURCHASE ORDER, EXCEPT
AS SET FORTH BELOW.
The minimum initial investment is $5,000, except as specified below. The minimum
initial investment is $2,000 for IRA accounts. The minimum subsequent investment
is $1,000.
SPECIAL RESTRICTIONS
Prospective investors should be aware that management intends to close the Fund
to new investments at the end of the fifteenth calendar day after the Fund
reaches $150 million in total assets. No new investments will be accepted in the
ninety-day period immediately after such closure. Subsequent to the end of this
ninety-day period, and depending upon market conditions and the availability of
suitable investments for the Fund, additional investments may be accepted from
existing shareholders, subject to the maximum purchase limitation described
below. The time period for any such subsequent investments will be determined by
management based primarily on its ability to effectively invest the Fund's
available cash. There is no limitation on purchases of Fund shares through the
reinvestment of dividends and capital gains distributions paid by the Fund.
-10-
<PAGE>
As a result of the Fund's intention to close the Fund to new investments, the
Fund is not appropriate for investors who make periodic investments such as
401(k) and 403(b) plans. Certain IRA accounts will be accepted.
See "Retirement Plans."
You may not buy Fund shares if your account (alone or in combination with any
related accounts) is valued at $500,000 or more. You may not buy Fund shares by
exchanging shares from any other Pioneer mutual funds that you currently own.
Management reserves the right to modify or eliminate restrictions on the sale of
Fund shares if such action is in the interest of Fund shareholders.
TELEPHONE PURCHASES. Your account is automatically authorized to have the
telephone purchase privilege unless you indicate otherwise on your Account
Application or by writing to Pioneering Services Corporation ("PSC"). The
telephone purchase option may be used to purchase additional shares for an
existing fund account, assuming the purchase of shares is not restricted; it may
not be used to establish a new account. Proper account identification will be
required for each telephone purchase. A maximum of $25,000 per account may be
purchased by telephone each day. The telephone purchase privilege is available
to IRA accounts but may not be available to other types of retirement plan
accounts. Call PSC for more information.
YOU ARE STRONGLY URGED TO CONSULT WITH YOUR FINANCIAL REPRESENTATIVE PRIOR TO
REQUESTING A TELEPHONE PURCHASE. To purchase shares by telephone, you must
establish your bank account of record by completing the appropriate section of
your Account Application or an Account Options Form. PSC will electronically
debit the amount of each purchase from this predesignated bank account.
Telephone purchases may not be made for 30 days after the establishment of your
bank of record or any change to your bank information.
Telephone purchases will be priced at the net asset value plus any applicable
sales charge next determined after PSC's acceptance of a telephone purchase
instruction and receipt of good funds (usually three days after the purchase
instruction). See "Telephone Transactions and Related Liabilities" for
additional information.
CLASS A SHARES
You may buy Class A shares at the public offering price calculated as indicated
below. Although your purchase may not exceed $500,000, you may qualify for a
reduced sales charge in connection with a Right of Accumulation or Letter of
Intention with respect to other Pioneer mutual funds. Call PSC for more
information.
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DEALER
ALLOWANCE
SALES CHARGE AS A % OF AS A %
NET OF
OFFERING AMOUNT OFFERING
AMOUNT OF PURCHASE PRICE INVESTED PRICE
- ------------------ ----- -------- -----
Less than $50,000 5.75% 6.10% 5.00%
$50,000 but less than $100,000 4.50 4.71 4.00
$100,000 but less than $250,000 3.50 3.63 3.00
$250,000 but less than $500,000 2.50 2.56 2.00
$500,000 2.00 2.04 1.75
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 Section 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. See the "Letter of Intention" section
of the Account Application. In connection with PGI's acquisition of Mutual of
Omaha Fund Management Company and contingent upon the achievement of certain
sales objectives, PFD pays to Mutual of Omaha Investor Services, Inc. 50% of
PFD's retention of any sales commission on sales of the Fund's Class A shares
through such dealer. From time to time, 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 the federal securities laws.
QUALIFYING FOR A REDUCED SALES CHARGE.
Class A shares of the Fund may be sold at net asset value per share without a
sales charge to: (a) current or former Trustees and officers of the Fund and
partners and employees of its legal counsel; (b) current or former directors,
officers, employees or sales representatives of PGI or its subsidiaries; (c)
current or former directors, officers, employees or sales representatives of any
subadviser or predecessor investment adviser to any investment company for which
PMC serves as investment adviser, and the subsidiaries or affiliates of such
persons; (d) current or former officers, partners, employees or registered
representatives of broker-dealers which have entered into sales agreements with
PFD; (e) members of the immediate families of any of the persons above; (f) any
trust, custodian, pension, profit-sharing or other benefit plan of the foregoing
persons; (g) insurance company separate accounts; (h) certain "wrap accounts"
for the benefit of clients of financial planners adhering to standards
established by PFD; (i) other funds and
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accounts for which PMC or any of its affiliates serves as investment adviser or
manager; and (j) certain unit investment trusts. Shares so purchased are
purchased for investment purposes and may not be resold except through
redemption or repurchase by or on behalf of the Fund. The availability of this
privilege is conditioned upon the receipt by PFD of written notification of
eligibility. Class A shares of the Fund may also be sold at net asset value
without a sales charge in connection with certain reorganization, liquidation or
acquisition transactions involving other investment companies or personal
holding companies.
Reduced sales charges for Class A shares may be available through an agreement
to purchase a specified quantity of Fund shares over a designated 13-month
period through a "Letter of Intention." Any investor planning to use a Letter of
Intention should call PSC for more information.
CLASS B SHARES
You may buy Class B shares at net asset value 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 gains
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, 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:
Year Since CDSC as a Percentage of Dollar
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 None
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<PAGE>
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 end of the
calendar quarter that is eight years after the purchase date, except as noted
below. 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
("IRS"), for which the Fund is applying, or an opinion of counsel that such
conversions will not constitute taxable events for federal tax purposes. There
can be no assurance that such ruling will be available. The conversion of Class
B shares to Class A shares will not occur if such ruling is not available and,
therefore, Class B shares would continue to be subject to higher expenses than
Class A shares for an indeterminate period.
WAIVER OR REDUCTION OF CONTINGENT DEFERRED SALES CHARGE. The CDSC on Class B
shares may be waived or reduced for non-retirement accounts if: (a) the
redemption results from the death of all registered owners of an account (in the
case of UGMAs, UTMAs and trust accounts, waiver applies upon the death of all
beneficial owners) or a total and permanent disability (as defined in Section 72
of the Code) of all registered owners occurring after the purchase of the shares
being redeemed or (b) the redemption is made in connection with limited
automatic redemptions as set forth 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).
The CDSC on Class B shares may be waived or reduced for Individual Retirement
Accounts ("IRAs") if: (a) the redemption results from the death or a total and
permanent disability (as defined in Section 72 of the Code) occurring after the
purchase of the shares being redeemed; (b) the distribution is part of a series
of substantially equal payments made over the life expectancy of the shareholder
or the joint life expectancy of the shareholder and his or her beneficiary or as
scheduled periodic payments to a shareholder (limited in any year to 10% of the
value of the account at the time the distribution amount is established; a
required minimum distribution due to the shareholder's attainment of age 70 1/2
may exceed the 10% limit only if the distribution amount is based on assets held
by Pioneer); (c) the distribution is a return of excess employee contributions;
(d) the distribution is to be rolled over to or reinvested in the same class of
shares in a Pioneer mutual fund and which will be subject to any applicable CDSC
upon redemption.
The CDSC on Class B shares subject to a CDSC may be waived or reduced for either
non- retirement or IRA accounts if: (a) the redemption is made by any state,
county, or city, or any
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<PAGE>
instrumentality, department, authority, or agency thereof, which is prohibited
by applicable laws from paying a CDSC in connection with the acquisition of
shares of any registered investment management company; or (b) the redemption is
made pursuant to the Fund's right to liquidate or involuntarily redeem shares in
a shareholder's account.
BROKER-DEALERS. An order for either Class of Fund shares received by PFD from a
broker-dealer prior to the close of regular trading on the Exchange is confirmed
at the price appropriate for that Class as determined at the close of regular
trading on the Exchange on the day the order is received, provided the order is
received by PFD prior to PFD's close of business (usually, 5:30 p.m. Eastern
Time). It is the responsibility of broker-dealers to transmit orders so that
they will be received by PFD prior to its close of business. PFD or its
affiliates may provide additional compensation to certain dealers or such
dealers' affiliates based on certain objective criteria established from time to
time by PFD. All such payments are made out of PFD's or the affiliate's own
assets. These payments will not change the price an investor will pay for shares
or the amount that the Fund will receive from such sale.
GENERAL. The Fund reserves the right in its sole discretion to withdraw all or
any part of the offering of shares when, in the judgment of the Fund's
management, such withdrawal is in the best interest of the Fund. An order to
purchase shares is not binding on, and may be rejected by, PFD until it has been
confirmed in writing by PFD and payment has been received.
VII. HOW TO SELL FUND SHARES
You can arrange to sell (redeem) fund shares on any day the Exchange is open by
selling either some or all of your shares to the Fund.
You may sell your shares either through your broker-dealer or directly to the
Fund. Please note the following:
o If you are selling shares from a retirement account, other than an IRA,
you must make your request in writing (except for exchanges to other
Pioneer mutual funds which can be requested by phone or in writing).
Call 1-800-622-0176 for more information.
o If you are selling shares from a non-retirement account, you may use
any of the methods described below.
Your shares will be sold at the share price next calculated after your
order is received and accepted less any applicable CDSC. Sale proceeds generally
will be sent to you in cash, normally within seven days after your order is
accepted. The Fund reserves the right to withhold payment of the sale proceeds
until checks received by the Fund in payment for the shares being sold have
cleared, which may take up to 15 calendar days from the purchase date.
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<PAGE>
IN WRITING. You may sell your shares by delivering a written request, signed by
all registered owners, in good order to PSC, however, you must use a written
request, including a signature guarantee, to sell your shares if any of the
following situations applies:
o you wish to sell over $50,000 worth of shares,
o your account registration or address has changed within the last 30
days,
o the check is not being mailed to the address on your account (address
of record),
o the check is not being made out to the account owners, or
o the sale proceeds are being transferred to a Pioneer account with a
different registration.
Your request should include your name, the Fund's name, your fund account
number, the Class of shares to be redeemed, the dollar amount or number of
shares to be redeemed, and any other applicable requirements as described below.
Unless instructed otherwise, Pioneer will send the proceeds of the sale to the
address of record. Fiduciaries and corporations are required to submit
additional documents. For more information, contact PSC at 1-800-225-6292.
Written requests will not be processed until they are received in good order by
PSC. Good order means that there are no outstanding claims or requests to hold
redemptions on the account, and any certificates are endorsed by the record
owner(s) exactly as the shares are registered and the signature(s) are
guaranteed by an eligible guarantor. You should be able to obtain a signature
guarantee from a bank, broker, dealer, credit union (if authorized under state
law), securities exchange or association, clearing agency or savings
association. A notary public cannot provide a signature guarantee. Signature
guarantees are not accepted by facsimile ("fax"). For additional information
about the necessary documentation for redemption by mail, please contact PSC at
1-800-225-6292.
BY TELEPHONE OR BY FAX. Your account is automatically authorized to have the
telephone redemption privilege unless you indicate otherwise on your Account
Application or by writing to PSC. Proper account identification will be required
for each telephone redemption. A maximum of $50,000 per account per day may be
redeemed by telephone or fax and the proceeds may be received by check or by
bank wire or electronic funds transfer. To receive the proceeds by check: the
check must be made payable exactly as the account is registered and the check
must be sent to the address of record which must not have changed in the last 30
days. To receive the proceeds by bank wire or by electronic funds transfer: the
proceeds must be sent to the bank address of record which must have been
properly pre-designated either on your Account Application or on an Account
Options Form and which must not have changed in the last 30 days. To redeem by
fax, send your redemption request to 1-800-225-4240. You may always elect to
deliver redemption instructions to PSC by mail. See "Telephone Transactions and
Related Liabilities" below. Telephone and fax redemptions will be priced as
described above. YOU ARE STRONGLY
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<PAGE>
URGED TO CONSULT WITH YOUR FINANCIAL REPRESENTATIVE PRIOR TO REQUESTING A
TELEPHONE REDEMPTION.
SELLING SHARES THROUGH YOUR BROKER-DEALER. The Fund has authorized PFD to act as
its agent in the repurchase of shares of the Fund from qualified broker-dealers
and reserves the right to terminate this procedure at any time. Your
broker-dealer must receive your request before the close of business on the
Exchange and transmit it to PFD before PFD's close of business to receive that
day's redemption price. Your broker-dealer is responsible for providing all
necessary documentation to PFD and may charge you for its services.
SMALL ACCOUNTS. The minimum account value is $500. If you hold shares of the
Fund in an account with a net asset value of less than the minimum required
amount due to redemptions or exchanges, the Fund may redeem the shares held in
this account at net asset value if you have not increased the net asset value of
the account to at least the minimum required amount within six months of notice
by the Fund to you of the Fund's intention to redeem the shares.
GENERAL. Redemptions may be suspended or payment postponed during any period in
which any of the following conditions exist: the Exchange is closed or trading
on the Exchange is restricted; an emergency exists as a result of which disposal
by the Fund of securities owned by it is not reasonably practicable or it is not
reasonably practicable for the Fund to fairly determine the value of the net
assets of its portfolio; or the SEC, by order, so permits. Redemptions and
repurchases are taxable transactions to shareholders. 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.
VIII. HOW TO EXCHANGE FUND SHARES
At this time, you may not open a new account in the Fund or purchase shares of
the Fund by exchanging shares from any other Pioneer mutual fund that you
already own. You may, however, exchange shares of the Fund for shares of other
Pioneer mutual funds. SUCH SHARES MAY NOT BE EXCHANGED BACK TO THIS FUND.
Exchanges must be at least $1,000.
WRITTEN EXCHANGES. You may exchange your Fund shares by sending a letter of
instruction to PSC. Your letter should include your name, the Fund's name and
the name of the Pioneer mutual fund into which you wish to exchange, your fund
account number(s), the Class of shares to be exchanged and the dollar amount or
number of shares to be exchanged. Written exchange requests must be signed by
all record owner(s) exactly as the shares are registered.
TELEPHONE EXCHANGES. Your account is automatically authorized to have the
telephone exchange privilege unless you indicated otherwise on your Account
Application or by writing to PSC. Proper account identification will be required
for each telephone exchange. Telephone
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exchanges may not exceed $500,000 per account per day. Each telephone exchange
request, whether by voice or by FactFoneSM, will be recorded. YOU ARE STRONGLY
URGED TO CONSULT WITH YOUR FINANCIAL REPRESENTATIVE PRIOR TO REQUESTING A
TELEPHONE EXCHANGE. See "Telephone Transactions and Related Liabilities" below.
AUTOMATIC EXCHANGES. You may automatically exchange shares from the Fund for
shares of the same Class in another Pioneer mutual fund account on a monthly or
quarterly basis. The accounts must have identical registrations and the
originating account must have a minimum balance of $5,000. The exchange will be
effective on the day of the month designated on your Account Application or
Account Options Form.
GENERAL. You may exchange your shares of the Fund at net asset value, without a
sales charge, for shares of the same Class of any other Pioneer mutual fund. Not
all Pioneer mutual funds offer more than one Class of shares. A new Pioneer
account opened in another Pioneer mutual fund through an exchange must have a
registration identical to that on the original account. Shares which would
normally be subject to a CDSC upon redemption will not be charged the applicable
CDSC at the time of an exchange; the applicable CDSC will carry over to the
shares purchased by exchange.
Exchange requests received by PSC before 4:00 p.m. Eastern Time will be
effective on that day if the requirements above have been met, otherwise, they
will be effective on the next business day. PSC will process exchanges only
after receiving an exchange request in good order. There are currently no fees
or sales charges imposed at the time of an exchange. An exchange of shares may
be made only in states where legally permitted. For federal and (generally)
state income tax purposes, an exchange is considered to be a sale of the shares
of the Fund exchanged and a purchase of shares in another Pioneer mutual fund.
Therefore, an exchange could result in a gain or loss on the shares sold,
depending on the tax basis of these shares and the timing of the transaction,
and special tax rules may apply.
You should consider the differences in objectives and policies of the Pioneer
mutual funds, as described in each fund's current prospectus, before making any
exchange. For the protection of the Fund's performance and shareholders, the
Fund and PFD reserve the right to refuse any exchange request or restrict, at
any time without notice, the number and/or frequency of exchanges to prevent
abuses of the exchange privilege. Such abuses may arise from frequent trading in
response to short-term market fluctuations, a pattern of trading by an
individual or group that appears to be an attempt to "time the market," or any
other exchange request which, in the view of management, will have a detrimental
effect on the Fund's portfolio management strategy or its operations. In
addition, the Fund and PFD reserve the right to charge a fee for exchanges or to
modify, limit, suspend or discontinue the exchange privilege with notice to
shareholders as required by law.
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<PAGE>
IX. DISTRIBUTION PLANS
The Fund, has adopted a Plan of Distribution for both Class A shares ("Class A
Plan") and Class B shares ("Class B Plan") in accordance with Rule 12b-1 under
the 1940 Act pursuant to which certain distribution and service fees are paid.
Expenditures of the Fund for continuing service fees to broker-dealers pursuant
to the Class A Plan will be accrued daily beginning July 1, 1997; other expenses
pursuant to the Class A Plan will be paid as accrued.
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
Fund's Board of Trustees. As of the date of this Prospectus, the Board of
Trustees has approved the following categories of expenses for Class A shares of
the Fund: (i) a service fee to be paid to qualified broker-dealers in an amount
not to exceed 0.25% per annum of the Fund's 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 (See "How to Buy Fund Shares"); 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. Banks are
currently prohibited under the Glass-Steagall Act from providing certain
underwriting or distribution services. If a bank was prohibited from acting in
any capacity or providing any of the described services, management would
consider what action, if any, would be appropriate.
Expenditures of the Fund pursuant to the Class A Plan are accrued daily and may
not exceed 0.25% of the Fund's average daily net assets attributable to Class A
shares. Distribution expenses of PFD are expected to substantially exceed the
distribution fees paid by the Fund in a given year. 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. 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 event, provided that payments by the Fund
during such 12-month period shall not exceed 0.25% of the Fund's average daily
net assets during such period. The Class A Plan may not be amended to increase
materially the annual percentage limitation of average net assets which may be
spent for the services described therein without approval of the shareholders of
the Fund.
The Class B Plan provides that the Fund compensates PFD through the payment of a
distribution fee at the annual rate of 0.75% of the Fund's average daily net
assets attributable to Class B shares and a service fee at the annual rate of
0.25% of the Fund's average daily net assets attributable to Class B shares. The
distribution fee is intended to compensate PFD for its distribution services to
the Fund. The service fee is intended to be additional compensation for
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<PAGE>
personal services and/or account maintenance services with respect to Class B
shares. PFD also receives the proceeds of any CDSC imposed on the redemption of
Class B shares.
Commissions of 4%, equal to 3.75% of the amount invested and a first year's
service fee equal to 0.25% of the amount invested in Class B shares, are paid to
broker-dealers who have selling agreements with PFD. PFD may advance to dealers
the first year service fee at a rate up to 0.25% of the purchase price of such
shares and, as compensation therefore, PFD may retain the service fee paid by
the Fund with respect to such shares for the first year after purchase. Dealers
will become eligible for additional service fees with respect to such shares
commencing in the 13th month following the purchase. Dealers may from time to
time be required to meet certain criteria in order to receive service fees. PFD
or its affiliates are entitled to retain all service fees payable under the
Class B 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.
X. DIVIDENDS, DISTRIBUTIONS AND TAXATION
The Fund intends to qualify each year as a "regulated investment company" under
Subchapter M of the Code, so that it will not pay federal income taxes on income
and capital gains distributed to shareholders at least annually.
Under the Code, the Fund will be subject to a nondeductible 4% federal excise
tax on a portion of its undistributed 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's policy is to pay to shareholders dividends from net investment
income, if any, and to make distributions from net long-term capital gains, if
any, in December. Distributions from net short-term capital gains, if any, may
be paid with such dividends; distributions from income and/or capital gains may
also be made at such times as may be necessary to avoid federal income or excise
tax. Dividends from the Fund's net investment income, net short-term capital
gains, and certain net foreign exchange gains are taxable as ordinary income,
and dividends from the Fund's net long-term capital gains are taxable as
long-term capital gains.
UNLESS SHAREHOLDERS SPECIFY OTHERWISE, ALL DISTRIBUTIONS WILL BE AUTOMATICALLY
REINVESTED IN ADDITIONAL FULL AND FRACTIONAL SHARES OF THE FUND. FOR FEDERAL
INCOME TAX PURPOSES, ALL DIVIDENDS ARE TAXABLE AS DESCRIBED ABOVE WHETHER A
SHAREHOLDER TAKES THEM IN CASH OR REINVESTS THEM IN ADDITIONAL SHARES OF THE
FUND. INFORMATION AS TO THE FEDERAL TAX STATUS OF DIVIDENDS AND DISTRIBUTIONS
WILL BE PROVIDED ANNUALLY. For further information on the distribution options
available to shareholders, see "Distribution Options" below.
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Distributions by the Fund of the dividend income it receives from U.S. domestic
corporations, if any, may qualify for the corporate dividends-received deduction
for corporate shareholders, subject to minimum holding-period requirements and
debt-financing restrictions under the Code.
Dividends and other distributions and the proceeds of redemptions, exchanges or
repurchases of Fund shares paid to individuals and other non-exempt payees will
be subject to a 31% backup withholding of federal income tax if the Fund is not
provided with the shareholder's correct taxpayer identification number and
certification that the number is correct and the shareholder is not subject to
backup withholding or if the Fund receives notice from the IRS or a broker that
such withholding applies. Please refer to the Account Application for additional
information.
The description above relates only to U.S. federal income tax consequences for
shareholders who are U.S. persons, i.e., U.S. citizens or residents or U.S.
corporations, partnerships, trusts or estates and who are subject to U.S.
federal income tax. Non-U.S. shareholders and tax-exempt shareholders are
subject to different tax treatment that is not described above. Shareholders
should consult their own tax advisers regarding state, local and other
applicable tax laws.
XI. SHAREHOLDER SERVICES
PSC is the shareholder services and transfer agent for shares of the Fund. PSC,
a Massachusetts corporation, is a wholly-owned subsidiary of PGI. PSC's offices
are located at 60 State Street, Boston, Massachusetts 02109, and inquiries to
PSC should be mailed to Pioneering Services Corporation, P.O. Box 9014, Boston,
Massachusetts 02205-9014. Brown Brothers Harriman & Co. (the "Custodian") serves
as custodian of the Fund's portfolio securities and other assets. The principal
business address of the mutual fund division of the Custodian is 40 Water
Street, Boston, Massachusetts 02109.
ACCOUNT AND CONFIRMATION STATEMENTS
PSC maintains an account for each shareholder and all transactions of the
shareholder are recorded in this account. Confirmation statements showing
details of transactions are sent to shareholders as transactions occur The
Combined Account Statement, mailed quarterly, is available to shareholders who
have more than one Pioneer mutual fund account.
Shareholders whose shares are held in the name of an investment broker-dealer or
other party will not normally have an account with the Fund and might not be
able to utilize some of the services available to shareholders of record.
Examples of services which might not be available are purchases, exchanges or
redemptions of shares by mail, automatic reinvestment of dividends and capital
gains distributions, withdrawal plans, telephone exchanges and redemptions, and
newsletters.
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ADDITIONAL INVESTMENTS
You may add to your account, unless the Fund is closed to new investments, by
sending a check (minimum of $1,000 for Class A and Class B shares) to PSC
(account number and Class of shares should be clearly indicated). The bottom
portion of a confirmation statement may be used as a remittance slip to make
additional investments.
Additions to your account are invested in full and fractional shares of the Fund
at the applicable offering price in effect as of the close of regular trading on
the Exchange on the day of receipt.
FINANCIAL REPORTS AND TAX INFORMATION
As a shareholder, you will receive financial reports at least semiannually. In
January of each year, the Fund will mail you information about the tax status of
dividends and distributions.
DISTRIBUTION OPTIONS
Dividends and capital gains distributions, if any, will automatically be
invested in additional shares of the Fund, at the applicable net asset value per
share, unless you indicate another option on the Account Application. Two other
options available are (a) dividends in cash and capital gains distributions in
additional shares; and (b) all dividends and capital gains distributions in
cash. These two options are not available, however, for retirement plans or for
an account with a net asset value of less than $500. Changes in your
distribution options may be made by written request to PSC.
If you elect to receive either dividends or capital gains or both in cash and a
distribution check issued to you is returned by the United States Postal Service
as not deliverable or a distribution check remains uncashed for six months or
more, the amount of the check may be reinvested in your account. Such additional
shares will be purchased at the then current net asset value. Furthermore, the
distribution option on the account will automatically be changed to the
reinvestment option until such time as you request a different option by writing
to PSC.
DIRECT DEPOSIT
If you have elected to take distributions, whether dividends or dividends and
capital gains, in cash, or have established a Systematic Withdrawal Plan, you
may choose to have those cash payments deposited directly into your savings,
checking or NOW bank account. You may establish this service by completing the
appropriate section on the Account Application when opening a new account or the
Account Options Form for an existing account.
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<PAGE>
VOLUNTARY TAX WITHHOLDING
You may request (in writing) that PSC withhold 28% of the dividends and capital
gains distributions paid from your account (before any reinvestment) and forward
the amount withheld to the IRS as a credit against your federal income taxes.
This option is not available for retirement plan accounts or for accounts
subject to backup withholding.
TELEPHONE TRANSACTIONS AND RELATED LIABILITIES
Your account is automatically authorized to have telephone transaction
privileges unless you indicate otherwise on your Account Application or by
writing to PSC. You may purchase, sell or exchange Fund shares by telephone. For
personal assistance, call 1-800-225-6292 between 8:00 a.m. and 9:00 p.m. Eastern
time on weekdays. See "How to Buy Fund Shares," "How to Sell Fund Shares" and
"How to Exchange Fund Shares" for more information. Computer-assisted
transactions are available to shareholders who have pre-recorded certain bank
information (see "FactFoneSM"). YOU ARE STRONGLY URGED TO CONSULT WITH YOUR
FINANCIAL REPRESENTATIVE PRIOR TO REQUESTING ANY TELEPHONE TRANSACTION.
To confirm that each transaction instruction received by telephone is genuine,
PSC 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, PSC or 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.
During times of economic turmoil or market volatility or as a result of severe
weather or a natural disaster, it may be difficult to contact the Fund by
telephone to institute a redemption or exchange. You should communicate with the
Fund in writing if you are unable to reach the Fund by telephone.
FACTFONE SM
FactFoneSM is an automated inquiry and telephone transaction system available to
Pioneer shareholders by dialing 1-800-225-4321. FactFoneSM allows you to obtain
current information on your Pioneer accounts and to inquire about the prices and
yields of all publicly available Pioneer mutual funds. In addition, you may use
FactFoneSM to make computer-assisted telephone purchases, exchanges and
redemptions from your Pioneer accounts if you have activated your personal
identification number ("PIN"). Telephone purchases and redemptions require the
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establishment of a bank account of record. You are strongly urged to consult
with your financial representative 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 FactFone SM. See "How
to Buy Fund Shares," "How to Sell Fund Shares," "How to Exchange Fund Shares"
and "Telephone Transactions and Related Liabilities." Call PSC for assistance.
RETIREMENT PLANS
Rollover and contributory IRA accounts may invest in the Fund. The minimum
initial investment for IRA accounts is $2,000. Retirement plans that must make
periodic investments may not invest in the Fund because periodic investments
will not be allowed after management closes the Fund to new investments (see
"How to Buy Fund Shares - Special Restrictions"). The Account Application
accompanying this Prospectus should not be used to establish an IRA account. A
separate application is required.
Contact the Retirement Plans Department of PSC at 1-800-622-0176 for information
relating to retirement plans for businesses, age-weighted profit sharing plans,
Simplified Employee Pension Plans, IRAs, and Section 403(b) retirement plans for
employees of certain non-profit organizations and public school systems, all of
which are available in conjunction with investments in most other Pioneer mutual
funds. TELECOMMUNICATIONS DEVICE FOR THE DEAF (TDD)
If you have a hearing disability and access to TDD keyboard equipment, you can
call our TDD number toll-free at 1-800-225-1997, weekdays from 8:30 a.m. to 5:30
p.m. Eastern Time, to contact our telephone representatives with questions about
your account.
SYSTEMATIC WITHDRAWAL PLANS
If your account has a total value of at least $10,000 you may establish a
Systematic Withdrawal Plan ("SWP") providing for fixed payments at regular
intervals. Withdrawals from Class B share accounts are limited to 10% of the
value of the account at the time the SWP is implemented. See "Waiver or
Reduction of Contingent Deferred Sales Charge" for more information. Periodic
checks of $50 or more will be sent to you, or any person designated by you,
monthly or quarterly, and your periodic redemptions of shares may be taxable to
you. Payments can be made either by check or electronic transfer to a bank
account designated by you. If you direct that withdrawal checks be paid to
another person after you have opened your account, a signature guarantee must
accompany your instructions. Purchases of Class A 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. You may obtain additional
information by calling PSC at 1-800-225-6292 or by referring to the Statement of
Additional Information.
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---------------
THE OPTIONS AND SERVICES AVAILABLE TO SHAREHOLDERS, INCLUDING THE TERMS OF THE
EXCHANGE PRIVILEGE, MAY BE REVISED, SUSPENDED OR TERMINATED AT ANY TIME BY PFD
OR BY THE FUND. YOU MAY ESTABLISH THE SERVICES DESCRIBED IN THIS SECTION WHEN
YOU OPEN YOUR ACCOUNT. YOU MAY ALSO ESTABLISH OR REVISE MANY OF THEM ON AN
EXISTING ACCOUNT BY COMPLETING AN ACCOUNT OPTIONS FORM, WHICH YOU MAY REQUEST BY
CALLING 1-800-225-6292.
XII. THE FUND
The Fund is a diversified open-end management investment company (commonly
referred to as a mutual fund) organized as a Delaware business trust on December
3, 1996. The Fund has authorized an unlimited number of shares of beneficial
interest. 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 then current net asset value
per share. See "How to Sell Fund Shares." 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 Fund reserves the right to create and issue additional series of shares. The
Trustees have the authority, without further shareholder approval, to classify
and reclassify the shares of the Fund, or any additional series of the Fund,
into one or more classes. As of the date of this Prospectus, the Trustees have
authorized the issuance of two classes of shares, designated Class A and Class
B. 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 and Class B shareholders have exclusive voting rights
with respect to the Rule 12b-1 distribution plans adopted by holders of those
shares in connection with the distribution of shares.
In addition to the requirements under Delaware law, the Declaration of Trust
provides that a shareholder of the Fund may bring a derivative action on behalf
of the Fund only if the following conditions are met: (a) shareholders eligible
to bring such derivative action under Delaware law who hold at least 10% of the
outstanding shares of the Fund, or 10% of the outstanding shares of the series
or class to which such action relates, shall join in the request for the
Trustees to commence such action; and (b) the Trustees must be afforded a
reasonable amount of time to consider such shareholder request and investigate
the basis of such claim. The Trustees shall be entitled to retain counsel or
other advisers in considering the merits of the request and shall require an
undertaking by the shareholders making such request to reimburse the Fund for
the expense of any such advisers in the event that the Trustees determine not to
bring such action.
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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 reserves the right to charge
a fee for the issuance of Class A share certificates; certificates will not be
issued for Class B shares. In order to supply the Fund with capital, PFD
beneficially owned 100% of the Fund's issued and outstanding shares immediately
prior to effectiveness of the Fund's registration statement. The Fund expects to
have significant assets in comparison to PFD's initial investment soon after
effectiveness and therefore PFD may no longer control the Fund.
XIII. INVESTMENT RESULTS
The average annual total return (for a designated period of time) on an
investment in the Fund may be included in advertisements, and furnished to
existing or prospective shareholders. The average annual total return for each
Class is computed in accordance with the SEC's standardized formula. The
calculation for all Classes assumes the reinvestment of all dividends and
distributions at net asset value and does not reflect the impact of federal or
state income taxes. In addition, for Class A shares the calculation assumes the
deduction of the maximum sales charge of 5.75%; for Class B shares the
calculation reflects the deduction of any applicable CDSC. The periods
illustrated would normally include one, five and ten years (or since the
commencement of the public offering of the shares of a Class, if shorter)
through the most recent calendar quarter.
One or more additional measures and assumptions, including but not limited to
historical total returns; distribution returns; results of actual or
hypothetical investments; changes in dividends, distributions or share values;
or any graphic illustration of such data may also be used. These data may cover
any period of the Fund's existence and may or may not include the impact of
sales charges, taxes or other factors.
Other investments or savings vehicles and/or unmanaged market indices,
indicators of economic activity or averages of mutual fund results may be cited
or compared with the investment results of the Fund. Rankings or listings by
magazines, newspapers or independent statistical or rating services, such as
Lipper Analytical Services, Inc., may also be referenced.
The Fund's investment results will vary from time to time depending on market
conditions, the composition of the Fund's portfolio and operating expenses of
the Fund. All quoted investment results are historical and should not be
considered representative of what an investment in the Fund may earn in any
future period. For further information about the calculation methods and uses of
the Fund's investment results, see the Statement of Additional Information.
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<PAGE>
APPENDIX--CERTAIN INVESTMENT PRACTICES
This Appendix provides a brief description of certain investment techniques that
the Fund may employ. For a more complete discussion of these and other
practices, see "Investment Objective and Policies" in this Prospectus and
"Investment Policies and Restrictions" in the Statement of Additional
Information.
OPTIONS ON SECURITIES AND SECURITIES INDICES
The Fund may purchase put and call options on securities in which the Fund may
invest and securities indices that are based on securities in which it may
invest to manage cash flow and to manage its exposure to stocks or stock markets
instead of, or in addition to, buying and selling stock. The Fund may also
purchase options in order to hedge against risks of market-wide price
fluctuations.
The Fund may purchase put options in order to hedge against an anticipated
decline in securities prices that might adversely affect the value of the Fund's
portfolio securities. If the Fund purchases a put option on a security or
securities index, the amount of the payment it would receive upon exercising the
option would depend on the extent of any decline in the value of the security or
the securities index below the exercise price. Such payments would tend to
offset a decline in the value of the Fund's portfolio securities. However, if
the value of the security or securities index increases and remains above the
exercise price while the put option is outstanding, the Fund will not be able to
profitably exercise the option and will lose the amount of the premium and any
transaction costs. Such loss may be partially offset by an increase in the value
of the Fund's portfolio securities.
The Fund may purchase call options on securities and securities indices in order
to remain fully invested in a particular stock market or to lock in a favorable
price on securities that it intends to buy in the future. If the Fund purchases
a call option on a security or securities index, the amount of the payment it
receives upon exercising the option depends on the extent of an increase in the
value of the security or securities index above the exercise price. Such
payments would in effect allow the Fund to benefit from securities market
appreciation even though it may not have had sufficient cash to purchase the
underlying securities. Such payments may also offset increases in the price of
securities that the Fund intends to purchase. If, however, the value of the
security or securities index declines and remains below the exercise price while
the call option is outstanding, the Fund will not be able to exercise the option
profitably and will lose the amount of the premium and transaction costs. Such
loss may be partially offset by a reduction in the price the Fund pays to buy
additional securities for its portfolio.
The Fund may sell an option it has purchased or a similar option prior to the
expiration of the purchased option in order to close out its position in an
option which it has purchased. The Fund
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may also allow options to expire unexercised, which would result in the loss of
the premium paid.
FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS
To hedge against changes in securities prices, the Fund may purchase and sell
various kinds of futures contracts, and purchase and write call and put options
on any of such futures contracts. The Fund may also enter into closing purchase
and sale transactions with respect to any of such contracts and options. The
futures contracts may be based on various securities indices. The Fund will
engage in futures and related options transactions for hedging purposes only.
These transactions involve brokerage costs and require margin deposits.
LIMITATIONS AND RISKS ASSOCIATED WITH TRANSACTIONS IN OPTIONS AND FUTURES
CONTRACTS
Transactions involving options on securities and securities indices, futures
contracts and options on futures involve (1) liquidity risk that contractual
positions cannot be easily closed out in the event of market changes or
generally in the absence of a liquid secondary market, (2) correlation risk that
changes in the value of hedging positions may not match the securities market
intended to be hedged and (3) market risk that an incorrect prediction of
securities prices by the Fund's investment adviser may cause the Fund to perform
less favorably than if such positions had not been entered. The Fund will
purchase and sell options that are traded only in a regulated market which is
open to the public. Options and futures contracts are highly specialized
activities which involve investment techniques and risks that are different from
those associated with ordinary portfolio transactions. The Fund may not enter
into futures contracts and options on futures contracts for speculative
purposes. All of the Fund's assets may be subject to futures contracts and
options on such contracts entered into for bona fide hedging purposes. The loss
that may be incurred by the Fund in entering into future contracts and written
options thereon is potentially unlimited. The Fund may not invest more than 5%
of its total assets in financial instruments that are used for non-hedging
purposes.
The Fund's transactions in options, futures contracts and options on futures
contracts may be limited by the requirements for qualification of the Fund as a
regulated investment company for tax purposes. See "Tax Status" in the Statement
of Additional Information.
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<PAGE>
PIONEER MID-CAP FUND [PIONEER LOGO]
60 STATE STREET
BOSTON, MASSACHUSETTS 02109
OFFICERS
JOHN F. COGAN, JR., Chairman and President
DAVID D. TRIPPLE, Executive Vice President
WILLIAM H. KEOUGH, Treasurer
JOSEPH P. BARRI, Secretary
INVESTMENT ADVISER
PIONEERING MANAGEMENT CORPORATION
CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.
INDEPENDENT PUBLIC ACCOUNTANTS
- ---------------------------
LEGAL COUNSEL
HALE AND DORR
PRINCIPAL UNDERWRITER
PIONEER FUNDS DISTRIBUTOR, INC.
SHAREHOLDER SERVICES AND TRANSFER AGENT
PIONEERING SERVICES CORPORATION
60 State Street
Boston, Massachusetts 02109
Telephone: 1-800-225-6292
SERVICE INFORMATION
If you would like information on the following, please call:
Existing and new accounts, prospectuses,
applications, service forms
and telephone transactions ...............................1-800-225-6292
FactFoneSM
Automated fund yields and prices,
account information.......................................1-800-225-4321
Retirement plans ............................................1-800-622-0176
Toll-free fax ...............................................1-800-225-4240
Telecommunications Device for the Deaf (TDD) ............... 1-800-225-1997
0297-xxxx
(C)Pioneer Funds Distributor, Inc.
<PAGE>
PIONEER MICRO-CAP FUND
60 State Street
Boston, Massachusetts 02109
STATEMENT OF ADDITIONAL INFORMATION
CLASS A AND CLASS B SHARES
March 1, 1997
This Statement of Additional Information is not a Prospectus ("Prospectus"), but
should be read in conjunction with the Prospectus, dated March 1, 1997 . 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 Pioneer Micro-Cap Fund (the "Fund")
at 60 State Street, Boston, Massachusetts 02109.
TABLE OF CONTENTS
Page
1. Investment Policies and Restrictions............................ 2
2. Management of the Fund.......................................... 9
3. Investment Adviser..............................................13
4. Underwriting Agreement and Distribution Plans...................14
5. Shareholder Servicing/Transfer Agent............................16
6. Custodian.......................................................16
7. Principal Underwriter...........................................16
8. Independent Public Accountants..................................17
9. Portfolio Transactions..........................................17
10. Tax Status and Dividends........................................18
11. Description of Shares...........................................21
12. Certain Liabilities.............................................22
13. Letter of Intention.............................................23
14. Systematic Withdrawal Plan......................................23
15. Determination of Net Asset Value................................24
16. Investment Results..............................................25
Appendix A......................................................28
Appendix B......................................................38
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A
PROSPECTUS AND IS AUTHORIZED FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS ONLY IF PRECEDED OR
ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
<PAGE>
1. INVESTMENT POLICIES AND RESTRICTIONS
The Fund's current Prospectus presents the investment objectives and the
principal investment policies of the Fund. Additional investment policies and a
further description of some of the policies described in the Prospectus appear
below.
The following policies and restrictions supplement those discussed in the
Prospectus. Whenever an investment policy or restriction states a maximum
percentage of the Fund's assets that may be invested in any security or presents
a policy regarding quality standards, this standard or other restrictions shall
be determined immediately after and as a result of the Fund's investment.
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 investment objectives and policies.
LENDING OF PORTFOLIO SECURITIES
The Fund may lend portfolio securities to member firms of the New York Stock
Exchange, under agreements which would require that the loans be secured
continuously by collateral in cash, cash equivalents or United States (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 would continue 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 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 which 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 30% of the value of the Fund's total assets.
OPTIONS ON SECURITIES AND SECURITIES INDICES
The Fund may purchase call and put options on securities and securities indices
for the purpose of hedging against the risk of unfavorable price movements
adversely affecting the value of the Fund's securities or securities which the
Fund intends to buy. Securities index options will not be used for speculative
purposes.
The Fund may only purchase and sell options that are traded only in a regulated
market which is open to the public. Currently, options on stock indices are
traded only on national securities exchanges or over-the-counter, both in the
United States and in foreign countries. A securities index fluctuates with
changes in the market values of the securities included in the index. For
example, some stock index options are based on a broad market index such as the
S&P 500 or the Value Line Composite Index in the U.S., the Nikkei in Japan or
the FTSE 100 in the United Kingdom. Index options may also be based on a
narrower market index such as the S&P 100 or on an industry or market segment
such as the AMEX Oil and Gas Index or the Computer and Business Equipment Index.
The Fund may purchase put options in order to hedge against an anticipated
decline in securities prices that might adversely affect the value of the Fund's
portfolio securities. If the Fund purchases a put option on a
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<PAGE>
security or securities index, the amount of the payment it would receive upon
exercising the option would depend on the extent of any decline in the value of
the security or securities index below the exercise price. Such payments would
tend to offset a decline in the value of the Fund's portfolio securities.
However, if the value of the security or securities index increases and remains
above the exercise price while the put option is outstanding, the Fund will not
be able to profitably exercise the option and will lose the amount of the
premium and any transaction costs. Such loss may be partially offset by an
increase in the value of the Fund's portfolio securities.
The Fund may purchase call options on securities and securities indices in order
to remain fully invested in the stock market or to lock in a favorable price on
securities that it intends to buy in the future. If the Fund purchases a call
option on a security or securities index, the amount of the payment it receives
upon exercising the option depends on the extent of an increase in the value of
other securities and securities indices above the exercise price. Such payments
would in effect allow the Fund to benefit from securities market appreciation
even though it may not have had sufficient cash to purchase the underlying
securities. Such payments may also offset increases in the price of securities
that the Fund intends to purchase. If, however, the value of the security or
securities index declines and remains below the exercise price while the call
option is outstanding, the Fund will not be able to exercise the option
profitably and will lose the amount of the premium and transaction costs. Such
loss may be partially offset by a reduction in the price the Fund pays to buy
additional securities for its portfolio.
The Fund may sell the security or securities index option it has purchased or
write a similar offsetting option in order to close out a position in an option
which it has purchased. These closing sale transactions enable the Fund to
immediately realize gains or minimize losses on their respective options
positions. However, there is no assurance that a liquid secondary market on an
options exchange will exist for any particular option, or at any particular
time, and for some options no secondary market may exist. In addition, security
or securities index prices may be distorted by interruptions in the trading of
securities of certain companies or of issuers in certain industries, or by
restrictions that may be imposed by an exchange on opening or closing
transactions, or both, which would disrupt trading in options on such security
or securities indices and preclude the Fund from closing out its options
positions. If the Fund is unable to effect a closing sale transaction with
respect to options that it has purchased, it would have to exercise the options
in order to realize any profit.
The hours of trading for options may not conform to the hours during which the
underlying securities are traded. To the extent that the options markets close
before the markets for the underlying securities, significant price movements
can take place in the underlying markets that can not be reflected in the
options markets. The purchase of options is a highly specialized activity which
involves investment techniques and risks different from those associated with
ordinary portfolio securities transactions.
In addition to the risks of imperfect correlation between the Fund's respective
portfolio and the security or securities index underlying the option, the
purchase of 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 security or the prices of
the securities comprising the securities index on which the option is based.
FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS
To hedge against changes in securities prices, the Fund may purchase and sell
various kinds of futures contracts, and purchase and write (sell) call and put
options on any of such futures contracts. The Fund may also enter into closing
purchase and sale transactions with respect to any of such contracts and
options. The
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<PAGE>
futures contracts may be based on various securities in which the Fund may
invest, securities indices that composed of securities in which the Fund may
invest, 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").
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 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 securities prices are rising, the Fund, through the purchase of futures
contracts, can attempt to secure better prices than might later be available in
the market when it effects anticipated purchases.
Positions taken in the futures markets are not normally held to maturity but are
instead liquidated through offsetting transactions which may result in a profit
or a loss. While futures contracts on securities will usually be liquidated in
this manner, the Fund may instead make, or take, delivery of the underlying
securities whenever it appears economically advantageous to do so. A clearing
corporation associated with the exchange on which futures on securities are
traded guarantees that, if still open, the sale or purchase will be performed on
the settlement date.
HEDGING STRATEGIES. Hedging, by use of futures contracts, seeks to establish
with more certainty the effective price of 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 decline in market prices that would adversely
affect the value of the Fund's portfolio securities. Such futures contracts may
include contracts for the future delivery of securities held by the Fund or
securities with characteristics similar to those of the Fund's portfolio
securities. If, in the opinion of Pioneering Management Corporation ("PMC"),
there is a sufficient degree of correlation between price trends for the Fund's
portfolio securities and futures contracts based on securities and securities
indices or other indices, the Fund may also enter into such futures contracts as
part of their 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, PMC 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 then available in the applicable market to be less favorable
than prices 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
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<PAGE>
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.
The Fund may use options on futures contracts for bona fide hedging or
non-hedging purposes as discussed below.
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 Investment Company Act of 1940, as amended (the "1940 Act")
to engage in such transactions without registering as commodity pool operators.
The Fund is not permitted to engage in speculative futures trading. The Fund
will determine that the price fluctuations in the futures contracts and options
on futures used for hedging purposes are substantially related to price
fluctuations in securities held by the Fund or which 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 that the Fund owns,
or futures contracts will be purchased to protect the Fund against an increase
in the price of securities it intends to purchase. As evidence of this hedging
intent, the Fund expects that on 75% or more of the occasions on which it takes
a long futures or option position (involving the purchase of futures contracts),
the Fund will have purchased, or will be in the process of purchasing,
equivalent amounts of related securities 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
Internal Revenue Code of 1986, as amended (the "Code"), for maintaining its
qualifications as a regulated investment company for federal income tax
purposes.
-5-
<PAGE>
Transaction costs associated with futures contracts and related options involve
brokerage costs, require margin deposits and, in the case of contracts and
options obligating the Fund to purchase securities 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 securities prices may result in a poorer overall
performance for the Fund than if it had not entered into any futures contracts
or options transactions. In the event of an imperfect correlation between a
futures position and a portfolio position which is intended to be protected, the
desired protection may not be obtained and the Fund may be exposed to risk of
loss.
RESTRICTED AND ILLIQUID SECURITIES
With respect to liquidity determinations generally, the Board of Trustees has
the ultimate responsibility for determining whether specific securities,
including Rule 144A securities, are liquid or illiquid. The Board has delegated
the function of making day to day determinations of liquidity to PMC, pursuant
to guidelines reviewed by the Trustees. PMC takes into account a number of
factors in reaching liquidity decisions. These factors may include but are not
limited to: (i) the frequency of trading in the security; (ii) the number of
dealers who make quotes in the securities; (iii) the number of dealers who have
undertaken to make a market in the security; (iv) the number of potential
purchasers; and (v) the nature of the security and how trading is effected
(e.g., the time needed to sell the security, how offers are solicited and the
mechanics of transfer). PMC will monitor the liquidity of securities in the
Fund's portfolio and report periodically on such decisions to the Trustees.
Since it is not possible to predict with assurance exactly how the market for
restricted securities sold and offered under Rule 144A will develop, the Board
will carefully monitor the Fund's investments in these securities, focusing on
such important factors, among others, as valuation, liquidity and availability
of information. This investment practice could have the effect of increasing the
level of illiquidity in the Fund to the extent that qualified institutional
buyers become for a time uninterested in purchasing these restricted securities.
INVESTMENT RESTRICTIONS
FUNDAMENTAL INVESTMENT RESTRICTIONS. The Fund has adopted certain additional
investment restrictions which may not be changed without the affirmative vote of
the holders of a "majority" (as defined in the 1940 Act) of the Fund's
outstanding voting securities. The Fund may not:
(1)......Issue senior securities, except as permitted by the Fund's
borrowing, lending and commodity restrictions and, for purposes of this
restriction, the issuance of shares of beneficial interest in multiple classes
or series, the purchase or sale of options, futures contracts and options on
futures contracts, forward commitments, forward foreign exchange contracts,
repurchase agreements, fully covered reverse repurchase agreements, dollar
rolls, swaps and any other financial transaction entered into pursuant to the
Fund's investment policies as described in the Prospectus and this Statement of
Additional Information and in accordance with applicable SEC pronouncements, as
well as the pledge, mortgage or hypothecation of the Fund's assets within the
meaning of the fundamental investment restriction regarding pledging, are not
deemed to be senior securities.
(2)......Borrow money, except from banks as a temporary measure to
facilitate the meeting of redemption requests or for extraordinary emergency
purposes and except pursuant to reverse repurchase
-6-
<PAGE>
agreements and dollar rolls and then only in amounts not to exceed 33 1/3% of
the Fund's total assets (including the amount borrowed) taken at market value.
The Fund will not use leverage to attempt to increase income.
(3)......Guarantee the securities of any other company, or mortgage,
pledge, hypothecate or assign or otherwise encumber as security for indebtedness
its securities or receivables in an amount exceeding the amount of the borrowing
thereby secured.
(4)......Act as an underwriter, except as it may be deemed to be on
underwriter in a sale of restricted securities held in its portfolio.
(5)......Invest in real estate, commodities or commodity contracts,
except that the Fund may invest financial futures contracts and related options
and in any other financial instruments which may be deemed to be commodities or
commodity contracts in which the Fund is not prohibited from investing by the
Commodity Exchange Act and the rules and regulations thereunder.
(6)......Make loans, except by the purchase of debt obligations in
which the Fund may invest consistent with its investment policies, by entering
into repurchase agreements or through the lending of portfolio securities, in
each case only to the extent permitted by the Prospectus and this Statement of
Additional Information. .
(7)......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.
It is the fundamental policy of the Fund not to concentrate its investments in
securities of companies in any particular industry. Following the current
opinion of the staff of the Securities and Exchange Commission (the
"Commission"), 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.
The Fund does not intend to enter into any reverse repurchase agreements or
dollar rolls, lend portfolio securities or invest in foreign securities, forward
currency contracts, options or futures on foreign currencies or securities index
put and call warrants, as described in fundamental investment restrictions (1),
(2) and (6) above, during the coming year. In addition, in compliance with an
informal position taken by the staff of the Commission regarding leverage, the
Fund will not purchase securities during the coming year at any time that
outstanding borrowings exceed 5% of the Fund's total assets.
2. MANAGEMENT OF THE FUND
The Fund's Board of Trustees provides broad supervision over the affairs of the
Fund. The officers of the Fund are responsible for the Fund's operations. The
Trustees and executive officers of the
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<PAGE>
Fund are listed below, together with their principal occupations during the past
five years. An asterisk indicates those Trustees who are interested persons of
the Fund within the meaning of the 1940 Act.
JOHN F. COGAN, JR.*, CHAIRMAN OF THE BOARD, PRESIDENT AND TRUSTEE, DOB: JUNE
1926
President, Chief Executive Officer and a Director of The Pioneer Group,
Inc. ("PGI"); Chairman and a Director of Pioneering Management Corporation
("PMC") and Pioneer Funds Distributor, Inc. ("PFD"); Director of Pioneering
Services Corporation ("PSC"), Pioneer Capital Corporation ("PCC") and
Forest-Starma (a Russian corporation); President and Director of Pioneer Plans
Corporation ("PPC"), Pioneer Investment Corp. ("PIC"), Pioneer Metals and
Technology, Inc. ("PMT"), Pioneer International Corp. ("PIntl"), Pioneer First
Russia, Inc. ("First Russia") and Pioneer Omega, Inc. ("Omega"); Chairman of the
Board and Director of Pioneer Goldfields Limited ("PGL") and Teberebie
Goldfields Limited; Chairman of the Supervisory Board of Pioneer Fonds
Marketing, GmbH ("Pioneer GmbH"); Member of the Supervisory Board of Pioneer
First Polish Trust Fund Joint Stock Company ("PFPT"); Chairman, President and
Trustee of all of the Pioneer mutual funds; and Partner, Hale and Dorr (counsel
to the Fund).
RICHARD H. EGDAHL, M.D., TRUSTEE, DOB: DECEMBER 1926
Boston University Health Policy Institute, 53 Bay State Rd., Boston, MA 02115
Professor of Management, Boston University School of Management;
Professor of Public Health, Boston University School of Public Health; Professor
of Surgery, Boston University School of Medicine; Director, Boston University
Health Policy Institute and Boston University Medical Center; Executive Vice
President and Vice Chairman of the Board, University Hospital; Academic Vice
President for Health Affairs, Boston University; Director, Essex Investment
Management Company, Inc. (investment adviser), Health Payment Review, Inc.
(health care containment software firm), Mediplex Group, Inc. (nursing care
facilities firm), Peer Review Analysis, Inc. (health care facilities firm) and
Springer-Verlag New York, Inc. (publisher); Honorary Trustee, Franciscan
Children's Hospital; and Trustee of all of the Pioneer mutual funds.
MARGARET B.W. GRAHAM, TRUSTEE, DOB: MAY 1947
The Keep, P.O. Box 110. Little Deer Isle, ME 04650
Founding Director, Winthrop Group, Inc. (consulting firm); Manager of
Research Operations, Xerox Palo Alto Research Center, from 1991 to 1994;
Professor of Operations Management and Management of Technology, Boston
University School of Management ("BUSM"), from 1989 to 1993; and Trustee of all
of the Pioneer mutual funds, except Pioneer Variable Contracts Trust.
JOHN W. KENDRICK, TRUSTEE, DOB: JULY 1917
6363 Waterway Drive, Falls Church, VA 22044
Professor Emeritus and Adjunct Scholar, George Washington University;
Economic Consultant and Director, American Productivity and Quality Center;
American Enterprise Institute; and Trustee of all of the Pioneer mutual funds,
except Pioneer Variable Contracts Trust.
MARGUERITE A. PIRET, TRUSTEE, DOB: MAY 1948
One Boston Place, Suite 2635, Boston, MA 02108
President, Newbury, Piret & Company, Inc. (merchant banking firm) and
Trustee of all of the Pioneer mutual funds.
DAVID D. TRIPPLE*, TRUSTEE AND EXECUTIVE VICE PRESIDENT, DOB: FEBRUARY 1944
-8-
<PAGE>
Executive Vice President and a Director of PGI; President, Chief
Investment Officer and a Director of PMC; Director of PFD, PCC, PIC, PIntl,
First Russia, Omega and Pioneer SBIC Corporation; and Executive Vice President
and Trustee of all of the Pioneer mutual funds.
STEPHEN K. WEST, TRUSTEE, DOB: SEPTEMBER 1928
125 Broad Street, New York, NY 10004
Partner, Sullivan & Cromwell (law firm); Trustee, The Winthrop Focus
Funds (mutual funds) and Trustee of all of the Pioneer mutual funds.
JOHN WINTHROP, TRUSTEE, DOB: JUNE 1936
One North Adgers Wharf, Charleston, SC 29401
President, John Winthrop & Co., Inc. (private investment firm);
Director of NUI Corp.; Trustee of Alliance Capital Reserves, Alliance Government
Reserves and Alliance Tax Exempt Reserves; and Trustee of all of the Pioneer
mutual funds, except Pioneer Variable Contracts Trust.
WILLIAM H. KEOUGH, TREASURER, DOB: APRIL 1937
Senior Vice President, Chief Financial Officer and Treasurer of PGI;
Treasurer of PFD, PMC, PSC, PCC, PIC, PIntl, PMT, PGL, First Russia, Omega and
Pioneer SBIC Corporation; Treasurer and Director of PPC; and Treasurer of all of
the Pioneer mutual funds.
JOSEPH P. BARRI, SECRETARY, DOB: AUGUST 1946
Secretary of PGI, PMC, PPC, PIC, PIntl, PMT, First Russia, Omega and PCC;
Clerk of PFD and PSC; Partner, Hale and Dorr (counsel to the Fund); and
Secretary of all of the Pioneer mutual funds.
ERIC W. RECKARD, ASSISTANT TREASURER, DOB: JUNE 1956
Manager of Fund Accounting of PMC since May 1994; Manager of Auditing,
Compliance and Business Analysis for PGI prior to May 1994; and Assistant
Treasurer of all of the Pioneer mutual funds.
ROBERT P. NAULT, ASSISTANT SECRETARY, DOB: MARCH 1964
General Counsel and Assistant Secretary of PGI since 1995; Assistant
Secretary of PMC, PIntl, PGL, First Russia, Omega and all of the Pioneer mutual
funds; Assistant Clerk of PFD and PSC; and formerly of Hale and Dorr (counsel to
the Fund) where he most recently served as junior partner.
The Fund's Declaration of Trust (the "Declaration of Trust") provides
that the holders of two-thirds of its outstanding shares may vote to remove a
Trustee of the Fund at any meeting of shareholders. See "Description of Shares"
below. The business address of all officers is 60 State Street, Boston,
Massachusetts 02109.
The expense of organizing the Fund and initially registering its shares under
federal and state securities laws are being charged to the Fund's operations, as
an expense, over a period not to exceed 60 months from the Fund's inception
date. If any of the original shares are redeemed by any holder thereof prior to
the end of the amortization period, the redemption proceeds will be decreased by
the pro rata share of the unamortized expenses as of the date of redemption. The
pro rata shares is derived by dividing the number of original shares redeemed by
the total number of original shares outstanding at the time of redemption.
-9-
<PAGE>
All of the outstanding capital stock of PFD, PMC and PSC is owned,
directly or indirectly, by PGI, a publicly-owned Delaware corporation. PMC, the
Fund's investment adviser, serves as the investment adviser for the Pioneer
mutual funds listed below and manages the investments of certain institutional
accounts.
The table below lists all the Pioneer U.S. mutual funds currently
offered to the public and the investment adviser and principal underwriter for
each fund.
Investment Principal
Fund Name Adviser Underwriter
Pioneer International Growth Fund PMC PFD
Pioneer Europe Fund PMC PFD
Pioneer World Equity Fund PMC PFD
Pioneer Emerging Markets Fund PMC PFD
Pioneer India Fund PMC PFD
Pioneer Capital Growth Fund PMC PFD
Pioneer Mid-Cap Fund PMC PFD
Pioneer Growth Shares PMC PFD
Pioneer Small Company Fund PMC PFD
Pioneer Micro-Cap Fund PMC PFD
Pioneer Gold Shares PMC PFD
Pioneer Equity-Income Fund PMC PFD
Pioneer Fund PMC PFD
Pioneer II PMC PFD
Pioneer Real Estate Shares PMC PFD
Pioneer Balanced Fund PMC PFD
Pioneer Short-Term Income Trust PMC PFD
Pioneer America Income Trust PMC PFD
Pioneer Bond Fund PMC PFD
Pioneer Intermediate Tax-Free Fund PMC PFD
Pioneer Tax-Free Income Fund PMC PFD
Pioneer Cash Reserves Fund PMC PFD
Pioneer Interest Shares, Inc. PMC Note 1
Pioneer Variable Contracts Trust PMC Note 2
- ------------------------------------
Note 1 This fund is a closed-end fund.
Note 2 This is a series of eight 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.
- ------------------------------------
To the knowledge of the Fund, no officer or trustee of the Fund owned 5% or more
of the issued and outstanding shares of PGI on the date of this Statement of
Additional Information, except Mr. Cogan who then owned approximately 14% of
such shares.
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<PAGE>
COMPENSATION OF OFFICERS AND TRUSTEES
The Fund pays no salaries or compensation to any of its officers. The Fund pays
an annual trustees' fee of $500 plus $120 per meeting attended to each Trustee
who is not affiliated with PMC, PFD or PGI and pays an annual trustees' fee of
$500 plus expenses to each Trustee affiliated with PMC, PFD or PGI. Any such
fees and expenses paid to affiliates or interested persons of PMC, PFD or PGI
are reimbursed to the Fund under its Management Contract.
The following table sets forth certain information with respect to the estimated
compensation of each Trustee of the Fund for the fiscal year ending November 30,
1997:
<TABLE>
<CAPTION>
Pension or
Retirement Total
Benefits Compensation
Compensation Accrued as from Fund and
Aggregate Part of Pioneer Family
Name of Trustee from the Fund* Fund's Expenses of Funds**
<S> <C> <C> <C>
John F. Cogan, Jr. $ 500 $0 $11,500
Richard H. Egdahl, M.D. 1,940 0 $62,000
Margaret B.W. Graham 1,940 0 $60,000
John W. Kendrick 1,940 0 $60,000
Marguerite A. Piret 2,040 0 $74,000
David D. Tripple 500 0 $11,500
Stephen K. West 2,040 0 $68,000
John Winthrop 2,040 0 $66,000
----- - ------
$12,940 0 $413,000
- -----------------------------------------------------------------------------------------------------
</TABLE>
* As of Fund's fiscal year ending November 30, 1997 (estimated).
** Estimated as of December 31, 1995 (calendar year end for all Pioneer mutual
funds).
3. INVESTMENT ADVISER
The Fund has contracted with PMC, 60 State Street, Boston, Massachusetts, to act
as its investment adviser. A description of the services provided to the Fund
under its management contract and the expenses paid by the Fund under the
contract is set forth in the Prospectus under the caption "Management of the
Fund."
The term of the management contract is one year and is renewable annually by the
vote of a majority of the Board of Trustees of the Fund (including a majority of
the Board of Trustees who are not parties to the contract or interested persons
of any such parties). The vote must be cast in person at a meeting called for
the purpose of voting on such renewal. This contract terminates if assigned and
may be terminated without penalty by either party upon sixty days' written
notice by vote of the Board of Directors or Trustees or a majority of the
outstanding voting securities. Pursuant to the management contract, PMC 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 PMC. PMC, 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 respective management
contract.
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<PAGE>
As compensation for its management services and expenses incurred, PMC is
entitled to a management fee from the Fund at the rate of 1.10% per annum of he
Fund's average daily net assets. The fee is normally computed and accrued daily
and paid monthly.
PMC has agreed not to impose any management fees and make other arrangements, if
necessary, to limit expenses for the Fund's Class A shares to not more than
1.75% of such Class's average net assets. The management fee attributable to the
Fund's Class B shares will not be imposed to the same extent that it is not
imposed for Class A shares. This agreement is temporary and voluntary and may be
terminated at any time by PMC. See "Expense Information" in the Prospectus.
4. UNDERWRITING AGREEMENT AND DISTRIBUTION PLANS
The Fund entered into an Underwriting Agreement with PFD. The Underwriting
Agreement will continue from year to year if annually approved by the Trustees.
The Underwriting Agreement 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 by the Fund under the Plan. 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
foreign countries. The Fund and PFD have agreed to indemnify each other against
certain liabilities, including liabilities under the Securities Act of 1933, as
amended. Under the Underwriting Agreement, PFD will use its best efforts in
rendering services to the Fund.
The Fund has adopted a plan of distribution pursuant to Rule 12b-1 under the
1940 Act with respect to its Class A shares (the "Class A Plan") and a plan of
distribution with respect to its Class B shares (the "Class B Plan") (together,
the "Plans").
CLASS A PLAN
Pursuant to the Class A Plan the Fund may reimburse PFD for its expenditures in
financing any activity primarily intended to result in the sale of Fund shares.
Certain categories of such expenditures have been approved by the Board of
Trustees and are set forth in the Prospectus. See "Distribution Plans" in each
Prospectus. The expenses of the Fund pursuant to the Class A Plan are accrued on
a fiscal year basis and may not exceed, with respect to Class A shares, the
annual rate of 0.25% of the Fund's average annual net assets attributable to
Class A.
CLASS B PLAN
The Class B Plan provides that the Fund shall pay PFD, as the Fund's distributor
for its Class B shares, a daily distribution fee equal on an annual basis to
0.75% of the Fund's average daily net assets attributable to Class B shares and
will pay PFD a service fee equal to 0.25% of the Fund's average daily net assets
attributable to Class B shares (which PFD will in turn pay to securities dealers
which enter into a sales agreement with PFD at a rate of up to 0.25% of the
Fund's average daily net assets attributable to Class B shares owned by
investors for whom that securities dealer is the holder or dealer of record).
This service fee is intended to be in consideration of personal services and/or
account maintenance services rendered by the dealer with respect to Class B
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
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<PAGE>
with respect to such shares for the first year after purchase. Dealers will
become eligible for additional service fees with respect to such shares
commencing in the thirteenth month following purchase. 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 B 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 B Plan is to
compensate PFD for its distribution services to 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 B Plan also provides
that PFD will receive all contingent deferred sales charges ("CDSCs")
attributable to Class B shares. (See "Distributions Plans" in the Prospectus.)
GENERAL
In accordance with the terms of the Plans, PFD provides to the Fund for review
by the Trustees a quarterly written report of the amounts expended under the
respective Plan and the purpose 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, PGI.
The Plans were adopted by a majority vote of the Board of Trustees, including
all of the Trustees who are not, and were not at the time they voted, interested
persons of the Fund, as defined in the 1940 Act (none of whom had or have any
direct or indirect financial interest in the operation of the Plans), cast in
person at a meeting called for the purpose of voting on the Plans. In approving
the Plans, the Trustees identified and considered a number of potential benefits
which the Plans may provide. The Board of Trustees believes that there is a
reasonable likelihood that the Plans will benefit each Fund and their current
and future shareholders. Under their terms, the Plans remain in effect from year
to year provided such continuance is approved annually by vote of the Trustees
in the manner described above. 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 in the manner described above. A Plan may be terminated
at any time, without payment of any penalty, by vote of the majority of the
Trustees who are not interested persons of the Fund and have no direct or
indirect financial interest in the operations of the Plan, or by a vote of a
majority of the outstanding voting securities of the respective Class of the
Fund (as defined in the 1940 Act). A Plan will automatically terminate in the
event of its assignment (as defined in the 1940 Act).
5. SHAREHOLDER SERVICING/TRANSFER AGENT
The Fund has contracted with PSC, 60 State Street, Boston, Massachusetts, to act
as shareholder servicing and transfer agent for the Fund. This contract
terminates if assigned and may be terminated without penalty
-13-
<PAGE>
by either party upon ninety days' written notice by vote of its Board of
Directors or Trustees or a majority of its outstanding voting securities.
Under the terms of its contract with the Fund, PSC 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 Fund portfolio accounts; and (iii) maintaining account records
and responding to shareholder inquiries.
PSC receives an annual fee of $22.75 for each Class A and Class B shareholder
account from the Fund as compensation for the services described above. PSC is
also reimbursed by the Fund for its cash out-of-pocket expenditures. The annual
fee is set at an amount determined by vote of a majority of the Trustees
(including a majority of the Trustees who are not parties to the contract with
PSC or interested persons of any such parties) to be comparable to fees for such
services being paid by other investment companies. The Fund may compensate
entities which have contracted to be an agent for specific transaction
processing and 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 PSC.
6. CUSTODIAN
Brown Brothers Harriman & Co. (the "Custodian") is the custodian of the Fund's
assets. The Custodian's responsibilities include safekeeping and controlling the
Fund's cash and securities, handling the receipt and delivery of securities, and
collecting interest and dividends on the Fund's investments. The Custodian does
not determine the investment policies of the Fund or decide which securities the
Fund will buy or sell. The Fund may, however, invest in securities, including
repurchase agreements, issued by the Custodian and may deal with the Custodian
as a principal in securities transactions. Portfolio securities may be deposited
into the Federal Reserve-Treasury Department Book Entry System or the Depository
Trust Company.
7. PRINCIPAL UNDERWRITER
PFD serves as the principal underwriter for the Fund in connection with the
continuous offering of the Class A and Class B shares of the Fund.
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 (other than
municipal debt securities issued by state political subdivisions or their
agencies or instrumentalities).
8. INDEPENDENT PUBLIC ACCOUNTANTS
_____________ is the Fund's independent public accountants, providing audit
services, tax return review, and assistance and consultation with respect to the
preparation of filings with the Commission.
9. PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on behalf
of the Fund by PMC pursuant to authority contained in the Fund's management
contract. In selecting brokers or dealers, PMC will consider 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
-14-
<PAGE>
capability, and financial condition of the dealer; the dealer's execution
services rendered on a continuing basis; and the reasonableness of any dealer
spreads.
PMC may select broker-dealers which provide brokerage and/or research services
to the Fund and/or other investment companies managed by PMC. In addition, if
PMC 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; furnishing analyses and
reports concerning issuers, industries, securities, economic factors and trends,
portfolio strategy and performance of accounts; and effecting securities
transactions and performing functions incidental thereto (such as clearance and
settlement). PMC maintains a listing of broker-dealers who provide such services
on a regular basis. However, because it is anticipated that many transactions on
behalf of the Fund and other investment companies managed by PMC 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.
The research received from broker-dealers may be useful to PMC in rendering
investment management services to the Fund as well as other investment companies
managed by PMC, 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 PMC clients may be useful to PMC in
carrying out its obligations to the Fund. The receipt of such research has not
reduced PMC's normal independent research activities; however, it enables PMC 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 or accounts managed by
PMC. This policy does not imply a commitment to execute all portfolio
transactions through all broker-dealers that sell shares of the Fund.
The Trustees periodically review PMC's performance of its responsibilities in
connection with the placement of portfolio transactions on behalf of the Fund.
In addition to the Fund, PMC acts as investment adviser to other Pioneer mutual
funds and certain private accounts with investment objectives similar to those
of the Fund. Securities frequently meet the investment objectives of the Fund,
such other funds and such private 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 the Fund, another mutual fund
in the Pioneer group or a private account managed by PMC may not be able to
acquire as large a position in such security as it desires, 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
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PMC decides to sell on behalf of another account the same portfolio security at
the same time. On the other hand, if the same securities are bought or sold at
the same time by more than one fund or account, the resulting participation in
volume transactions could produce better executions for the Fund or the account.
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.
10. TAX STATUS AND DIVIDENDS
It is the Fund's policy to meet the requirements of Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), for qualification as a regulated
investment company. These requirements relate to the sources of the Fund's
income, the diversification of its assets, and the timing of its distributions.
If the Fund meets all such requirements and distributes to its shareholders at
least annually all investment company taxable income and net capital gain, if
any, which it receives, the Fund will be relieved of the necessity of paying
federal income tax.
In order to qualify under Subchapter M, 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 other income (including gains from
options, futures or forward contracts) derived with respect to its business of
investing in such stock, securities or currencies (the "90% income test"), limit
its gains from the sale of stock, securities and certain other investments held
for less than three months to less than 30% of its annual gross income (the "30%
test") and satisfy certain diversification and income distribution requirements.
Dividends from investment company taxable income, which includes net investment
income, net short-term capital gain in excess of net long-term capital loss are
taxable as ordinary income, whether received in cash or in additional shares.
Dividends from net long-term capital gain in excess of net short-term capital
loss, if any, whether received in cash or additional shares, are taxable to the
Fund's shareholders as long-term capital gains for federal income tax purposes
without regard to the length of time shares of the Fund have been held. The
federal income tax status of all distributions will be reported to shareholders
annually.
Any dividend declared by the Fund in October, November or December as of a
record date in such a month and paid during the following January will be
treated for federal income tax purposes as received by shareholders on December
31 of the calendar year in which it is declared.
At the time of an investor's purchase of Fund shares, a portion of the purchase
price is often attributable to realized or unrealized appreciation in the Fund's
portfolio or undistributed taxable income of the Fund. Consequently, subsequent
distributions 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 in reality represent a return of a portion of the investment.
Any loss realized upon the redemption of shares with a tax holding period of six
months or less will be treated as a long-term capital loss to the extent of any
amounts treated as distributions of long-term capital gain with respect to such
shares.
In addition, if Class A shares redeemed or exchanged have been held for less
than 91 days, (1) in the case of a reinvestment at net asset value, the sales
charge paid on such shares is not included in their tax basis under
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the Code and (2) in the case of an exchange, all or a portion of the sales
charge paid on such shares is not included in their tax basis under the Code, to
the extent a sales charge that would otherwise apply to the shares received is
educed pursuant to the exchange privilege. In either case, the portion of the
sales charge not included in the tax basis of the shares redeemed or surrendered
in an exchange is included in the tax basis of the shares acquired in the
reinvestment or exchange. Losses on certain redemptions may be disallowed under
"wash sale" rules in the event of other investments in the same Fund within a
period of 61 days beginning 30 days before and ending 30 days after a redemption
or other sale of shares.
For federal income tax purposes, the Fund is permitted to carry forward a net
capital loss in any year to offset net capital gains, if any, during the eight
years following the year of the loss. To the extent subsequent net capital gains
are offset by such losses, they would not result in federal income tax liability
to such Fund and are not expected to be distributed as such to shareholders.
Options written or purchased and futures contracts entered into by the Fund on
certain securities and securities and securities indices may cause the Fund to
recognize gains or losses from marking-to-market at the end of its taxable year
even though such options may not have lapsed, been closed out, or exercised or
such futures or forward contracts may not have been closed out or disposed of
and may affect the characterization as long-term or short-term of some capital
gains and losses realized by the Fund. Losses on certain options, futures 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. The tax rules applicable to options, futures, and
straddles may affect the amount, timing and character of the Fund's income and
loss and hence of its distributions to shareholders. Certain tax elections may
be available that would enable the Fund to ameliorate some adverse effects of
the tax rules described in this paragraph.
For purposes of the 70% dividends-received deduction available to corporations,
dividends received by the Fund, if any, from U.S. domestic corporations in
respect of any share of stock with a tax holding period of at least 46 days (91
days in the case of certain preferred stock) held in an unleveraged position and
distributed and designated by the Fund may be treated as qualifying dividends.
Any corporate shareholder should consult its tax adviser regarding the
possibility that its tax basis in its shares may be reduced, for federal income
tax purposes, by reason of "extraordinary dividends" received with respect to
the shares. Corporate shareholders must meet the minimum holding period
requirement stated above (46 or 91 days), taking into account any holding-period
reductions from certain hedging or other transactions that diminish risk of
loss, with respect to their Fund shares in order to qualify for the deduction
and, if they borrow to acquire Fund shares, may be denied a portion of the
dividends-received deduction. The entire qualifying dividend, including the
otherwise deductible amount, will be included in determining the excess (if any)
of a corporation's adjusted current earnings over its alternative minimum
taxable income, which may increase a corporation's alternative minimum tax
liability.
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.
The Fund is not subject to Massachusetts corporation franchise or excise taxes
and, provided that it qualifies as a regulated investment company under the
Code, also will not be required to pay any Massachusetts income tax.
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Federal law requires that the Fund withhold (as "backup withholding") 31% of
reportable payments, including dividends, capital gain dividends, and the
proceeds of redemptions (including exchanges) and repurchases, to shareholders
who have not complied with Internal Revenue Service ("IRS") regulations. In
order to avoid this withholding requirement, shareholders must certify on their
Account Applications, or on separate W-9 Forms, that their Social Security or
other Taxpayer Identification Number is correct and that they are not currently
subject to backup withholding, or that they are exempt from backup withholding.
The Fund may nevertheless be required to withhold if it receives notice from the
IRS or a broker that the number provided is incorrect or backup withholding is
applicable as a result of previous underreporting of interest or dividend
income.
The description above relates only to U.S. federal income tax consequences for
shareholders who are U.S. persons, i.e., U.S. citizens or residents and U.S.
domestic corporations, partnerships, trusts or estates, and who are subject to
U.S. federal income tax. The description does not address the special tax rules
applicable to particular types of investors, such as banks, insurance companies,
or tax-exempt entities. Shareholders should consult their own tax advisers on
these matters and on state, local and other applicable tax laws. Investors other
than U.S. persons may be subject to different U.S. tax treatment, including a
possible 30% U.S. withholding tax (or withholding tax at a lower treaty rate) on
amounts treated as ordinary dividends from the Fund and, unless an effective IRS
Form W-8 or authorized substitute is on file, to 31% backup withholding on
certain other payments from the Fund.
11. DESCRIPTION OF SHARES
The Fund's Declaration of Trust 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 in the future, 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 of
Trust 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 two classes of shares of the Fund, designated as
Class A shares and Class B 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.
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 shares 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 Fund's Declaration of Trust without the
affirmative vote of a majority of its shares. Shares have no preemptive or
conversion rights. Shares are fully paid and non-assessable by the Fund, except
as stated below.
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12. CERTAIN LIABILITIES
As a Delaware business trust, the Fund's operations are governed by its
Declaration of Trust dated December 3, 1996. A copy of the Fund's Certificate of
Trust, also dated December 3, 1996, is on file with the office of the Secretary
of State of Delaware. Generally, Delaware business trust shareholders are not
personally liable for obligations of the Delaware business trust under Delaware
law. The Delaware Business Trust Act (the "Delaware Act") provides that a
shareholder of a Delaware business trust shall be entitled to the same
limitation of liability extended to shareholders of private for-profit
corporations. The Fund's Declaration of Trust expressly provides that the Fund
is organized under the Delaware Act and that the Declaration of Trust is to be
governed by Delaware law. It is nevertheless possible that a Delaware business
trust, such as the Fund, might become a party to an action in another state
whose courts refused to apply Delaware law, in which case the trust's
shareholders could become subject to personal liability.
To guard against this risk, the Declaration of Trust (i) contains an express
disclaimer of shareholder liability for acts or obligations of the Fund and
provides that notice of such disclaimer may be given in each agreement,
obligation 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.
The Declaration of Trust further provides that the Fund shall indemnify each of
its Trustees and officers against liabilities and expenses reasonably incurred
by them, in connection with, or arising out of, any action, suit or proceeding,
threatened against or otherwise involving such Trustee or officer, directly or
indirectly, by reason of being or having been a Trustee or officer of the Fund.
The Declaration of Trust does not authorize the Fund to indemnify any Trustee or
officer against any liability to which he or she would otherwise be subject by
reason of or for willful misfeasance, bad faith, gross negligence or reckless
disregard of such person's duties.
13. LETTER OF INTENTION
Purchases in the Class A shares of the Fund of $50,000 or more (excluding any
reinvestments of dividends and capital gains distributions) made within a
13-month period pursuant to a Letter of Intention provided by PFD will qualify
for a reduced sales charge. Such reduced sales charge will be the charge that
would be applicable to the purchase of all Class A shares purchased during such
13-month period pursuant to a Letter of Intention had such shares been purchased
all at once. See "How to Buy Fund Shares" in each Prospectus. The use of the
Letter of Investment procedure may be limited for this Fund. A Letter of Intent
may, however, be used in connection with the purchases of shares of other
Pioneer mutual funds. For example, a person who signs a Letter of Intention
providing for a total investment in Class A shares of $50,000 over a 13-month
period would be charged at the 4.50% sales charge rate with respect to all
purchases during that period. Should the amount actually purchased during the
13-month period be more or less than that indicated in the Letter, an adjustment
in the sales charge will be made. A purchase not made pursuant to a Letter of
Intention may be included thereafter if the Letter is filed within 90 days of
such purchase. Any shareholder
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may also obtain the reduced sales charge by including the value (at current
offering price) of all the shares of record he holds in the Fund and in all
other Pioneer mutual funds as of the date of the Letter of Intention as a credit
toward determining the applicable scale of sales charge for the Class A shares
to be purchased under the Letter of Intention.
The Letter of Intention authorizes PSC to escrow Class A shares having a
purchase price equal to 5% of the stated investment specified in the Letter of
Intention. A Letter of Intention is not a binding obligation upon the investor
to purchase, or the Fund to sell, the full amount indicated and the investor
should carefully read the provisions of the Letter of Intention set forth in the
Account Application before signing.
14. SYSTEMATIC WITHDRAWAL PLAN
The Systematic Withdrawal Plan ("SWP") is designed to provide a convenient
method of receiving fixed payments at regular intervals from Class A shares of
the Fund deposited by the applicant under this SWP. The applicant must deposit
or purchase for deposit with PSC shares of the Fund having a total value of not
less than $10,000. Periodic checks of $50 or more will be deposited monthly or
quarterly directly into a bank account designated by the applicant or will be
sent by check to the applicant, or any person designated by him monthly or
quarterly. Withdrawals from Class B share accounts are limited to 10% of the
value of the account at the time the SWP is implemented.
Any income dividends or capital gains distributions on shares under the SWP will
be credited to the SWP account on the payment date in full and fractional shares
at the net asset value per share in effect on the record date.
SWP payments are made from the proceeds of the redemption of shares deposited
under the SWP in a SWP account. To the extent that such redemptions for periodic
withdrawals exceed dividend income reinvested in the SWP account, such
redemptions will reduce and may ultimately exhaust the number of shares
deposited in the SWP account. Redemptions are taxable transactions to
shareholders. 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.
The SWP may be terminated at any time (1) by written notice to PSC or from PSC
to the shareholder; (2) upon receipt by PSC of appropriate evidence of the
shareholder's death; or (3) when all shares under the SWP have been redeemed.
15. DETERMINATION OF NET ASSET VALUE
The net asset value per share of each class of the Fund is determined as of the
close of regular trading on the New York Stock Exchange (the "Exchange")
(currently 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, 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 in 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 in which no purchase orders for the shares of the
Fund become effective and no shares are tendered for redemption.
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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 a class, and dividing it by the number of
outstanding shares of the class. For purposes of determining net asset value,
expenses of the classes of the Fund are accrued daily.
Securities that have not traded on the date of valuation or securities for which
sales prices are not generally reported are valued at the mean between the last
bid and asked prices. Securities for which no market quotations are readily
available (excluding those whose trading has been suspended) will be valued at
fair value as determined in good faith by the Board of Trustees, although the
actual computations may be made by persons acting pursuant to the direction of
the Board of Trustees.
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. Class B shares
are offered at net asset value without the imposition of an initial sales
charge.
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 rankings prepared by Lipper Analytical Services,
Inc., a widely recognized independent service which monitors mutual fund
performance; the Standard & Poor's 500 Stock Index ("S&P 500"), an index of
unmanaged groups of common stock; the Dow Jones Industrial Average, a recognized
unmanaged index of common stocks of 30 industrial companies listed on the New
York Stock Exchange; or The Frank Russell Indexes ("Russell 1000," "2000,"
"2500," "3000,") or the Wilshire Total Market Value Index ("Wilshire 5000"), two
recognized unmanaged indexes of broad based common stocks.
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. 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, Investment
Company Data, Inc., Johnson's Charts, Kanon Bloch Carre and Co., Lipper
Analytical Services, 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
such Fund's 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
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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
gains distributions and will be expressed as a percentage increase or decrease
from an initial value, for the entire period or for one or more specified
periods within the entire period. Total return percentages for periods of less
than one year will usually be annualized; total return percentages for periods
longer than one year will usually be accompanied by total return percentages for
each year within the period and/or by the average annual compounded total return
for the period. The income and capital components of a given return may be
separated and portrayed in a variety of ways in order to illustrate their
relative significance. Performance may also be portrayed in terms of cash or
investment values, without percentages. Past performance cannot guarantee any
particular future result.
The Fund's average annual total return quotations for each of its classes as
that information may appear in the Fund's Prospectus, this Statement of
Additional Information or in advertising are calculated by standard methods
prescribed by the Commission.
STANDARDIZED AVERAGE ANNUAL TOTAL RETURN QUOTATIONS
Average annual total return quotations for Class A and Class B 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 deduction of the CDSC
for Class B shares at the end of the period.
T = average annual total return
n = number of years
ERV = ending redeemable value of the hypothetical
$1000 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 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's mean
account size.
AUTOMATED INFORMATION LINE
FactFoneSM, Pioneer's 24-hour automated information line, allows shareholders to
dial toll-free 1-800-225-4321 and hear recorded fund information, including:
o net asset value prices for all Pioneer mutual funds;
o annualized 30-day yields on Pioneer's fixed income funds;
o annualized 7-day yields and 7-day effective (compound) yields
for Pioneer's money market funds; and
o dividends and capital gains distributions on all Pioneer mutual
funds.
Yields are calculated in accordance with Commission mandated standard formulas.
In addition, by using a personal identification number ("PIN"), shareholders may
enter purchases, exchanges and redemptions, access their account balance and
last three transactions and may order a duplicate statement. See "FactFoneSM" in
the Prospectus for more information.
All performance numbers communicated through FactFoneSM represent past
performance, and figures for all quoted bond funds include the maximum
applicable sales charge. A shareholder's actual yield and total return will vary
with changing market conditions. The value of Class A and Class B shares (except
for Pioneer money market funds, which seek a stable $1.00 share price) will also
vary, and such shares may be worth more or less at redemption than their
original cost.
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APPENDIX A
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 be used, if appropriate. The indices
are not available for direct investment. The data presented is not meant to be
indicative of the performance of the Fund, reflects past performance and does
not guarantee future results.
S&P 500
This index is a readily available, carefully constructed, market value weighted
benchmark of common stock performance. Currently, the S&P Composite Index
includes 500 of the largest stocks (in terms of stock market value) in the
United States; prior to March 1957 it consisted of 90 of the largest stocks.
DOW JONES INDUSTRIAL AVERAGE
This is a total return index based on the performance of 30 blue chip stocks.
U.S. SMALL STOCK INDEX
This index is a market value weighted index of the ninth and tenth deciles of
the New York Stock Exchange (NYSE), plus stocks listed on the American Stock
Exchange (AMEX) and over-the-counter (OTC) with the same or less capitalization
as the upper bound of the NYSE ninth decile.
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. Unfortunately, the inflation rate as derived by the CPI is not
measured over the same period as the other asset returns. All of the security
returns are measured from one month-end to the next month-end. CPI commodity
prices are collected during the month. Thus, measured inflation rates lag the
other series by about one-half month. Prior to January 1978, the CPI (as
compared with CPI-U) was used. Both inflation measures are constructed by the
U.S. Department of Labor, Bureau of Labor Statistics, Washington, DC.
S&P/BARRA INDEXES
The S&P/BARRA Growth and Value Indexes are constructed by dividing the stocks in
the S&P 500 Index according to price-to-book ratios. The Growth Index contains
stocks with higher price-to-book ratios, and the Value Index contains stocks
with lower price-to-book ratios. Both indexes are market capitalization
weighted.
LONG-TERM U.S. GOVERNMENT BONDS
The total returns on long-term government bonds from 1977 to 1991 are
constructed with data from The Wall Street Journal. Over 1926-1976, data are
obtained from the Government bond file at the Center for Research in Security
Prices (CRSP), Graduate School of Business, University of Chicago. Each year, a
one-bond portfolio with a term of approximately 20 years and a reasonably
current coupon was used, and whose returns did not reflect potential tax
benefits, impaired negotiability, or special redemption or call privileges.
Where callable bonds had to be used, the term of the bond was assumed to be a
simple
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COMPARATIVE PERFORMANCE INDEX DESCRIPTIONS
average of the maturity and first call dates minus the current date. The bond
was "held" for the calendar year and returns were computed. Total returns for
1977-1991 are calculated as the change in the flat price or and-interest price.
INTERMEDIATE-TERM U.S. GOVERNMENT BONDS
Total returns of the intermediate-term government bonds for 1977-1991 are
calculated from The Wall Street Journal prices, using the change in flat price.
Returns from 1934-1986 are obtained from the CRSP Government Bond File.
Each year, one-bond portfolios are formed, the bond chosen is the shortest
noncallable bond with a maturity not less than 5 years, and this bond is "held"
for the calendar year. Monthly returns are computed. (Bonds with impaired
negotiability or special redemption privileges are omitted, as are partially or
fully tax-exempt bonds starting with 1943.) From 1934-1942, almost all bonds
with maturities near 5 years were partially or full tax-exempt and were selected
using the rules described above. Personal tax rates were generally low in that
period, so that yields on tax-exempt bonds were similar to yields on taxable
bonds. From 1926-1933, there are few bonds suitable for construction of a series
with a 5-year maturity. For this period, five year bond yield estimates are
used.
MSCI
Morgan Stanley Capital International Indices, developed by the Capital
International S.A., are based on share prices of some 1470 companies listed on
the stock exchanges around the world.
Countries in the MSCI EAFE Portfolio are: Australia; Austria; Belgium; Denmark;
Finland; France; Germany; Hong Kong; Italy; Japan; Netherlands; N. Zealand;
Norway; Singapore/Malaysia; Spain; Sweden; Switzerland; United Kingdom.
6 MONTH CDS
Data sources include the Federal Reserve Bulletin and The Wall Street Journal.
LONG-TERM U.S. CORPORATE BONDS
For 1969-1991, corporate bond total returns are represented by the Salomon
Brothers Long-Term High-Grade Corporate Bond Index. Since most large corporate
bond transactions take place over the counter, a major dealer is the natural
source of these data. The index includes nearly all Aaa- and Aa-rated bonds. If
a bond is downgraded during a particular month, its return for the month is
included in the index before removing the bond from future portfolios.
Over 1926-1968 the total returns were calculated by summing the capital
appreciation returns and the income returns. For the period 1946-1968, Ibbotson
and Sinquefield backdated the Salomon Brothers' index, using Salomon Brothers'
monthly yield data with a methodology similar to that used by Salomon for
1969-1991. Capital appreciation returns were calculated from yields assuming (at
the beginning of each monthly holding period) a 20-year maturity, a bond price
equal to par, and a coupon equal to the
-24-
<PAGE>
COMPARATIVE PERFORMANCE INDEX DESCRIPTIONS
beginning-of-period yield. For the period 1926-1945, the Standard and Poor's
monthly High-Grade Corporate Composite yield data were used, assuming a 4
percent coupon and a 20-year maturity. The conventional present-value formula
for bond price for the beginning and end-of-month prices was used. (This formula
is presented in Ross, Stephen A., and Randolph W. Westerfield, Corporate
Finance, Times Mirror/Mosby, St. Louis, 1990, p. 97 ["Level-Coupon Bonds"].) The
monthly income return was assumed to be one-twelfth the coupon.
U.S. (30 DAY) TREASURY BILLS
For the U.S. Treasury bill index, data from The Wall Street Journal are used for
1977-1991; the CRSP U.S. Government Bond File is the source until 1976. Each
month a one-bill portfolio containing the shortest-term bill having not less
than one month to maturity is constructed. (The bill's original term to maturity
is not relevant.) To measure holding period returns for the one-bill portfolio,
the bill is priced as of the last trading day of the previous month-end and as
of the last trading day of the current month.
NAREIT-EQUITY INDEX
All of the data is based upon the last closing price of the month for all
tax-qualified REITs listed on the NYSE, AMSE and the NASDAQ. The data is
market-value-weighted. Prior to 1987 REITs were added to the index the January
following their listing. Since 1987 Newly formed or listed REITs are added to
the total shares outstanding figure in the month that the shares are issued.
Only common shares issued by the REIT are included in the index. The total
return calculation is based upon the weighing at the beginning of the period.
Only those REITs listed for the entire period are used in the total return
calculation. Dividends are included in the month based upon their payment date.
There is no smoothing of income. Liquidating dividends, whether full or partial,
are treated as income.
RUSSELL 2000 SMALL STOCK INDEX
Index of the 2,000 smallest stocks in the Russell 3000 Index (TM); the smallest
company has a market capitalization of approximately $13 million. The Russell
3000 is comprised of the 3,000 largest US companies as determined by market
capitalization representing approximately 98% of the US equity market. The
largest company in the index has a market capitalization of $67 billion. The
Russell Indexes (TM) are reconstituted annually as of June 1st, based on May 31
market capitalization rankings.
WILSHIRE REAL ESTATE SECURITIES INDEX
The Wilshire Real Estate Securities Index is a market capitalization-weighted
index which measures the performance of more than 85 securities.
The index contains performance data on five major categories of property;
office, retail, industrial, apartment and miscellaneous. Additionally, the Index
has real estate portfolio encumbered by 16% third party mortgages. The companies
in the WRESEC are 79% equity and hybrid REIT's and 21% real estate operating
companies. The capitalization is 47% NYSE, 33% AMEX and 20% OTC."
-25-
<PAGE>
COMPARATIVE PERFORMANCE INDEX DESCRIPTIONS
STANDARD & POOR'S MIDCAP 400 INDEX
The Standard and Poor's MidCap 400 Index is a market-value-weighted index. The
performance data for the MidCap 400 Index were calculated by taking the stocks
presently in the MidCap 400 Index and
tracking them backwards in time as long as there were prices reported. No
attempt was made to determine what stocks "might have been" in the MidCap 400
Index five or ten years ago had it existed. Dividends are reinvested on a
monthly basis prior to June 30, 1991, and are reinvested daily thereafter.
The S&P MidCap 400 Index and the S&P 500 together represent approximately 85% of
the total market capitalization of stocks traded in the United States.
BANK SAVINGS ACCOUNT
Data sources include the U.S. League of Savings Institutions Sourcebook; average
annual yield on savings deposits in FSLIC [FDIC] insured savings institutions
for the years 1963-1987 and The Wall Street Journal for the years 1988-1994.
Source: Ibbotson Associates
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
S&P 500 Dow U.S. Small S&P/ S&P/
Jones Stock U.S. BARRA BARRA
Industrials Index Inflation Growth Value
Dec 1928 43.61 55.38 39.69 -0.97 N/A N/A
Dec 1929 -8.42 -13.64 -51.36 0.20 N/A N/A
Dec 1930 -24.90 -30.22 -38.15 -6.03 N/A N/A
Dec 1931 -43.34 -49.03 -49.75 -9.52 N/A N/A
Dec 1932 -8.19 -16.88 -5.39 -10.30 N/A N/A
Dec 1933 53.99 73.71 142.87 0.51 N/A N/A
Dec 1934 -1.44 8.07 24.22 2.03 N/A N/A
Dec 1935 47.67 43.77 40.19 2.99 N/A N/A
Dec 1936 33.92 30.23 64.80 1.21 N/A N/A
Dec 1937 -35.03 -28.88 -58.01 3.10 N/A N/A
Dec 1938 31.12 33.16 32.80 -2.78 N/A N/A
Dec 1939 -0.41 1.31 0.35 -0.48 N/A N/A
Dec 1940 -9.78 -7.96 -5.16 0.96 N/A N/A
Dec 1941 -11.59 -9.88 -9.00 9.72 N/A N/A
Dec 1942 20.34 14.12 44.51 9.29 N/A N/A
Dec 1943 25.90 19.06 88.37 3.16 N/A N/A
Dec 1944 19.75 17.19 53.72 2.11 N/A N/A
Dec 1945 36.44 31.60 73.61 2.25 N/A N/A
Dec 1946 -8.07 -4.40 -11.63 18.16 N/A N/A
Dec 1947 5.71 7.61 0.92 9.01 N/A N/A
Dec 1948 5.50 4.27 -2.11 2.71 N/A N/A
Dec 1949 18.79 20.92 19.75 -1.80 N/A N/A
Dec 1950 31.71 26.40 38.75 5.79 N/A N/A
Dec 1951 24.02 21.77 7.80 5.87 N/A N/A
Dec 1952 18.37 14.58 3.03 0.88 N/A N/A
Dec 1953 -0.99 2.02 -6.49 0.62 N/A N/A
Dec 1954 52.62 51.25 60.58 -0.50 N/A N/A
Dec 1955 31.56 26.58 20.44 0.37 N/A N/A
Dec 1956 6.56 7.10 4.28 2.86 N/A N/A
Dec 1957 -10.78 -8.63 -14.57 3.02 N/A N/A
Dec 1958 43.36 39.31 64.89 1.76 N/A N/A
Dec 1959 11.96 20.21 16.40 1.50 N/A N/A
Dec 1960 0.47 -6.14 -3.29 1.48 N/A N/A
Dec 1961 26.89 22.60 32.09 0.67 N/A N/A
Dec 1962 -8.73 -7.43 -11.90 1.22 N/A N/A
Dec 1963 22.80 20.83 23.57 1.65 N/A N/A
Dec 1964 16.48 18.85 23.52 1.19 N/A N/A
Dec 1965 12.45 14.39 41.75 1.92 N/A N/A
Dec 1966 -10.06 -15.78 -7.01 3.35 N/A N/A
Dec 1967 23.98 19.16 83.57 3.04 N/A N/A
Dec 1968 11.06 7.93 35.97 4.72 N/A N/A
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
S&P 500 Dow U.S. Small S&P/ S&P/
Jones Stock U.S. BARRA BARRA
Industrials Index Inflation Growth Value
Dec 1969 -8.50 -11.78 -25.05 6.11 N/A N/A
Dec 1970 4.01 9.21 -17.43 5.49 N/A N/A
Dec 1971 14.31 9.83 16.50 3.36 N/A N/A
Dec 1972 18.98 18.48 4.43 3.41 N/A N/A
Dec 1973 -14.66 -13.28 -30.90 8.80 N/A N/A
Dec 1974 -26.47 -23.58 -19.95 12.20 N/A N/A
Dec 1975 37.20 44.75 52.82 7.01 31.72 43.38
Dec 1976 23.84 22.82 57.38 4.81 13.84 34.93
Dec 1977 -7.18 -12.84 25.38 6.77 -11.82 -2.57
Dec 1978 6.56 2.79 23.46 9.03 6.78 6.16
Dec 1979 18.44 10.55 43.46 13.31 15.72 21.16
Dec 1980 32.42 22.17 39.88 12.40 39.40 23.59
Dec 1981 -4.91 -3.57 13.88 8.94 -9.81 0.02
Dec 1982 21.41 27.11 28.01 3.87 22.03 21.04
Dec 1983 22.51 25.97 39.67 3.80 16.24 28.89
Dec 1984 6.27 1.31 -6.67 3.95 2.33 10.52
Dec 1985 32.16 33.55 24.66 3.77 33.31 29.68
Dec 1986 18.47 27.10 6.85 1.13 14.50 21.67
Dec 1987 5.23 5.48 -9.30 4.41 6.50 3.68
Dec 1988 16.81 16.14 22.87 4.42 11.95 21.67
Dec 1989 31.49 32.19 10.18 4.65 36.40 26.13
Dec 1990 -3.17 -0.56 -21.56 6.11 0.20 -6.85
Dec 1991 30.55 24.19 44.63 3.06 38.37 22.56
Dec 1992 7.67 7.41 23.35 2.90 5.07 10.53
Dec 1993 9.99 16.94 20.98 2.75 1.68 18.60
Dec 1994 1.31 5.06 3.11 2.78 3.13 -0.64
Dec 1995 37.43 36.84 34.46 2.74 38.13 36.99
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
Intermediate MSCI Long-
Long-Term -Term U.S. EAFE 6 Term U.S. U.S.
U.S. Gov't Government - Net of MONTH Corporate (30 Day)
Bonds Bonds Taxes CDs Bonds T- Bill
Dec 1925 N/A N/A N/A N/A N/A N/A
Dec 1926 7.77 5.38 N/A N/A 7.37 3.27
Dec 1927 8.93 4.52 N/A N/A 7.44 3.12
Dec 1928 0.1 0.92 N/A N/A 2.84 3.56
Dec 1929 3.42 6.01 N/A N/A 3.27 4.75
Dec 1930 4.66 6.72 N/A N/A 7.98 2.41
Dec 1931 -5.31 -2.32 N/A N/A -1.85 1.07
Dec 1932 16.84 8.81 N/A N/A 10.82 0.96
Dec 1933 -0.07 1.83 N/A N/A 10.38 0.30
Dec 1934 10.03 9.00 N/A N/A 13.84 0.16
Dec 1935 4.98 7.01 N/A N/A 9.61 0.17
Dec 1936 7.52 3.06 N/A N/A 6.74 0.18
Dec 1937 0.23 1.56 N/A N/A 2.75 0.31
Dec 1938 5.53 6.23 N/A N/A 6.13 -0.02
Dec 1939 5.94 4.52 N/A N/A 3.97 0.02
Dec 1940 6.09 2.96 N/A N/A 3.39 0.00
Dec 1941 0.93 0.50 N/A N/A 2.73 0.06
Dec 1942 3.22 1.94 N/A N/A 2.60 0.27
Dec 1943 2.08 2.81 N/A N/A 2.83 0.35
Dec 1944 2.81 1.80 N/A N/A 4.73 0.33
Dec 1945 10.73 2.22 N/A N/A 4.08 0.33
Dec 1946 -0.10 1.00 N/A N/A 1.72 0.35
Dec 1947 -2.62 0.91 N/A N/A -2.34 0.50
Dec 1948 3.40 1.85 N/A N/A 4.14 0.81
Dec 1949 6.45 2.32 N/A N/A 3.31 1.10
Dec 1950 0.06 0.70 N/A N/A 2.12 1.20
Dec 1951 -3.93 0.36 N/A N/A -2.69 1.49
Dec 1952 1.16 1.63 N/A N/A 3.52 1.66
Dec 1953 3.64 3.23 N/A N/A 3.41 1.82
Dec 1954 7.19 2.68 N/A N/A 5.39 0.86
Dec 1955 -1.29 -0.65 N/A N/A 0.48 1.57
Dec 1956 -5.59 -0.42 N/A N/A -6.81 2.46
Dec 1957 7.46 7.84 N/A N/A 8.71 3.14
Dec 1958 -6.09 -1.29 N/A N/A -2.22 1.54
Dec 1959 -2.26 -0.39 N/A N/A -0.97 2.95
Dec 1960 13.78 11.76 N/A N/A 9.07 2.66
Dec 1961 0.97 1.85 N/A N/A 4.82 2.13
Dec 1962 6.89 5.56 N/A N/A 7.95 2.73
Dec 1963 1.21 1.64 N/A N/A 2.19 3.12
Dec 1964 3.51 4.04 N/A 4.18 4.77 3.54
Dec 1965 0.71 1.02 N/A 4.68 -0.46 3.93
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
Intermediate MSCI Long-
Long-Term -Term U.S. EAFE 6 Term U.S. U.S.
U.S. Gov't Government - Net of MONTH Corporate (30 Day)
Bonds Bonds Taxes CDs Bonds T- Bill
Dec 1966 3.65 4.69 N/A 5.75 0.20 4.76
Dec 1967 -9.18 1.01 N/A 5.48 -4.95 4.21
Dec 1968 -0.26 4.54 N/A 6.44 2.57 5.21
Dec 1969 -5.07 -0.74 N/A 8.71 -8.09 6.58
Dec 1970 12.11 16.86 -11.66 7.06 18.37 6.52
Dec 1971 13.23 8.72 29.59 5.36 11.01 4.39
Dec 1972 5.69 5.16 36.35 5.38 7.26 3.84
Dec 1973 -1.11 4.61 -14.92 8.60 1.14 6.93
Dec 1974 4.35 5.69 -23.16 10.20 -3.06 8.00
Dec 1975 9.20 7.83 35.39 6.51 14.64 5.80
Dec 1976 16.75 12.87 2.54 5.22 18.65 5.08
Dec 1977 -0.69 1.41 18.06 6.12 1.71 5.12
Dec 1978 -1.18 3.49 32.62 10.21 -0.07 7.18
Dec 1979 -1.23 4.09 4.75 11.90 -4.18 10.38
Dec 1980 -3.95 3.91 22.58 12.33 -2.76 11.24
Dec 1981 1.86 9.45 -2.28 15.50 -1.24 14.71
Dec 1982 40.36 29.1 -1.86 12.18 42.56 10.54
Dec 1983 0.65 7.41 23.69 9.65 6.26 8.80
Dec 1984 15.48 14.02 7.38 10.65 16.86 9.85
Dec 1985 30.97 20.33 56.16 7.82 30.09 7.72
Dec 1986 24.53 15.14 69.44 6.30 19.85 6.16
Dec 1987 -2.71 2.90 24.63 6.58 -0.27 5.47
Dec 1988 9.67 6.10 28.27 8.15 10.70 6.35
Dec 1989 18.11 13.29 10.54 8.27 16.23 8.37
Dec 1990 6.18 9.73 -23.45 7.85 6.78 7.81
Dec 1991 19.3 15.46 12.13 4.95 19.89 5.60
Dec 1992 8.05 7.19 -12.17 3.27 9.39 3.51
Dec 1993 18.24 11.24 32.56 2.88 13.19 2.90
Dec 1994 -7.77 -5.14 7.78 5.40 -5.76 3.90
Dec 1995 31.67 16.8 11.21 5.21 26.39 5.60
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
S & P Bank
NAREIT - Russell Wilshire Midcap Savings
Equity 2000 Real Estate 400 Account
Dec 1925 N/A N/A N/A N/A N/A
Dec 1926 N/A N/A N/A N/A N/A
Dec 1927 N/A N/A N/A N/A N/A
Dec 1928 N/A N/A N/A N/A N/A
Dec 1929 N/A N/A N/A N/A N/A
Dec 1930 N/A N/A N/A N/A 5.30
Dec 1931 N/A N/A N/A N/A 5.10
Dec 1932 N/A N/A N/A N/A 4.10
Dec 1933 N/A N/A N/A N/A 3.40
Dec 1934 N/A N/A N/A N/A 3.50
Dec 1935 N/A N/A N/A N/A 3.10
Dec 1936 N/A N/A N/A N/A 3.20
Dec 1937 N/A N/A N/A N/A 3.50
Dec 1938 N/A N/A N/A N/A 3.50
Dec 1939 N/A N/A N/A N/A 3.40
Dec 1940 N/A N/A N/A N/A 3.30
Dec 1941 N/A N/A N/A N/A 3.10
Dec 1942 N/A N/A N/A N/A 3.00
Dec 1943 N/A N/A N/A N/A 2.90
Dec 1944 N/A N/A N/A N/A 2.80
Dec 1945 N/A N/A N/A N/A 2.50
Dec 1946 N/A N/A N/A N/A 2.20
Dec 1947 N/A N/A N/A N/A 2.30
Dec 1948 N/A N/A N/A N/A 2.30
Dec 1949 N/A N/A N/A N/A 2.40
Dec 1950 N/A N/A N/A N/A 2.50
Dec 1951 N/A N/A N/A N/A 2.60
Dec 1952 N/A N/A N/A N/A 2.70
Dec 1953 N/A N/A N/A N/A 2.80
Dec 1954 N/A N/A N/A N/A 2.90
Dec 1955 N/A N/A N/A N/A 2.90
Dec 1956 N/A N/A N/A N/A 3.00
Dec 1957 N/A N/A N/A N/A 3.30
Dec 1958 N/A N/A N/A N/A 3.38
Dec 1959 N/A N/A N/A N/A 3.53
Dec 1960 N/A N/A N/A N/A 3.86
Dec 1961 N/A N/A N/A N/A 3.90
Dec 1962 N/A N/A N/A N/A 4.08
Dec 1963 N/A N/A N/A N/A 4.17
Dec 1964 N/A N/A N/A N/A 4.19
Dec 1965 N/A N/A N/A N/A 4.23
Dec 1966 N/A N/A N/A N/A 4.45
Dec 1967 N/A N/A N/A N/A 4.67
Dec 1968 N/A N/A N/A N/A 4.68
Dec 1969 N/A N/A N/A N/A 4.80
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
S & P Bank
NAREIT - Russell Wilshire Midcap Savings
Equity 2000 Real Estate 400 Account
Bank Savings Account
Dec 1970 N/A N/A N/A N/A 5.14
Dec 1971 N/A N/A N/A N/A 5.30
Dec 1972 8.01 N/A N/A N/A 5.37
Dec 1973 -15.52 N/A N/A N/A 5.51
Dec 1974 -21.40 N/A N/A N/A 5.96
Dec 1975 19.30 N/A N/A N/A 6.21
Dec 1976 47.59 N/A N/A N/A 6.23
Dec 1977 22.42 N/A N/A N/A 6.39
Dec 1978 10.34 N/A 13.04 N/A 6.56
Dec 1979 35.86 43.09 70.81 N/A 7.29
Dec 1980 24.37 38.58 22.08 N/A 8.78
Dec 1981 6.00 2.03 7.18 N/A 10.71
Dec 1982 21.60 24.95 24.47 22.68 11.19
Dec 1983 30.64 29.13 27.61 26.10 9.71
Dec 1984 20.93 -7.30 20.64 1.18 9.92
Dec 1985 19.10 31.05 22.20 35.58 9.02
Dec 1986 19.16 5.68 20.30 16.21 7.84
Dec 1987 -3.64 -8.77 -7.86 -2.03 6.92
Dec 1988 13.49 24.89 24.18 20.87 7.20
Dec 1989 8.84 16.24 2.37 35.54 7.91
Dec 1990 -15.35 -19.51 -33.46 -5.12 7.80
Dec 1991 35.7 46.05 20.03 50.1 4.61
Dec 1992 14.59 18.41 7.36 11.91 2.89
Dec 1993 19.65 18.91 15.24 13.96 2.73
Dec 1994 3.17 -1.82 1.64 -3.57 4.96
Dec 1995 15.27 28.44 13.65 30.94 5.24
Source: Ibbotson Associates
<PAGE>
APPENDIX B
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 United States.
As of December 31, 1995, PMC employed a professional investment staff
of 44, with a combined average of 15 years' experience in the financial services
industry.
Total assets of all Pioneer mutual funds at December 31, 1995, were
approximately $12 billion representing 982,369 shareholder accounts - 637,060
non-retirement accounts and 345,309 retirement accounts.
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<PAGE>
PIONEER MICRO-CAP FUND
PART C. OTHER INFORMATION
-------------------------
Item 24. Financial Statements and Exhibits.
(a) Financial Statements:
Statement of Assets and Liabilities*
Report of Independent Public Accountants*
(b) Exhibits:
1.1 Agreement and Declaration of Trust.
1.2 Certificate of Trust.
2. By-Laws.
3. None.
4.1 Specimen Class A Share Certificate
5. Form of Management Contract
6.1. Form of Underwriting Agreement
6.2. Form of Dealer Sales Agreement.
7. None.
8. Form of Custodian Agreement with Brown Brothers Harriman
& Co.
9. Form of Investment Company Service Agreement
10. Opinion of Counsel.*
11. Consent of Independent Public Accountants.*
12. None.
13. Form of Share Purchase Agreement.
14. None.
15.1 Form of Class A Shares Distribution Plan.*
15.2 Form of Class B Shares Distribution Plan.*
16. Not applicable.
C-1
<PAGE>
17. Not applicable.
18. Multiclass Plan Pursuant to Rule 18f-3.
19. Powers of Attorney.*
--------------
* To be filed by amendment.
Item 25. Persons Controlled By or Under Common Control with Registrant.
Percent State/Country
of of
Company Owned By Shares Incorporation
Pioneering Management Corp. (PMC) PGI 100% DE
Pioneering Services Corp. (PSC) PGI 100% MA
Pioneer Capital Corp. (PCC) PGI 100% MA
Pioneer Fonds Marketing GmbH (GmbH) PGI 100% MA
Pioneer SBIC Corp. (SBIC) PGI 100% MA
Pioneer Associates, Inc. (PAI) PGI 100% MA
Pioneer International Corp. (PInt) PGI 100% MA
Pioneer Plans Corp. (PPC) PGI 100% MA
Pioneer Goldfields Ltd (PGL) PGI 100% MA
Pioneer Investments Corp. (PIC) PGI 100% MA
Pioneer Metals and Technology,
Inc. (PMT) PGI 100% DE
Pioneer First Polish Trust Fund
Joint Stock Co. (First Polish) PGI 100% Poland
Teberebie Goldfields Ltd. (TGL) PGI 90% Ghana
Pioneer Funds Distributor, Inc.
(PFD) PMC 100% MA
SBIC's outstanding capital stock PCC 100% MA
THE FUNDS: All are parties to management contracts with PMC.
BUSINESS
FUND TRUST
Pioneer International Growth Fund MA
Pioneer Europe Fund MA
Pioneer Emerging Markets Fund DE
Pioneer India Fund DE
Pioneer Growth Trust MA
Pioneer Mid-Cap Fund DE
Pioneer Growth Shares DE
Pioneer Small Company Fund DE
Pioneer World Equity Fund DE
Pioneer II DE
Pioneer Real Estate Shares DE
Pioneer Short-Term Income Fund MA
C-2
<PAGE>
Pioneer America Income Trust MA
Pioneer Bond Fund MA
Pioneer Income Fund DE
Pioneer Intermediate Tax-Free Fund MA
Pioneer Tax-Free Income Fund DE
Pioneer Money Market Trust DE
Pioneer Variable Contracts Trust DE
Pioneer Interest Shares, Inc. DE
OTHER:
. SBIC is the sole general partner of Pioneer Ventures Limited Partnership, a
Massachusetts limited partnership.
. ITI Pioneer AMC Ltd. (ITI Pioneer) (Indian Corp.), is a joint venture
between PMC and Investment Trust of India Ltd. (ITI) (Indian Corp.)
. ITI and PMC own approximately 54% and 45%, respectively, of the total
equity capital of ITI Pioneer.
JOHN F. COGAN, JR.
Owns approximately 14% of the outstanding shares of PGI.
TRUSTEE/
ENTITY CHAIRMAN PRESIDENT DIRECTOR OTHER
Pioneer Family of
Mutual Funds X X X
PGL X X X
PGI X X X
PPC X X
PIC X X
Pintl X X
PMT X X
PCC X
PSC X
PMC X X
PFD X X
TGL X X
First Polish X Member of
Supervisory Board
Hale and Dorr Partner
GmbH Chairman of
Supervisory
Board
C-3
<PAGE>
Item 26. Number of Holders of Securities.
Immediately prior to the effective date of this Registration Statement,
it is expected that there will be one record holder of Registrant's shares of
beneficial interest.
Item 27. Indemnification.
Except for the Agreement and Declaration of Trust dated August 8, 1995,
establishing the Registrant as a Trust under Delaware law, there is no contract,
arrangement or statute under which any Trustee, officer, underwriter or
affiliated person of the Registrant is insured or indemnified. The Agreement and
Declaration of Trust provides that no Trustee or officer will be indemnified
against any liability to which the Registrant would otherwise be subject by
reason of or for willful misfeasance, bad faith, gross negligence or reckless
disregard of such person's duties.
Insofar as indemnification for liability arising under the Securities
Act of 1933, as amended (the "Act"), may be available to Trustees, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a Trustee, officer or controlling
person of the Registrant 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 Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser.
All of the information required by this item is set forth in the Form
ADV, as amended, of Pioneering Management Corporation. The following sections of
such Form ADV are incorporated herein by reference:
(a) Items 1 and 2 of Part 2;
(b) Section 6, Business Background, of each Schedule D.
Item 29. Principal Underwriter
(a) See Item 25 above.
(b) Directors and Officers of PFD:
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
- ----------------- ---------------- ---------------
John F. Cogan, Jr. Director and Chairman Chairman of the Board,
President and Trustee
C-4
<PAGE>
Robert L. Butler Director and President None
David D. Tripple Director Executive Vice
President
Steve M. Graziano Senior Vice President None
Stephen W. Long Senior Vice President None
John W. Drachman Vice President None
Barry C. Knight Vice President None
William A. Misata Vice President None
Anne W. Patenaude Vice President None
Mary Kleeman Vice President None
Gail Smyth Vice President None
Constance S. Spiros Vice President None
Marcy Supovitz Vice President None
Steven R. Berke Assistant None
Vice President
Mary Sue Hoban Assistant None
Vice President
William H. Keough Treasurer Treasurer
Roy P. Rossi Assistant Treasurer None
Joseph P. Barri Clerk Secretary
Robert P. Nault Assistant Clerk Assistant Secretary
- ---------------
(c) Not applicable.
Item 30. Location of Accounts and Records
The accounts and records are maintained at the Registrant's office at
60 State Street, Boston, Massachusetts; contact the Treasurer.
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<PAGE>
Item 31. Management Services
The Registrant is not a party to any management-related service
contract, except as described in the Prospectus and the Statement of Additional
Information.
Item 32. Undertakings
(a) Not applicable.
(b) The Registrant undertakes to file a post-effective amendment, using
financial statements which need not be certified, within four to six months from
the later of the effective date of this Registration Statement or the
commencement of operations.
(c) The Registrant undertakes to deliver, or cause to be delivered with
the Prospectus, to each person to whom the Prospectus is sent or given a copy of
the Registrant's report to shareholders furnished pursuant to and meeting the
requirements of Rule 30d-1 from which the specified information is incorporated
by reference, unless such person currently holds securities of the Registrant
and otherwise has received a copy of such report, in which case the Registrant
shall state in the Prospectus that it will furnish, without charge, a copy of
such report on request, and the name, address and telephone number of the person
to whom such a request should be directed.
C-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Boston and Commonwealth of Massachusetts, on the 20th
day of December, 1996.
PIONEER MICRO-CAP FUND
By: /s/John F. Cogan, Jr.
John F. Cogan, Jr.
President
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
/s/John F. Cogan, Jr. Chairman of the Board, )
John F. Cogan, Jr. Trustee and President )
(Principal Executive )
Officer) )December 20, 1996
)
)
)
)
)
)
/s/William H. Keough Chief Financial Officer )December 20, 1996
William H. Keough and Treasurer (Principal )
Financial and Accounting )
Officer) )
Trustees:
/s/John F. Cogan, Jr. )
John F. Cogan, Jr. Trustee )December 20, 1996
)
<PAGE>
/s/Margaret B.W. Graham* )
Margaret B.W. Graham Trustee )December 20, 1996
)
/s/John W. Kendrick* )
John W. Kendrick Trustee )December 20, 1996
)
/s/Marguerite A. Piret* )
Marguerite A. Piret Trustee )December 20, 1996
)
/s/David D. Tripple* )
David D. Tripple Trustee )December 20, 1996
)
/s/Stephen K. West* )
Stephen K. West Trustee )December 20, 1996
)
/s/John Winthrop* )
John Winthrop Trustee )December 20, 1996
*By /s/ Joseph P. Barri Dated: December 20, 1996
-------------------
Joseph P. Barri
Attorney-in-Fact
<PAGE>
Exhibit Index
Exhibit Page
Number Document Title Number
1.1 Agreement and Declaration of Trust.
1.2 Certificate of Trust.
2. By-Laws.
4.1 Specimen Class A Share Certificate
5. Form of Management Contract
6.1. Form of Underwriting Agreement
6.2. Form of Dealer Sales Agreement.
8. Form of Custodian Agreement with Brown Brothers Harriman
& Co.
9. Form of Investment Company Service Agreement
13. Form of Share Purchase Agreement.
15.1 Form of Class A Shares Distribution Plan.
15.2 Form of Class B Shares Distribution Plan.
18. Multiclass Plan Pursuant to Rule 18f-3
PIONEER MICRO-CAP FUND
AGREEMENT AND
DECLARATION OF TRUST
This AGREEMENT AND DECLARATION OF TRUST is made on December 3, 1996 by the
undersigned trustees (together with all other persons from time to time duly
elected, qualified and serving as Trustees in accordance with the provisions of
Article II hereof, the "Trustees");
NOW, THEREFORE, the Trustees declare that all money and property contributed to
the Trust shall be held and managed in trust pursuant to this Agreement and
Declaration of Trust.
ARTICLE I
NAME AND DEFINITIONS
Section 1. Name. The name of the Trust created by this Agreement and Declaration
of Trust is "Pioneer Micro-Cap Fund."
Section 2. Definitions. Unless otherwise provided or required by the context:
(a)"Administrator" means the party, other than the Trust, to the
contract described in Article III, Section 3 hereof.
(b)"By-laws" means the By-laws of the Trust adopted by the
Trustees, as amended from time to time, which By-laws are expressly herein
incorporated by reference as part of the "governing instrument" within the
meaning of the Delaware Act.
(c) "Class" means the class of Shares of a Series established
pursuant to Article V.
(d)"Commission," "Interested Person" and "Principal Underwriter"
have the meanings provided in the 1940 Act. Except as such term may be otherwise
defined by the Trustees in conjunction with the establishment of any Series of
Shares, the term "vote of a majority of the Shares outstanding and entitled to
vote" shall have the same meaning as is assigned to the term "vote of a majority
of the outstanding voting securities" in the 1940 Act.
(e) "Covered Person" means a person so defined in Article IV,
Section 2.
(f)"Custodian" means any Person other than the Trust who has
custody of any Trust Property as required by Section 17(f) of the 1940 Act, but
does not include a system for the central handling of securities described in
said Section 17(f).
(g)"Declaration" shall mean this Agreement and Declaration of
Trust, as amended or restated from time to time. Reference in this Declaration
of Trust to "Declaration," "hereof," "herein," and "hereunder" shall be deemed
to refer to this Declaration rather than exclusively to the article or section
in which such words appear.
<PAGE>
(h)"Delaware Act" means Chapter 38 of Title 12 of the Delaware
Code entitled "Treatment of Delaware Business Trusts," as amended from time to
time.
(i)"Distributor" means the party, other than the Trust, to the
contract described in Article III, Section 1 hereof.
(j) "His" shall include the feminine and neuter, as well as the
masculine, genders.
(k)"Investment Adviser" means the party, other than the Trust, to
the contract described in Article III, Section 2 hereof.
(l)"Net Asset Value" means the net asset value of each Series of
the Trust, determined as provided in Article VI, Section 3.
(m)"Person" means and includes individuals, corporations,
partnerships, trusts, associations, joint ventures, estates and other entities,
and governments and agencies and political subdivisions, thereof, whether
domestic or foreign.
(n) "Series" means a series of Shares established pursuant to
Article V.
(o) "Shareholder" means a record owner of Outstanding Shares;
(p)"Shares" means the equal proportionate transferable units of
interest into which the beneficial interest of each Series or Class is divided
from time to time (including whole Shares and fractions of Shares). "Outstanding
Shares" means Shares shown in the books of the Trust or its transfer agent as
then issued and outstanding, but does not include Shares which have been
repurchased or redeemed by the Trust and which are held in the treasury of the
Trust.
(q)"Transfer Agent" means any Person other than the Trust who
maintains the Shareholder records of the Trust, such as the list of
Shareholders, the number of Shares credited to each account, and the like.
(r)"Trust" means Pioneer Micro-Cap Fund established hereby, and
reference to the Trust, when applicable to one or more Series, refers to that
Series.
(s)"Trustees" means the person who has signed this Declaration of
Trust, so long as he shall continue in office in accordance with the terms
hereof, and all other persons who may from time to time be duly qualified and
serving as Trustees in accordance with Article II, in all cases in their
capacities as Trustees hereunder.
(t)"Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the Trust or any Series
or the Trustees on behalf of the Trust or any Series.
(u)The "1940 Act" means the Investment Company Act of 1940, as
amended from time to time.
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<PAGE>
ARTICLE II
THE TRUSTEES
Section 1. Management of the Trust. The business and affairs of the Trust shall
be managed by or under the direction of the Trustees, and they shall have all
powers necessary or desirable to carry out that responsibility. The Trustees may
execute all instruments and take all action they deem necessary or desirable to
promote the interests of the Trust. Any determination made by the Trustees in
good faith as to what is in the interests of the Trust shall be conclusive. In
construing the provisions of this Declaration, the presumption shall be in favor
of a grant of power to the Trustees.
Section 2. Powers. The Trustees in all instances shall act as principals, free
of the control of the Shareholders. The Trustees shall have full power and
authority to take or refrain from taking any action and to execute any contracts
and instruments that they may consider necessary or desirable in the management
of the Trust. The Trustees shall not in any way be bound or limited by current
or future laws or customs applicable to trust investments, but shall have full
power and authority to make any investments which they, in their sole
discretion, deem proper to accomplish the purposes of the Trust. The Trustees
may exercise all of their powers without recourse to any court or other
authority. Subject to any applicable limitation herein or in the By-laws or
resolutions of the Trust, the Trustees shall have power and authority, without
limitation:
(a) To operate as and carry on the business of an investment
company, and exercise all the powers necessary and appropriate to the conduct of
such operations.
(b) To invest in, hold for investment, or reinvest in, cash;
securities, including common, preferred and preference stocks; warrants;
subscription rights; profit-sharing interests or participations and all other
contracts for or evidence of equity interests; bonds, debentures, bills, time
notes and all other evidences of indebtedness; negotiable or non-negotiable
instruments; government securities, including securities of any state,
municipality or other political subdivision thereof, or any governmental or
quasi-governmental agency or instrumentality; and money market instruments
including bank certificates of deposit, finance paper, commercial paper,
bankers' acceptances and all kinds of repurchase agreements, of any corporation,
company, trust, association, firm or other business organization however
established, and of any country, state, municipality or other political
subdivision, or any governmental or quasi-governmental agency or
instrumentality; or any other security, property or instrument in which the
Trust or any of its Series shall be authorized to invest.
(c) To acquire (by purchase, subscription or otherwise), to
hold, to trade in and deal in, to acquire any rights or options to purchase or
sell, to sell or otherwise dispose of, to lend and to pledge any such
securities, to enter into repurchase agreements, reverse repurchase agreements,
firm commitment agreements and forward foreign currency exchange contracts, to
purchase and sell options on securities, securities indices, currency and other
financial assets, futures contracts and options on futures contracts of all
descriptions and to engage in all types of hedging and risk-management
transactions.
(d To exercise all rights, powers and privileges of ownership
or interest in all securities and repurchase agreements included in the Trust
Property, including the right to vote
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<PAGE>
thereon and otherwise act with respect thereto and to do all acts for the
preservation, protection, improvement and enhancement in value of all such
securities and repurchase agreements.
(e) To acquire (by purchase, lease or otherwise) and to hold,
use, maintain, develop and dispose of (by sale or otherwise) any property, real
or personal, including cash or foreign currency, and any interest therein.
(f)To borrow money or other property in the name of the Trust
exclusively for Trust purposes and in this connection issue notes or other
evidence of indebtedness; to secure borrowings by mortgaging, pledging or
otherwise subjecting as security the Trust Property; and to endorse, guarantee,
or undertake the performance of any obligation or engagement of any other Person
and to lend Trust Property.
(g)To aid by further investment any corporation, company,
trust, association or firm, any obligation of or interest in which is included
in the Trust Property or in the affairs of which the Trustees have any direct or
indirect interest; to do all acts and things designed to protect, preserve,
improve or enhance the value of such obligation or interest; and to guarantee or
become surety on any or all of the contracts, stocks, bonds, notes, debentures
and other obligations of any such corporation, company, trust, association or
firm.
(h)To adopt By-laws not inconsistent with this Declaration
providing for the conduct of the business of the Trust and to amend and repeal
them to the extent such right is not reserved to the Shareholders.
(i)To elect and remove such officers and appoint and terminate
such agents as they deem appropriate.
(j)To employ as custodian of any assets of the Trust, subject
to any provisions herein or in the By-laws, one or more banks, trust companies
or companies that are members of a national securities exchange, or other
entities permitted by the Commission to serve as such.
(k)To retain one or more transfer agents and shareholder
servicing agents, or both.
(l)To provide for the distribution of Shares either through a
Principal Underwriter as provided herein or by the Trust itself, or both, or
pursuant to a distribution plan of any kind.
(m) To set record dates in the manner provided for herein or
in the By- laws.
(n)To delegate such authority as they consider desirable to
any officers of the Trust and to any agent, independent contractor, manager,
investment adviser, custodian or underwriter.
(o)To hold any security or other property (i) in a form not
indicating any trust, whether in bearer, book entry, unregistered or other
negotiable form, or (ii) either in the Trust's or Trustees' own name or in the
name of a custodian or a nominee or nominees, subject to safeguards according to
the usual practice of business trusts or investment companies.
(p)To establish separate and distinct Series with separately
defined investment objectives and policies and distinct investment purposes, and
with separate Shares representing
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<PAGE>
beneficial interests in such Series, and to establish separate Classes, all in
accordance with the provisions of Article V.
(q)To the full extent permitted by Section 3804 of the
Delaware Act, to allocate assets, liabilities and expenses of the Trust to a
particular Series and assets, liabilities and expenses to a particular Class or
to apportion the same between or among two or more Series or Classes, provided
that any liabilities or expenses incurred by a particular Series or Class shall
be payable solely out of the assets belonging to that Series or Class as
provided for in Article V, Section 4.
(r)To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or concern whose
securities are held by the Trust; to consent to any contract, lease, mortgage,
purchase, or sale of property by such corporation or concern; and to pay calls
or subscriptions with respect to any security held in the Trust.
(s)To compromise, arbitrate, or otherwise adjust claims in
favor of or against the Trust or any matter in controversy including, but not
limited to, claims for taxes.
(t)To make distributions of income, capital gains, returns of
capital (if any) and redemption proceeds to Shareholders in the manner
hereinafter provided for.
(u)To establish committees for such purposes, with such
membership, and with such responsibilities as the Trustees may consider proper,
including a committee consisting of fewer than all of the Trustees then in
office, which may act for and bind the Trustees and the Trust with respect to
the institution, prosecution, dismissal, settlement, review or investigation of
any legal action, suit or proceeding, pending or threatened.
(v)To issue, sell, repurchase, redeem, cancel, retire,
acquire, hold, resell, reissue, dispose of and otherwise deal in Shares; to
establish terms and conditions regarding the issuance, sale, repurchase,
redemption, cancellation, retirement, acquisition, holding, resale, reissuance,
disposition of or dealing in Shares; and, subject to Articles V and VI, to apply
to any such repurchase, redemption, retirement, cancellation or acquisition of
Shares any funds or property of the Trust or of the particular Series with
respect to which such Shares are issued.
(w)To invest part or all of the Trust Property (or part or all
of the assets of any Series), or to dispose of part or all of the Trust Property
(or part or all of the assets of any Series) and invest the proceeds of such
disposition, in securities issued by one or more other investment companies
registered under the 1940 Act all without any requirement of approval by
Shareholders. Any such other investment company may (but need not) be a trust
(formed under the laws of the State of New York or of any other state) which is
classified as a partnership for federal income tax purposes.
(x)To carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary or
desirable to accomplish any purpose or to further any of the foregoing powers,
and to take every other action incidental to the foregoing business or purposes,
objects or powers.
(y) To sell or exchange any or all of the assets of the Trust,
subject to Article IX, Section 4.
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<PAGE>
(z)To enter into joint ventures, partnerships and other
combinations and associations.
(aa)To join with other security holders in acting through a
committee, depositary, voting trustee or otherwise, and in that connection to
deposit any security with, or transfer any security to, any such committee,
depositary or trustee, and to delegate to them such power and authority with
relation to any security (whether or not so deposited or transferred) as the
Trustees shall deem proper, and to agree to pay, and to pay, such portion of the
expenses and compensation of such Committee, depositary or trustee as the
Trustees shall deem proper;
(bb)To purchase and pay for entirely out of Trust Property
such insurance as the Trustees may deem necessary or appropriate for the conduct
of the business, including, without limitation, insurance policies insuring the
assets of the Trust or payment of distributions and principal on its portfolio
investments, and, subject to applicable law and any restrictions set forth in
the By-laws, insurance policies insuring the Shareholders, Trustees, officers,
employees, agents, investment advisers, Principal Underwriters, or independent
contractors of the Trust, individually, against all claims and liabilities of
every nature arising by reason of holding Shares, holding, being or having held
any such office or position, or by reason of any action alleged to have been
taken or omitted by any such Person as Trustee, officer, employee, agent,
investment adviser, Principal underwriter, or independent contractor, including
any action taken or omitted that may be determined to constitute negligence,
whether or not the Trust would have the power to indemnify such Person against
liability;
(cc)To adopt, establish and carry out pension, profit-sharing,
share bonus, share purchase, savings, thrift and other retirement, incentive and
benefit plans and trusts, including the purchasing of life insurance and annuity
contracts as a means of providing such retirement and other benefits, for any or
all of the Trustees, officers, employees and agents of the Trust;
(dd) To enter into contracts of any kind and description;
(ee) To interpret the investment policies, practices or
limitations of any Series or Class; and
(ff) To guarantee indebtedness and contractual obligations of
others.
The clauses above shall be construed as objects and powers,
and the enumeration of specific powers shall not limit in any way the general
powers of the Trustees. Any action by one or more of the Trustees in their
capacity as such hereunder shall be deemed an action on behalf of the Trust or
the applicable Series, and not an action in an individual capacity. No one
dealing with the Trustees shall be under any obligation to make any inquiry
concerning the authority of the Trustees, or to see to the application of any
payments made or property transferred to the Trustees or upon their order. In
construing this Declaration, the presumption shall be in favor of a grant of
power to the Trustees.
Section 3. Certain Transactions. Except as prohibited by
applicable law, the Trustees may, on behalf of the Trust, buy any securities
from or sell any securities to, or lend any assets of the Trust to, any Trustee
or officer of the Trust or any firm of which any such Trustee or officer is a
member acting as principal, or have any such dealings with any investment
adviser,
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<PAGE>
administrator, distributor or transfer agent for the Trust or with any
Interested Person of such person. The Trust may employ any such person or entity
in which such person is an Interested Person, as broker, legal counsel,
registrar, investment adviser, administrator, distributor, transfer agent,
dividend disbursing agent, custodian or in any other capacity upon customary
terms.
Section 4. Initial Trustees; Election and Number of Trustees.
The initial Trustees shall be the persons initially signing this Declaration.
The number of Trustees (other than the initial Trustees) shall be fixed from
time to time by a majority of the Trustees; provided, that there shall be at
least one (1) Trustee and no more than fifteen (15). The Shareholders shall
elect the Trustees (other than the initial Trustees) on such dates as the
Trustees may fix from time to time.
Section 5. Term of Office of Trustees. Each Trustee shall hold
office for life or until his successor is elected or the Trust terminates;
except that (a) any Trustee may resign by delivering to the other Trustees or to
any Trust officer a written resignation effective upon such delivery or a later
date specified therein; (b) any Trustee may be removed with or without cause at
any time by a written instrument signed by at least a majority of the then
Trustees, specifying the effective date of removal; (c) any Trustee who requests
to be retired, or who is declared bankrupt or has become physically or mentally
incapacitated or is otherwise unable to serve, may be retired by a written
instrument signed by a majority of the other Trustees, specifying the effective
date of retirement; and (d) any Trustee may be removed at any meeting of the
Shareholders by a vote of at least two-thirds of the Outstanding Shares.
Section 6. Vacancies; Appointment of Trustees. Whenever a
vacancy shall exist in the Board of Trustees, regardless of the reason for such
vacancy, the remaining Trustees shall appoint any person as they determine in
their sole discretion to fill that vacancy, consistent with the limitations
under the 1940 Act. Such appointment shall be made by a written instrument
signed by a majority of the Trustees or by a resolution of the Trustees, duly
adopted and recorded in the records of the Trust, specifying the effective date
of the appointment. The Trustees may appoint a new Trustee as provided above in
anticipation of a vacancy expected to occur because of the retirement,
resignation or removal of a Trustee, or an increase in number of Trustees,
provided that such appointment shall become effective only at or after the
expected vacancy occurs. As soon as any such Trustee has accepted his
appointment in writing, the trust estate shall vest in the new Trustee, together
with the continuing Trustees, without any further act or conveyance, and he
shall be deemed a Trustee hereunder. The Trustees' power of appointment is
subject to Section 16(a) of the 1940 Act. Whenever a vacancy in the number of
Trustees shall occur, until such vacancy is filled as provided in this Article
II, the Trustees in office, regardless of their number, shall have all the
powers granted to the Trustees and shall discharge all the duties imposed upon
the Trustees by the Declaration. The death, declination to serve, resignation,
retirement, removal or incapacity of one or more Trustees, or all of them, shall
not operate to annul the Trust or to revoke any existing agency created pursuant
to the terms of this Declaration of Trust.
Section 7. Temporary Vacancy or Absence. Whenever a vacancy in
the Board of Trustees shall occur, until such vacancy is filled, or while any
Trustee is absent from his domicile (unless that Trustee has made arrangements
to be informed about, and to participate in, the affairs of the Trust during
such absence), or is physically or mentally incapacitated, the remaining
Trustees shall have all the powers hereunder and their certificate as to such
vacancy, absence, or incapacity shall be conclusive. Any Trustee may, by power
of attorney, delegate his powers as
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<PAGE>
Trustee for a period not exceeding six (6) months at any one time to any other
Trustee or Trustees.
Section 8. Chairman. The Trustees shall appoint one of their
number to be Chairman of the Board of Trustees. The Chairman shall preside at
all meetings of the Trustees, shall be responsible for the execution of policies
established by the Trustees and the administration of the Trust, and may be the
chief executive, financial and/or accounting officer of the Trust.
Section 9. Action by the Trustees. The Trustees shall act by
majority vote at a meeting duly called at which a quorum is present, including a
meeting held by conference telephone, teleconference or other electronic media
or communication equipment by means of which all persons participating in the
meeting can communicate with each other; or by written consent of a majority of
Trustees (or such greater number as may be required by applicable law) without a
meeting. A majority of the Trustees shall constitute a quorum at any meeting.
Meetings of the Trustees may be called orally or in writing by the President or
by any one of the Trustees. Notice of the time, date and place of all Trustees'
meetings shall be given to each Trustee as set forth in the By-laws; provided,
however, that no notice is required if the Trustees provide for regular or
stated meetings. Notice need not be given to any Trustee who attends the meeting
without objecting to the lack of notice or who signs a waiver of notice either
before or after the meeting. The Trustees by majority vote may delegate to any
Trustee or Trustees or committee authority to approve particular matters or take
particular actions on behalf of the Trust. Any written consent or waiver may be
provided and delivered to the Trust by facsimile or other similar electronic
mechanism.
Section 10. Ownership of Trust Property. The Trust Property of
the Trust and of each Series shall be held separate and apart from any assets
now or hereafter held in any capacity other than as Trustee hereunder by the
Trustees or any successor Trustees. Legal title in and beneficial ownership of
all of the assets of the Trust shall at all times be considered as vested in the
Trust, except that the Trustees may cause legal title in and beneficial
ownership of any Trust Property to be held by, or in the name of one or more of
the Trustees acting for and on behalf of the Trust, or in the name of any person
as nominee acting for and on behalf of the Trust. No Shareholder shall be deemed
to have a severable ownership in any individual asset of the Trust or of any
Series or any right of partition or possession thereof, but each Shareholder
shall have, as provided in Article V, a proportionate undivided beneficial
interest in the Trust or Series or Class thereof represented by Shares. The
Shares shall be personal property giving only the rights specifically set forth
in this Trust Instrument. The Trust, or at the determination of the Trustees one
or more of the Trustees or a nominee acting for and on behalf of the Trust,
shall be deemed to hold legal title and beneficial ownership of any income
earned on securities of the Trust issued by any business entities formed,
organized, or existing under the laws of any jurisdiction, including the laws of
any foreign country. Upon the resignation or removal of a Trustee, or his
otherwise ceasing to be a Trustee, he shall execute and deliver such documents
as the remaining Trustees shall require for the purpose of conveying to the
Trust or the remaining Trustees any Trust Property held in the name of the
resigning or removed Trustee. Upon the incapacity or death of any Trustee, his
legal representative shall execute and deliver on his behalf such documents as
the remaining Trustees shall require as provided in the preceding sentence.
Section 11. Effect of Trustees Not Serving. The death,
resignation, retirement, removal, incapacity or inability or refusal to serve of
the Trustees, or any one of them, shall not
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operate to annul the Trust or to revoke any existing agency created pursuant to
the terms of this Declaration.
Section 12. Trustees, etc. as Shareholders. Subject to any
restrictions in the By-laws, any Trustee, officer, agent or independent
contractor of the Trust may acquire, own and dispose of Shares to the same
extent as any other Shareholder; the Trustees may issue and sell Shares to and
buy Shares from any such person or any firm or company in which such person is
interested, subject only to any general limitations herein.
Section 13. Series Trustees. In connection with the
establishment of one or more Series or Classes, the Trustees establishing such
Series or Class may appoint, to the extent permitted by the Delaware Act,
separate Trustees with respect to such Series or Classes (the "Series
Trustees"). Series Trustees may, but are not required to, serve as Trustees of
the Trust or any other Series or Class of the Trust. The Series Trustees shall
have, to the exclusion of any other Trustee of the Trust, all the powers and
authorities of Trustees hereunder with respect to such Series or Class, but
shall have no power or authority with respect to any other Series or Class. Any
provision of this Declaration relating to election of Trustees by Shareholders
only shall entitle the Shareholders of a Series or Class for which Series
Trustees have been appointed to vote with respect to the election of such Series
Trustees and the Shareholders of any other Series or Class shall not be entitled
to participate in such vote. In the event that Series Trustees are appointed,
the Trustees initially appointing such Series Trustees shall, without the
approval of any Outstanding Shares, amend either the Declaration or the By-laws
to provide for the respective responsibilities of the Trustees and the Series
Trustees in circumstances where an action of the Trustees or Series Trustees
affects all Series of the Trust or two or more Series represented by different
Trustees.
ARTICLE III
CONTRACTS WITH SERVICE PROVIDERS
Section 1. Underwriting Contract. The Trustees may in their
discretion from time to time enter into an exclusive or non-exclusive
distribution contract or contracts providing for the sale of the Shares whereby
the Trustees may either agree to sell the Shares to the other party to the
contract or appoint such other party as their sales agent for the Shares, and in
either case on such terms and conditions, if any, as may be prescribed in the
By-laws, and such further terms and conditions as the Trustees may in their
discretion determine not inconsistent with the provisions of this Article III or
of the By-laws; and such contract may also provide for the repurchase of the
Shares by such other party as agent of the Trustees.
Section 2. Advisory or Management Contract. The Trustees may
in their discretion from time to time enter into one or more investment advisory
or management contracts or, if the Trustees establish multiple Series, separate
investment advisory or management contracts with respect to one or more Series
whereby the other party or parties to any such contracts shall undertake to
furnish the Trust or such Series management, investment advisory,
administration, accounting, legal, statistical and research facilities and
services, promotional or marketing activities, and such other facilities and
services, if any, as the Trustees shall from time to time consider desirable and
all upon such terms and conditions as the Trustees may in their discretion
determine. Notwithstanding any provisions of the Declaration, the Trustees may
authorize the
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Investment Advisers or persons to whom the Investment Adviser delegates certain
or all of their duties, or any of them, under any such contracts (subject to
such general or specific instructions as the Trustees may from time to time
adopt) to effect purchases, sales, loans or exchanges of portfolio securities
and other investments of the Trust on behalf of the Trustees or may authorize
any officer, employee or Trustee to effect such purchases, sales, loans or
exchanges pursuant to recommendations of such Investment Advisers, or any of
them (and all without further action by the Trustees). Any such purchases,
sales, loans and exchanges shall be deemed to have been authorized by all of the
Trustees.
Section 3. Administration Agreement. The Trustees may in their
discretion from time to time enter into an administration agreement or, if the
Trustees establish multiple Series or Classes, separate administration
agreements with respect to each Series or Class, whereby the other party to such
agreement shall undertake to manage the business affairs of the Trust or of a
Series or Class thereof of the Trust and furnish the Trust or a Series or a
Class thereof with office facilities, and shall be responsible for the ordinary
clerical, bookkeeping and recordkeeping services at such office facilities, and
other facilities and services, if any, and all upon such terms and conditions as
the Trustees may in their discretion determine.
Section 4. Service Agreement. The Trustees may in their
discretion from time to time enter into service agreements with respect to one
or more Series or Classes of Shares whereby the other parties to such Service
Agreements will provide administration and/or support services pursuant to
administration plans and service plans, and all upon such terms and conditions
as the Trustees in their discretion may determine.
Section 5. Transfer Agent. The Trustees may in their
discretion from time to time enter into a transfer agency and shareholder
service contract whereby the other party to such contract shall undertake to
furnish transfer agency and shareholder services to the Trust. The contract
shall have such terms and conditions as the Trustees may in their discretion
determine not inconsistent with the Declaration. Such services may be provided
by one or more Persons.
Section 6. Custodian. The Trustees may appoint or otherwise
engage one or more banks or trust companies, each having aggregate capital,
surplus and undivided profits (as shown in its last published report) of at
least two million dollars ($2,000,000), or any other entity satisfying the
requirements of the 1940 Act, to serve as Custodian with authority as its agent,
but subject to such restrictions, limitations and other requirements, if any, as
may be contained in the By-laws of the Trust. The Trustees may also authorize
the Custodian to employ one or more sub-custodians, including such foreign banks
and securities depositories as meet the requirements of applicable provisions of
the 1940 Act, and upon such terms and conditions as may be agreed upon between
the Custodian and such sub-custodian, to hold securities and other assets of the
Trust and to perform the acts and services of the Custodian, subject to
applicable provisions of law and resolutions adopted by the Trustees.
Section 7. Affiliations of Trustees or Officers, Etc. The fact
that:
(i)any of the Shareholders, Trustees or officers of the Trust
or any Series thereof is a shareholder, director, officer, partner,
trustee, employee, manager, adviser or distributor of or for any
partnership, corporation, trust, association or other organization or
of or for any parent or affiliate of any organization, with which a
contract of the character described in this Article III or for services
as Custodian, Transfer Agent or disbursing agent or for
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related services may have been or may hereafter be made, or that any
such organization, or any parent or affiliate thereof, is a Shareholder
of or has an interest in the Trust, or that
(ii) any partnership, corporation, trust, association or other
organization with which a contract of the character described in
Sections 1, 2, 3 or 4 of this Article III or for services as Custodian,
Transfer Agent or disbursing agent or for related services may have
been or may hereafter be made also has any one or more of such
contracts with one or more other partnerships, corporations, trusts,
associations or other organizations, or has other business or
interests,
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same or create any liability or accountability to the Trust or its Shareholders.
ARTICLE IV
COMPENSATION, LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 1. Compensation. The Trustees as such shall be
entitled to reasonable compensation from the Trust, and they may fix the amount
of such compensation. Nothing herein shall in any way prevent the employment of
any Trustee for advisory, management, legal, accounting, investment banking or
other services and payment for the same by the Trust.
Section 2. Limitation of Liability. All persons contracting
with or having any claim against the Trust or a particular Series shall look
only to the assets of all Series or such particular Series for payment under
such contract or claim; and neither the Trustees nor, when acting in such
capacity, any of the Trust's officers, employees or agents, whether past,
present or future, shall be personally liable therefor. Every written instrument
or obligation on behalf of the Trust or any Series shall contain a statement to
the foregoing effect, but the absence of such statement shall not operate to
make any Trustee or officer of the Trust liable thereunder. Provided they have
exercised reasonable care and have acted under the reasonable belief that their
actions are in the best interest of the Trust, the Trustees and officers of the
Trust shall not be responsible or liable for any act or omission or for neglect
or wrongdoing of them or any officer, agent, employee, investment adviser or
independent contractor of the Trust, but nothing contained in this Declaration
or in the Delaware Act shall protect any Trustee or officer of the Trust against
liability to the Trust or to Shareholders to which he would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office.
Section 3. Indemnification. (a) Subject to the exceptions and
limitations contained in subsection (b) below:
(i)every person who is, or has been, a Trustee or an officer,
employee or agent of the Trust (including any individual who
serves at its request as director, officer, partner, trustee
or the like of another organization in which it has any
interest as a shareholder, creditor or otherwise) ("Covered
Person") shall be indemnified by the Trust or the appropriate
Series to the fullest extent permitted by law against
liability and against all expenses reasonably incurred or paid
by him in connection with any claim, action, suit or
proceeding in which he becomes involved as a party or
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otherwise by virtue of his being or having been a Covered
Person and against amounts paid or incurred by him in the
settlement thereof; and
(ii) as used herein, the words "claim," "action," "suit," or
"proceeding" shall apply to all claims, actions, suits or
proceedings (civil, criminal or other, including appeals),
actual or threatened, and the words "liability" and "expenses"
shall include, without limitation, attorneys' fees, costs,
judgments, amounts paid in settlement, fines, penalties and
other liabilities.
(b) No indemnification shall be provided hereunder to a
Covered Person:
(i)who shall have been adjudicated by a court or body before
which the proceeding was brought (A) to be liable to the Trust
or its Shareholders by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office, or (B) not to have
acted in good faith in the reasonable belief that his action
was in the best interest of the Trust; or
(ii) in the event of a settlement, unless there has been a
determination that such Covered Person did not engage in
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office;
(A) by the court or other body approving the settlement; (B)
by at least a majority of those Trustees who are neither
Interested Persons of the Trust nor are parties to the matter
based upon a review of readily available facts (as opposed to
a full trial-type inquiry); (C) by written opinion of
independent legal counsel based upon a review of readily
available facts (as opposed to a full trial-type inquiry) or
(D) by a vote of a majority of the Outstanding Shares entitled
to vote (excluding any Outstanding Shares owned of record or
beneficially by such individual).
(c) The rights of indemnification herein provided may be
insured against by policies maintained by the Trust, shall be severable, shall
not be exclusive of or affect any other rights to which any Covered Person may
now or hereafter be entitled, and shall inure to the benefit of the heirs,
executors and administrators of a Covered Person.
(d) To the maximum extent permitted by applicable law,
expenses in connection with the preparation and presentation of a defense to any
claim, action, suit or proceeding of the character described in subsection (a)
of this Section may be paid by the Trust or applicable Series from time to time
prior to final disposition thereof upon receipt of an undertaking by or on
behalf of such Covered Person that such amount will be paid over by him to the
Trust or applicable Series if it is ultimately determined that he is not
entitled to indemnification under this Section; provided, however, that either
(i) such Covered Person shall have provided appropriate security for such
undertaking, (ii) the Trust is insured against losses arising out of any such
advance payments or (iii) either a majority of the Trustees who are neither
Interested Persons of the Trust nor parties to the matter, or independent legal
counsel in a written opinion, shall have determined, based upon a review of
readily available facts (as opposed to a full trial-type inquiry) that there is
reason to believe that such Covered Person will not be disqualified from
indemnification under this Section.
(e) Any repeal or modification of this Article IV by the
Shareholders, or adoption or modification of any other provision of the
Declaration or By- laws inconsistent with this Article, shall be prospective
only, to the extent that such repeal, or modification would, if applied
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retrospectively, adversely affect any limitation on the liability of any Covered
Person or indemnification available to any Covered Person with respect to any
act or omission which occurred prior to such repeal, modification or adoption.
Section 3. Indemnification of Shareholders. If any Shareholder
or former Shareholder of any Series shall be held personally liable solely by
reason of his being or having been a Shareholder and not because of his acts or
omissions or for some other reason, the Shareholder or former Shareholder (or
his heirs, executors, administrators or other legal representatives or in the
case of any entity, its general successor) shall be entitled out of the assets
belonging to the applicable Series to be held harmless from and indemnified
against all loss and expense arising from such liability. The Trust, on behalf
of the affected Series, shall, upon request by such Shareholder, assume the
defense of any claim made against such Shareholder for any act or obligation of
the Series and satisfy any judgment thereon from the assets of the Series.
Section 4. No Bond Required of Trustees. No Trustee shall be
obligated to give any bond or other security for the performance of any of his
duties hereunder.
Section 5. No Duty of Investigation; Notice in Trust
Instruments, Etc. No purchaser, lender, transfer agent or other Person dealing
with the Trustees or any officer, employee or agent of the Trust or a Series
thereof shall be bound to make any inquiry concerning the validity of any
transaction purporting to be made by the Trustees or by said officer, employee
or agent or be liable for the application of money or property paid, loaned, or
delivered to or on the order of the Trustees or of said officer, employee or
agent. Every obligation, contract, instrument, certificate, Share, other
security of the Trust or a Series thereof or undertaking, and every other act or
thing whatsoever executed in connection with the Trust shall be conclusively
presumed to have been executed or done by the executors thereof only in their
capacity as Trustees under this Declaration or in their capacity as officers,
employees or agents of the Trust or a Series thereof. Every written obligation,
contract, instrument, certificate, Share, other security of the Trust or a
Series thereof or undertaking made or issued by the Trustees may recite that the
same is executed or made by them not individually, but as Trustees under the
Declaration, and that the obligations of the Trust or a Series thereof under any
such instrument are not binding upon any of the Trustees or Shareholders
individually, but bind only the Trust Property or the Trust Property of the
applicable Series, and may contain any further recital which they may deem
appropriate, but the omission of such recital shall not operate to bind the
Trustees individually. The Trustees shall at all times maintain insurance for
the protection of the Trust Property or the Trust Property of the applicable
Series, its Shareholders, Trustees, officers, employees and agents in such
amount as the Trustees shall deem adequate to cover possible tort liability, and
such other insurance as the Trustees in their sole judgment shall deem
advisable.
Section 6. Reliance on Experts, Etc. Each Trustee, officer or
employee of the Trust or a Series thereof shall, in the performance of his
duties, powers and discretions hereunder be fully and completely justified and
protected with regard to any act or any failure to act resulting from reliance
in good faith upon the books of account or other records of the Trust or a
Series thereof, upon an opinion of counsel, or upon reports made to the Trust or
a Series thereof by any of its officers or employees or by the Investment
Adviser, the Administrator, the Distributor, Transfer Agent, selected dealers,
accountants, appraisers or other experts or consultants selected with reasonable
care by the Trustees, officers or employees of the Trust, regardless of whether
such counsel or expert may also be a Trustee.
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ARTICLE V
SERIES; CLASSES; SHARES
Section 1. Establishment of Series or Class. The Trust shall
consist of one or more Series. Without limiting the authority of the Trustees to
establish and designate any further Series, the Trustees hereby establish a
single Series which shall be designated Pioneer Micro-Cap Fund. Each additional
Series shall be established and is effective upon the adoption of a resolution
of a majority of the Trustees or any alternative date specified in such
resolution. The Trustees may designate the relative rights and preferences of
the Shares of each Series. The Trustees may divide the Shares of any Series into
Classes. Without limiting the authority of the Trustees to establish and
designate any further Classes, the Trustees hereby establish three Classes of
Shares which shall be designated Class A, Class B and Class C Shares. The
Classes of Shares of the existing Series herein established and designated and
any Shares of any further Series and Classes that may from time to time be
established and designated by the Trustees shall be established and designated,
and the variations in the relative rights and preferences as between the
different Series shall be fixed and determined, by the Trustees; provided, that
all Shares shall be identical except for such variations as shall be fixed and
determined between different Series or Classes by the Trustees in establishing
and designating such Class or Series. In connection therewith with respect to
the existing Classes, the purchase price, the method of determining the net
asset value, and the relative dividend rights of holders shall be as set forth
in the Trust's Registration Statement on Form N- 1A under the Securities Act of
1933 and/or the 1940 Act and as in effect at the time of issuing Shares of the
existing Classes.
All references to Shares in this Declaration shall be deemed
to be Shares of any or all Series or Classes as the context may require. The
Trust shall maintain separate and distinct records for each Series and hold and
account for the assets thereof separately from the other assets of the Trust or
of any other Series. A Series may issue any number of Shares or any Class
thereof and need not issue Shares. Each Share of a Series shall represent an
equal beneficial interest in the net assets of such Series. Each holder of
Shares of a Series or a Class thereof shall be entitled to receive his pro rata
share of all distributions made with respect to such Series or Class. Upon
redemption of his Shares, such Shareholder shall be paid solely out of the funds
and property of such Series. The Trustees may adopt and change the name of any
Series or Class.
Section 2. Shares. The beneficial interest in the Trust shall
be divided into transferable Shares of one or more separate and distinct Series
or Classes established by the Trustees. The number of Shares of each Series and
Class is unlimited and each Share shall have no par value per Share or such
other amount as the Trustees may establish. All Shares issued hereunder shall be
fully paid and nonassessable. Shareholders shall have no preemptive or other
right to subscribe to any additional Shares or other securities issued by the
Trust. The Trustees shall have full power and authority, in their sole
discretion and without obtaining Shareholder approval, to issue original or
additional Shares at such times and on such terms and conditions as they deem
appropriate; to issue fractional Shares and Shares held in the treasury; to
establish and to change in any manner Shares of any Series or Classes with such
preferences, terms of conversion, voting powers, rights and privileges as the
Trustees may determine (but the Trustees may not change Outstanding Shares in a
manner materially adverse to the Shareholders of such Shares); to divide or
combine the Shares of any Series or Classes into a greater or lesser number;
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to classify or reclassify any unissued Shares of any Series or Classes into one
or more Series or Classes of Shares; to abolish any one or more Series or
Classes of Shares; to issue Shares to acquire other assets (including assets
subject to, and in connection with, the assumption of liabilities) and
businesses; and to take such other action with respect to the Shares as the
Trustees may deem desirable. Shares held in the treasury shall not confer any
voting rights on the Trustees and shall not be entitled to any dividends or
other distributions declared with respect to the Shares.
Section 3. Investment in the Trust. The Trustees shall accept
investments in any Series or Class from such persons and on such terms as they
may from time to time authorize. At the Trustees' discretion, such investments,
subject to applicable law, may be in the form of cash or securities in which
that Series is authorized to invest, valued as provided in Article VI, Section
3. Investments in a Series shall be credited to each Shareholder's account in
the form of full Shares at the Net Asset Value per Share next determined after
the investment is received or accepted as may be determined by the Trustees;
provided, however, that the Trustees may, in their sole discretion, (a) impose a
sales charge upon investments in any Series or Class, (b) issue fractional
Shares, (c) determine the Net Asset Value per Share of the initial capital
contribution or (d) authorize the issuance of Shares at a price other than Net
Asset Value to the extent permitted by the 1940 Act or any rule, order or
interpretation of the Commission thereunder. The Trustees shall have the right
to refuse to accept investments in any Series at any time without any cause or
reason therefor whatsoever.
Section 4. Assets and Liabilities of Series. All consideration
received by the Trust for the issue or sale of Shares of a particular Series,
together with all assets in which such consideration is invested or reinvested,
all income, earnings, profits, and proceeds thereof (including any proceeds
derived from the sale, exchange or liquidation of such assets, and any funds or
payments derived from any reinvestment of such proceeds in whatever form the
same may be), shall be held and accounted for separately from the assets of
every other Series and are referred to as "assets belonging to" that Series. The
assets belonging to a Series shall belong only to that Series for all purposes,
and to no other Series, subject only to the rights of creditors of that Series.
Any assets, income, earnings, profits, and proceeds thereof, funds, or payments
which are not readily identifiable as belonging to any particular Series shall
be allocated by the Trustees between and among one or more Series as the
Trustees deem fair and equitable. Each such allocation shall be conclusive and
binding upon the Shareholders of all Series for all purposes, and such assets,
earnings, income, profits or funds, or payments and proceeds thereof shall be
referred to as assets belonging to that Series. The assets belonging to a Series
shall be so recorded upon the books of the Trust, and shall be held by the
Trustees in trust for the benefit of the Shareholders of that Series. The assets
belonging to a Series shall be charged with the liabilities of that Series and
all expenses, costs, charges and reserves attributable to that Series, except
that liabilities and expenses allocated solely to a particular Class shall be
borne by that Class. Any general liabilities, expenses, costs, charges or
reserves of the Trust which are not readily identifiable as belonging to any
particular Series or Class shall be allocated and charged by the Trustees
between or among any one or more of the Series or Classes in such manner as the
Trustees deem fair and equitable. Each such allocation shall be conclusive and
binding upon the Shareholders of all Series or Classes for all purposes.
Without limiting the foregoing, but subject to the right of
the Trustees to allocate general liabilities, expenses, costs, charges or
reserves as herein provided, the debts, liabilities, obligations and expenses
incurred, contracted for or otherwise existing with respect to a particular
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Series shall be enforceable against the assets of such Series only, and not
against the assets of any other Series. Notice of this contractual limitation on
liabilities among Series may, in the Trustees' discretion, be set forth in the
certificate of trust of the Trust (whether originally or by amendment) as filed
or to be filed in the Office of the Secretary of State of the State of Delaware
pursuant to the Delaware Act, and upon the giving of such notice in the
certificate of trust, the statutory provisions of Section 3804 of the Delaware
Act relating to limitations on liabilities among Series (and the statutory
effect under Section 3804 of setting forth such notice in the certificate of
trust) shall become applicable to the Trust and each Series. Any person
extending credit to, contracting with or having any claim against any Series may
look only to the assets of that Series to satisfy or enforce any debt, with
respect to that Series. No Shareholder or former Shareholder of any Series shall
have a claim on or any right to any assets allocated or belonging to any other
Series.
Section 5. Ownership and Transfer of Shares. The Trust or a
transfer or similar agent for the Trust shall maintain a register containing the
names and addresses of the Shareholders of each Series and Class thereof, the
number of Shares of each Series and Class held by such Shareholders, and a
record of all Share transfers. The register shall be conclusive as to the
identity of Shareholders of record and the number of Shares held by them from
time to time. The Trustees may authorize the issuance of certificates
representing Shares and adopt rules governing their use. The Trustees may make
rules governing the transfer of Shares, whether or not represented by
certificates. Except as otherwise provided by the Trustees, Shares shall be
transferable on the books of the Trust only by the record holder thereof or by
his duly authorized agent upon delivery to the Trustees or the Trust's transfer
agent of a duly executed instrument of transfer, together with a Share
certificate if one is outstanding, and such evidence or the genuineness of each
such execution and authorization and of such other matters as may be required by
the Trustees. Upon such delivery, and subject to any further requirements
specified by the Trustees or contained in the By-laws, the transfer shall be
recorded on the books of the Trust. Until a transfer is so recorded, the
Shareholder of record of Shares shall be deemed to be the holder of such Shares
for all purposes hereunder and neither the Trustees nor the Trust, nor any
transfer agent or registrar or any officer, employee or agent of the Trust,
shall be affected by any notice of a proposed transfer.
Section 6. Status of Shares; Limitation of Shareholder
Liability. Shares shall be deemed to be personal property giving Shareholders
only the rights provided in this Declaration. Every Shareholder, by virtue of
having acquired a Share, shall be held expressly to have assented to and agreed
to be bound by the terms of this Declaration and to have become a party hereto.
No Shareholder shall be personally liable for the debts, liabilities,
obligations and expenses incurred by, contracted for, or otherwise existing with
respect to, the Trust or any Series. The death, incapacity, dissolution,
termination or bankruptcy of a Shareholder during the existence of the Trust
shall not operate to terminate the Trust, nor entitle the representative of any
such Shareholder to an accounting or to take any action in court or elsewhere
against the Trust or the Trustees, but entitles such representative only to the
rights of such Shareholder under this Trust. Ownership of Shares shall not
entitle the Shareholder to any title in or to the whole or any part of the Trust
Property or right to call for a partition or division of the same or for an
accounting, nor shall the ownership of Shares constitute the Shareholders as
partners. Neither the Trust nor the Trustees shall have any power to bind any
Shareholder personally or to demand payment from any Shareholder for anything,
other than as agreed by the Shareholder. Shareholders shall have the same
limitation of personal liability as is extended to shareholders of a private
corporation for profit incorporated in the State of Delaware. Every written
obligation of the Trust or any Series
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shall contain a statement to the effect that such obligation may only be
enforced against the assets of the appropriate Series or all Series; however,
the omission of such statement shall not operate to bind or create personal
liability for any Shareholder or Trustee.
ARTICLE VI
DISTRIBUTIONS AND REDEMPTIONS
Section 1. Distributions. The Trustees or a committee of one
or more Trustees and one or more officers may declare and pay dividends and
other distributions, including dividends on Shares of a particular Series and
other distributions from the assets belonging to that Series. No dividend or
distribution, including, without limitation, any distribution paid upon
termination of the Trust or of any Series (or Class) with respect to, nor any
redemption or repurchase of, the Shares of any Series (or Class) shall be
effected by the Trust other than from the assets held with respect to such
Series, nor shall any Shareholder of any particular Series otherwise have any
right or claim against the assets held with respect to any other Series except
to the extent that such Shareholder has such a right or claim hereunder as a
Shareholder of such other Series. The Trustees shall have full discretion to
determine which items shall be treated as income and which items as capital; and
each such determination and allocation shall be conclusive and binding upon the
Shareholders. The amount and payment of dividends or distributions and their
form, whether they are in cash, Shares or other Trust Property, shall be
determined by the Trustees. Dividends and other distributions may be paid
pursuant to a standing resolution adopted once or more often as the Trustees
determine. All dividends and other distributions on Shares of a particular
Series shall be distributed pro rata to the Shareholders of that Series in
proportion to the number of Shares of that Series they held on the record date
established for such payment, except that such dividends and distributions shall
appropriately reflect expenses allocated to a particular Class of such Series.
The Trustees may adopt and offer to Shareholders such dividend reinvestment
plans, cash dividend payout plans or similar plans as the Trustees deem
appropriate.
Section 2. Redemptions. Each Shareholder of a Series shall
have the right at such times as may be permitted by the Trustees to require the
Series to redeem all or any part of his Shares at a redemption price per Share
equal to the Net Asset Value per Share at such time as the Trustees shall have
prescribed by resolution, or, to the extent permitted by the 1940 Act, at such
other redemption price and at such times as the Trustees shall prescribe by
resolution. In the absence of such resolution, the redemption price per Share
shall be the Net Asset Value next determined after receipt by the Series of a
request for redemption in proper form less such charges as are determined by the
Trustees and described in the Trust's Registration Statement for that Series
under the Securities Act of 1933. The Trustees may specify conditions, prices,
and places of redemption, may specify binding requirements for the proper form
or forms of requests for redemption and may specify the amount of any deferred
sales charge to be withheld from redemption proceeds. Payment of the redemption
price may be wholly or partly in securities or other assets at the value of such
securities or assets used in such determination of Net Asset Value, or may be in
cash. Upon redemption, Shares may be reissued from time to time. The Trustees
may require Shareholders to redeem Shares for any reason under terms set by the
Trustees, including, but not limited to, the failure of a Shareholder to supply
a taxpayer identification number if required to do so, or to have the minimum
investment required, or to pay when due for the purchase of Shares issued to
him. To the extent permitted by law, the Trustees may retain the proceeds of any
redemption of Shares required by them for payment of amounts
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due and owing by a Shareholder to the Trust or any Series or Class or any
governmental authority. Notwithstanding the foregoing, the Trustees may postpone
payment of the redemption price and may suspend the right of the Shareholders to
require any Series or Class to redeem Shares during any period of time when and
to the extent permissible under the 1940 Act.
Section 3. Determination of Net Asset Value. The Trustees
shall cause the Net Asset Value of Shares of each Series or Class to be
determined from time to time in a manner consistent with applicable laws and
regulations. The Trustees may delegate the power and duty to determine Net Asset
Value per Share to one or more Trustees or officers of the Trust or to a
custodian, depository or other agent appointed for such purpose. The Net Asset
Value of Shares shall be determined separately for each Series or Class at such
times as may be prescribed by the Trustees or, in the absence of action by the
Trustees, as of the close of regular trading on the New York Stock Exchange on
each day for all or part of which such Exchange is open for unrestricted
trading.
Section 4. Suspension of Right of Redemption. If, as referred
to in Section 2 of this Article, the Trustees postpone payment of the redemption
price and suspend the right of Shareholders to redeem their Shares, such
suspension shall take effect at the time the Trustees shall specify, but not
later than the close of business on the business day next following the
declaration of suspension. Thereafter Shareholders shall have no right of
redemption or payment until the Trustees declare the end of the suspension. If
the right of redemption is suspended, a Shareholder may either withdraw his
request for redemption or receive payment based on the Net Asset Value per Share
next determined after the suspension terminates.
Section 5. Repurchase by Agreement. The Trust may repurchase
Shares directly, or through the Distributor or another agent designated for the
purpose, by agreement with the owner thereof at a price not exceeding the Net
Asset Value per Share determined as of the time when the purchase or contract of
purchase is made or the Net Asset Value as of any time which may be later
determined, provided payment is not made for the Shares prior to the time as of
which such Net Asset Value is determined.
ARTICLE VII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 1. Voting Powers. The Shareholders shall have power to
vote only with respect to (a) the election of Trustees as provided in Section 2
of this Article; (b) the removal of Trustees as provided in Article II, Section
3(d); (c) any investment advisory or management contract as provided in Article
VIII, Section 1; (d) any termination of the Trust as provided in Article IX,
Section 4; (e) the amendment of this Declaration to the extent and as provided
in Article X, Section 8; and (f) such additional matters relating to the Trust
as may be required or authorized by law, this Declaration, or the By-laws or any
registration of the Trust with the Commission or any State, or as the Trustees
may consider desirable.
On any matter submitted to a vote of the Shareholders, all Shares shall
be voted by individual Series or Class, except (a) when required by the 1940
Act, Shares shall be voted in the aggregate and not by individual Series or
Class, and (b) when the Trustees have determined that the matter affects the
interests of more than one Series or Class, then the Shareholders of all such
Series or Classes shall be entitled to vote thereon. As determined by the
Trustees without the
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<PAGE>
vote or consent of shareholders, on any matter submitted to a vote of
Shareholders either (i) each whole Share shall be entitled to one vote as to any
matter on which it is entitled to vote and each fractional Share shall be
entitled to a proportionate fractional vote or (ii) each dollar of net asset
value (number of Shares owned times net asset value per share of such Series or
Class, as applicable) shall be entitled to one vote on any matter on which such
Shares are entitled to vote and each fractional dollar amount shall be entitled
to a proportionate fractional vote. Without limiting the power of the Trustees
in any way to designate otherwise in accordance with the preceding sentence, the
Trustees hereby establish that each whole Share shall be entitled to one vote as
to any matter on which it is entitled to vote and each fractional Share shall be
entitled to a proportionate fractional vote. There shall be no cumulative voting
in the election of Trustees. Shares may be voted in person or by proxy or in any
manner provided for in the By-laws. The By-laws may provide that proxies may be
given by any electronic or telecommunications device or in any other manner, but
if a proposal by anyone other than the officers or Trustees is submitted to a
vote of the Shareholders of any Series or Class, or if there is a proxy contest
or proxy solicitation or proposal in opposition to any proposal by the officers
or Trustees, Shares may be voted only in person or by written proxy. Until
Shares of a Series are issued, as to that Series the Trustees may exercise all
rights of Shareholders and may take any action required or permitted to be taken
by Shareholders by law, this Declaration or the By-laws. Meetings of
Shareholders shall be called and notice thereof and record dates therefor shall
be given and set as provided in the By-laws.
Section 2. Quorum; Required Vote. One-third of the Outstanding
Shares of each Series or Class, or one-third of the Outstanding Shares of the
Trust, entitled to vote in person or by proxy shall be a quorum for the
transaction of business at a Shareholders' meeting with respect to such Series
or Class, or with respect to the entire Trust, respectively. Any lesser number
shall be sufficient for adjournments. Any adjourned session of a Shareholders'
meeting may be held within a reasonable time without further notice. Except when
a larger vote is required by law, this Declaration or the By-laws, a majority of
the Shares voting at a Shareholders' meeting in person or by proxy shall decide
any matters to be voted upon with respect to the entire Trust and a plurality of
such Shares shall elect a Trustee; provided, that if this Declaration or
applicable law permits or requires that Shares be voted on any matter by
individual Series or Classes, then a majority of the Shares of that Series or
Class (or, if required by law, a majority of the Shares outstanding and entitled
to vote of that Series or Class) voting at a Shareholders' meeting in person or
by proxy on the matter shall decide that matter insofar as that Series or Class
is concerned. Shareholders may act as to the Trust or any Series or Class by the
written consent of a majority (or such other amount as may be required by
applicable law) of the Outstanding Shares of the Trust or of such Series or
Class, as the case may be.
Section 3. Record Dates. For the purpose of determining the
Shareholders of any Series (or Class) who are entitled to receive payment of any
dividend or of any other distribution, the Trustees may from time to time fix a
date, which shall be before the date for the payment of such dividend or such
other payment, as the record date for determining the Shareholders of such
Series (or Class) having the right to receive such dividend or distribution.
Without fixing a record date, the Trustees may for distribution purposes close
the register or transfer books for one or more Series (or Classes) any time
prior to the payment of a distribution. Nothing in this Section shall be
construed as precluding the Trustees from setting different record dates for
different Series (or Classes).
Section 4. Additional Provisions. The By-laws may include
further provisions for Shareholders' votes and meetings and related matters.
<PAGE>
ARTICLE VIII
EXPENSES OF THE TRUST AND SERIES
Section 1. Payment of Expenses by the Trust. Subject to
Article V, Section 4, the Trust or a particular Series shall pay, or shall
reimburse the Trustees from the assets belonging to all Series or the particular
Series, for their expenses (or the expenses of a Class of such Series) and
disbursements, including, but not limited to, interest charges, taxes, brokerage
fees and commissions; expenses of issue, repurchase and redemption of Shares;
certain insurance premiums; applicable fees, interest charges and expenses of
third parties, including the Trust's investment advisers, managers,
administrators, distributors, custodians, transfer agents and fund accountants;
fees of pricing, interest, dividend, credit and other reporting services; costs
of membership in trade associations; telecommunications expenses; funds
transmission expenses; auditing, legal and compliance expenses; costs of forming
the Trust and its Series and maintaining its existence; costs of preparing and
printing the prospectuses of the Trust and each Series, statements of additional
information and Shareholder reports and delivering them to Shareholders;
expenses of meetings of Shareholders and proxy solicitations therefor; costs of
maintaining books and accounts; costs of reproduction, stationery and supplies;
fees and expenses of the Trustees; compensation of the Trust's officers and
employees and costs of other personnel performing services for the Trust or any
Series; costs of Trustee meetings; Commission registration fees and related
expenses; state or foreign securities laws registration fees and related
expenses; and for such non- recurring items as may arise, including litigation
to which the Trust or a Series (or a Trustee or officer of the Trust acting as
such) is a party, and for all losses and liabilities by them incurred in
administering the Trust. The Trustees shall have a lien on the assets belonging
to the appropriate Series, or in the case of an expense allocable to more than
one Series, on the assets of each such Series, prior to any rights or interests
of the Shareholders thereto, for the reimbursement to them of such expenses,
disbursements, losses and liabilities.
Section 2. Payment of Expenses by Shareholders. The Trustees
shall have the power, as frequently as they may determine, to cause each
Shareholder, or each Shareholder of any particular Series, to pay directly, in
advance or arrears, for charges of the Trust's custodian or transfer,
shareholder servicing or similar agent, an amount fixed from time to time by the
Trustees, by setting off such charges due from such Shareholder from declared
but unpaid dividends owed such Shareholder and/or by reducing the number of
Shares in the account of such Shareholder by that number of full and/or
fractional Shares which represents the outstanding amount of such charges due
from such Shareholder.
ARTICLE IX
MISCELLANEOUS
Section 1. Trust Not a Partnership. This Declaration creates a
trust and not a partnership. No Trustee shall have any power to bind personally
either the Trust's officers or any Shareholder.
Section 2. Trustee Action. The exercise by the Trustees of
their powers and discretion hereunder in good faith and with reasonable care
under the circumstances then prevailing shall be
<PAGE>
binding upon everyone interested. Subject to the provisions of Article IV, the
Trustees shall not be liable for errors of judgment or mistakes of fact or law.
Section 3. Record Dates. The Trustees may fix in advance a
date up to ninety (90) days before the date of any Shareholders' meeting, or the
date for the payment of any dividends or other distributions, or the date for
the allotment of rights, or the date when any change or conversion or exchange
of Shares shall go into effect as a record date for the determination of the
Shareholders entitled to notice of, and to vote at, any such meeting, or
entitled to receive payment of such dividend or other distribution, or to
receive any such allotment of rights, or to exercise such rights in respect of
any such change, conversion or exchange of Shares.
Section 4. Termination of the Trust. (a) This Trust shall have
perpetual existence. Subject to the vote of a majority of the Shares outstanding
and entitled to vote of the Trust or of each Series to be affected, the Trustees
may
(i) sell and convey all or substantially all of the assets of
all Series or any affected Series to another Series or to
another entity which is an open-end investment company as
defined in the 1940 Act, or is a series thereof, for adequate
consideration, which may include the assumption of all
outstanding obligations, taxes and other liabilities, accrued
or contingent, of the Trust or any affected Series, and which
may include shares of or interests in such Series, entity, or
series thereof; or
(ii) at any time sell and convert into money all or
substantially all of the assets of all Series or any affected
Series.
Upon making reasonable provision for the payment of all known liabilities of all
Series or any affected Series in either (i) or (ii), by such assumption or
otherwise, the Trustees shall distribute the remaining proceeds or assets (as
the case may be) ratably among the Shareholders of all Series or any affected
Series; however, the payment to any particular Class of such Series may be
reduced by any fees, expenses or charges allocated to that Class.
(b) The Trustees may take any of the actions specified in subsection
(a) (i) and (ii) above without obtaining the vote of a majority of the Shares
Outstanding and entitled to vote of the Trust or any Series if a majority of the
Trustees determines that the continuation of the Trust or Series is not in the
best interests of the Trust, such Series, or their respective Shareholders as a
result of factors or events adversely affecting the ability of the Trust or such
Series to conduct its business and operations in an economically viable manner.
Such factors and events may include the inability of the Trust or a Series to
maintain its assets at an appropriate size, changes in laws or regulations
governing the Trust or the Series or affecting assets of the type in which the
Trust or Series invests, or economic developments or trends having a significant
adverse impact on the business or operations of the Trust or such Series.
(c) Upon completion of the distribution of the remaining proceeds or
assets pursuant to subsection (a), the Trust or affected Series shall terminate
and the Trustees and the Trust shall be discharged of any and all further
liabilities and duties hereunder with respect thereto and the right, title and
interest of all parties therein shall be canceled and discharged. Upon
termination of the Trust, following completion of winding up of its business,
the Trustees shall cause a certificate of
<PAGE>
cancellation of the Trust's certificate of trust to be filed in accordance with
the Delaware Act, which certificate of cancellation may be signed by any one
Trustee.
Section 5. Reorganization. (a) Notwithstanding anything else herein, to
change the Trust's form or place of organization the Trustees may, without
Shareholder approval unless such approval is required by applicable law, (i)
cause the Trust to merge or consolidate with or into one or more entities, if
the surviving or resulting entity is the Trust or another open-end management
investment company under the 1940 Act, or a series thereof, that will succeed to
or assume the Trust's registration under the 1940 Act, (ii) cause the Shares to
be exchanged under or pursuant to any state or federal statute to the extent
permitted by law, or (iii) cause the Trust to incorporate under the laws of
Delaware or any other U.S. jurisdiction. Any agreement of merger or
consolidation or certificate of merger may be signed by a majority of Trustees
and facsimile signatures conveyed by electronic or telecommunication means shall
be valid.
(b) Pursuant to and in accordance with the provisions of Section
3815(f) of the Delaware Act, an agreement of merger or consolidation approved by
the Trustees in accordance with this Section 5 may effect any amendment to the
Declaration or effect the adoption of a new trust instrument of the Trust if it
is the surviving or resulting trust in the merger or consolidation.
(c) The Trustees may create one or more business trusts to which all or
any part of the assets, liabilities, profits or losses of the Trust or any
Series or Class thereof may be transferred and may provide for the conversion of
Shares in the Trust or any Series or Class thereof into beneficial interests in
any such newly created trust or trusts or any series or classes thereof.
Section 6. Declaration of Trust. The original or a copy of this
Declaration of Trust and of each amendment hereto or Declaration of Trust
supplemental shall be kept at the office of the Trust where it may be inspected
by any Shareholder. Anyone dealing with the Trust may rely on a certificate by a
Trustee or an officer of the Trust as to the authenticity of the Declaration of
Trust or any such amendments or supplements and as to any matters in connection
with the Trust. The masculine gender herein shall include the feminine and
neuter genders. Headings herein are for convenience only and shall not affect
the construction of this Declaration of Trust. This Declaration of Trust may be
executed in any number of counterparts, each of which shall be deemed an
original.
Section 7. Applicable Law. This Declaration and the Trust created
hereunder are governed by and construed and administered according to the
Delaware Act and the applicable laws of the State of Delaware; provided,
however, that there shall not be applicable to the Trust, the Trustees or this
Declaration of Trust (a) the provisions of Section 3540 of Title 12 of the
Delaware Code, or (b) any provisions of the laws (statutory or common) of the
State of Delaware (other than the Delaware Act) pertaining to trusts which
relate to or regulate (i) the filing with any court or governmental body or
agency of trustee accounts or schedules of trustee fees and charges, (ii)
affirmative requirements to post bonds for trustees, officers, agents or
employees of a trust, (iii) the necessity for obtaining court or other
governmental approval concerning the acquisition, holding or disposition of real
or personal property, (iv) fees or other sums payable to trustees, officers,
agents or employees of a trust, (v) the allocation of receipts and expenditures
to income or principal, (vi) restrictions or limitations on the permissible
nature, amount or concentration of trust investments or requirements relating to
the titling, storage or other manner of holding of trust assets, or (vii) the
establishment of fiduciary or other standards of responsibilities or limitations
on the acts or powers of trustees, which are inconsistent with the limitations
or
<PAGE>
liabilities or authorities and powers of the Trustees set forth or referenced in
this Declaration. The Trust shall be of the type commonly called a Delaware
business trust, and, without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust under
Delaware law. The Trust specifically reserves the right to exercise any of the
powers or privileges afforded to trusts or actions that may be engaged in by
trusts under the Delaware Act, and the absence of a specific reference herein to
any such power, privilege or action shall not imply that the Trust may not
exercise such power or privilege or take such actions.
Section 8. Amendments. The Trustees may, without any Shareholder vote,
amend or otherwise supplement this Declaration by making an amendment, a
Declaration of Trust supplemental hereto or an amended and restated trust
instrument; provided, that Shareholders shall have the right to vote on any
amendment (a) which would affect the voting rights of Shareholders granted in
Article VII, Section l, (b) to this Section 8, (c) required to be approved by
Shareholders by law or by the Trust's registration statement(s) filed with the
Commission, and (d) submitted to them by the Trustees in their discretion. Any
amendment submitted to Shareholders which the Trustees determine would affect
the Shareholders of any Series shall be authorized by vote of the Shareholders
of such Series and no vote shall be required of Shareholders of a Series not
affected. Notwithstanding anything else herein, any amendment to Article IV
which would have the effect of reducing the indemnification and other rights
provided thereby to Trustees, officers, employees, and agents of the Trust or to
Shareholders or former Shareholders, and any repeal or amendment of this
sentence shall each require the affirmative vote of the holders of two-thirds of
the Outstanding Shares of the Trust entitled to vote thereon.
Section 9. Derivative Actions. In addition to the requirements set
forth in Section 3816 of the Delaware Act, a Shareholder may bring a derivative
action on behalf of the Trust only if the following conditions are met:
(a) Shareholders eligible to bring such derivative action under the
Delaware Act who hold at least 10% of the Outstanding Shares of the Trust, or
10% of the Outstanding Shares of the Series or Class to which such action
relates, shall join in the request for the Trustees to commence such action; and
(b) the Trustees must be afforded a reasonable amount of time to
consider such shareholder request and to investigate the basis of such claim.
The Trustees shall be entitled to retain counsel or other advisers in
considering the merits of the request and shall require an undertaking by the
Shareholders making such request to reimburse the Trust for the expense of any
such advisers in the event that the Trustees determine not to bring such action.
Section 10. Fiscal Year. The fiscal year of the Trust shall end on a
specified date as set forth in the By-laws. The Trustees may change the fiscal
year of the Trust without Shareholder approval.
Section 11. Severability. The provisions of this Declaration are
severable. If the Trustees determine, with the advice of counsel, that any
provision hereof conflicts with the 1940 Act, the regulated investment company
provisions of the Internal Revenue Code or with other applicable laws and
regulations, the conflicting provision shall be deemed never to have constituted
a part of this Declaration; provided, however, that such determination shall not
affect any of the remaining provisions of this Declaration or render invalid or
improper any action taken or omitted prior to such determination. If any
provision hereof shall be held invalid or unenforceable in any
<PAGE>
jurisdiction, such invalidity or unenforceability shall attach only to such
provision only in such jurisdiction and shall not affect any other provision of
this Declaration.
IN WITNESS WHEREOF, the undersigned has executed this instrument as of
the date first written above.
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John F. Cogan, Jr.
As Trustee and not individually
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Richard H. Egdahl
As Trustee and not individually
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Margaret B. W. Graham
As Trustee and not individually
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John W. Kendrick
As Trustee and not individually
- ----------------------------------------
Marguerite A. Piret
As Trustee and not individually
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David D. Tripple
As Trustee and not individually
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Stephen K. West
As Trustee and not individually
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John Winthrop
As Trustee and not individually
The address of each Trustee is c/o
Pioneer Micro-Cap Fund, 60 State
Street, Boston, Massachusetts 02109
CERTIFICATE OF TRUST
THIS Certificate of Trust of Pioneer Micro-Cap Fund (the "Trust"),
dated December 4, 1996, is being duly executed and filed by John F. Cogan,
Jr., as trustee, to form a business trust under the Delaware Business Trust Act
(12 Del. C. ss. 3801, et seq.).
1. Name. The name of the business trust formed hereby is Pioneer
Micro-Cap Fund.
2. Registered Agent. The business address of the registered
office of the Trust in the State of Delaware is 1201 North Market Street in the
City of Wilmington, County of New Castle, 19801. The name of the Trust's
registered agent at such address is Delaware Corporation Organizers, Inc.
3. Effective Date. This Certificate of Trust shall be effective
upon the date and time of filing.
4. Series Trust. Notice is hereby given that pursuant to Section
3804 of the Delaware Business Trust Act, the debts, liabilities, obligations and
expenses incurred, contracted for or otherwise existing with respect to a
particular series of the Trust shall be enforceable against the assets of such
series only and not against the assets of the Trust generally. The Trust is a
registered investment company under the Investment Company Act of 1940, as
amended.
IN WITNESS WHEREOF, the undersigned, being the Trustee of the Trust,
has executed this Certificate of Trust as of the date first above-written.
____________________________
John F. Cogan, Jr.
As Trustee and not individually
BY-LAWS
OF
PIONEER MICRO-CAP FUND
ARTICLE I
DEFINITIONS
All capitalized terms have the respective meanings given them in the
Agreement and Declaration of Trust of Pioneer Micro-Cap Fund dated December 3,
1996, as amended or restated from time to time.
ARTICLE II
OFFICES
Section 1. Principal Office. Until changed by the Trustees, the principal office
of the Trust shall be in Boston, Massachusetts.
Section 2. Other Offices. The Trust may have offices in such other places
without as well as within the State of Delaware as the Trustees may from time to
time determine.
Section 3. Registered Office and Registered Agent. The Board of Trustees shall
establish a registered office in the State of Delaware and shall appoint as the
Trust's registered agent for service of process in the State of Delaware an
individual resident of the State of Delaware or a Delaware corporation or a
corporation authorized to transact business in the State of Delaware; in each
case the business office of such registered agent for service of process shall
be identical with the registered Delaware office of the Trust.
ARTICLE III
SHAREHOLDERS
Section 1. Meetings. Meetings of the Shareholders of the Trust or a Series or
Class thereof shall be held as provided in the Declaration of Trust at such
place within or without the State of Delaware as the Trustees shall designate.
The holders of one-third of the Outstanding Shares of the Trust or a Series or
Class thereof present in person or by proxy and entitled to vote shall
constitute a quorum at any meeting of the Shareholders of the Trust or a Series
or Class thereof.
Section 2. Notice of Meetings. Notice of all meetings of the Shareholders,
stating the time, place and purposes of the meeting, shall be given by the
Trustees by mail or telegraphic or electronic means to each Shareholder at his
address as recorded on the register of the Trust mailed at least (10) days and
not more than ninety (90) days before the meeting, provided,
<PAGE>
however, that notice of a meeting need not be given to a Shareholder to whom
such notice need not be given under the proxy rules of the Commission under the
1940 Act and the Securities Exchange Act of 1934, as amended. Only the business
stated in the notice of the meeting shall be considered at such meeting. Any
adjourned meeting may be held as adjourned without further notice. No notice
need be given to any Shareholder who shall have failed to inform the Trust of
his current address or if a written waiver of notice, executed before or after
the meeting by the Shareholder or his attorney thereunto authorized, is filed
with the records of the meeting.
Section 3. Record Date for Meetings and Other Purposes. For the purpose of
determining the Shareholders who are entitled to notice of and to vote at any
meeting, or to participate in any distribution, or for the purpose of any other
action, the Trustees may from time to time close the transfer books for such
period, not exceeding thirty (30) days, as the Trustees may determine; or
without closing the transfer books the Trustees may fix a date not more than
ninety (90) days prior to the date of any meeting of Shareholders or
distribution or other action as a record date for the determination of the
persons to be treated as Shareholders of record for such purposes, except for
dividend payments which shall be governed by the Declaration of Trust.
Section 4. Proxies. At any meeting of Shareholders, any holder of Shares
entitled to vote thereat may vote by proxy, provided that no proxy shall be
voted at any meeting unless it shall have been placed on file with the
Secretary, or with such other officer or agent of the Trust as the Secretary may
direct, for verification prior to the time at which such vote shall be taken. A
proxy shall be deemed signed if the shareholder's name is placed on the proxy
(whether by manual signature, typewriting, telegraphic transmission, facsimile,
other electronic means or otherwise) by the Shareholder or the Shareholder's
attorney-in-fact. Proxies may be given by any electronic or telecommunication
device except as otherwise provided in the Declaration of Trust. Proxies may be
solicited in the name of one or more Trustees or one or more of the officers of
the Trust. Only Shareholders of record shall be entitled to vote. As determined
by the Trustees without the vote or consent of Shareholders, on any matter
submitted to a vote of Shareholders, either (i) each whole Share shall be
entitled to one vote as to any matter on which it is entitled to vote and each
fractional Share shall be entitled to a proportionate fractional vote or (ii)
each dollar of net asset value (number of Shares owned times net asset value per
Share of such Series or Class, as applicable) shall be entitled to one vote on
any matter on which such Shares are entitled to vote and each fractional dollar
amount shall be entitled to a proportionate fractional vote. Without limiting
their power to designate otherwise in accordance with the preceding sentence,
the Trustees have established in the Declaration of Trust that each whole share
shall be entitled to one vote as to any matter on which it is entitled by the
Declaration of Trust to vote and fractional shares shall be entitled to a
proportionate fractional vote. When any Share is held jointly by several
persons, any one of them may vote at any meeting in person or by proxy in
respect of such Share, but if more than one of them shall be present at such
meeting in person or by proxy, and such joint owners or their proxies so present
disagree as to any vote to be cast, such vote shall not be received in respect
of such Share. A proxy purporting to be executed by or on behalf of a
Shareholder shall be deemed valid unless challenged at or prior to its exercise,
and the burden of proving invalidity shall rest on the challenger. If the holder
of any such share is a minor or a person of unsound mind, and subject to
guardianship or the legal control of any other person as regards the charge or
management of such Share, he may vote by his guardian or such other person
appointed or having such control, and such vote may be given in person or by
proxy.
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<PAGE>
Section 5. Abstentions and Broker Non-Votes. Outstanding Shares represented in
person or by proxy (including Shares which abstain or do not vote with respect
to one or more of any proposals presented for Shareholder approval) will be
counted for purposes of determining whether a quorum is present at a meeting.
Abstentions will be treated as Shares that are present and entitled to vote for
purposes of determining the number of Shares that are present and entitled to
vote with respect to any particular proposal, but will not be counted as a vote
in favor of such proposal. If a broker or nominee holding Shares in "street
name" indicates on the proxy that it does not have discretionary authority to
vote as to a particular proposal, those Shares will not be considered as present
and entitled to vote with respect to such proposal.
Section 6. Inspection of Records. The records of the Trust shall be open to
inspection by Shareholders to the same extent as is permitted shareholders of a
Delaware business corporation.
Section 7. Action without Meeting. Any action which may be taken by Shareholders
may be taken without a meeting if a majority of Outstanding Shares entitled to
vote on the matter (or such larger proportion thereof as shall be required by
law) consent to the action in writing and the written consents are filed with
the records of the meetings of Shareholders. Such consents shall be treated for
all purposes as a vote taken at a meeting of Shareholders.
ARTICLE IV
TRUSTEES
Section 1. Meetings of the Trustees. The Trustees may in their discretion
provide for regular or stated meetings of the Trustees. Notice of regular or
stated meetings need not be given. Meetings of the Trustees other than regular
or stated meetings shall be held whenever called by the President, the Chairman
or by any one of the Trustees, at the time being in office. Notice of the time
and place of each meeting other than regular or stated meetings shall be given
by the Secretary or an Assistant Secretary or by the officer or Trustee calling
the meeting and shall be mailed to each Trustee at least two days before the
meeting, or shall be given by telephone, cable, wireless, facsimile or other
electronic mechanism to each Trustee at his business address, or personally
delivered to him at least one day before the meeting. Such notice may, however,
be waived by any Trustee. Notice of a meeting need not be given to any Trustee
if a written waiver of notice, executed by him before or after the meeting, is
filed with the records of the meeting, or to any Trustee who attends the meeting
without protesting prior thereto or at its commencement the lack of notice to
him. A notice or waiver of notice need not specify the purpose of any meeting.
The Trustees may meet by means of a telephone conference circuit or similar
communications equipment by means of which all persons participating in the
meeting can hear each other at the same time and participation by such means
shall be deemed to have been held at a place designated by the Trustees at the
meeting. Participation in a telephone conference meeting shall constitute
presence in person at such meeting. Any action required or permitted to be taken
at any meeting of the Trustees may be taken by the Trustees without a meeting if
a majority of the Trustees consent to the action in writing and the written
consents are filed with the records of the Trustees' meetings. Such consents
shall be treated as a vote for all purposes.
-3-
<PAGE>
Section 2. Quorum and Manner of Acting. A majority of the Trustees shall be
present in person at any regular or special meeting of the Trustees in order to
constitute a quorum for the transaction of business at such meeting and (except
as otherwise required by law, the Declaration of Trust or these By-laws) the act
of a majority of the Trustees present at any such meeting, at which a quorum is
present, shall be the act of the Trustees. In the absence of a quorum, a
majority of the Trustees present may adjourn the meeting from time to time until
a quorum shall be present. Notice of an adjourned meeting need not be given.
ARTICLE V
COMMITTEES
Section 1. Executive and Other Committees. The Trustees by vote of a majority of
all the Trustees may elect from their own number an Executive Committee to
consist of not less than three (3) members to hold office at the pleasure of the
Trustees, which shall have the power to conduct the current and ordinary
business of the Trust while the Trustees are not in session, including the
purchase and sale of securities and the designation of securities to be
delivered upon redemption of Shares of the Trust or a Series thereof, and such
other powers of the Trustees as the Trustees may delegate to them, from time to
time, except those powers which by law, the Declaration of Trust or these
By-laws they are prohibited from delegating. The Trustees may also elect from
their own number other Committees from time to time; the number composing such
Committees, the powers conferred upon the same (subject to the same limitations
as with respect to the Executive Committee) and the term of membership on such
Committees to be determined by the Trustees. The Trustees may designate a
chairman of any such Committee. In the absence of such designation the Committee
may elect its own Chairman.
Section 2. Meetings, Quorum and Manner of Acting. The Trustees may (1) provide
for stated meetings of any Committee, (2) specify the manner of calling and
notice required for special meetings of any Committee, (3) specify the number of
members of a Committee required to constitute a quorum and the number of members
of a Committee required to exercise specified powers delegated to such
Committee, (4) authorize the making of decisions to exercise specified powers by
written assent of the requisite number of members of a Committee without a
meeting, and (5) authorize the members of a Committee to meet by means of a
telephone conference circuit.
The Executive Committee shall keep regular minutes of its meetings and records
of decisions taken without a meeting and cause them to be recorded in a book
designated for that purpose and kept in the office of the Trust.
ARTICLE VI
OFFICERS
Section 1. General Provisions. The officers of the Trust shall be a President, a
Treasurer and a Secretary, who shall be elected by the Trustees. The Trustees
may elect or appoint such other officers or agents as the business of the Trust
may require, including one or more Vice
-4-
<PAGE>
Presidents, one or more Assistant Secretaries, and one or more Assistant
Treasurers. The Trustees may delegate to any officer or committee the power to
appoint any subordinate officers or agents.
Section 2. Term of Office and Qualifications. Except as otherwise provided by
law, the Declaration of Trust or these By-laws, the President, the Treasurer,
the Secretary and any other officer shall each hold office at the pleasure of
the Board of Trustees or until his successor shall have been duly elected and
qualified. The Secretary and the Treasurer may be the same person. A Vice
President and the Treasurer or a Vice President and the Secretary may be the
same person, but the offices of Vice President, Secretary and Treasurer shall
not be held by the same person. The President shall hold no other office,
however, the President may also serve as Chairman. Except as above provided, any
two offices may be held by the same person. Any officer may be but none need be
a Trustee or Shareholder.
Section 3. Removal. The Trustees, at any regular or special meeting of the
Trustees, may remove any officer with or without cause, by a vote of a majority
of the Trustees then in office. Any officer or agent appointed by an officer or
committee may be removed with or without cause by such appointing officer or
committee.
Section 4. Powers and Duties of the Chairman. The Trustees may, but need not,
appoint from among their number a Chairman. When present he shall preside at the
meetings of the Shareholders and of the Trustees. He may call meetings of the
Trustees and of any committee thereof whenever he deems it necessary. He shall
be an executive officer of the Trust and shall have, with the President, general
supervision over the business and policies of the Trust, subject to the
limitations imposed upon the President, as provided in Section 5 of this Article
VI.
Section 5. Powers and Duties of the President. The President may call meetings
of the Trustees and of any Committee thereof when he deems it necessary and
shall preside at all meetings of the Shareholders. Subject to the control of the
Trustees and to the control of any Committees of the Trustees, within their
respective spheres, as provided by the Trustees, he shall at all times exercise
a general supervision and direction over the affairs of the Trust. He shall have
the power to employ attorneys and counsel for the Trust or any Series or Class
thereof and to employ such subordinate officers, agents, clerks and employees as
he may find necessary to transact the business of the Trust or any Series or
Class thereof. He shall also have the power to grant, issue, execute or sign
such powers of attorney, proxies or other documents as may be deemed advisable
or necessary in furtherance of the interests of the Trust or any Series thereof.
The President shall have such other powers and duties, as from time to time may
be conferred upon or assigned to him by the Trustees.
Section 6. Powers and Duties of Vice Presidents. In the absence or disability of
the President, the Vice President or, if there be more than one Vice President,
any Vice President designated by the Trustees, shall perform all the duties and
may exercise any of the powers of the President, subject to the control of the
Trustees. Each Vice President shall perform such other duties as may be assigned
to him from time to time by the Trustees and the President.
Section 7. Powers and Duties of the Treasurer. The Treasurer shall be the
principal financial and accounting officer of the Trust. He shall deliver all
funds of the Trust or any Series or Class thereof
-5-
<PAGE>
which may come into his hands to such Custodian as the Trustees may employ. He
shall render a statement of condition of the finances of the Trust or any Series
or Class thereof to the Trustees as often as they shall require the same and he
shall in general perform all the duties incident to the office of a Treasurer
and such other duties as from time to time may be assigned to him by the
Trustees. The Treasurer shall give a bond for the faithful discharge of his
duties, if required so to do by the Trustees, in such sum and with such surety
or sureties as the Trustees shall require.
Section 8. Powers and Duties of the Secretary. The Secretary shall keep the
minutes of all meetings of the Trustees and of the Shareholders in proper books
provided for that purpose; he shall have custody of the seal of the Trust; he
shall have charge of the Share transfer books, lists and records unless the same
are in the charge of a transfer agent. He shall attend to the giving and serving
of all notices by the Trust in accordance with the provisions of these By-laws
and as required by law; and subject to these By-laws, he shall in general
perform all duties incident to the office of Secretary and such other duties as
from time to time may be assigned to him by the Trustees.
Section 9. Powers and Duties of Assistant Officers. In the absence or disability
of the Treasurer, any officer designated by the Trustees shall perform all the
duties, and may exercise any of the powers, of the Treasurer. Each officer shall
perform such other duties as from time to time may be assigned to him by the
Trustees. Each officer performing the duties and exercising the powers of the
Treasurer, if any, and any Assistant Treasurer, shall give a bond for the
faithful discharge of his duties, if required so to do by the Trustees, in such
sum and with such surety or sureties as the Trustees shall require.
Section 10. Powers and Duties of Assistant Secretaries. In the absence or
disability of the Secretary, any Assistant Secretary designated by the Trustees
shall perform all the duties, and may exercise any of the powers, of the
Secretary. Each Assistant Secretary shall perform such other duties as from time
to time may be assigned to him by the Trustees.
Section 11. Compensation of Officers and Trustees and Members of the Advisory
Board. Subject to any applicable provisions of the Declaration of Trust, the
compensation of the officers and Trustees and members of an advisory board shall
be fixed from time to time by the Trustees or, in the case of officers, by any
Committee or officer upon whom such power may be conferred by the Trustees. No
officer shall be prevented from receiving such compensation as such officer by
reason of the fact that he is also a Trustee.
ARTICLE VII
FISCAL YEAR
The fiscal year of the Trust shall begin on the first day of December
in each year and shall end on the last day of November in each year, provided,
however, that the Trustees may from time to time change the fiscal year. The
taxable year of each Series of the Trust shall be as determined by the Trustees
from time to time.
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<PAGE>
ARTICLE VIII
SEAL
The Trustees may adopt a seal which shall be in such form and shall have such
inscription thereon as the Trustees may from time to time prescribe.
ARTICLE IX
SUFFICIENCY AND WAIVERS OF NOTICE
Whenever any notice whatever is required to be given by law, the Declaration of
Trust or these By-laws, a waiver thereof in writing, signed by the person or
persons entitled to said notice, whether before or after the time stated
therein, shall be deemed equivalent thereto. A notice shall be deemed to have
been sent by mail, telegraph, cable, wireless, facsimile or other electronic
means for the purposes of these By-laws when it has been delivered to a
representative of any company holding itself out as capable of sending notice by
such means with instructions that it be so sent.
ARTICLE X
AMENDMENTS
These By-laws, or any of them, may be altered, amended or repealed, or new
By-laws may be adopted by (a) vote of a majority of the Outstanding Shares
voting in person or by proxy at a meeting of Shareholders and entitled to vote
or (b) by the Trustees, provided, however, that no By-law may be amended,
adopted or repealed by the Trustees if such amendment, adoption or repeal
requires, pursuant to law, the Declaration of Trust or these By-laws, a vote of
the Shareholders.
END OF BY-LAWS
-7-
PIONEER MICRO-CAP FUND
ORGANIZED AS A BUSINESS TRUST UNDER THE
LAWS OF THE STATE OF DELAWARE
SEE REVERSE SIDE FOR CERTAIN DEFINITIONS
This is to certify that
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF BENEFICIAL INTEREST, WITHOUT PAR
VALUE, OF THE TRUST OR SERIES OF THE TRUST IDENTIFIED ABOVE.
transferable only on the books of the Trust, by the holder hereof, in person or
by duly authorized attorney, upon surrender of this Certificate properly
endorsed. The aforesaid holder is entitled to require the Trust to purchase all
or any part of the Shares represented by this Certificate at net asset value, as
more fully set forth on the reverse of this Certificate. This Certificate is not
valid until countersigned by the Transfer Agent.
IN WITNESS WHEREOF, the said Trust has caused this Certificate to be
signed by its duly authorized officers and its seal to be hereunto affixed.
Dated:
Countersigned:
PIONEERING SERVICES CORPORATION
Transfer Agent
Authorized Officer
Treasurer President
<PAGE>
REVERSE
THE REGISTERED HOLDER OF THIS CERTIFICATE IS ENTITLED TO ALL THE
RIGHTS, INTEREST AND PRIVILEGES OF A SHAREHOLDER AS PROVIDED BY THE ARTICLES OF
INCORPORATION AND BY-LAWS OF THE FUND, AS AMENDED, WHICH ARE INCORPORATED BY
REFERENCE HEREIN. IN PARTICULAR, THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
TRANSFERABLE BY THE HOLDER, IN PERSON OR BY HIS DULY AUTHORIZED ATTORNEY, BUT
ONLY ON SURRENDER OF THIS CERTIFICATE PROPERLY ENDORSED AND WHEN THE TRANSFER IS
MADE ON THE BOOKS OF THE FUND.
THE HOLDER OF THIS CERTIFICATE, AS PROVIDED IN SAID ARTICLES OF
INCORPORATION AND BY-LAWS, AS AMENDED, SHALL NOT IN ANY WISE BE PERSONALLY
LIABLE FOR ANY DEBT, OBLIGATION OR ACT OF THE FUND.
ANY SHAREHOLDER DESIRING TO DISPOSE OF HIS SHARES MAY DEPOSIT HIS
CERTIFICATE, DULY ENDORSED IN BLANK OR ACCOMPANIED BY AN INSTRUMENT OF TRANSFER
EXECUTED IN BLANK, AT THE OFFICE OF PIONEERING SERVICES CORPORATION OR ANY
SUCCESSOR TRANSFER AGENT OF THE FUND, TOGETHER WITH AN IRREVOCABLE OFFER IN
WRITING TO SELL THE SHARES REPRESENTED THEREBY AT THE NET ASSET VALUE THEREOF
AND THE FUND WILL THEREAFTER PURCHASE SAID SHARES FOR CASH AT NET ASSET VALUE.
THE COMPUTATION OF NET ASSET VALUE, THE LIMITATIONS UPON THE DATE OF PAYMENT AND
PROVISIONS DEALING WITH SUSPENSION OF THIS RIGHT IN CERTAIN EMERGENCIES ARE
FULLY DESCRIBED IN SAID ARTICLES OF INCORPORATION AND BY-LAWS, AS AMENDED.
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME
AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
SIGNATURES MUST BE GUARANTEED IN ACCORDANCE WITH THE THEN CURRENT
PROSPECTUS OF THE FUND.
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with rights of survivorship UGMA/"state abbreviation"
- -- Uniform Gifts to Minors UTMA/"state abbreviation/age" -- Uniform Transfer to
Minors
Additional abbreviations that do not appear in the above list may also be used.
<PAGE>
For Value Received, ______________________ hereby sell, assign and transfer
unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
| |
| |
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF
ASSIGNEE)
Shares represented by the within Certificate, and do hereby irrevocably
constitute and appoint
Attorney to transfer the said shares on the books of the within named Fund with
full power of substitution in the premises.
Dated,
Owner
Signature of Co-Owner, if any
IMPORTANT: BEFORE SIGNING, READ AND COMPLY CAREFULLY WITH
NOTICE PRINTED ABOVE.
Signature(s) guaranteed by:
MANAGEMENT CONTRACT
THIS AGREEMENT dated this 1st day of March, 1997 between Pioneer
Micro-Cap Fund, a Delaware business trust (the "Trust"), and Pioneering
Management Corporation, a Delaware corporation (the "Manager").
W I T N E S S E T H
WHEREAS, the Trust is registered as an open-end, diversified,
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and has filed with the Securities and Exchange
Commission (the "Commission") a registration statement (the "Registration
Statement") for the purpose of registering its shares for public offering under
the Securities Act of 1933, as amended (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. (a) 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 Securities
and Exchange 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.
(b) 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 entities.
(c) The Manager will maintain all books and records with respect to
the Trust's securities transactions required by sub-paragraphs (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.
<PAGE>
2. (a) Except as otherwise provided herein, the Manager, at its own
expense, shall furnish to the Trust office space in the offices of the Manager
or in such other place as may be agreed upon from time to time, and all
necessary office facilities, equipment and personnel for managing the 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.
(b) The Manager shall pay directly or reimburse the Trust for: (i)
the compensation (if any) of the Trustees who are affiliated with, or
"interested persons" (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.
(c) The Trust shall assume and shall pay: (i) charges and expenses
for fund accounting, pricing and appraisal services and related overhead,
including, to the extent such services are performed by personnel of the
Manager, or its affiliates, office space and facilities and personnel
compensation, training and benefits; (ii) the charges and expenses of auditors;
(iii) the charges and expenses of any custodian, transfer agent, plan agent,
dividend disbursing agent and registrar appointed by the Trust with respect to
the 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 the Commission,
state or blue sky securities agencies and foreign countries, including the
preparation of Prospectuses and Statements of Additional Information for filing
with the Commission; (vii) all expenses of shareholders' and Trustees' meetings
and of preparing, printing and distributing prospectuses, notices, proxy
statements and all reports to shareholders and to governmental agencies; (viii)
charges and expenses of legal counsel to the Trust 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), The Pioneer Group, Inc. or Pioneer Trusts
Distributor, Inc.; (xi) the cost of preparing and printing share certificates;
and (xii) interest on borrowed money, if any.
(d) In addition to the expenses described in Section 2(c) 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.
3. (a) The Trust shall pay to the Manager, as compensation for the
Manager's services and expenses assumed hereunder, a fee at the rate of 1.10%
per annum of the Trust's average daily net assets. The agreement set forth in
the proviso to the preceding sentence shall not survive the merger,
consolidation or other business combination of the Trust with one or more other
entities unless the Trust is the surviving entity. The management fee payable
hereunder shall be computed daily and paid monthly in arrears. In the event of
termination of this Agreement, the fee provided in this Section shall be
computed on the basis of the period ending on the last business day on which
this Agreement is in effect subject to a pro rata adjustment based on the number
of days elapsed in the current month as a percentage of the total number of days
in such month.
(b) If the operating expenses of the Trust in any year exceed the
limits set by state securities laws or regulations in states in which shares of
the Trust are sold, the amount payable to the Manager under subsection (a) above
will be reduced (but not below $0), and the Manager shall make other
arrangements concerning expenses but, in each instance, only as and to
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<PAGE>
the extent required by such laws or regulations. If amounts have already been
advanced to the Manager under this Agreement, the Manager will return such
amounts to the Trust to the extent required by the preceding sentence.
(c) In addition to the foregoing, the Manager may from time to time
agree not to impose all or a portion of its fee otherwise payable hereunder (in
advance of the time such fee or a portion thereof would otherwise accrue) and/or
undertake to pay or reimburse the Trust for all or a portion of its expenses not
otherwise required to be borne or reimbursed by the Manager. Any such fee
reduction or undertaking may be discontinued or modified by the Manager at any
time.
4. 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, at a meeting of Trustees called for the purpose of
voting on such approval and by the affirmative vote of a "majority of the
outstanding voting securities" (as defined in the 1940 Act) of the Trust. The
authority given to the Manager in Sections 1 through 6 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.
5. 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.
6. (a) Nothing in this Agreement will in any way limit or restrict the
Manager or any of its officers, Trustees, or employees from buying, selling or
trading in any securities for its or their own accounts or other accounts. The
Manager may act as an investment advisor to any other person, firm or
corporation, and may perform management and any other services for any other
person, association, corporation, firm or other entity pursuant to any contract
or otherwise, and take any action or do any thing in connection therewith or
related thereto; and no such performance of management or other services or
taking of any such action or doing of any such thing shall be in any manner
restricted or otherwise affected by any aspect of any relationship of the
Manager to or with the Trust or deemed to violate or give rise to any duty or
obligation of the Manager to the Trust except as otherwise imposed by law. The
Trust recognizes that 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.
(b) In connection with purchases or sales of securities for
the account of the Trust, neither the Manager nor any of its Trustees, 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
-3-
<PAGE>
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.
(c) 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, to the extent permitted by applicable laws and regulations, may
aggregate the securities to be sold or purchased in order to obtain the best
execution and lower brokerage commissions, if any. In such event, allocation of
the securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Manager in the manner it considers to be the
most equitable and consistent with its fiduciary obligations to the Trust and to
such clients.
7. This Agreement shall become effective on the date hereof and shall
remain in force until May 31, 1998 and from year to year thereafter, but only so
long as its continuance is approved annually by a vote of the Trustees of the
Trust voting in person, including a majority of its Trustees who are not parties
to this Agreement or "interested persons" (as defined in the 1940 Act) of any
such parties, at a meeting of Trustees called for the purpose of voting on such
approval or by a vote of a "majority of the outstanding voting securities" (as
defined in the 1940 Act) of the Trust, subject to the right of the Trust and the
Manager to terminate this contract as provided in Section 8 hereof.
8. 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 its outstanding voting securities" (as defined in the 1940 Act)
and the giving of 60 days' written notice to the other party.
9. 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.
10. 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.
11. 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 or any series thereof.
12. This Agreement states the entire agreement of the parties hereto,
and is intended to be the complete and exclusive statement of the terms hereof.
It may not be added to or changed orally, and may not be modified or rescinded
except by a writing signed by the parties hereto and in accordance with the 1940
Act, when applicable.
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<PAGE>
13. This Agreement and all performance hereunder shall be governed by
and construed in accordance with the laws of The Commonwealth of Massachusetts.
14. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms or provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction.
15. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers and their seal to be hereto affixed
as of the day and year first above written.
ATTEST: PIONEER MICRO-CAP FUND
________________________ ________________________
Joseph P. Barri John F. Cogan, Jr.
Secretary Chairman and President
ATTEST: PIONEERING MANAGEMENT
CORPORATION
________________________ ________________________
Joseph P. Barri David D. Tripple
Secretary President
UNDERWRITING AGREEMENT
THIS UNDERWRITING AGREEMENT, dated this 1st day of March, 1997, by and
between Pioneer Micro-Cap Fund, a Delaware business trust ("Pioneer"), and
Pioneer Funds Distributor, Inc., a Massachusetts corporation (the
"Underwriter").
W I T N E S S E T H
WHEREAS, Pioneer is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and has filed a registration statement (the "Registration
Statement") with the Securities and Exchange Commission (the "Commission") for
the purpose of registering shares of beneficial interest for public offering
under the Securities Act of 1933, as amended;
WHEREAS, the Underwriter engages in the purchase and sale of securities
both as a broker and a dealer and is registered as a broker-dealer with the
Commission and is a member in good standing of the National Association of
Securities Dealers, Inc. (the "NASD");
WHEREAS, the parties hereto deem it mutually advantageous that the
Underwriter should act as Principal Underwriter, as defined in the 1940 Act, for
the sale to the public of the shares of beneficial interest of the securities
portfolio of each series of Pioneer which the Trustees may establish from time
to time (individually, a "Portfolio" and collectively, the "Portfolios"); and
NOW, THEREFORE, in consideration of the mutual covenants and benefits
set forth herein, Pioneer and the Underwriter do hereby agree as follows:
1. Pioneer does hereby grant to the Underwriter the right and option to
purchase shares of beneficial interest of each class of each Portfolio of
Pioneer (the "Shares") for sale to investors either directly or indirectly
through other broker-dealers. The Underwriter is not required to purchase any
specified number of Shares, but will purchase from Pioneer only a sufficient
number of Shares as may be necessary to fill unconditional orders received from
time to time by the Underwriter from investors and dealers.
2. The Underwriter shall offer Shares to the public at an offering
price based upon the net asset value of the Shares, to be calculated for each
class of shares as described in the Registration Statement, including the
Prospectus, filed with the Commission and in effect at the time of the offering,
plus sales charges as approved by the Underwriter and the Trustees of Pioneer
and as further outlined in Pioneer's Prospectus. The offering price shall be
subject to any provisions set forth in the Prospectus from time to time with
respect thereto, including, without limitation, rights of accumulation, letters
of intention, exchangeability of shares, reinstatement privileges, net asset
value purchases by certain persons and reinvestments of dividends and capital
gain distributions.
<PAGE>
3. In the case of all Shares sold to investors through other
broker-dealers, a portion of applicable sales charges will be reallowed to such
broker-dealers who are members of the NASD or, in the case of certain sales by
banks or certain sales to foreign nationals, to brokers or dealers exempt from
registration with the Commission. The concession reallowed to broker-dealers
shall be set forth in a written sales agreement and shall be generally the same
for broker-dealers providing comparable levels of sales and service.
4. This Agreement shall terminate on any anniversary hereof if its
terms and renewal have not been approved by a majority vote of the Trustees of
Pioneer voting in person, including a majority of its Trustees who are not
"interested persons" of the Trust and who have no direct or indirect financial
interest in the operation of the Underwriting Agreement (the "Qualified
Trustees"), at a meeting of Trustees called for the purpose of voting on such
approval. This Agreement may also be terminated at any time, without payment of
any penalty, by Pioneer on 60 days' written notice to the Underwriter, or by the
Underwriter upon similar notice to Pioneer. This Agreement may also be
terminated by a party upon five (5) days' written notice to the other party in
the event that the Commission has issued an order or obtained an injunction or
other court order suspending effectiveness of the Registration Statement
covering these Shares of Pioneer. Finally, this Agreement may also be terminated
by Pioneer upon five (5) days' written notice to the Underwriter provided either
of the following events has occurred: (i) the NASD has expelled the Underwriter
or suspended its membership in that organization; or (ii) the qualification,
registration, license or right of the Underwriter to sell Shares in a particular
state has been suspended or cancelled in a state in which sales of the Shares of
Pioneer during the most recent 12 month period exceeded 10% of all Shares of
Pioneer sold by the Underwriter during such period.
5. The compensation for the services of the Underwriter as a principal
underwriter under this Agreement shall be (i) that part of the sales charge
which is retained by the Underwriter after allowance of discounts to dealers as
set forth in the Registration Statement, including the Prospectus, filed with
the Commission and in effect at the time of the offering, as amended, and (ii)
those amounts payable to the Underwriter as reimbursement of expenses pursuant
to any distribution plan for Pioneer which may be in effect. Nothing contained
herein shall relieve Pioneer of any obligation under its management contract or
any other contract with any affiliate of the Underwriter.
6. The parties to this Agreement acknowledge and agree that all
liabilities arising hereunder, whether direct or indirect, of any nature
whatsoever, including without limitation, liabilities arising in connection with
any agreement of Pioneer or its Trustees as set forth herein to indemnify any
party to this Agreement or any other person, if any, shall be satisfied out of
the assets of Pioneer and that no Trustee, officer or holder of shares of
beneficial interest of Pioneer shall be personally liable for any of the
foregoing liabilities. Pioneer's Agreement and Declaration of Trust, as amended
from time to time, is on file in the Office of the Secretary of State of the
State of Delaware. The Declaration of Trust describes in detail the respective
-2-
<PAGE>
responsibilities and limitations on liability of the Trustees, officers, and
holders of Shares of beneficial interest.
7. This Agreement shall automatically terminate in the event of its
assignment (as that term is defined in the 1940 Act).
8. In the event of any dispute between the parties, this Agreement
shall be construed according to the laws of The Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their duly authorized officers and their seal to be hereto
affixed as of the day and year first above written.
ATTEST: PIONEER MICRO-CAP FUND
_____________________________ _____________________________
Joseph P. Barri John F. Cogan, Jr.
Secretary President
ATTEST: PIONEER FUNDS DISTRIBUTOR, INC.
_____________________________ _____________________________
Joseph P. Barri Robert L. Butler
Clerk President
PIONEER FUNDS DISTRIBUTOR, INC.
60 State Street
Boston, MA 02109
(617) 742-7825
SALES AGREEMENT
Gentlemen:
Pioneer Funds Distributor, Inc. (PFD), acts as principal underwriter, as
defined in the Investment Company Act of 1940, for the registered investment
companies (the "Funds") listed on Appendix A attached (as amended from time to
time by PFD.) Acting as a principal, PFD offers to sell shares of the Funds
subject to the conditions set forth in this agreement and subsequent amendments
thereto.
1. Shares purchased from PFD for sale to the public shall be offered and
sold at the price or prices, and on the terms and conditions, set forth in the
currently effective prospectus of the Funds, as amended or supplemented from
time to time (the "Prospectus" or "Prospectuses"). In the sale of such shares to
the public you shall act as dealer for your own account or as agent for your
customer and in no transaction shall you have any authority to act or hold
yourself out as agent for PFD, any of the Funds, the Funds' Custodians, the
Funds' Transfer agent, or any other party, and nothing in this agreement shall
constitute you a partner, employee or agent of ours or give you any authority to
act for PFD. Neither PFD nor the funds shall be liable for any of your acts or
obligations as a broker-dealer under this agreement. Nothing herein shall be
construed to prohibit your acting as agent for one or both customers in the sale
of shares by one customer to another and charging such customer(s) a reasonable
commission.
2. Shares purchased from PFD for sale to the public shall be purchased
only to cover orders previously received by you from your customers. Shares
purchased for your own bona fide investment shall not be reoffered or sold
except to the applicable Fund or to PFD. PFD also agrees to purchase shares only
for investment or to cover orders received.
3. If you purchase shares from your customers, you agree to pay such
customers not less than the redemption price in effect on the date of purchase,
as defined in the prospectus of the applicable Fund. Sales of shares at prices
reflecting a discount, concession, commission or other reallowance shall be made
only to registered broker-dealers which are members of the National Association
of Securities Dealers Inc. (NASD) and who also have entered into sales
agreements with PFD.
4. Only unconditional orders for a designated number of shares or dollar
amount of investment shall be accepted. Procedures relating to handling orders
shall be conveyed to you from time to time. All orders are subject to acceptance
or rejection by PFD in our sole discretion.
5. If any shares sold to or through you under the terms of this agreement
are repurchased by PFD or by the issuer or are tendered for redemption within
seven business days after the date of our confirmation of the original purchase
by you, we both agree to pay to the Fund all commissions on such shares.
6. Sales by you to the public shall earn a commission computed as a
percentage of the applicable offering price and which varies with the size and
nature of each such purchase. The terms and conditions affecting the applicable
offering prices on shares sold with a front-end sales charge , including
features such as combined purchase, rights of accumulation, Letters of Intention
and net asset value purchases, are described in the prospectuses. The schedules
of commissions generally payable with respect to sales of the Funds are outlined
on Appendix A to this agreement. Commission checks for less than $1 will not be
issued.
PFD may, from time to time, offer additional commissions or bonuses on
sales by you or your representatives without otherwise revising this agreement.
Any such additional commissions or bonuses shall take effect in accordance with
the terms and conditions contained in written notification to you.
7. Remittance of the net amount due for shares purchased from PFD shall
be made payable to Pioneering Services Corporation (PSC) Agent for the
Underwriter, in New York or Boston funds, within three days of our confirmation
of sale to you, or within such shorter time as specified by the rules of the
NASD or of a registered clearing agent through which the transaction is settled.
Payments made to PSC should be sent to Post Office Box 9014, Boston, MA 02205
(or wired to an account designated by PSC), along with your transfer
instructions on the appropriate copy of our confirmation of sale to you. If such
payment is not received by PSC, we reserve the right to liquidate the shares
purchased for your account and risk. Promptly upon receipt of payment, shares
sold to you shall be deposited by PSC to an account on the books of the Fund(s)
in accordance with your instructions. Certificates will not be issued unless
specifically requested and we reserve the right to levy a charge for issuance of
certificates.
8. You represent that you are and, at the time of purchasing any shares
of the Funds, will be registered as a broker-dealer with the US. Securities and
Exchange Commission (SEC) or are exempt from such registration; if required to
be registered as a broker-dealer you are a member in good standing of the NASD;
you are qualified to act as a broker-dealer in the states or jurisdictions in
which you intend to offer shares of the Funds; you will abide by all applicable
federal and state statutes and the rules of the NASD; and when making sales to
citizens or residents of foreign countries, that you will abide by all
applicable laws and regulations of that country. Expulsion or suspension from
the NASD or revocation or suspension of SEC registration shall act as an
immediate cancellation of this agreement.
9. No person is authorized to make any representations concerning shares
of any of the Funds except those contained in the then current Prospectus or
Statement of Additional Information for such Fund. In purchasing shares from PFD
you shall rely solely on the representations contained in such Prospectuses and
Statements of Additional Information.
10. Additional copies of the current prospectuses, Statements of
Additional Information (SAI), and other literature will be supplied in
reasonable quantities upon request.
<PAGE>
11. We reserve the right in our discretion to suspend sales or withdraw
the offering of shares of any Fund entirely. Either party hereto has the right
to cancel this agreement upon five days' written notice to the other party. We
reserve the right to amend this agreement at any time and you agree that an
order to purchase shares of any one of the Funds placed by you after notice of
such amendment has been sent to you shall constitute your agreement to any such
amendment.
12. All written communications to PFD should be sent to the above address.
All written communications to you will be sent to your address listed below.
13. This agreement shall become effective upon receipt by us of your
acceptance hereof and supersedes any prior agreement between us with respect to
the sales of Shares of any of the Funds.
14. This agreement shall be construed in accordance with the laws of
Massachusetts. The parties hereby agree that all disputes between us of whatever
subject matter, whether existing on the date hereof or arising hereafter, shall
be submitted to arbitration in accordance with the then current Code of
Arbitration Procedure of the NASD, the Uniform Arbitration Act or similar rules.
Arbitration shall take place in the city of Boston, Massachusetts. Any decision
that shall be made in such arbitration shall be final and binding and shall have
the same force and effect as a judgment made in a court of competent
jurisdiction.
15. You appoint the transfer agent for each Fund as your agent to execute
the purchase transactions of Shares of such Fund in accordance with the terms
and provisions of any account, program, plan or service established or used by
your customers and to confirm each purchase to your customers on your behalf,
except as modified in writing by the transfer agent, and you guarantee to us and
the Fund the legal capacity of your customers so purchasing such Shares and any
other person in whose name the Shares are to be registered.
PIONEER FUNDS DISTRIBUTOR, INC.
Date: ,
By:__________________________________
William A. Misata
Vice President
The undersigned hereby accepts the offer set forth in above letter.
By:__________________________________________________
Title:________________________________________________
RETAIN ONE COPY AND RETURN THE OTHER
<PAGE>
APPENDIX A
CLASS A
Schedule 1
<TABLE>
<CAPTION>
<S> <C> <C>
Pioneer Fund Pioneer Mid-Cap Fund* Pioneer Equity-Income Fund
Pioneer II Pioneer Gold Shares Pioneer Growth Shares
Pioneer International Growth Fund Pioneer Europe Fund Pioneer Real Estate Shares
Pioneer Capital Growth Fund Pioneer Emerging Markets Fund Pioneer Small Company Fund
Pioneer India Fund
Pioneer World Equity Fund
Sales Charge
as % of Public Broker/Dealer
Purchase Amount Offering Price Commission
Less than $ 50,000.......... 5.75 5.00%
$ 50,000 - 99,999.......... 4.50 4.00
100,000 - 249,999.......... 3.50 3.00
250,000 - 499,999.......... 2.50 2.00
500,000 - 999,999.......... 2.00 1.75
1,000,000 or more .......... none a) see below
Schedule 2
Pioneer Bond Fund Pioneer America Income Trust Pioneer Tax-Free Income Fund
Pioneer Income Fund
Sales Charge
as % of Public Broker/Dealer
Purchase Amount Offering Price Commission
Less than $100,000.......... 4.50 4.00%
$100,000 - 249,999.......... 3.50 3.00
250,000 - 499,000......... 2.50 2.00
500,000 - 999,999......... 2.00 1.75
1,000,000 or more .......... none a) see below
Schedule 3
Pioneer Intermediate Tax-Free Fund
Sales Charge
as % of Public Broker/Dealer
Purchase Amount Offering Price Commission
Less than $ 50,000.......... 3.50 3.00%
$ 50,000 - 99,999......... 3.00 2.50
100,000 - 499,999.......... 2.50 2.00
500,000 - 999,999.......... 2.00 1.75
1,000,000 or more .......... none a) see below
Schedule 4
Pioneer Short-Term Income Trust
Sales Charge
as % of Public Broker/Dealer
Purchase Amount Offering Price Commission
Less than $ 50,000.......... 2.50 2.00%
$ 50,000 - 99,999......... 2.00 1.75
100,000 - 249,999.......... 1.50 1.25
250,000 - 999,999.......... 1.00 1.00
1,000,000 or more .......... none a) see below
</TABLE>
a) Purchases of $1 million or more, and certain group plans, are not subject to
an initial sales charge. PFD may pay a commission to broker-dealers who initiate
and are responsible for such purchases at the following rate: for funds listed
on schedules 1 and 2 above, the rate is as follows: 1% on the first $5 million
invested, .50 of 1% on the next $45 million and .25 of 1% on the excess over 50
million. For funds listed on schedules 3 and 4 : .50 of 1% on purchases of $1
million to $5 million and .10 of 1% on the excess over $5 million. A one-year
prepaid service fee is included in this commission. 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. A contingent deferred sales charge will be payable on these
investments in the event of share redemption within 12 months following the
share purchase, at the rate of 1% on funds in schedules 1 and 2 ; and .50 of 1%
on funds in schedules 3 and 4, 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. For additional information about the broker-dealer
commission and contingent deferred sales charge applicable to these
transactions, refer to the Fund's prospectus.
PLEASE RETAIN THIS COPY
<PAGE>
Schedule 5
Pioneer Cash Reserves Fund Pioneer U.S. Government Money Fund
No Load
CLASS B
Schedule 1 Schedule 2 Schedule 3
---------- ---------- ----------
<TABLE>
<CAPTION>
<S> <C> <C>
Pioneer Fund Pioneer Intermediate Tax-Free Pioneer Short-Term
Pioneer II Fund Fund Income Trust
Pioneer Equity Income Fund
Pioneer Bond Fund
Pioneer Capital Growth Fund
Pioneer Europe Fund
Pioneer Gold Share
Pioneer America Income Trust
Pioneer Emerging Markets Fund
Pioneer India Fund
Pioneer Cash Reserves Fund
Pioneer Growth Shares
Pioneer Income Fund
Pioneer Tax-Free Income Fund
Pioneer Small Company Fund
Pioneer International Growth Fund
Pioneer Real Estate Shares
Pioneer Mid-Cap Fund*
Pioneer World Equity Fund
</TABLE>
Broker/Dealer
Commission 4.00% 3.00% 2.00%
- ----------
Year Since
Purchase CDSC% CDSC% CDSC%
First 4.0 3.0 2.0
Second 4.0 3.0 2.0
Third 3.0 2.0 1.0
Fourth 3.0 1.0 none
Fifth 2.0 none none
Sixth 1.0 none To A Class
Seventh none To A Class
Eigth none
Ninth To A Class
a)Dealer Commission includes a first year service fee equal to 0.25% of the
amount invested in all Class B shares.
CLASS C
<TABLE>
<CAPTION>
<S> <C> <C>
Pioneer America Income Trust Pioneer Bond Fund Pioneer Capital Growth Fund
Pioneer Cash Reserves Funds Pioneer Emerging Markets Fund Pioneer Equity-Income Fund
Pioneer Europe Fund Pioneer Gold Shares Pioneer Growth Shares
Pioneer Income Fund Pioneer Real Estate Shares Pioneer India Fund
Pioneer Intermediate Tax-Free Fund Pioneer Small Company Fund Pioneer Tax-Free Income Fund
Pioneer International Growth Fund Pioneer Mid-Cap Fund* Pioneer World Equity Fund
</TABLE>
a) 1% Payout to Broker
b) 1% CDSC for One Year
*formerly Pioneer Three Fund
<PAGE>
PIONEER FUNDS DISTRIBUTOR, INC.
60 State Street
Boston, MA 02109
(617) 742-7825
SUPPLEMENTAL SALES AND SERVICE AGREEMENT
You have entered into a Sales Agreement with Pioneer Funds Distributor, Inc.
("PFD") with respect to the Pioneer mutual funds for which PFD serves as
principal underwriter ("the Funds").
This agreement incorporates and supplements that agreement. In consideration of
your sales of shares of the Funds, for providing services to shareholders of the
Funds and of the Pioneer money market funds and assisting PFD and its affiliates
in providing such services, we are authorized to pay you certain service fees as
specified herein. Receipt by you of any such service fees is subject to the
terms and conditions contained in the Funds' prospectuses and/or specified
below, as may be amended from time to time.
1. You agree to cooperate as requested with programs that the Funds, PFD or
their affiliates provide to enhance shareholder service.
2. You agree to take an active role in providing such shareholder services as
processing purchase and redemption transactions and, where applicable, exchanges
and account transfers; establishing and maintaining shareholder accounts;
providing certain information and assistance with respect to the Funds;
responding to shareholder inquiries or advising us of such inquiries where
appropriate.
3., You agree to assign an active registered representative to each shareholder
account on your and our records and to reassign accounts when registered
representatives leave your firm. You also agree, with respect to accounts which
are held in nominee or "street" name, to provide such documentation and
verification that active representatives are assigned to all such accounts as
PFD may require from time to time.
4. You agree to pay to the registered representatives assigned to shareholder
accounts a share of any service fees paid to you pursuant to this agreement. You
also agree to instruct your representatives to regularly contact shareholders
whose accounts are assigned to them.
5. You acknowledge that service fee payments are subject to terms and conditions
set forth herein and in the Funds' prospectuses, Statements of Additional
Information and Plans of Distribution and that this agreement may be terminated
by either party at any time by written notice to the other. Any order to
purchase or sell shares received by PFD from you subsequent to the date of our
notification to you of an amendment of the Agreement shall be deemed to be your
acceptance of such an amendment.
6. You acknowledge that your continued participation in this agreement is
subject to your providing a level of support to PFD's marketing and shareholder
retention efforts that is deemed acceptable by PFD. Factors which may be
considered by PFD in this respect include, but are not limited to, the level of
shareholder redemptions, the level of assistance in disseminating shareholder
communications, reasonable access to your offices and/or representatives by PFD
wholesalers or other employees and whether your compensation system or
"preferential list" unduly discriminates against the sale of shares of the
Funds.
7. Service fees will generally be paid quarterly, at the rates and under the
conditions specified on schedule A hereto.
8. All communications to PFD should be sent to the above address. Any notice to
you shall be duly given if mailed or telegraphed to the address specified by you
below. This agreement, in conjunction with the Sales Agreement, describes the
complete understanding of the parties.
This agreement shall be construed under the laws of the Commonwealth of
Massachusetts.
Accepted: Execute this Agreement in duplicate
and return one ofthe duplicate originals to us.
By:___________________________
By:_________________________________________
Title:________________________ William A. Misata
Vice President
RETAIN ONE COPY AND RETURN THE OTHER
<PAGE>
SUPPLEMENTAL SALES AND SERVICE AGREEMENT
WITH PIONEER FUNDS DISTRIBUTOR, INC.
SCHEDULE A
1. Except as specified in Section 4 below, service fees on the aggregate
net asset value of each account assigned to you in Pioneer Fund, Pioneer II, and
Pioneer Mid-Cap Fund** will be paid at the rate of:
a. 0.15% annually on shares acquired prior to August 19, 1991.
b. 0.25% annually on shares acquired on or after August 19, 1991.
2. Except as specified in Section 4 below, service fees on the aggregate
net asset value of each account assigned to you in:
Pioneer Fund Pioneer II
Pioneer America Income Trust Pioneer International Growth Fund
Pioneer Bond Fund Pioneer Growth Shares
Pioneer Intermediate Tax-Free Fund Pioneer Real Estate Shares
Pioneer Europe Fund Pioneer Income Fund
Pioneer Capital Growth Fund Pioneer Tax-Free Income Fund
Pioneer Equity-Income Fund Pioneer Short-Term Income Trust
Pioneer Gold Shares Pioneer India Fund
Pioneer Emerging Markets Fund Pioneer Small Company Fund*
Pioneer World Equity Fund
will be paid at the rate of:
a. 0.15% annually if the shares are acquired on or after August 19, 1991,
as a result of an exchange from Pioneer Fund, Pioneer II, or Pioneer Mid-Cap
Fund** of shares owned prior to August 19, 1991.
b. 0.25% annually on all other shares.
3. Except as specified in Section 4 below, service fees will be paid at an
annual rate of 0.15% of the aggregate net asset value of each account assigned
to you in:
Pioneer Cash Reserves Fund
4. Exceptions -- Service fees will not be paid on accounts representing:
a. Purchases by you or your affiliates, employees or
representatives.
b Shares which were purchased at net asset value, except for sales
of the money market funds or sales on which you are paid a
commission and which are subject to the contingent deferred sales
charge described in the funds' prospectuses.
c. "House" accounts or any other accounts not assigned to an active
registered representative(s).
d. Accounts established in Pioneer Bond Fund prior to January 1,
1986.
e. Service fees of less than $50 per calendar quarter will not be
paid.
f. Pioneer reserves the right to reduce the service fee paid on
individual accounts of more than $10 million.
g. First year services fees on shares subject to a CDSC are at the
rate of 0.25% and are prepaid as part of the initial sales
commission.
5. Service fees on shares sold with a front-end sales charge normally
begin to be earned as soon as the transaction settles, unless specified
otherwise in the fund prospectus. Since the commission on shares sold with a
CDSC includes a prepaid one year service fee , periodic service fees on such
shares are paid beginning one year following the transaction.
6. Service Fees of 1% on class C shares will begin after first year.
* Service fees begin accruing January 1, 1996
** Formerly Pioneer Three Fund
AGREEMENT BETWEEN
BROWN BROTHERS HARRIMAN & CO.
AND
PIONEER MICRO-CAP FUND
<PAGE>
TABLE OF CONTENTS
<PAGE>
1. Employment of Custodian 1
2. Powers and Duties of the Custodian
with respect to Property of the Fund
held by the Custodian 1
A. Safekeeping 2
B. Manner of Holding Securities 2
C. Registered Name; Nominee 2
D. Purchases 2
E. Exchanges 4
F. Sales of Securities 4
G. Depositary Receipts 5
H. Exercise of Rights; Tender Offers 6
I. Stock Dividends, Rights, Etc. 6
J. Options 6
K. Borrowings 7
L. Demand Deposit Bank Accounts 7
M. Interest Bearing Call or Time Deposits 8
N. Foreign Exchange Transactions
and Futures Contracts 9
O. Stock Loans 10
P. Collections 10
Q. Dividends, Distributions and Redemptions 11
R. Proxies, Notices, Etc. 12
S. Nondiscretionary Details 12
T. Bills 13
U. Deposit of Fund Assets in Securities Systems 13
V. Other Transfers 15
W. Investment Limitations 15
X. Proper Instructions 16
Y. Segregated Account 17
3. Powers and Duties of the Custodian with
Respect to the Appointment of Subcustodians 18
4. Assistance by the Custodian as to Certain Matters 22
5. Powers and Duties of the Custodian with
Respect to its Role as Financial Agent 22
A. Records 22
B. Accounts 23
C. Access to Records 23
D. Disbursements 23
<PAGE>
6. Standard of Care and Related Matters 23
A. Liability of the Custodian with
Respect to Proper Instructions;
Evidence of Authority; Etc. 24
B. Liability of the Custodian with
Respect to Use of Securities System 25
C. Liability of the Custodian with
respect to Subcustodians 25
D. Standard of Care; Liability;
Indemnification 26
E. Reimbursement of Advances 28
F. Security for Obligations to Custodian 28
G. Appointment of Agents 29
H. Powers of Attorney 29
7. Compensation of the Custodian 29
8. Termination; Successor Custodian 29
9. Amendment 30
10. Governing Law 31
11. Notices 31
12. Binding Effect 31
13. Counterparts 32
<PAGE>
CUSTODIAN AGREEMENT
AGREEMENT made this December 3, 1996, between PIONEER MICRO-CAP FUND
(herein referred to as the "Fund") and Brown Brothers Harriman & Co. (the
"Custodian");
WITNESSETH: That in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
1. Employment of Custodian: The Fund hereby employs and appoints the
Custodian as a custodian for the term and subject to the provisions of this
Agreement. The Custodian shall not be under any duty or obligation to require
the Fund to deliver to it any securities or funds owned by the Fund and shall
have no responsibility or liability for or on account of securities or funds not
so delivered. The Fund will deposit with the Custodian copies of the Declaration
of Trust or Certificate of Incorporation and By-Laws (or comparable documents)
of the Fund and all amendments thereto, and copies of such votes and other
proceedings of the Fund as may be necessary for or convenient to the Custodian
in the performance of its duties.
2. Powers and Duties of the Custodian with respect to Property of the
Fund held by the Custodian: Except for securities and funds held by any
Subcustodians or held by the Custodian through a non-U.S. securities depository
appointed pursuant to the
-1-
<PAGE>
provisions of Section 3 hereof, the Custodian shall have and perform the
following powers and duties:
A. Safekeeping - To keep safely the securities and other assets of
the Fund that have been delivered to the Custodian and, on behalf of the Fund,
from time to time to receive delivery of securities for safekeeping.
B. Manner of Holding Securities - To hold securities of the Fund (1)
by physical possession of the share certificates or other instruments
representing such securities in registered or bearer form, or (2) in book-entry
form by a Securities System (as said term is defined in Section 2U).
C. Registered Name; Nominee - To hold registered securities of the
Fund (1) in the name or any nominee name of the Custodian or the Fund, or in the
name or any nominee name of any Agent appointed pursuant to Section 6F, or (2)
in street certificate form, so-called, and in any case with or without any
indication of fiduciary capacity, provided that securities are held in an
account of the Custodian containing only assets of the Fund or only assets held
as fiduciary or custodian for customers.
D. Purchases - Upon receipt of Proper Instructions, as defined in
Section X on Page 17, insofar as funds are available for the purpose, to pay for
and receive securities purchased for the account of the Fund, payment being made
only upon receipt of the securities (1) by the Custodian, or (2) by a clearing
corporation of a national securities exchange of which the Custodian is a
member, or (3) by a Securities System. However, (i)
-2-
<PAGE>
in the case of repurchase agreements entered into by the Fund, the Custodian (as
well as an Agent) may release funds to a Securities System or to a Subcustodian
prior to the receipt of advice from the Securities System or Subcustodian that
the securities underlying such repurchase agreement have been transferred by
book entry into the Account (as defined in Section 2U) of the Custodian (or such
Agent) maintained with such Securities System or Subcustodian, so long as such
payment instructions to the Securities System or Subcustodian include a
requirement that delivery is only against payment for securities, (ii) in the
case of foreign exchange contracts, options, time deposits, call account
deposits, currency deposits, and other deposits, contracts or options pursuant
to Sections 2J, 2L, 2M and 2N, the Custodian may make payment therefor without
receiving an instrument evidencing said deposit, contract or option so long as
such payment instructions detail specific securities to be acquired, and (iii)
in the case of securities in which payment for the security and receipt of the
instrument evidencing the security are under generally accepted trade practice
or the terms of the instrument representing the security expected to take place
in different locations or through separate parties, such as commercial paper
which is indexed to foreign currency exchange rates, derivatives and similar
securities, the Custodian may make payment for such securities prior to delivery
thereof in accordance with such generally accepted trade practice or the terms
of the instrument representing such security.
-3-
<PAGE>
E. Exchanges - Upon receipt of proper instructions, to exchange
securities held by it for the account of the Fund for other securities in
connection with any reorganization, recapitalization, split-up of shares, change
of par value, conversion or other event relating to the securities or the issuer
of such securities and to deposit any such securities in accordance with the
terms of any reorganization or protective plan. Without proper instructions, the
Custodian may surrender securities in temporary form for definitive securities,
may surrender securities for transfer into a name or nominee name as permitted
in Section 2C, and may surrender securities for a different number of
certificates or instruments representing the same number of shares or same
principal amount of indebtedness, provided the securities to be issued are to be
delivered to the Custodian, and further provided the Custodian shall at the time
of surrendering securities or instruments receive a receipt or other evidence of
ownership thereof.
F. Sales of Securities - Upon receipt of proper instructions, to make
delivery of securities which have been sold for the account of the Fund, but
only against payment therefor (1) in cash, by a certified check, bank cashier's
check, bank credit, or bank wire transfer, or (2) by credit to the account of
the Custodian with a clearing corporation of a national securities exchange of
which the Custodian is a member, or (3) by credit to the account of the
Custodian or an Agent of the Custodian with a Securities System; provided,
however, that (i)
-4-
<PAGE>
in the case of delivery of physical certificates or instruments representing
securities, the Custodian may make delivery to the broker buying the securities,
against receipt therefor, for examination in accordance with "street delivery"
custom, provided that the payment therefor is to be made to the Custodian (which
payment may be made by a broker's check) or that such securities are to be
returned to the Custodian, and (ii) in the case of securities referred to in
clause (iii) of the last sentence of Section 2D, the Custodian may make
settlement, including with respect to the form of payment, in accordance with
generally accepted trade practice relating to such securities or the terms of
the instrument representing said security.
G. Depositary Receipts - Upon receipt of proper instructions, to
instruct a Subcustodian or an Agent to surrender securities to the depositary
used by an issuer of American Depositary Receipts or International Depositary
Receipts (hereinafter collectively referred to as "ADRs") for such securities
against a written receipt therefor adequately describing such securities and
written evidence satisfactory to the Subcustodian or Agent that the depositary
has acknowledged receipt of instructions to issue with respect to such
securities ADRs in the name of the Custodian, or a nominee of the Custodian, for
delivery to the Custodian in Boston, Massachusetts, or at such other place as
the Custodian may from time to time designate.
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Upon receipt of proper instructions, to surrender ADRs to the issuer
thereof against a written receipt therefor adequately describing the ADRs
surrendered and written evidence satisfactory to the Custodian that the issuer
of the ADRs has acknowledged receipt of instructions to cause its depositary to
deliver the securities underlying such ADRs to a Subcustodian or an Agent.
H. Exercise of Rights; Tender Offers - Upon timely receipt of proper
instructions, to deliver to the issuer or trustee thereof, or to the agent of
either, warrants, puts, calls, rights or similar securities for the purpose of
being exercised or sold, provided that the new securities and cash, if any,
acquired by such action are to be delivered to the Custodian, and, upon receipt
of proper instructions, to deposit securities upon invitations for tenders of
securities, provided that the consideration is to be paid or delivered or the
tendered securities are to be returned to the Custodian.
I. Stock Dividends, Rights, Etc. - To receive and collect all stock
dividends, rights and other items of like nature; and to deal with the same
pursuant to proper instructions relative thereto.
J. Options - Upon receipt of proper instructions, to receive and
retain confirmations or other documents evidencing the purchase or writing of an
option on a security or securities index by the Fund; to deposit and maintain in
a segregated account, either physically or by book-entry in a Securities System,
securities subject to a covered call option written by
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the Fund; and to release and/or transfer such securities or other assets only in
accordance with the provisions of any agreement among the Fund, the Custodian
and; and to pay, release and/or transfer such securities, cash or other assets
in accordance with a broker-dealer relating to such securities or other assets a
notice or other communication evidencing the expiration, termination or exercise
of such covered option furnished by The Options Clearing Corporation, the
securities or options exchange on which such covered option is traded or such
other organization as may be responsible for handling such options transactions.
K. Borrowings - Upon receipt of proper instructions, to deliver
securities of the Fund to lenders or their agents as collateral for borrowings
effected by the Fund, provided that such borrowed money is payable to or upon
the Custodian's order as Custodian for the Fund.
L. Demand Deposit Bank Accounts - To open and operate an account or
accounts in the name of the Fund on the Custodian's books subject only to draft
or order by the Custodian. All funds received by the Custodian from or for the
account of the Fund shall be deposited in said account(s). The responsibilities
of the Custodian to the Fund for deposits accepted on the Custodian's books
shall be that of a U. S. bank for a similar deposit
If and when authorized by proper instructions the Custodian may open
and operate an additional account(s) in such other banks or trust companies as
may be designated by the Fund in such instructions (any such bank or trust
company so
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designated by the Fund being referred to hereafter as a "Banking Institution"),
provided that such account(s) (hereinafter collectively referred to as "demand
deposit bank accounts") shall be in the name of the Custodian for account of the
Fund and subject only to the Custodian's draft or order. Such demand deposit
accounts may be opened with Banking Institutions in the United States and in
other countries and may be denominated in either U. S. Dollars or other
currencies as the Fund may determine. All such deposits shall be deemed to be
portfolio securities of the Fund and accordingly the responsibility of the
Custodian therefore shall be the same as and no greater than the Custodian's
responsibility in respect of other portfolio securities of the Fund.
M. Interest Bearing Call or Time Deposits - To place interest bearing
fixed term and call deposits with such banks and in such amounts as the Fund may
authorize pursuant to proper instructions. Such deposits may be placed with the
Custodian or with Subcustodians or other Banking Institutions as the Fund may
determine. Deposits may be denominated in U. S. Dollars or other currencies and
need not be evidenced by the issuance or delivery of a certificate to the
Custodian, provided that the Custodian shall include in its records with respect
to the assets of the Fund appropriate notation as to the amount and currency of
each such deposit, the accepting Banking Institution and other appropriate
details, and shall retain such forms of advice or receipt evidencing the
deposit, if any, as may be forwarded to
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the Custodian by the Banking Institution. Such deposits, other than those placed
with the Custodian, shall be deemed portfolio securities of the Fund and the
responsibilities of the Custodian therefor shall be the same as those for demand
deposit bank accounts placed with other banks, as described in Section L of this
Agreement. The responsibility of the Custodian for such deposits accepted on the
Custodian's books shall be that of a U.S. bank for a similar deposit.
N. Foreign Exchange Transactions and Futures Contracts - Pursuant to
proper instructions, to enter into foreign exchange contracts or options to
purchase and sell foreign currencies for spot and future delivery on behalf and
for the account of the Fund. Such transactions may be undertaken by the
Custodian with such Banking Institutions, including the Custodian and
Subcustodian(s) as principals, as approved and authorized by the Fund. Foreign
exchange contracts and options other than those executed with the Custodian,
shall be deemed to be portfolio securities of the Fund and the responsibilities
of the Custodian therefor shall be the same as those for demand deposit bank
accounts placed with other banks as described in Section 2L of this agreement.
Upon receipt of proper instructions, to receive and retain confirmations
evidencing the purchase or sale of a futures contract or an option on a futures
contract by the Fund; to deposit and maintain in a segregated account, for the
benefit of any futures commission merchant or to pay to such futures commission
merchant, assets designated by the Fund as initial,
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maintenance or variation "margin" deposits intended to secure the Fund's
performance of its obligations under any futures contracts purchased or sold or
any options on futures contracts written by the Fund, in accordance with the
provisions of any agreement or agreements among any of the Fund, the Custodian
and such futures commission merchant, designated to comply with the rules of the
Commodity Futures Trading Commission and/or any contract market, or any similar
organization or organizations, regarding such margin deposits; and to release
and/or transfer assets in such margin accounts only in accordance with any such
agreements or rules.
0. Stock Loans - Upon receipt of proper instructions, to deliver
securities of the Fund, in connection with loans of securities by the Fund, to
the borrower thereof prior to receipt of the collateral, if any, for such
borrowing, provided that for stock loans secured by cash collateral the
Custodian's instructions to the Securities System require that the Securities
System may deliver the securities to the borrower thereof only upon receipt of
the collateral for such borrowing.
P. Collections - To collect, receive and deposit in said account or
accounts all income, payments of principal and other payments with respect to
the securities held hereunder, and in connection therewith to deliver the
certificates or other instruments representing the securities to the issuer
thereof or its agent when securities are called, redeemed, retired or otherwise
become payable; provided, that the payment is to be made
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in such form and manner and at such time, which may be after delivery by the
Custodian of the instrument representing the security, as is in accordance with
the terms of the instrument representing the security, or such proper
instructions as the Custodian may receive, or governmental regulations, the
rules of Securities Systems or other U.S. securities depositories and clearing
agencies or, with respect to securities referred to in clause (iii) of the last
sentence of Section 2D, in accordance with generally accepted trade practice;
(ii) to execute ownership and other certificates and affidavits for all federal
and state tax purposes in connection with receipt of income or other payments
with respect to securities of the Fund or in connection with transfer of
securities, and (iii) pursuant to proper instructions to take such other actions
with respect to collection or receipt of funds or transfer of securities which
involve an investment decision.
Q. Dividends, Distributions and Redemptions - Upon receipt of proper
instructions from the Fund, or upon receipt of instructions from the Fund's
shareholder servicing agent or agent with comparable duties (the "Shareholder
Servicing Agent") (given by such person or persons and in such manner on behalf
of the Shareholder Servicing Agent as the Fund shall have authorized), the
Custodian shall release funds or securities to the Shareholder Servicing Agent
or otherwise apply funds or securities, insofar as available, for the payment of
dividends or other distributions to Fund shareholders. Upon receipt of proper
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instructions from the Fund, or upon receipt of instructions from the Shareholder
Servicing Agent (given by such person or persons and in such manner on behalf of
the Shareholder Servicing Agent as the Fund shall have authorized), the
Custodian shall release funds or securities, insofar as available, to the
Shareholder Servicing Agent or as such Agent shall otherwise instruct for
payment to Fund shareholders who have delivered to such Agent a request for
repurchase or redemption of their shares of capital stock of the Fund.
R. Proxies, Notices, Etc. - Promptly to deliver or mail to the Fund
all forms of proxies and all notices of meetings and any other notices or
announcements affecting or relating to securities owned by the Fund that are
received by the Custodian, and upon receipt of proper instructions to execute
and deliver or cause its nominee to execute and deliver such proxies or other
authorizations as may be required. Neither the Custodian nor its nominee shall
vote upon any of such securities or execute any proxy to vote thereon or give
any consent or take any other action with respect thereto (except as otherwise
herein provided) unless ordered to do so by proper instructions.
S. Nondiscretionary Details - Without the necessity of express
authorization from the Fund, to attend to all nondiscretionary details in
connection with the sale, exchange, substitution, purchase, transfer or other
dealings with securities, funds or other property of the Fund held by the
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Custodian except as otherwise directed from time to time by the Directors or
Trustees of the Fund.
T. Bills - Upon receipt of proper instructions, to pay or cause to be
paid, insofar as funds are available for the purpose, bills, statements, or
other obligations of the Fund.
U. Deposit of Fund Assets in Securities Systems - The Custodian may
deposit and/or maintain securities owned by the Fund in (i) The Depository Trust
Company, (ii) any book-entry system as provided in Subpart 0 of Treasury
Circular No. 300, 31 CFR 306, Subpart B of 31 CFR Part 350, or the book-entry
regulations of federal agencies substantially in the form of Subpart 0, or (iii)
any other domestic clearing agency registered with the Securities and Exchange
Commission under Section 17A of the Securities Exchange Act of 1934 which acts
as a securities depository and whose use the Fund has previously approved in
writing (each of the foregoing being referred to in this Agreement as a
"Securities System"). Utilization of a Securities System shall be in accordance
with applicable Federal Reserve Board and Securities and Exchange Commission
rules and regulations, if any, and subject to the following provisions:
1) The Custodian may deposit and/or maintain Fund securities, either
directly or through one or more Agents appointed by the Custodian (provided that
any such agent shall be qualified to act as a custodian of the Fund pursuant to
the Investment Company Act of 1940 and the rules and regulations thereunder), in
a Securities System provided that such securities
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<PAGE>
are represented in an account ("Account") of the Custodian or such Agent in the
Securities System which shall not include any assets of the Custodian or Agent
other than assets held as a fiduciary, custodian, or otherwise for customers;
2) The records of the Custodian with respect to securities of the
Fund which are maintained in a Securities System shall identify by book-entry
those securities belonging to the Fund;
3) The Custodian shall pay for securities purchased for the account
of the Fund upon (i) receipt of advice from the Securities System that such
securities have been transferred to the Account, and (ii) the making of an entry
on the records of the Custodian to reflect such payment and transfer for the
account of the Fund. The Custodian shall transfer securities sold for the
account of the Fund upon (i) receipt of advice from the Securities System that
payment for such securities has been transferred to the Account, and (ii) the
making of an entry on the records of the Custodian to reflect such transfer and
payment for the account of the Fund. Copies of all advices from the Securities
System of transfers of securities for the account of the Fund shall identify the
Fund, be maintained for the Fund by the Custodian or an Agent as referred to
above, and be provided to the Fund at its request. The Custodian shall furnish
the Fund confirmation of each transfer to or from the account of the Fund in the
form of a written advice or notice and shall furnish to the Fund copies of daily
transaction sheets reflecting each day's
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<PAGE>
transactions in the Securities System for the account of the Fund on the next
business day;
4) The Custodian shall provide the Fund with any report obtained by
the Custodian or any Agent as referred to above on the Securities System's
accounting system, internal accounting control and procedures for safeguarding
securities deposited in the Securities System; and the Custodian and such Agents
shall send to the Fund such reports on their own systems of internal accounting
control as the Fund may reasonably request from time to time.
5) At the written request of the Fund, the Custodian will terminate
the use of any such Securities System on behalf of the Fund as promptly as
practicable.
V. Other Transfers - Upon receipt of proper instructions, to deliver
securities, funds and other property of the Fund to a Subcustodian or another
custodian of the Fund; and, upon receipt of proper instructions, to make such
other disposition of securities, funds or other property of the Fund in a manner
other than or for purposes other than as enumerated elsewhere in this Agreement,
provided that the instructions relating to such disposition shall include a
statement of the purpose for which the delivery is to be made, the amount of
securities to be delivered and the name of the person or persons to whom
delivery is to be made.
W. Investment Limitations - In performing its duties generally, and
more particularly in connection with the purchase, sale and exchange of
securities made by or for the Fund, the
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Custodian may assume unless and until notified in writing to the contrary that
proper instructions received by it are not in conflict with or in any way
contrary to any provisions of the Fund's Declaration of Trust or Certificate of
Incorporation or By-Laws (or comparable documents) or votes or proceedings of
the shareholders or Directors of the Fund. The Custodian shall in no event be
liable to the Fund and shall be indemnified by the Fund for any violation which
occurs in the course of carrying out instructions given by the Fund of any
investment limitations to which the Fund is subject or other limitations with
respect to the Fund's powers to make expenditures, encumber securities, borrow
or take similar actions affecting the Fund.
X. Proper Instructions - Proper instructions shall mean a tested
telex from the Fund or a written request, direction, instruction or
certification signed or initialled on behalf of the Fund by one or more person
or persons as the Board of Directors or Trustees of the Fund shall have from
time to time authorized, provided, however, that no such instructions directing
the delivery of securities or the payment of funds to an authorized signatory of
the Fund shall be signed by such person. Those persons authorized to give proper
instructions may be identified by the Board of Directors or Trustees by name,
title or position and will include at least one officer empowered by the Board
to name other individuals who are authorized to give proper instructions on
behalf of the Fund. Telephonic or other oral instructions given by any one of
the above persons will be
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considered proper instructions if the Custodian reasonably believes them to have
been given by a person authorized to give such instructions with respect to the
transaction involved. Oral instructions will be confirmed by tested telex or in
writing in the manner set forth above but the lack of such confirmation shall in
no way affect any action taken by the Custodian in reliance upon such oral
instructions. The Fund authorizes the Custodian to tape record any and all
telephonic or other oral instructions given to the Custodian by or on behalf of
the Fund (including any of its officers, Directors, Trustees, employees or
agents) and will deliver to the Custodian a similar authorization from any
investment manager or adviser or person or entity with similar reponsibilities
which is authorized to give proper instructions on behalf of the Fund to the
Custodian. Proper instructions may relate to specific transactions or to types
or classes of transactions, and may be in the form of standing instructions.
Proper instructions may include communications effected directly
between electro-mechanical or electronic devices or systems, in addition to
tested telex, provided that the Fund and the Custodian agree to the use of such
device or system.
Y. Segregated Account - The Custodian shall upon receipt of proper
instructions establish and maintain on its books a segregated account or
accounts for and on behalf of the Fund, into which account or accounts may be
transferred cash and/or securities of the Fund, including securities maintained
by the Custodian
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pursuant to Section 2U hereof, (i) in accordance with the provisions of any
agreement among the Fund, the Custodian and a broker-dealer registered under the
Securities Exchange Act of 1934 and a member of the National Association of
Securities Dealers, Inc. (or any futures commission merchant registered under
the Commodity Exchange Act) relating to compliance with the rules of the Options
Clearing Corporation and of any registered national securities exchange (or the
Commodity Futures Trading Commission or any registered contract market), or any
similar organization or organizations, regarding escrow or other arrangements in
connection with transactions by the Fund, (ii) for purposes of segregating cash
or securities in connection with options purchased, sold or written by the Fund
or commodity futures contracts or options thereon purchased or sold by the Fund,
(iii) for the purposes of compliance by the Fund with the procedures required by
Investment Company Act Release No. 10666, or any subsequent release or releases
of the Securities and Exchange Commission relating to the maintenance of
segregated accounts by registered investment companies, and (iv) as mutually
agreed from time to time between the Fund and the Custodian.
3. Powers and Duties of the Custodian with Respect to the Appointment
of Subcustodians: The Fund hereby authorizes and instructs the Custodian to hold
securities, funds and other property of the Fund which are maintained outside
the United States at subcustodians appointed pursuant to the provisions of this
Section 3 (a "Subcustodian"). The Fund shall approve in
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writing (1) the appointment of each Subcustodian and the subcustodian agreement
to be entered into between such Subcustodian and the Custodian, and (2) if the
Subcustodian is organized under the laws of a country other than the United
States, the country or countries in which the Subcustodian is authorized to hold
securities, cash and other property of the Fund. The Fund hereby further
authorizes and instructs the Custodian and any Subcustodian to utilize such
securities depositories located outside the United States which are approved in
writing by the Fund to hold securities, cash and other property of the Fund.
Upon such approval by the Fund, the Custodian is authorized on behalf of the
Fund to notify each Subcustodian of its appointment as such. The Custodian may,
at any time in its discretion, remove any Subcustodian that has been appointed
as such but will promptly notify the Fund of any such action.
Those Subcustodians, and the countries where and the securities
depositories through which they or the Custodian may hold securities, cash and
other property of the Fund which the Fund has approved to date are set forth on
Appendix A hereto. Such Appendix shall be amended from time to time as
Subcustodians, and/or countries and/or securities depositories are changed,
added or deleted. The Fund shall be responsible for informing the Custodian
sufficiently in advance of a proposed investment which is to be held in a
country not listed on Appendix A, in order that there shall be sufficient time
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for the Fund to give the approval required by the preceding paragraph and for
the Custodian to put the appropriate arrangements in place with such
Subcustodian, including negotiation of a subcustodian agreement and submission
of such subcustodian agreement to the Fund for approval.
If the Fund shall have invested in a security to be held in a country
before the foregoing procedures have been completed, such security shall be held
by such agent as the Custodian may appoint. In any event, the Custodian shall be
liable to the Fund for the actions of such agent if and only to the extent the
Custodian shall have recovered from such agent for any damages caused the Fund
by such agent. At the request of the Fund, Custodian agrees to remove any
securities held on behalf of the Fund by such agent, if practical, to an
approved Subcustodian. Under such circumstances Custodian will collect income
and respond to corporate actions on a best efforts basis.
With respect to securities and funds held by a Subcustodian, either
directly or indirectly (including by a securities depository or clearing
agency), notwithstanding any provision of this Agreement to the contrary,
payment for securities purchased and delivery of securities sold may be made
prior to receipt of the securities or payment, respectively, and securities or
payment may be received in a form, in accordance with governmental regulations,
rules of securities depositories and clearing agencies, or generally accepted
trade practice in the applicable local market.
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In the event that any Subcustodian appointed pursuant to the
provisions of this Section 3 fails to perform any of its obligations under the
terms and conditions of the applicable subcustodian agreement, the Custodian
shall use its best efforts to cause such Subcustodian to perform such
obligations. In the event that the Custodian is unable to cause such
Subcustodian to perform fully its obligations thereunder, the Custodian shall
forthwith upon the Fund's request terminate such Subcustodian in accordance with
the termination provisions under the applicable subcustodian agreement and, if
necessary or desirable, appoint another subcustodian in accordance with the
provisions of this Section 3. At the election of the Fund, it shall have the
right to enforce, to the extent permitted by the subcustodian agreement and
applicable law, the Custodian's rights against any such Subcustodian for loss or
damage caused the Fund by such Subcustodian.
The Custodian will not amend any subcustodian agreement or agree to
change or permit any changes thereunder except upon the prior written approval
of the Fund.
The Custodian may, at any time in its discretion upon notification to
the Fund, terminate any Subcustodian of the Fund in accordance with the
termination provisions under the applicable Subcustodian Agreement, and at the
written request of the Fund, the Custodian will terminate any Subcustodian in
accordance with the termination provisions under the applicable Subcustodian
Agreement.
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If necessary or desirable, the Custodian may appoint another
subcustodian to replace a Subcustodian terminated pursuant to the foregoing
provisions of this Section 3, such appointment to be made upon approval of the
successor subcustodian by the Fund's Board of Directors or Trustees in
accordance with the provisions of this Section 3.
In the event the Custodian receives a claim from a Subcustodian under
the indemnification provisions of any subcustodian agreement, the Custodian
shall promptly give written notice to the Fund of such claim. No more than
thirty days after written notice to the Fund of the Custodian's intention to
make such payment, the Fund will reimburse the Custodian the amount of such
payment except in respect of any negligence or misconduct of the Custodian.
4. Assistance by the Custodian as to Certain Matters: The Custodian
may assist generally in the preparation of reports to Fund shareholders and
others, audits of accounts, and other ministerial matters of like nature.
5. Powers and Duties of the Custodian with Respect to its Role as
Financial Agent: The Fund hereby also appoints the Custodian as the Funds
financial agent. With respect to the appointment as financial agent, the
Custodian shall have and perform the following powers and duties:
A. Records - To create, maintain and retain such records relating to
its activities and obligations under this Agreement as are required under the
Investment Company Act of 1940 and the
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rules and regulations thereunder (including Section 31 thereof and Rules 31a-1
and 31a-2 thereunder) and under applicable Federal and State tax laws. All such
records will be the property of the Fund and in the event of termination of this
Agreement shall be delivered to the successor custodian.
B. Accounts - To keep books of account and render statements,
including interim monthly and complete quarterly financial statements, or copies
thereof, from time to time as reasonably requested by proper instructions.
C. Access to Records - The books and records maintained by the
Custodian pursuant to Sections 5A and 5B shall at all times during the
Custodian's regular business hours be open to inspection and audit by officers
of, attorneys for and auditors employed by the Fund and by employees and agents
of the Securities and Exchange Commission, provided that all such individuals
shall observe all security requirements of the Custodian applicable to its own
employees having access to similar records within the Custodian and such
regulations as may be reasonably imposed by the Custodian.
D. Disbursements - Upon receipt of proper instructions, to pay or
cause to be paid, insofar as funds are available for the purpose, bills,
statements and other obligations of the Fund (including but not limited to
interest charges, taxes, management fees, compensation to Fund officers and
employees, and other operating expenses of the Fund).
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6. Standard of Care and Related Matters:
A. Liability of the Custodian with Respect to Proper Instructions;
Evidence of Authority, Etc. The Custodian shall not be liable for any action
taken or omitted in reliance upon proper instructions believed by it to be
genuine or upon any other written notice, request, direction, instruction,
certificate or other instrument believed by it to be genuine and signed by the
proper party or parties.
The Secretary or Assistant Secretary of the Fund shall certify to the
Custodian the names, signatures and scope of authority of all persons authorized
to give proper instructions or any other such notice, request, direction,
instruction, certificate or instrument on behalf of the Fund, the names and
signatures of the officers of the Fund, the name and address of the Shareholder
Servicing Agent, and any resolutions, votes, instructions or directions of the
Fund's Board of Directors or Trustees or shareholders. Such certificate may be
accepted and relied upon by the Custodian as conclusive evidence of the facts
set forth therein and may be considered in full force and effect until receipt
of a similar certificate to the contrary.
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Agreement.
The Custodian shall be entitled, at the expense of the Fund, to
receive and act upon advice of (i) counsel regularly
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retained by the Custodian in respect of custodian matters, (ii) counsel for the
Fund, or (iii) such other counsel as the Fund and the Custodian may agree upon,
with respect to all matters, and the Custodian shall be without liability for
any action reasonably taken or omitted pursuant to such advice.
B. Liability of the Custodian with Respect to Use of Securities
System - With respect to the portfolio securities, cash and other property of
the Fund held by a Securities System, the Custodian shall be liable to the Fund
only for any loss or damage to the Fund resulting from use of the Securities
System if caused by any negligence, misfeasance or misconduct of the Custodian
or any of its agents or of any of its or their employees or from any failure of
the Custodian or any such agent to enforce effectively such rights as it may
have against the Securities System. At the election of the Fund, it shall be
entitled to be subrogated to the rights of the Custodian with respect to any
claim against the Securities System or any other person which the Custodian may
have as a consequence of any such loss or damage to the Fund if and to the
extent that the Fund has not been made whole for any such loss or damage.
C. Liability of the Custodian with respect to Subcustodians The
Custodian shall be liable to the Fund for any loss or damage to the Fund caused
by or resulting from the acts or omissions of any Subcustodian to the extent
that under the terms set forth in the subcustodian agreement between the
Custodian and the Subcustodian (or in the subcustodian agreement
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between a Subcustodian and any secondary Subcustodian), the Subcustodian (or
secondary Subcustodian) has failed to perform in accordance with the standard of
conduct imposed under such subcustodian agreement as determined in accordance
with the law which is adjudicated to govern such agreement and in accordance
with any determination of any court as to the duties of said Subcustodian
pursuant to said agreement. The Custodian shall also be liable to the Fund for
its own negligence in transmitting any instructions received by it from the Fund
and for its own negligence in connection with the delivery of any securities or
funds held by it to any Subcustodian.
D. Standard of Care; Liability; Indemnification - The Custodian shall
be held only to the exercise of reasonable care and diligence in carrying out
the provisions of this Agreement, provided that the Custodian shall not thereby
be required to take any action which is in contravention of any applicable law.
The Fund agrees to indemnify and hold harmless the Custodian and its nominees
from all claims and liabilities (including counsel fees) incurred or assessed
against it or its nominees in connection with the performance of this Agreement,
except such as may arise from its or its nominee's breach of the relevant
standard of conduct set forth in this Agreement. Without limiting the foregoing
indemnification obligation of the Fund, the Fund agrees to indemnify the
Custodian and any nominee in whose name portfolio securities or other property
of the Fund is registered
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<PAGE>
against any liability the Custodian or such nominee may incur by reason of taxes
assessed to the Custodian or such nominee or other costs, liability or expense
incurred by the Custodian or such nominee resulting directly or indirectly from
the fact that portfolio securities or other property of the Fund is registered
in the name of the Custodian or such nominee.
It is also understood that the Custodian shall not be liable for any
loss involving any securities, currencies, deposits or other property of the
Fund, whether maintained by it, a Subcustodian, a securities depository, an
agent of the Custodian or a Subcustodian, a Securities System, or a Banking
Institution, or for any loss arising from a foreign currency transaction or
contract, where the loss results from a Sovereign Risk or where the entity
maintaining such securities, currencies, deposits or other property of the Fund,
whether the Custodian, a Subcustodian, a securities depository, an agent of the
Custodian or a Subcustodian, a Securities System or a Banking Institution, has
exercised reasonable care maintaining such property or in connection with the
transaction involving such property. A "Sovereign Risk" shall mean
nationalization, expropriation, devaluation, revaluation, confiscation, seizure,
cancellation, destruction or similar action by any governmental authority, de
facto or de jure; or enactment, promulgation, imposition or enforcement by any
such governmental authority of currency restrictions, exchange controls, taxes,
levies or other charges affecting the Fund's property; or acts of war,
terrorism,
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<PAGE>
insurrection or revolution; or any other act or event beyond the Custodian's
control.
E. Reimbursement of Advances - The Custodian shall be entitled to
receive reimbursement from the Fund on demand, in the manner provided in Section
7, for its cash disbursements, expenses and charges (including the fees and
expenses of any Subcustodian or any Agent) in connection with this Agreement,
but excluding salaries and usual overhead expenses.
F. Security for obligations to Custodian - If the Fund shall require
the Custodian to advance cash or securities for any purpose for the benefit of
the Fund, including in connection with foreign exchange contracts or options
(collectively, an "Advance"), or if the Custodian or any nominee thereof shall
incur or be assessed any taxes, charges, expenses, assessments, claims or
liabilities in connection with the performance of this Agreement (collectively a
"Liability"), except such as may arise from its or such nominee's breach of the
relevant standard of conduct set forth in this Agreement, then in such event any
property at any time held for the account of the Fund by the Custodian or a
Subcustodian shall be security for such Advance or Liability and if the Fund
shall fail to repay or indemnify the Custodian promptly, the Custodian shall be
entitled to utilize available cash and to dispose of the Fund's property,
including securities, to the extent necessary to obtain reimbursement or
indemnification.
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<PAGE>
G. Appointment of Agents - The Custodian may at any time or times in
its discretion appoint (and may at any time remove) any other bank or trust
company as its agent (an "Agent") to carry out such of the provisions of this
Agreement as the Custodian may from time to time direct, provided, however, that
the appointment of such Agent (other than an Agent appointed pursuant to the
third paragraph of Section 3) shall not relieve the Custodian of any of its
responsibilities under this agreement.
H. Powers of Attorney - Upon request, the Fund shall deliver to the
Custodian such proxies, powers of attorney or other instruments as may be
reasonable and necessary or desirable in connection with the performance by the
Custodian or any Subcustodian of their respective obligations under this
Agreement or any applicable subcustodian agreement.
7. Compensation of the Custodian: The Fund shall pay the Custodian a
custody fee based on such fee schedule as may from time to time be agreed upon
in writing by the Custodian and the Fund. Such fee, together with all amounts
for which the Custodian is to be reimbursed in accordance with Section 6E, shall
be billed to the Fund in such a manner as to permit payment by a direct cash
payment to the Custodian.
8. Termination; Successor Custodian: This Agreement shall continue in
full force and effect until terminated by either party by an instrument in
writing delivered or mailed, postage prepaid, to the other party, such
termination to take effect not sooner than seventy five (75) days after the date
of
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<PAGE>
such delivery or mailing. In the event of termination the Custodian shall be
entitled to receive prior to delivery of the securities, funds and other
property held by it all accrued fees and unreimbursed expenses the payment of
which is contemplated by Sections 6E and 7, upon receipt by the Fund of a
statement setting forth such fees and expenses.
In the event of the appointment of a successor custodian, it is
agreed that the funds and securities owned by the Fund and held by the Custodian
or any Subcustodian shall be delivered to the successor custodian, and the
Custodian agrees to cooperate with the Fund in execution of documents and
performance of other actions necessary or desirable in order to substitute the
successor custodian for the Custodian under this Agreement.
9. Amendment: This Agreement constitutes the entire understanding and
agreement of the parties hereto with respect to the subject matter hereof. No
provision of this Agreement may be amended or terminated except by a statement
in writing signed by the party against which enforcement of the amendment or
termination is sought.
In connection with the operation of this Agreement, the Custodian and
the Fund may agree in writing from time to time on such provisions
interpretative of or in addition to the provisions of this Agreement as may in
their joint opinion be consistent with the general tenor of this Agreement. No
interpretative or additional provisions made as provided in the
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<PAGE>
preceding sentence shall be deemed to be an amendment of this Agreements.
The section headings in this Agreement are for the convenience of the
parties and in no way alter, amend, limit or restrict the contractual
obligations of the parties set forth in this Agreement.
10. Governing Law: This instrument is executed and delivered in The
Commonwealth of Massachusetts and shall be governed by and construed according
to the laws of said Commonwealth.
11. Notices: Notices and other writings delivered or mailed postage
prepaid to the Fund addressed to the Fund at 60 State Street, Boston,
Massachusetts 02109 or to such other address as the Fund may have designated to
the Custodian in writing, or to the Custodian at 40 Water Street, Boston,
Massachusetts 02109, Attention: Manager, Securities Department, or to such other
address as the Custodian may have designated to the Fund in writing, shall be
deemed to have been properly delivered or given hereunder to the respective
addressee.
12. Binding Effect: This Agreement shall be binding on and shall
inure to the benefit of the Fund and the Custodian and their respective
successors and assigns, provided that neither party hereto may assign this
Agreement or any of its rights or obligations hereunder without the prior
written consent of the other party.
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<PAGE>
13. Counterparts: This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original. This Agreement shall
become effective when one or more counterparts have been signed and delivered by
each of the parties.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed in its name and behalf on the day and year first above written.
PIONEER MICRO-CAP FUND BROWN BROTHERS HARRIMAN & CO.
By_________________________________ per pro________________________________
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INVESTMENT COMPANY SERVICE AGREEMENT
March 1, 1997
Pioneer Micro-Cap Fund, a Delaware business trust with its principal
place of business at 60 State Street, Boston, Massachusetts 02109 ("Customer")
and Pioneering Services Corporation, a Massachusetts corporation ("PSC"), hereby
agree as follows:
1. SERVICES TO BE PROVIDED BY PSC. During the term of this Agreement,
PSC will provide to each series of shares of beneficial interest (the "Series")
of Customer, which may be established, from time to time (the "Account"), with
the services described in Exhibits A, B, C and D (collectively, the "Exhibits")
that are attached hereto and incorporated herein by reference. It is understood
that PSC may subcontract any of such services to one or more firms designated by
PSC, provided that PSC (i) shall be solely responsible for all compensation
payable to any such firm and (ii) shall be liable to Customer for the acts or
omissions of any such firm to the same extent as PSC would be liable to Customer
with respect to any such act or omission hereunder.
2. EFFECTIVE DATE. This Agreement shall become effective on the date
hereof (the "Effective Date") and shall continue in effect until it is
terminated in accordance with Section 11 below.
3. DELIVERY, VERIFICATION AND RECEIPT FOR DATA AND ASSETS. Prior to the
Effective Date, Customer agrees to deliver to PSC all such documentation, data
and materials as PSC may reasonably prescribe to enable it to perform the
services contemplated by this Agreement. If PSC so requests, Customer agrees to
confirm the accuracy of any starting records of Customer's assets and accounts
produced from PSC's computer or held in other recording systems. In the event
Customer does not, prior to the Effective Date, comply fully with any of the
foregoing provisions of this Section 3, the date for commencement of PSC's
services hereunder may be postponed by PSC until such compliance has taken
place.
Customer shall, from time to time, while this Agreement is in effect
deliver all such materials and data as may be necessary or desirable to enable
PSC to perform its services hereunder, including without limitation, those
described in Section 12 hereof.
4. REPORTS AND MAINTENANCE OF RECORDS BY PSC. PSC will furnish to
Customer and to properly authorized auditors, examiners, distributors, dealers,
underwriters, salesmen, insurance companies, investors, and others designated by
Customer in writing, such books, any and all records and reports at such times
as are prescribed for each service in the Exhibits attached hereto. Customer
agrees to examine or to ask any other authorized recipient to examine each such
report or copy promptly and will report or cause to be reported any errors or
discrepancies therein of which Customer then has any knowledge. PSC may at its
option at any time, and shall forthwith upon Customer's demand, turn over to
Customer and cease to retain in PSC's files, any and all records and documents
created and maintained by PSC
<PAGE>
pursuant to this Agreement which are no longer needed by PSC in the performance
of its services or for its protection.
If not so turned over to Customer, such documents and reports will be
retained by PSC for six years from the year of creation, during the first two of
which the same will be in readily accessible form. At the end of six years, such
records and documents will be turned over to Customer by PSC unless Customer
authorizes their destruction.
5. PSC'S DUTY OF CARE. PSC shall at all time use reasonable care and
act in good faith in performing its duties hereunder. PSC shall incur no
liability to Customer in connection with its performance of services hereunder
except to the extent that it does not comply with the foregoing standards.
PSC shall at all times adhere to various procedures and systems
consistent with industry standards in order to safeguard Customer's checks,
records and other data from loss or damage attributable to fire or theft. PSC
shall maintain insurance adequate to protect against the costs of reconstructing
checks, records and other data in the event of such loss and shall notify
Customer in the event of a material adverse change in such insurance coverage.
In the event of damage or loss occurring to Customer's records or data such that
PSC is unable to meet the terms of this Agreement, PSC shall transfer all
records and data to a transfer agent of Customer's choosing upon Customer's
written authorization to do so.
Without limiting the generality of the foregoing, PSC shall not be
liable or responsible for delays or errors occurring by reason of circumstances
beyond its control including acts of civil, military or banking authority,
national emergencies, labor difficulties, fire, flood or other catastrophes,
acts of God, insurrection, war, riots, failure of transportation, communication
or power supply.
6. CONFIDENTIALITY. PSC will keep confidential all records and
information provided by Customer or by the shareholders of the Account to PSC,
except to the extent disclosures are required by this Agreement, are required by
the Customer's Prospectus and Statement of Additional Information, or are
required by a valid subpoena or warrant issued by a court of competent
jurisdiction or by a state or federal agency or governmental authority.
7. CUSTOMER INSPECTION. Upon reasonable notice, in writing signed by
Customer, PSC shall make available, during regular business hours, all records
and other data created and maintained pursuant to this Agreement for reasonable
audit and inspection by Customer or Customer's agents, including reasonable
visitation by Customer or Customer's agents, including inspecting PSC's
operation facilities. PSC shall not be liable for injury to or responsible in
any way for the safety of any individual visiting PSC's facilities under the
authority of this section. Customer will keep confidential and will cause to
keep confidential all confidential information obtained by its employees or
agents or any other individual representing Customer while on PSC's premises.
Confidential information shall include (1) any
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<PAGE>
information of whatever nature regarding PSC's operations, security procedures,
and data processing capabilities, (2) financial information regarding PSC, its
affiliates, or subsidiaries, and (3) any information of whatever kind or
description regarding any customer of PSC, its affiliates or subsidiaries.
8. RELIANCE BY PSC ON INSTRUCTIONS AND ADVICE; INDEMNITY. PSC shall be
entitled to seek advice of Customer's legal counsel with respect to PSC's
responsibilities and duties hereunder and shall in no event be liable to
Customer for any action taken pursuant to such advice, except to the extent that
Customer's legal counsel determines in its sole discretion that the rendering of
advice to PSC would result in a conflict of interest.
Whenever PSC is authorized to take action hereunder pursuant to proper
instructions from Customer, PSC shall be entitled to rely upon any certificate,
letter or other instrument or telephone call reasonably believed by PSC to be
genuine and to have been properly made or signed by an officer or other
authorized agent of Customer, and shall be entitled to receive as conclusive
proof of any fact or matter required to be ascertained by it hereunder a
certificate signed by an officer of Customer or any other person authorized by
Customer's Board of Trustees.
Subject to the provisions of Section 13 of this Agreement, Customer
agrees to indemnify and hold PSC, its employees, agents and nominees harmless
from any and all claims, demands, actions and suits, whether groundless or
otherwise, and from and against any and all judgments, liabilities, losses,
damages, costs, charges, counsel fees and other expenses of every nature and
character arising out of or in any way relating to PSC's action or non-action
upon information, instructions or requests given or made to PSC by Customer with
respect to the Account.
Notwithstanding the above, whenever Customer may be asked to indemnify
or hold PSC harmless, Customer shall be advised of all pertinent facts arising
from the situation in question. Additionally, PSC will use reasonable care to
identify and notify Customer promptly concerning any situation which presents,
actually or potentially, a claim for indemnification against Customer. Customer
shall have the option to defend PSC against any claim for which PSC is entitled
to indemnification from Customer under the terms hereof, and in the event
Customer so elects, it will notify PSC and, thereupon, Customer shall take over
complete defense of the claim and PSC shall sustain no further legal or other
expenses in such a situation for which indemnification shall be sought or
entitled. PSC may in no event confess any claim or make any compromise in any
case in which Customer will be asked to indemnify PSC except with Customer's
prior written consent.
9. MAINTENANCE OF DEPOSIT ACCOUNTS. PSC shall maintain on behalf of
Customer such deposit accounts as are necessary or desirable from time to time
to enable PSC to carry out the provisions of this Agreement.
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<PAGE>
10. COMPENSATION AND REIMBURSEMENT TO PSC. For the services rendered by
PSC under this Agreement, Customer agrees to pay an annual fee of $22.75 per
account to PSC, such fee to be payable in equal monthly installments. In
addition, Customer shall reimburse PSC monthly for out-of-pocket expenses such
as postage, forms, envelopes, checks, "outside" mailings, telephone line and
other charges, mailgrams, mail insurance on certificates and data processing
file recovery insurance.
11. TERMINATION. Either PSC or Customer may at any time terminate this
Agreement by giving 90 days' prior written notice to the other.
After the date of termination, for so long as PSC in fact continues to
perform any one or more of the services contemplated by this Agreement or any
exhibit hereto, the provisions of this Agreement, including without limitation
the provisions of Section 8 dealing with indemnification, shall where applicable
continue in full force and effect.
12. REQUIRED DOCUMENTS. Customer agrees to furnish to PSC prior to the
Effective Date the following (to the extent not previously provided):
A. Two (2) copies of the Agreement and Declaration of Trust of
Customer, and of any amendments thereto, certified by an officer of
the Customer.
B. Two (2) copies of the following documents, currently
certified by the Secretary of Customer:
a. Customer's By-laws and any amendment thereto.
b. Certified copies of resolutions of Customer's Board of
Trustees covering the following matters.
(1) Approval of this Agreement.
(2) Authorization of specified officers of
Customer to instruct PSC hereunder (if different from
other officers of Customer previously specified by
Customer as to other Customer accounts being serviced by
PSC).
C. List of all officers of Customer together with specimen signatures
of those officers who are authorized to sign share certificates and to instruct
PSC in all other matters.
D. Two (2) copies of the following:
a. Prospectus
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<PAGE>
b. Statement of Additional Information
c. Management Agreement
d. Registration Statement
E. Opinion of counsel for Customer as to the due authorization by and
binding effect of this Agreement on Customer, the applicability of the
Securities Act of 1933, as amended, and the Investment Company Act of 1940, as
amended, and the approval by such public authorities as may be prerequisite to
lawful sale and delivery in the various states.
F. Amendments to, and changes in, any of the foregoing forthwith upon
such amendments and changes being available, but in no case later than the
effective date.
13. INDEMNIFICATION. The parties to this Agreement acknowledge and
agree that all liabilities arising, directly or indirectly, under this
Agreement, of any and every nature whatsoever, including without limitation,
liabilities arising in connection with any agreement of Customer or its Trustees
set forth herein to indemnify any party to this Agreement or any other person,
shall be satisfied out of the assets of the Account first and then of Customer
and that no Trustee, officer or holder of shares of beneficial interest of
Customer shall be personally liable for any of the foregoing liabilities.
Customer's Agreement and Declaration of Trust, dated December 4, 1996, describes
in detail the respective responsibilities and limitations on liability of the
Trustees, officers, and holders of shares of beneficial interest of Customer.
14. LIMITATIONS ON EXCHANGES. PSC acknowledges that shareholders of
other Pioneer mutual funds may not open new accounts with Customer or purchase
shares of Customer by exchanging shares from other Pioneer mutual funds.
Shareholders of Customer may exchange their shares of Customer for shares of
other Pioneer mutual funds. Such shares, however, may not be exchanged back into
Customer. The foregoing exchange restriction shall be in effect, unless Customer
notifies PSC otherwise.
15. MISCELLANEOUS. In connection with the operation of this Agreement,
PSC and Customer may agree from time to time on such provisions interpretive of
or in addition to the provisions of this Agreement as may in their joint opinion
be consistent with the general tenor of this Agreement. Any such interpretive or
additional provisions are to be signed by both parties and annexed hereto, but
no such provision shall contravene any applicable Federal and state law or
regulation, and no such provision shall be deemed to be an amendment of this
Agreement.
This Agreement shall be construed in accordance with the laws
of The Commonwealth of Massachusetts.
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<PAGE>
IN WITNESS WHEREOF, Customer and PSC have caused this Agreement to be
executed in their respective names by their respective officers thereunto duly
authorized as of the date first written above.
ATTEST: PIONEERING SERVICES CORPORATION
___________________________ ___________________________
Joseph P. Barri, Clerk Roger Rainville
Executive Vice President
PIONEER MICRO-CAP FUND
___________________________ ___________________________
Joseph P. Barri, Secretary John F. Cogan, Jr.
President
<PAGE>
EXHIBIT A - TO INVESTMENT COMPANY SERVICE AGREEMENT
Shareholder Account Service:
As Servicing Agent for fund accounts and in accordance with the provisions of
the standard fund application and Customer's prospectus, PSC will:
1. Open, maintain and close accounts.
2. Purchase shares for the shareholder.
3. Out of the money received in payment for sales of Customer's
shares pay to the Customer's custodian the net asset value per
share and pay to the underwriter and to the dealer their
commission, if any, on a bimonthly basis.
4.Redeem shares by systematic withdrawal orders. (See Exhibit B)
5. Issue share certificates, upon instruction, resulting from
withdrawals from share accounts (It is the policy of PSC to issue
share certificates only upon request of the shareholder).
Maintain records showing name, address, certificate numbers and
number of shares.
6. Deposit certificates to shareholder accounts when furnished with
such documents as PSC deems necessary to authorize the deposit.
7. Reinvest or disburse dividends and other distributions upon
direction of shareholder.
8. Establish the proper registration of ownership of shares.
9. Pass upon the adequacy of documents submitted by a shareholder or
his legal representative to substantiate the transfer of
ownership of shares from the registered owner to transferees.
10. Make transfers from time to time upon the books of the Customer
in accordance with properly executed transfer instructions
furnished to PSC.
11. Upon receiving appropriate detailed instructions and written
materials prepared by Customer and, where applicable, proxy
<PAGE>
proofs checked by Customer, mail shareholder reports, proxies and
related materials of suitable design for automatic enclosing,
receive and tabulate executed proxies, and furnish an annual
meeting list of shareholders when required.
12. Respond to shareholder inquiries in a timely manner.
13. Maintain dealer and salesperson records.
14. Maintain and furnish to Customer such shareholder information as
Customer may reasonably request for the purpose of compliance by
Customer with the applicable tax and securities law of various
jurisdictions.
15. Mail confirmations of transactions to shareholders in a timely
fashion (confirmations of Automatic Investment Plan transactions
will be mailed quarterly).
16. Provide Customer with such information regarding correspondence
as well as enable Customer to comply with related N-SAR
requirements.
17. Maintain continuous proof of the outstanding shares of Customer.
18. Solicit taxpayer identification numbers.
19. Provide data to enable Customer to file abandoned property
reports for those accounts that have been indicated by the Post
Office to be not at the address of record with no forwarding
address.
20. Maintain bank accounts and reconcile same on a monthly basis.
21. Provide management information reports on a quarterly basis to
Customer's Board of Trustees/Directors outlining the level of
service provided.
22. Provide sale/statistical reporting for purposes of providing fund
management with information to maximizing the return to
shareholders.
<PAGE>
EXHIBIT B - TO INVESTMENT COMPANY SERVICE AGREEMENT
Redemption Service:
In accordance with the provisions of the Customer's Prospectus, as servicing
agent for the redemptions, PSC will:
1. Where applicable, establish accounts payable based on information
furnished to PSC on behalf of Customer (i.e., copies of trade
confirmations and other documents deemed necessary or desirable
by PSC on the first business day following the trade date).
2. Receive for redemption either:
a. Share certificates, supported by appropriate documentation;
or
b. Written or telephone authorization (where no share
certificates are issued).
3. Verify there are sufficient available shares in an account to
cover redemption requests.
4. Transfer the redeemed or repurchased shares to Customer's
treasury share account or, if applicable, cancel such shares for
retirement.
5. Pay the applicable redemption or repurchase price to the
shareholder in accordance with Customer's Prospectus and
Declaration of Trust on or before the seventh calendar day
succeeding any receipt of certificates or requests for redemption
or repurchase in "good order" as defined in the Prospectus.
6. Notify Customer and the underwriter on behalf of Customer of the
total number of shares presented and covered by such requests
within a reasonable period of time following receipt.
7. Promptly notify the shareholder if any such certificate or
request for redemption or repurchase is not in "good order"
together with notice of the documents required to comply with the
good order standards. Upon receipt of the necessary documents PSC
shall effect such redemption at the net asset value applicable at
the date and time of receipt of such documents.
8. Produce periodic reports of unsettled items, if any.
9. Adjust unsettled items, if any, relative to dividends and
distributions.
10. Report to Customer any late redemptions which must be included in
Customer's N-SAR.
<PAGE>
EXHIBIT C - TO INVESTMENT COMPANY SERVICE AGREEMENT
Exchange Service:
1. Receive and process exchanges in accordance with a duly executed
exchange authorization. PSC will redeem existing shares and use
the proceeds to purchase new shares. Shares of Customer purchased
directly or acquired through reinvestment of dividends on such
shares may be exchanged for shares of other Pioneer funds (which
funds have sales charges) only by payment of the applicable sales
charge, if any, as described in Customer's Prospectus. Shares of
Customer acquired by exchange and through reinvestment of
dividends on such shares may be re-exchanged to another Pioneer
fund at their respective net asset values.
2. Make authorized deductions of fees, if any.
3. Register new shares identically with the shares surrendered for
exchange. Mail new shares certificates, if requested, or an
account statement confirming the exchange by first class mail to
the address of record.
4. Maintain a record of unprocessed exchanges and produce a periodic
report.
<PAGE>
EXHIBIT D - TO INVESTMENT COMPANY SERVICE AGREEMENT
Income Accrual and Disbursing Service:
1. Distribute income dividends and/or capital gain distributions,
either through reinvestment or in cash, in accordance with
shareholder instructions.
2. On the mailing date, Customer shall make available to PSC
collected funds to make such distribution.
3. Adjust unsettled items relative to dividends and distribution.
4. Reconcile dividends and/or distributions with Customer.
5. Prepare and file annual Federal and State information returns of
distributions and, in the case of Federal returns, mail
information copies to shareholders and report and pay Federal
income taxes withheld from distributions made to non-resident
aliens.
SHARE PURCHASE AGREEMENT
This Agreement is made as of the 1st day of March, 1997 between The
Pioneer Group, Inc., a Delaware corporation ("PGI"), and Pioneer Micro-Cap Fund,
a Delaware business trust (the "Trust").
WHEREAS, the Trust wishes to sell to PGI, and PGI wishes to purchase
from the Trust, $100,000 of shares of beneficial interest of the Trust ( shares)
at a purchase price of $ per share (collectively, the "Shares"); and
WHEREAS, PGI is purchasing the Shares for the purpose of providing the
initial capitalization of the Trust 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, PGI is
delivering to the Trust a check in the amount of $100,000 in full payment for
the Shares.
2. PGI agrees that it is purchasing the Shares for investment and has
no present intention of redeeming or reselling the Shares.
3. PGI further agrees that it may not withdraw the Shares from the
Trust at a rate, which at any time during the Trust's first five years of
operations, exceeds in the aggregate $1,666.67 per month.
Executed as of the date first set forth above.
THE PIONEER GROUP, INC.
_____________________________
John F. Cogan, Jr.
President
PIONEER MICRO-CAP FUND
_____________________________
Joseph P. Barri
Secretary
CLASS A SHARES DISTRIBUTION PLAN
PIONEER MICRO-CAP FUND
CLASS A SHARES DISTRIBUTION PLAN, dated as of March 1, 1997, of PIONEER
MICRO-CAP FUND, a Delaware business trust (the "Trust").
WITNESSETH
WHEREAS, the Trust is engaged in business as an open-end, diversified,
management investment company and is registered under the Investment Company Act
of 1940, as amended (collectively with the rules and regulations promulgated
thereunder, the "1940 Act");
WHEREAS, the Trust intends to distribute shares of beneficial interest
(the "Class A 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 A distribution plan (the "Class A Plan") as a plan
of distribution pursuant to such Rule;
WHEREAS, the Trust desires that Pioneer Funds Distributor, Inc., a
Massachusetts corporation ("PFD"), provide certain distribution services for the
Trust's Class A Shares in connection with the Class A 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 such
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
A 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 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 Trust recognizes and agrees that PFD may impose certain
deferred sales charges in connection with the repurchase of Class A 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 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
<PAGE>
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 A Plan will benefit the Trust and its Class A
shareholders;
NOW, THEREFORE, the Board of Trustees of the Trust hereby adopts this
Class A Plan for the Trust as a plan of distribution of Class A Shares in
accordance with Rule 12b-1, on the following terms and conditions:
1. The Trust may expend pursuant to this Class A Plan amounts not to
exceed 0.25% of the average daily net assets attributable to Class A Shares per
annum.
2. Subject to the limit in paragraph 1, the Trust shall reimburse PFD
for amounts expended by PFD to finance any activity which is primarily intended
to result in the sale of Class A Shares of the Trust or the provision of
services to Class A shareholders of the Trust, including but not limited to
commissions or other payments to Dealers and salaries and other expenses of PFD
relating to selling or servicing efforts, provided, that the Board of Trustees
of the Trust shall approve categories of expenses for which reimbursement shall
be made pursuant to this paragraph 2 and, without limiting the generality of the
foregoing, the initial categories of such expenses shall be (i) a service fee to
be paid to qualified broker-dealers in an amount not to exceed 0.25% per annum
of the Trust'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 Trust'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 Trust). Such
reimbursement shall be paid ten (10) days after the end of the month or quarter,
as the case may be, in which such expenses are incurred. The Trust acknowledges
that PFD will charge an initial sales load or a contingent sales load in
connection with certain sales of Class A Shares of the Trust and that PFD will
reallow to Dealers all or a portion of such sales loads, as described in the
Trust's Prospectus from time to time. Nothing contained herein is intended to
have any effect whatsoever on PFD's ability to charge any such sales loads or to
reallow all or any portion thereof to Dealers.
3. The Trust understands that agreements between PFD and Dealers may
provide for payment of fees to Dealers in connection with the sale of Class A
Shares and the provision of services to Class A shareholders of the Trust.
Nothing in this Class A 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 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
Trust.
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<PAGE>
4. Nothing herein contained shall be deemed to require the Trust to
take any action contrary to its Declaration of Trust or By-Laws or any
applicable statutory or regulatory requirement to which it is subject or by
which it is bound, or to relieve or deprive the Trust's Board of Trustees of the
responsibility for and control of the conduct of the affairs of the Trust.
5. This Class A Plan shall become effective upon approval by (i) a
"majority of the outstanding voting securities" of Class A of the Trust, (ii) a
vote of the Board of Trustees, and (iii) 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 A Plan or in any agreement
related to the Class A Plan (the "Qualified Trustees"), such votes with respect
to (ii) and (iii) above 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 Trust and a majority of the Qualified
Trustees. If such annual approval is not obtained, this Class A Plan shall
expire on March 1, 1998. This Class A Plan shall automatically terminate upon
assignment. In the event of termination or non-continuance of this Class A Plan,
the Trust has twelve months to reimburse any expense which it incurs prior to
such termination or non-continuance, provided that payments by the Trust during
such twelve-month period shall not exceed 0.25% of the Trust's average daily net
assets attributable to Class A Shares during such period.
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 Trust and may not be materially
amended in any case without a vote of a majority of both the Trustees and the
Qualified Trustees. Any amendment of this 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 Trust.
8. In the event of termination or expiration of this Class A Plan, the
Trust may nevertheless, within twelve months of such termination or expiration
reimburse any expense which it incurs prior to such termination or expiration,
provided that payments by the Trust during such twelve-month period shall not
exceed 0.25% of the Trust'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.
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<PAGE>
9. The Trust and PFD shall provide to the Trust's Board of Trustees,
and the Board of Trustees shall review, at least quarterly, a written report of
the amounts expended under this 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 Trust.
11. For the purposes of this Class A Plan, the terms "assignment,"
"interested persons," "majority of the outstanding voting securities" and
"specifically approved at least annually" are used as defined in the 1940 Act.
12. The Trust shall preserve copies of this 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.
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CLASS B SHARES DISTRIBUTION PLAN
PIONEER MICRO-CAP FUND
CLASS B SHARES DISTRIBUTION PLAN, dated as of March 1, 1997 of PIONEER
MICRO-CAP FUND, a Delaware business trust (the "Trust").
WITNESSETH
WHEREAS, the Trust is engaged in business as an open-end, diversified,
management investment company and is registered under the Investment Company Act
of 1940, as amended (collectively with the rules and regulations promulgated
thereunder, the "1940 Act");
WHEREAS, the Trust intends to distribute 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 such Rule;
WHEREAS, the Trust desires that Pioneer Funds Distributor, Inc., a
Massachusetts corporation ("PFD"), provide certain distribution services for the
Trust's Class B Shares in connection with the Class B 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 such
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
B 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 B Shares in connection with the
offering of Class B Shares, (b) PFD 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 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 B
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 B 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 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
<PAGE>
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 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 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 paid during any one
year for distribution services with respect to Class B Shares
shall be .75% of the Trust's average daily net assets
attributable to Class B Shares for such year.
(c) Distribution services and expenses for which PFD
may be compensated pursuant to this 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 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 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 PFD to the Class B Shares, PFD shall be
entitled to be paid any fees payable under this clause (d)
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.
(e) Personal and account maintenance services for
which PFD or any of its affiliates, banks or Dealers may be
compensated pursuant to this 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 B
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<PAGE>
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 B 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 subsection (d)
of Section 26 of Article III of the Rules of Fair Practice 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 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. 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 B Plan shall become effective upon approval by (i) a
"majority of the outstanding voting securities" of Class B of the Trust, (ii) a
vote of the Board of Trustees, and (iii) 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 B Plan or in any agreements
related to the Class B Plan (the "Qualified Trustees"), such votes with respect
to (ii) and (iii) above to be cast in person at a meeting called for the purpose
of voting on this Class B Plan.
5. 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 March 1, 1998.
6. This Class B Plan may be amended at any time by the Board of
Trustees, 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
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<PAGE>
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 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.
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 B Plan and the purposes for which such
expenditures were made.
8. 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.
9. For the purposes of this Class B Plan, the terms "assignment,"
"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 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.
11. 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.
12. 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.
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PIONEER MICRO-CAP FUND
MULTIPLE CLASS PLAN PURSUANT TO RULE 18F-3
CLASS A SHARES, CLASS B SHARES AND CLASS C SHARES
MARCH _____, 1997
Each class of shares of Pioneer Micro-Cap Fund (the "Trust") 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 Trust's
prospectus, 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 Trust's prospectus. Class A Shares
shall be entitled to the shareholder services set forth from time to time in the
Trust'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 Trust'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 Trust 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.
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 Trust's prospectus. Class B Shares are sold subject to the minimum purchase
requirements set forth in the Trust's prospectus. Class B Shares shall be
entitled to the shareholder services set forth from time to time in the Trust'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 Trust have exclusive voting
rights, if any, with respect to the Trust'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 Trust to
fail to satisfy any requirement necessary to obtain or rely on a private letter
ruling from the IRS relating to the issuance of
<PAGE>
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
Trust at the end of a specified number of years after the initial purchase date
of Class B shares, except as provided in the Trust'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 per share without the
imposition of an initial sales charge. However, Class C shares redeemed within
one year of purchase will be subject to a CDSC as set forth in the Trust's
prospectus. Class C Shares are sold subject to the minimum purchase requirements
set forth in the Trust's prospectus. Class C Shares shall be entitled to the
shareholder services set forth from time to time in the Trust'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 Trust have exclusive voting rights, if any, with
respect to the Trust'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 Trust 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. 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 Investment Company Act of 1940, as amended
(the "Act")) of (a) all of the Trustees of the Trust, and (b) those of the
Trustees who are not "interested persons" of the Trust, as such term may be from
time to time defined under the Act.
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<PAGE>
ARTICLE V. 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 IV.
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