File Nos. 33-
811-09223
As filed with the Securities and Exchange Commission on February 4, 1999
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 STRATEGIC INCOME FUND
(Exact Name of Registrant as Specified in Charter)
60 State Street, Boston, Massachusetts 02109
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (617) 742-7825
Joseph P. Barri, Hale and Dorr LLP, 60 State Street, Boston, Massachusetts 02109
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this registration statement under the Securities Act of 1933.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to Section 8(a), may determine.
<PAGE>
[PIONEER LOGO]
Pioneer
Strategic Income
Fund
Class A, Class B and Class C Shares
Prospectus, April 8, 1999
No government securities commission or agency has approved the fund's shares or
determined whether this prospectus is accurate or complete. Any representation
to the contrary is a crime.
- ----------------------------------------------
Contents
Basic information about the fund 1
Management 7
Buying, exchanging and selling shares 9
Dividends, capital gains and taxes 27
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<PAGE>
Basic information about the fund
[SIDEBAR]
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[MAGNIFYING GLASS GRAPHIC]
Below investment rade debt
securities
A debt security is below investment
grade if it is rated BB or lower by
Standard & Poor's Rating Group or the
equivalent rating by nationally
recognized securities rating
organization or determined to be of
equivalent credit quality by Pioneer.
- ----------------------------
[END SIDEBAR]
Investment objective
A high level of current income.
Investment strategies
The fund has the flexibility to invest in a broad range of issuers and segments
of the market for debt securities. Pioneer Investment Management, Inc., the
fund's investment adviser, normally allocates the fund's investments among the
following three segments of the debt markets:
[square bullet] High yield securities
[square bullet] Investment grade securities of U.S. issuers
[square bullet] Investment grade and non-investment grade securities of
non-U.S. issuers
Normally, each of the sectors represent no less than 15% or more than 65% of the
fund's assets (at the time of purchase). Pioneer's allocations among these
segments of the debt markets depend upon its outlook on economic, interest rate
and political trends.
The fund invests primarily in:
[square bullet] Debt securities issued or guaranteed by the U.S. government,
its agencies or instrumentalities or non-U.S governmental
entities
[square bullet] Debt securities of U.S. and non-U.S. corporate issuers
[square bullet] Mortgage-backed and asset-backed securities
The fund's investments may have all types of interest rate payment and reset
terms, including fixed rate, adjustable rate, zero coupon, contingent, deferred,
payment in kind and auction rate features. The fund invests in securities with a
broad range of maturities.
Depending upon Pioneer's allocation among market segments, up to 70% of the
fund's assets may be held in securities rated below investment grade at the time
of purchase or determined to be of equivalent quality by Pioneer. Up to 20% of
the fund's assets may be invested in debt securities rated below CCC by Standard
& Poor's Rating Group or the equivalent by another nationally recognized rating
organization or determined to be of equivalent credit quality by Pioneer. Debt
securities rated below investment grade are commonly referred to as "junk bonds"
and are considered speculative. Lower quality debt securities involve greater
risk of loss, are subject to greater price volatility and are less liquid,
especially during periods of economic uncertainty or change, than higher rated
debt securities.
The fund may invest in securities of non-U.S. corporate and governmental
issuers, including debt securities of corporate and
- --------------------------------------------------------------------------------
An investment in the fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Contact your investment professional to discuss how the fund fits into your
portfolio.
- --------------------------------------------------------------------------------
1
<PAGE>
governmental issuers in emerging markets. Non-U.S. investments includes
securities issued by non-U.S. governments, banks or corporations, foreign
branches of U.S. banks and certain supranational organizations, such as the
World Bank and the European Union.
Pioneer considers both macroeconomic and issuer specific factors in selecting a
portfolio designed to achieve the fund's investment objective. In assessing the
appropriate maturity, rating, sector and country weighing of the fund's
portfolio, Pioneer considers a variety of macroeconomic factors that are
expected to influence economic activity and interest rates. These factors
include fundamental economic indicators, Federal Reserve monetary policy and the
relative value of the U.S. dollar compared to other currencies. Once Pioneer
determines the preferable portfolio characteristic, Pioneer selects individual
securities based upon the terms of the securities (such as yields compared to
U.S. Treasuries or comparable issuers), liquidity and rating, sector and issuer
diversification. Pioneer also employs fundamental research and due diligence to
assess an issuer's credit quality, taking into account financial condition and
profitability, future capital needs, potential for change in rating, industry
outlook, the competitive environment and management ability. In making these
portfolio decisions, Pioneer relies on the knowledge, experience and judgment of
its own staff who have access to a wide variety of research.
Principal risks of investing in the fund
Even though the fund seeks a high level of current income, you could lose money
on your investment, or the fund could fail to generate current income, if:
[square bullet] Interest rates go up, causing the value of the fund's
investments to decline
[square bullet] The issuer of a security owned by the fund defaults on its
obligation to pay principal and/or interest or has its credit
rating downgraded
[square bullet] During periods of declining interests rates, the issuer of a
security may exercise its option to prepay principal earlier
than scheduled, forcing the fund to reinvest in lower yielding
securities. This is known as call or prepayment risk
[square bullet] During periods of rising interest rates, the average life of
certain types of securities may be extended because of slower
than expected principal payments. This may lock in a below
market interest rate, increase the security's duration and
reduce the value of the security. This is known as extension
risk
[square bullet] Pioneer's judgment about the attractiveness, relative value or
potential appreciation of a particular sector, security or
hedging strategy proves to be incorrect
To the extent the fund invests significantly in asset-backed and
mortgage-related securities, its exposure to prepayment and extension risks may
be greater than if it invested in other fixed income securities. Mortgage
derivatives held by the fund may have especially volatile prices and may have a
disproportionate effect on the fund's share price.
2
<PAGE>
Basic information about the fund
Investment in high yield securities involves substantial risk of loss.
These securities are considered speculative with respect to the issuer's ability
to pay interest and principal and are susceptible to default or decline in
market value due to adverse economic and business developments. The market
values for high yield securities tends to be very volatile, and these securities
are less liquid than investment grade debt securities. For these reasons, your
investment in the fund is subject to the following specific risks:
[square bullet] Increased price sensitivity to changing interest rates and
deteriorating economic environment
[square bullet] Greater risk of loss due to default or declining credit quality
[square bullet] Adverse company specific events are more likely to render the
issuer unable to make interest and/or principal payments
[square bullet] A negative perception of the high yield market develops,
depressing the price and liquidity of high yield securities.
This negative perception could last for a significant period of
time
Investing in non-U.S. issuers may involve unique risks compared to investing in
the securities of U.S. issuers. Some of these risks do not apply to larger more
developed countries. These risks are more pronounced to the extent the fund
invests in issuers in countries with emerging markets or of the fund invests
significantly in one country. These risks may include:
[square bullet] Less information about non-U.S. issuers or markets may be
available due to less rigorous disclosure and accounting
standards or regulatory practices
[square bullet] Many non-U.S. markets are smaller, less liquid and more volatile
than U.S. markets. In a changing market, Pioneer may not be able
to sell the fund's portfolio securities in amounts and at prices
Pioneer considers reasonable
[square bullet] The U.S. dollar may appreciate against non-U.S. currencies or a
non-U.S. government may impose restrictions on currency
conversion or trading
[square bullet] The economy of non-U.S. countries may grow at a slower rate than
expected or may experience a downturn or recession
[square bullet] Economic, political and social developments that adversely
affect the securities markets
[square bullet] Non-U.S. governmental obligations involve the risk of debt
moratorium, repudiation or renegotiation and the fund may be
unable to enforce its rights against the issuers
3
<PAGE>
Fees and expenses
These are the fees and expenses, based upon estimated expenses for the current
fiscal year, you may pay if you invest in the fund.
<TABLE>
<CAPTION>
Shareowner fees
paid directly from your investment Class A Class B Class C
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Maximum sales charge when you buy shares
as a percentage of offering price 4.5% None None
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Maximum deferred sales charge as a percentage
of offering price or the amount you receive when
you sell shares, whichever is less None(1) 4% 1%
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</TABLE>
<TABLE>
<CAPTION>
Annual fund operating expenses
paid from the assets of the fund
as a percentage of average daily net assets Class A Class B Class C
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Management Fee(2) 0.75% 0.75% 0.75%
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Distribution and Service (12b-1) Fee 0.25% 1.00% 1.00%
- ------------------------------------------------------------------------------------------------
Other Expenses(2) % % %
- ------------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses % % %
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</TABLE>
(1) Purchases of $1 million or more and purchases by participants in certain
group plans are not subject to an initial sales charge but may be subject
to a contingent deferred sales charge. See "Buying, exchanging and selling
shares."
(2) Pioneer has agreed not to impose all or a portion of its management fee
and, if necessary, to limit other operating expenses of the fund to the
extent required to reduce Class A expenses to % of the average daily net
assets attributable to Class A shares; the portion of fund expenses
attributable to Class B and Class C shares will be reduced only to the
extent such expenses are reduced for Class A shares. This agreement is
voluntary and temporary and may be revised or terminated at any time.
Example
This example helps you compare the costs of investing in the fund with the cost
of investing in other mutual funds. It assumes that: a) you invest $10,000 in
the fund for the time periods shown, b) you reinvest all dividends and
distributions, c) your investment has a 5% return each year and d) the fund's
operating expenses remain the same.
Although your actual costs may be higher or lower, under these assumptions your
costs would be:
<TABLE>
<CAPTION>
If you sell your shares If you do not sell your shares
---------------------------------------------------------------------
Number of years you own your shares
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 3 1 3
- -------------------------------------------------------------------------------------------
Class A $ $ $ $
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Class B
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Class C
- -------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
Basic information about the fund
Other investment strategies
As discussed, the fund invests primarily in a broad range of debt securities to
achieve a high level of current income.
This section describes additional investments that the fund may make or
strategies that it may pursue to a lesser degree to achieve the fund's goal.
Some of the fund's secondary investment policies also entail risks. To learn
more about these investments and risks, you should obtain and read the statement
of additional information (SAI).
Investments other than debt securities
The fund may invest up to up to 20% of its assets in equity securities,
including common stocks, preferred stocks, warrants, convertible debt securities
and depository receipts. Equity securities rank junior in a company's capital
structure to debt securities and consequently may entail greater risk of loss
than fixed income securities.
The fund may enter into mortgage dollar roll transactions to earn additional
income. In these transactions, the fund sells a U.S. agency mortgage-backed
security and simultaneously agrees to repurchase at a future date another U.S.
agency mortgage-backed security with the same interest rate and maturity date,
but generally backed by a different pool of mortgages. The fund loses the right
to receive interest and principal payments on the security it sold. However, the
fund benefits from the interest earned on investing the proceeds of the sale and
may receive a fee or a lower repurchase price. The benefits from these
transactions depend upon Pioneer's ability to forecast mortgage prepayment
patterns on different mortgage pools. The fund may lose money if, during the
period between the time it agrees to the forward purchase of the mortgage
securities and the settlement date, these securities decline in value due to
market conditions or prepayments on the underlying mortgages.
Additional information about debt securities
The fund may invest in mortgage-backed and asset-backed securities.
Mortgage-related securities may be issued by private companies or by agencies of
the U.S. government and represent direct or indirect participation in, or are
collateralized by and payable from, mortgage loans secured by real property.
Asset-backed securities represent participations in, or are secured by and
payable from, assets such as installment sales or loan contracts, leases, credit
card receivables and other categories of receivables.
Certain debt instruments may only pay principal at maturity or may only
represent the right to receive payments of principal or payments of interest on
underlying pools of mortgage or government securities, but not both. The value
of these types of instruments may change more drastically than debt securities
that pay both principal and interest during periods of changing interest rates.
Principal only mortgage backed securities are particularly subject to prepayment
risk. Interest only instruments are particularly subject to extension risk. For
mortgage derivatives and structured securities that have imbedded leverage
features, small changes in interest or prepayment rates may cause large and
sudden price movements.
5
<PAGE>
Mortgage derivatives can also become illiquid and hard to value in declining
markets.
For purposes of the fund's credit quality policies, if a security receives
different ratings from nationally recognized rating organizations, the fund will
use the highest rating assigned to that security.
Temporary investments
Normally, the fund invests substantially all of its assets to meet its
investment objectives. The fund may invest the remainder of its assets in
securities with a remaining maturity of less than one year, cash equivalents or
may hold cash. For temporary defensive purposes, the fund may depart from its
principal investment strategies and invest part or all of its assets in these
securities. During such periods, the fund may not be able to achieve its
investment objective. The fund intends to adopt a defensive strategy only when
Pioneer believes debt securities in which the fund normally invests have
extraordinary risks due to political or economic factors.
Short-term trading
The fund usually does not trade for short-term profits. The fund will sell an
investment, however, even if it has only been held for a short time, if it no
longer meets the fund's investment criteria. If the fund does a lot of trading,
it may incur additional operating expenses, which would reduce performance, and
could cause shareowners to incur a higher level of taxable income or capital
gains.
Derivatives
The fund may use futures, options, forward foreign currency exchange contracts
and other derivatives. A derivative is a security or instrument whose value is
determined by reference to the value or the change in value of one or more
securities, currencies, indices or other financial instruments. The fund does
not use derivatives as a primary investment technique and generally limits their
use to hedging. However, the fund may use derivatives for a variety of purposes,
including:
[square bullet] As a hedge against adverse changes in interest rates or
currency exchange rates
[square bullet] As a substitute for purchasing or selling securities
[square bullet] To increase the fund's return
Even a small investment in derivatives can have a significant impact on the
fund's exposure to stock market values, interest rates or currency exchange
rates. If changes in a derivative's value do not correspond to changes in the
value of the fund's other investments, the fund may not fully benefit from or
could lose money on the derivative position. In addition, some derivatives
involve risk of loss if the person who issued the derivative defaults on its
obligation. Certain derivatives may be less liquid and more difficult to value.
6
<PAGE>
Management
Pioneer, the fund's investment adviser,
selects the fund's investments and oversees the fund's operations.
Pioneer Group
The Pioneer Group, Inc. and its subsidiaries are engaged in financial services
businesses in the United States and many foreign countries. As of December 31,
1998, the firm had more than $23 billion in assets under management worldwide
including more than $22 billion in U.S. mutual funds. The firm's U.S. mutual
fund investment history includes creating in 1928 one of the first mutual funds.
John F. Cogan, chairman of the board and president of The Pioneer Group, Inc.
owns approximately 14% of the firm. He is also an officer and director of each
of the Pioneer mutual funds.
Investment adviser
Pioneer manages a family of U.S. and international stock funds, bond funds and
money market funds. Pioneer is a subsidiary of The Pioneer Group, Inc. Its main
office is at 60 State Street, Boston, Massachusetts 02109.
Portfolio manager
Day-to-day management of the fund's portfolio is the responsibility of a team of
fixed income portfolio managers and analysts supervised by Sherman B. Russ and
Kenneth J. Taubes.
Mr. Russ and Mr. Taubes are jointly responsible for overseeing Pioneer's U.S.
and global fixed income team. Mr. Russ is a senior vice president of Pioneer. He
joined Pioneer in 1983 and has been an investment professional since 1962. Mr.
Taubes joined Pioneer as a senior vice president in September 1998 and has been
an investment professional since 1986. Prior to joining Pioneer, Mr. Taubes had
served since 1991 as a senior vice president and senior portfolio manager for
several Putnam Investments institutional accounts and mutual funds.
Mr. Russ, Mr. Taubes and their team operate under the supervision of Theresa A.
Hamacher. Ms. Hamacher is chief investment officer of Pioneer. She joined
Pioneer in 1997 and has been an investment professional since 1984.
7
<PAGE>
Management fee
The fund pays Pioneer a fee for managing the fund and to cover the cost of
providing certain services to the fund. Pioneer's annual fee is equal to
0.75% of the fund's average daily net assets up to $100 million, 0.70% of the
next $400 million, 0.65% of the next $500 million and 0.60% on assets over
$1 billion. The fee is normally computed daily and paid monthly.
Distributor and transfer agent
Pioneer Funds Distributor, Inc. is the fund's distributor. Pioneering Services
Corporation is the fund's transfer agent. The fund compensates the distributor
and transfer agent for their services. The distributor and the transfer agent
are subsidiaries of The Pioneer Group, Inc.
Year 2000
Information technology experts are concerned about computer and other electronic
systems' ability to process date-related information on and after January 1,
2000. This scenario, commonly referred to as the "Year 2000 problem," could have
an adverse impact on the fund and the provision of services to its shareowners.
Pioneer is addressing the Year 2000 problem with respect to its systems and
those used by the distributor and transfer agent. During 1999, Pioneer expects
to finish addressing all material Year 2000 issues and to participate in
industry-wide testing. The fund has obtained assurances from its other service
providers that they are taking appropriate Year 2000 measures and Pioneer is
monitoring their efforts. Although the fund does not expect the Year 2000
problem to adversely impact it, the fund cannot guarantee that its, or the
fund's service providers', efforts will be successful.
8
<PAGE>
Buying, exchanging and selling shares
[SIDEBAR]
- ---------------------------
[MAGNIFYING GLASS GRAPHIC]
Share price
The net asset value
per share calculated
on the day of your
transaction,
adjusted for any
applicable sales
charge, is often
referred to as the
share price.
- ---------------------------
[END SIDEBAR]
Net asset value
The fund's net asset value is the value of its portfolio of securities plus any
other assets minus its operating expenses and any other liabilities. The fund
calculates a net asset value for each class of shares every day the New York
Stock Exchange is open when regular trading closes (normally 4:00 p.m. Eastern
time).
The fund generally values its portfolio securities based on market prices or
quotations. When market prices are not available or are considered by Pioneer to
be unreliable, the fund may use an asset's fair value. Fair value is determined
in accordance with procedures approved by the fund's trustees. International
securities markets may be open on days when the U.S. markets are closed. For
this reason, the values of any international securities owned by the fund could
change on a day when you cannot buy or sell shares of the fund.
You buy or sell shares at the net asset value per share calculated on the day of
your transaction, adjusted for any applicable sales charge. When you buy Class A
shares, you pay an initial sales charge. When you sell Class B or Class C
shares, you may pay a contingent deferred sales charge depending on how long you
have owned your shares.
Choosing a class of shares
The fund offers three classes of shares through this prospectus. Each class has
different sales charges and expenses, allowing you to choose the class that best
meets your needs.
Factors you should consider include:
[square bullet] How long you expect to own the shares
[square bullet] The expenses paid by each class
[square bullet] Whether you qualify for any reduction or waiver of sales
charges
Your investment professional can help you determine which class meets your
goals. Your investment firm may receive different compensation depending upon
which class you choose. If you are not a U.S. citizen and are purchasing shares
outside the U.S., you may pay different sales charges under local laws and
business practices.
Distribution plans
The fund has adopted a distribution plan for each class of shares offered
through this prospectus in accordance with Rule 12b-1 under the Investment
Company Act of 1940. Under each plan the fund pays distribution and service fees
to the distributor. Because these fees are an ongoing expense, over time they
increase the cost of your investment and your shares may cost more than shares
that are not subject to a distribution fee.
9
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
Comparing classes of shares
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Class A Class B Class C
- ------------------------------------------------------------------------------------------------
Why you might Class A shares may be You may prefer Class B You may prefer Class C
prefer each class your best alternative shares if you do not shares if you do not
if you prefer to pay an want to pay an initial wish to pay an initial
initial sales charge sales charge, or if sales charge and you
and have lower annual you plan to hold your would rather pay higher
expenses, or if you investment for at annual expenses over
qualify for any least six years. Class time.
reduction or waiver of B shares are not
the initial sales recommended if you are
charge. investing $250,000
or more.
- ------------------------------------------------------------------------------------------------
Initial sales Up to 4.5% of the None None
charge offering price, which
is reduced or waived
for large purchases and
certain types of
investors. At the time
of your purchase, your
investment firm may
receive a commission
from the distributor of
up to 5%, declining as
the size of your
investment increases.
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Contingent None, except in certain Up to 4% is charged if A 1% charge if you sell
deferred sales circumstances when the you sell your shares. your shares within one
charges initial sales charge is The charge is reduced year of purchase. Your
waived. over time and not investment firm may
charged after six receive a commission
years. Your investment from the distributor at
firm may receive a the time of your
commission from the purchase of up to 1%.
distributor at the
time of your purchase
of up to 4%.
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Distribution and Up to 0.25% of average Up to 1% of average Up to 1% of average
service fees daily net assets. daily net assets. daily net assets.
- ------------------------------------------------------------------------------------------------
Annual expenses Lower than Class B Higher than Class A Higher than Class A
(including or Class C. shares; Class B shares shares; Class C shares
distribution and convert to Class A do not convert to any
service fees) shares after eight other class of shares.
years. You continue to pay
higher annual expenses.
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Exchange privilege Class A shares of other Class B shares of Class C shares of other
Pioneer mutual funds. other Pioneer mutual Pioneer mutual funds.
funds.
</TABLE>
10
<PAGE>
Buying, exchanging and selling shares
Sales charges: Class A shares
[SIDEBAR]
[MAGNIFYING GLASS GRAPHIC]
- --------------------------
Offering price
The net asset value
per share plus any
initial sales charge.
- --------------------------
[END SIDEBAR]
You pay the offering price when you buy Class A shares unless you qualify to
purchase shares at net asset value. You pay a lower sales charge as the size of
your investment increases. You do not pay a sales charge when you reinvest
dividends or distributions paid by the fund.
Investments of $1 million or more
You do not pay a sales charge when you purchase Class A shares if you are
investing $1 million or more, or you are a participant in certain group plans.
However, you pay a deferred sales charge if you sell your Class A shares within
one year of purchase. The sales charge is equal to 1% of your investment or your
sales proceeds, whichever is less.
Reduced sales charges
You may qualify for a reduced Class A sales charge if you own or are purchasing
shares of Pioneer mutual funds. If you or your investment professional notifies
the distributor of your eligibility for a reduced sales charge at the time of
your purchase, the distributor will credit you with the combined value (at the
current offering price) of all your Pioneer mutual fund shares and the shares of
your spouse and the shares of any children under 21. Certain trustees and
fiduciaries may also qualify for a reduced sales charge. For this purpose,
Pioneer mutual funds include any fund for which the distributor is principal
underwriter and, at the distributor's discretion, may include funds organized
outside the U.S. managed by Pioneer.
See "Qualifying for a reduced sales charge" for more information.
<TABLE>
<CAPTION>
Sales charges for Class A shares
Sales charge as % of
--------------------------------
Offering Net amount
Amount of purchase price invested
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Less than $100,000 4.50 4.71
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$100,000 but less than $250,000 3.50 3.63
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$250,000 but less than $500,000 2.50 2.56
- -----------------------------------------------------------------------------------------------
$500,000 but less than $1 million 2.00 2.04
- -----------------------------------------------------------------------------------------------
$1 million or more -0- -0-
- -----------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
Sales charges: Class B shares
You buy Class B shares at net asset value per share without paying an initial
sales charge. However, you will pay a contingent deferred sales charge to the
distributor if you sell your Class B shares within six years of purchase. The
contingent deferred sales charge decreases as the number of years since your
purchase increases.
<TABLE>
<CAPTION>
Contingent deferred sales charge
- ------------------------------------------------
On shares sold As a % of
before the dollar amount subject
end of year to the sales charge
- ------------------------------------------------
<S> <C>
01 4
02 4
03 3
04 3
05 2
06 1
07+ -0-
</TABLE>
Conversion to Class A shares
Class B shares automatically convert into Class A shares. This helps you
because Class A shares pay lower expenses.
Your Class B shares will convert to Class A shares at the beginning of the
calendar month that is eight years after the date of purchase except that:
[square bullet] Shares bought by reinvesting dividends and capital gains will
convert to Class A shares at the same time as shares on which
the dividend or distribution was paid
[square bullet] Shares purchased by exchanging shares from another fund will
convert on the date that the shares originally acquired would
have converted into Class A shares
Currently, the Internal Revenue Service permits the conversion of shares to take
place without imposing a federal tax. Conversion may not occur if the Internal
Revenue Service deems it a taxable event for federal tax purposes.
[SIDEBAR]
- ---------------------
[MAGNIFYING GLASS GRAPHIC]
Contingent deferred sales charge
A sales charge that may be deducted
from your sale proceeds.
- ---------------------
[END SIDEBAR]
- --------------------------------------------------------------------------------
Paying the contingent deferred sales charge (CDSC)
Several rules apply for Class B shares so that you pay the lowest possible CDSC.
[square bullet] The CDSC is calculated on the current market value, or the
original cost, of the shares you are selling, whichever is less
[square bullet] You do not pay a CDSC on reinvested dividends or distributions
[square bullet] In determining the number of years since your purchase, all
purchases are considered to have been made on the first day of
that month
[square bullet] If you sell only some of your shares, the transfer agent will
first sell your shares that are not subject to any CDSC and then
the shares that you have owned the longest
[square bullet] You may qualify for a waiver of the CDSC normally charged. See
"Qualifying for a reduced sales charge"
- --------------------------------------------------------------------------------
12
<PAGE>
Buying, exchanging and selling shares
Sales charges: Class C shares
You buy Class C shares at net asset value per share without paying an initial
sales charge. However, if you sell your Class C shares within one year of
purchase, you will pay to the distributor a contingent deferred sales charge of
1% of the current market value, or the original cost, of the shares you are
selling, whichever is less.
[SIDEBAR]
- --------------------------
[MAGNIFYING GLASS GRAPHIC]
Contingent deferred
sales charge
A sales charge that
may be deducted
from your sale
proceeds.
- --------------------------
[END SIDEBAR]
- --------------------------------------------------------------------------------
Paying the contingent deferred sales charge (CDSC)
Several rules apply for Class C shares which result in your paying the
lowest CDSC.
[square bullet] The CDSC is calculated on the current market value, or the
original cost, of the shares you are selling, whichever is less
[square bullet] You do not pay a CDSC on reinvested dividends or distributions
[square bullet] In determining the number of years since your purchase, all
purchases are considered to have been made on the first day of
that month
[square bullet] If you sell only some of your shares, the transfer agent will
first sell your shares that are not subject to any CDSC and then
the shares that you bought most recently
[square bullet] You may qualify for a waiver of the CDSC normally charged. See
"Qualifying for a reduced sales charge"
- --------------------------------------------------------------------------------
13
<PAGE>
Qualifying for a reduced sales charge
Initial Class A sales charge waivers
You may purchase Class A shares at net asset value (without a sales charge) or
with a reduced initial sales charge as follows. If you believe you qualify for
any of the waivers discussed below, contact the distributor. You are required to
provide written confirmation of your eligibility. You may not resell these
shares except to or on behalf of the fund.
Class A purchases at net asset value are available to:
[square bullet] Current or former trustees and officers of the fund;
[square bullet] Current or former partners and employees of legal counsel to
the fund;
[square bullet] Current or former directors, officers, employees or sales
representatives of The Pioneer Group, Inc. and its affiliates;
[square bullet] Current or former directors, officers, employees or sales
representatives of any subadviser or a predecessor adviser (or
their affiliates) to any investment company for which Pioneer
serves as investment adviser;
[square bullet] Current or former officers, partners, employees or
registered representatives of broker-dealers which have
entered into sales agreements with the distributor;
[square bullet] Members of the immediate families of any of the persons above;
[square bullet] Any trust, custodian, pension, profit sharing or other benefit
plan of the foregoing persons;
[square bullet] Insurance company separate accounts;
[square bullet] Certain "wrap accounts" for the benefit of clients of
financial planners adhering to standards established by the
distributor;
[square bullet] Other funds and accounts for which Pioneer or any of its
affiliates serve as investment adviser or manager;
[square bullet] In connection with certain reorganization, liquidation or
acquisition transactions involving other investment companies
or personal holding companies;
[square bullet] Certain unit investment trusts;
[square bullet] Employer-sponsored retirement plans with 100 or more eligible
employees or at least $500,000 in plan assets;
[square bullet] Participants in Optional Retirement Programs if (i) your
employer has authorized a limited number of mutual funds to
participate in the program, (ii) all participating mutual
funds sell shares to program participants at net asset value,
(iii) your employer has agreed in writing to actively promote
Pioneer mutual funds to program participants and (iv) the
program provides for a matching contribution for each
participant contribution.
14
<PAGE>
Class A purchases at a reduced initial sales charge or net asset value are also
available to:
Group Plans if the sponsoring organization
[square bullet] recommends purchases of Pioneer mutual funds to,
[square bullet] permits solicitation of, or
[square bullet] facilitates purchases by its employees, members or
participants.
Letter of intent (Class A)
You can use a letter of intent to qualify for reduced sales charges in two
situations:
[square bullet] If you plan to invest at least $100,000 (excluding any
reinvestment of dividends and capital gain distributions) in the
fund's Class A shares during the next 13 months
[square bullet] If you include in your letter of intent the value - at the
current offering price - of all of your Class A shares of the
fund and all other Pioneer mutual fund shares held of record in
the amount used to determine the applicable sales charge for the
fund shares you plan to buy.
Completing a letter of intent does not obligate you to purchase additional
shares, but if you do not buy enough shares to qualify for the projected level
of sales charges by the end of the 13-month period (or when you sell your
shares, if earlier), the distributor will recalculate your sales charge. You
must pay the additional sales charge within 20 days after you are notified of
the recalculation or it will be deducted from your account (or your sale
proceeds). For more information regarding letters of intent, please contact your
investment professional or obtain and read the statement of additional
information.
Reinvestment (Class A)
If you sold shares of another mutual fund within the past 60 days, you may be
able to reinvest the sale proceeds from that fund in Class A shares of the fund
at net asset value without a sales charge.
To qualify:
[square bullet] Your investment firm must have a sales agreement with the
distributor;
[square bullet] You must demonstrate that the amount invested is from the
proceeds of the sale of shares from another mutual fund that
occurred within 60 days immediately preceding your purchase;
[square bullet] You paid a sales charge on the original purchase of the shares
sold; and
[square bullet] The mutual fund whose shares were sold also offers net asset
value purchases to shareowners that sell shares of a Pioneer
mutual fund.
15
<PAGE>
Waiver or reduction of contingent deferred sales charges (CDSC)
Class A shares that are subject to a CDSC
Purchases of Class A shares of $1 million or more, or by participants in a Group
Plan which were not subject to an initial sales charge, may be subject to a CDSC
upon redemption. A CDSC is payable to the distributor in the event of a share
redemption within 12 months following the share purchase, at the rate of 1% of
the lesser of the value of the shares redeemed (exclusive of reinvested dividend
and capital gain distributions) or the total cost of such shares. However, the
CDSC is waived for redemptions of Class A shares purchased by an
employer-sponsored retirement plan qualified under Section 401 of the Internal
Revenue Code that has 1,000 or more eligible employees or at least $10 million
in plan assets.
Class A, Class B and Class C shares
The distributor may waive or reduce the CDSC for Class A shares that are subject
to a CDSC or for Class B or Class C shares if:
[square bullet] The distribution results from the death of all registered
account owners or a participant in an employer-sponsored plan.
For UGMAs, UTMAs and trust accounts, the waiver applies only
upon the death of all beneficial owners;
[square bullet] The distribution results from a total and permanent disability
(as defined by Section 72 of the Internal Revenue Code)
occurring after the purchase of the shares being sold. For
UGMAs, UTMAs and trust accounts, the waiver only applies upon
the disability of all beneficial owners;
[square bullet] The distribution is made in connection with limited automatic
redemptions as described in "Systematic withdrawal plans"
(limited in any year to 10% of the value of the account in the
fund at the time the withdrawal plan is established);
[square bullet] The distribution is from any type of IRA, 403(b) or
employer-sponsored plan and one of the following applies:
- It is part of a series of substantially equal periodic
payments made over the life expectancy of the participant or
the joint life expectancy of the participant and his or her
beneficiary (limited in any year to 10% of the value of the
participant's account at the time the distribution amount is
established);
- It is a required minimum distribution due to the attainment
of age 70-1/2, in which case the distribution amount may
exceed 10% (based solely on plan assets held in Pioneer
mutual funds);
16
<PAGE>
Buying, exchanging and selling shares
- It is rolled over to or reinvested in another Pioneer fund in
the same class of shares, which will be subject to the CDSC
of the shares originally held;
- It is in the form of a loan to a participant in a plan that
permits loans (each repayment will be subject to a CDSC as
though a new purchase);
[square bullet] The distribution is to a participant in an employer-sponsored
retirement plan qualified under section 401 of the Internal
Revenue Code and is:
- A return of excess employee deferrals or contributions;
- A qualifying hardship distribution as defined by the Internal
Revenue Code. For Class B shares, waiver is granted only on
payments of up to 10% of total plan assets held by Pioneer
for all participants, reduced by the total of any prior
distributions made in that calendar year;
- Due to retirement or termination of employment. For Class B
shares, waiver is granted only on payments of up to 10% of
total plan assets held in a Pioneer mutual fund for all
participants, reduced by the total of any prior distributions
made in the same calendar year;
- From a qualified defined contribution plan and represents a
participant's directed transfer, provided that this privilege
has been preauthorized through a prior agreement with the
distributor regarding participant directed transfers (not
available to Class B shares);
[square bullet] The distribution is made pursuant to the fund's right to
liquidate or involuntarily redeem shares in a shareholder's
account;
[square bullet] The selling broker elects, with the distributor's approval, to
waive receipt of the commission normally paid at the time of the
sale.
17
<PAGE>
Opening your account
If your shares are held in your investment firm's name, the options and services
available to you may be different from those discussed in this prospectus. Ask
your investment professional for more information.
Account options
Use your account application to select options and privileges for your account.
You can change your selections at any time by sending a completed account
options form to the transfer agent. You may be required to obtain a signature
guarantee to make certain changes to an existing account.
Call or write to the fund's transfer agent for account applications, account
options forms and other account information:
Pioneering Services Corporation
P.O. Box 9014
Boston, Massachusetts 02205-9014
Telephone 1-800-225-6292
Telephone transaction privileges
If your account is registered in your name, you can buy, exchange or sell fund
shares by telephone. If you do not want your account to have telephone
transaction privileges, you must indicate that choice on your account
application or by writing to the transfer agent.
When you request a telephone transaction the transfer agent will try to confirm
that the request is genuine. The transfer agent records the call, requires the
caller to provide the personal identification number for the account and sends
you a written confirmation. The fund may implement other confirmation procedures
from time to time. Different procedures may apply if you have a non-U.S. account
or if your account is registered in the name of an institution, broker-dealer or
other third party.
[SIDEBAR]
[TELEPHONE GRAPHIC]
- ------------------------
By phone
If you want to place your telephone
transaction by speaking to a
shareowner services representative, call
1-800-225-6292 between 8:00 a.m.
and 9:00 p.m. Eastern time
on any weekday that the New York Stock
Exchange is open. You may use
FactFone(SM) at any time.
- ------------------------
[END SIDEBAR]
18
<PAGE>
[SIDEBAR]
[QUESTION MARK GRAPHIC]
- -----------------------
Consult your
investment
professional to learn
more about buying,
exchanging or
selling fund shares.
- -----------------------
[END SIDEBAR]
General rules on buying, exchanging and selling
your fund shares
Share price
If you place an order with your investment firm before the New York Stock
Exchange closes and your investment firm submits the order to the distributor
prior to the distributor's close of business (usually 5:30 p.m. Eastern time),
your share price will be calculated that day. Otherwise, your price per share
will be calculated at the close of the New York Stock Exchange after the
distributor receives your order. Your investment firm is responsible for
submitting your order to the distributor.
Buying
You may buy fund shares from any investment firm that has a sales agreement with
the distributor. If you do not have an investment firm, please call
1-800-225-6292 for information on how to locate an investment professional in
your area.
You can buy fund shares at the offering price. The distributor may reject any
order until it has confirmed the order in writing and received payment. The fund
reserves the right to stop offering any class of shares.
Minimum investment amounts
Your initial investment must be at least $1,000. Additional investments must be
at least $100 for Class A shares and $500 for Class B or Class C shares. You may
qualify for lower initial or subsequent investment minimums if you are opening a
retirement plan account, establishing an automatic investment plan or placing
your trade through your investment firm.
- --------------------------------------------------------------------------------
Retirement plan accounts
You can purchase fund shares through tax-deferred retirement plans for
individuals, businesses and tax-exempt organizations.
Your initial investment for most types of retirement plan accounts must be at
least $250. Additional investments for most types of retirement plans must be at
least $100.
You may not use the account application accompanying this prospectus to
establish a Pioneer retirement plan. You can obtain retirement plan applications
from your investment firm or by calling the Retirement Plans Department at
1-800-622-0176.
- --------------------------------------------------------------------------------
19
<PAGE>
Exchanging
You may exchange your shares for shares of the same class of another Pioneer
mutual fund.
Your exchange request must be for at least $1,000 unless the fund you are
exchanging into has a different minimum. The fund allows you to exchange your
shares at net asset value without charging you either an initial or contingent
deferred sales charge at the time of the exchange. Shares you acquire as part of
an exchange will continue to be subject to any contingent deferred sales charge
that applies to the shares you originally purchased. When you ultimately sell
your shares, the date of your original purchase will determine your contingent
deferred sales charge.
Before you request an exchange, consider each fund's investment objective and
policies as described in the fund's prospectus.
Selling
Your shares will be sold at net asset value per share next calculated after the
fund receives your request in good order.
If the shares you are selling are subject to a deferred sales charge, it will be
deducted from the sale proceeds. The fund generally will send your sale proceeds
by check, bank wire or electronic funds transfer. Normally you will be paid
within seven days. If you recently sent a check to purchase the shares being
sold, the fund may delay payment of the sale proceeds until your check has
cleared. This may take up to 15 calendar days from the purchase date.
If you are selling shares from a non-retirement account or certain IRAs, you may
use any of the methods described below. If you are selling shares from a
retirement account other than an IRA, you must make your request in writing.
[SIDEBAR]
[COLUMN GRAPHIC]
- ------------------
You may have to
pay federal income
taxes on a sale or
an exchange.
- ------------------
[END SIDEBBAR]
- --------------------------------------------------------------------------------
Good order means that:
[square bullet] You have provided adequate instructions
[square bullet] There are no outstanding claims against your account
[square bullet] There are no transaction limitations on your account
[square bullet] If you have any fund share certificates, you submit them and
they are signed by each record owner exactly as the shares are
registered
[square bullet] Your request includes a signature guarantee if you:
- Are selling over $100,000 worth of shares
- Changed your account registration or address within the
last 30 days
- Instruct the transfer agent to mail the check to an address
different from the one on your account
- Want the check paid to someone other than the account
owner(s)
- Are transferring the sale proceeds to a Pioneer mutual fund
account with a different registration
- --------------------------------------------------------------------------------
20
<PAGE>
Buying, exchanging and selling shares
<TABLE>
<CAPTION>
-------------------------------------------- -----------------------------------------------
Buying shares Exchanging shares
-------------------------------------------- -----------------------------------------------
<S> <C> <C>
Through your Normally, your investment firm will send Normally, your investment firm will send
investment firm your purchase request to the fund's transfer your exchange request to the fund's transfer
agent. Consult your investment professional agent. Consult your investment professional
for more information. Your investment firm for more information about exchanging your
may receive a commission from the shares.
distributor for your purchase of fund
shares. The distributor or its affiliates
may pay additional compensation, out of
their own assets, to certain investment
firms or their affiliates based on objective
criteria established by the distributor.
-------------------------------------------- -----------------------------------------------
By phone You can use the telephone purchase privilege After you establish your fund account, you
if you have an existing non-retirement can exchange fund shares by phone if:
account or certain IRAs. You can purchase
additional fund shares by phone if: [square bullet] You are using the exchange
to establish a new account,
[square bullet] You established your bank provided the new account has
account of record at least a registration identical to
30 days ago the original account
[square bullet] Your bank information has [square bullet] The fund into which you are
not changed for at least 30 exchanging offers the same
days class of shares
[square bullet] You are not purchasing more [square bullet] You are not exchanging more
than $25,000 worth of shares than $500,000 worth of
per account per day shares per account per day
[square bullet] You can provide the proper [square bullet] You can provide the proper
account identification account identification
information information
When you request a telephone purchase, the
transfer agent will electronically debit the
amount of the purchase from your bank
account of record. The transfer agent will
purchase fund shares for the amount of the
debit at the offering price determined after
the transfer agent receives your telephone
purchase instruction and good funds. It
usually takes three business days for the
transfer agent to receive notification from
your bank that good funds are available in
the amount of your investment.
-------------------------------------------- -----------------------------------------------
In writing, You can purchase fund shares for an existing You can exchange fund shares by mailing or
by mail fund account by mailing a check to the faxing a letter of instruction to the
or by fax transfer agent. Make your check payable to transfer agent. You can exchange fund shares
the fund. Neither initial nor subsequent directly through the fund only if your
investments should be made by third party account is registered in your name. However,
check. Your check must be in U.S. dollars you may not fax an exchange request for more
and drawn on a U.S. bank. Include in your than $500,000. Include in your letter:
purchase request the fund's name, the
account number and the name or names in the [square bullet] The names and signatures of
account registration. all registered owners
[square bullet] A signature guarantee for
each registered owner if the
amount of the exchange is
more than $500,000
[square bullet] The name of the fund out of
which you are exchanging and
the name of the fund into
which you are exchanging
[square bullet] The class of shares you are
exchanging
[square bullet] The dollar amount or number
of shares you are exchanging
</TABLE>
21
<PAGE>
- ----------------------------------------
Selling shares
- ----------------------------------------
Normally, your investment firm will send
your request to sell shares to the
fund's transfer agent. Consult your
investment professional for more
information. The fund has authorized the
distributor to act as its agent in the
repurchase of fund shares from qualified
investment firms. The fund reserves the
right to terminate this procedure at any
time.
- ----------------------------------------
You may sell up to $100,000 per account
per day. You may sell fund shares held
in a retirement plan account by phone
only if your account is an IRA. You may
not sell your shares by phone if you
have changed your address (for checks)
or your bank information (for wires and
transfers) in the last 30 days.
You may receive your sale proceeds:
[square bullet] By check, provided the check is made payable
exactly as your account is registered
[square bullet] By bank wire or by electronic funds transfer,
provided the sale proceeds are being sent to
your bank address of record
- ----------------------------------------
You can sell some or all of your fund shares by writing directly to the fund
only if your account is registered in your name. Include in your request your
name, the fund's name, your fund account number, the class of shares to be sold,
the dollar amount or number of shares to be sold and any other applicable
requirements as described below. The transfer agent will send the sale
proceeds to your address of record unless you provide other instructions.
Your request must be signed by all registered owners and be in good order.
The transfer agent will not process your request until it is received in good
order. You may not sell more than $100,000 per account per day by fax.
- -------------------------------------------
How to contact us
By phone [TELEPHONE GRAPHIC]
For information or to request a telephone
transaction between 8:00 a.m. and 9:00 p.m.
(Eastern time) by speaking with a
shareholder services representative call
1-800-225-6292
To request a transaction using FactFone(SM)
call 1-800-225-4321
Telecommunications Device for the Deaf (TDD)
1-800-225-1997
By mail [ENVELOPE GRAPHIC]
Send your written instructions to:
Pioneering Services Corporation
P.O. Box 9014
Boston, Massachusetts 02205-9014
By fax [FAX MACHINE GRAPHIC]
Fax your exchange and sale requests to:
1-800-225-4240
- -------------------------------------------
- --------------------------------------------------------------------------------
Exchange privilege
The fund and the distributor 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. Abuses include frequent trading in
response to short-term market fluctuations and a pattern of trading that appears
to be an attempt to "time the market." In addition, the fund and the distributor
reserve the right, at any time without notice, to charge a fee for exchanges or
to modify, limit, suspend or discontinue the exchange privilege.
- --------------------------------------------------------------------------------
22
<PAGE>
Account options
See the account application form for more details on each of the following
options.
Automatic investment plans
You can make regular periodic investments in the fund by setting up monthly bank
drafts, government allotments, payroll deduction, a Pioneer Investomatic Plan
and other similar automatic investment plans. You may use an automatic
investment plan to establish a Class A share account with a small initial
investment. If you have a Class B or Class C share account and your balance is
at least $1,000, you may establish an automatic investment plan.
Pioneer Investomatic Plan
If you establish a Pioneer Investomatic Plan, the transfer agent will make a
periodic investment in fund shares by means of a preauthorized electronic funds
transfer from your bank account. Your plan investments are voluntary. You may
discontinue your plan at any time or change the plan's dollar amount, frequency
or investment date by calling or writing to the transfer agent. You should allow
up to 30 days for the transfer agent to establish your plan.
Automatic exchanges
You can automatically exchange your fund shares for shares of the same class of
another Pioneer mutual fund. The automatic exchange will begin on the day you
select when you complete the appropriate section of your account application or
an account options form. In order to use automatic exchange:
[square bullet] You must select exchanges on a monthly or quarterly basis
[square bullet] Both the originating and receiving accounts must have
identical registrations
[square bullet] The originating account has a minimum balance of $5,000
Distribution options
The fund offers three distribution options. Any fund shares you buy by
reinvesting distributions will be priced at the applicable net asset value per
share.
(1) Unless you indicate another option on your account application, any
dividends and capital gain distributions paid to you by the fund will
automatically be invested in additional fund shares.
(2) You may elect to have the amount of any dividends paid to you in cash and
any capital gain distributions reinvested in additional shares.
(3) You may elect to have the full amount of any dividends and/or capital gain
distributions paid to you in cash.
Options (2) or (3) are not available to retirement plan accounts or accounts
with a current value of less than $500.
If your distribution check is returned to the transfer agent or you do not cash
the check for six months or more, the transfer agent may reinvest the amount of
the check in your account and automatically change the distribution option on
your account to option (1) until you request a different option in writing.
These additional shares will be purchased at the then current net asset value.
23
<PAGE>
Directed dividends
You can invest the dividends paid by one of your Pioneer mutual fund accounts in
a second Pioneer mutual fund account. The value of your second account must be
at least $1,000 ($500 for Pioneer Fund or Pioneer II). You may direct the
investment of any amount of dividends. There are no fees or charges for directed
dividends. If you have a retirement plan account, you may only direct dividends
to accounts with identical registrations.
Systematic withdrawal plans
When you establish a systematic withdrawal plan for your account, the transfer
agent will sell the number of fund shares you specify on a periodic basis and
the proceeds will be paid to you or to any person you select. You must obtain a
signature guarantee to direct payments to another person after you have
established your systematic withdrawal plan. Payments can be made either by
check or by electronic transfer to a bank account you designate.
To establish a systematic withdrawal plan:
[square bullet] Your account must have a total value of at least $10,000 when
you establish your plan
[square bullet] You must request a periodic withdrawal of at least $50
[square bullet] You may not request a periodic withdrawal of more than 10% of
the value of any Class B or Class C share account (valued at
the time the plan is implemented)
Systematic sales of fund shares may be taxable transactions for you. If you
purchase Class A shares while you are making systematic withdrawals from your
account, you may pay unnecessary sales charges.
Direct Deposit
If you elect to take dividends or dividends and capital gain distributions in
cash, or if you establish a systematic withdrawal plan, you may choose to have
those cash payments deposited directly into your savings, checking or NOW bank
account.
Voluntary tax withholding
You may have the transfer agent withhold 28% of the dividends and capital gain
distributions paid from your fund account (before any reinvestment) and forward
the amount withheld to the Internal Revenue Service as a credit against your
federal income taxes. Voluntary tax withholding is not available for retirement
plan accounts or for accounts subject to backup withholding.
Reinstatement privilege for Class A shares
You may qualify for the reinstatement privilege if you recently sold all or part
of your Class A shares.
24
<PAGE>
Shareowner services
FactFone(SM) 1-800-225-4321
You can use FactFone(SM) to:
[square bullet] Obtain current information on your Pioneer mutual fund
accounts
[square bullet] Inquire about the prices and yields of all publicly available
Pioneer mutual funds
[square bullet] Make computer-assisted telephone purchases, exchanges and
redemptions for your fund accounts
[square bullet] Request account statements
If you plan to use FactFone(SM) to make telephone purchases and redemptions,
first you must activate your personal identification number and establish your
bank account of record. If your account is registered in the name of a
broker-dealer or other third party, you may not be able to use FactFone(SM).
Confirmation statements
The transfer agent maintains an account for each investment firm or individual
shareowner and records all account transactions. You will be sent confirmation
statements showing the details of your transactions as they occur, except
automatic investment plan transactions, which are confirmed quarterly. If you
have more than one Pioneer mutual fund account registered in your name, the
Pioneer combined account statement will be mailed to you each quarter.
Tax information
In January of each year, the fund will mail you information about the tax status
of the dividends and distributions paid to you by the fund.
Pioneer website
www.pioneerfunds.com
The website includes a full selection of information on mutual fund investing.
You can also use the website to get:
[square bullet] Your current account information
[square bullet] Prices, returns and yields of all publicly available Pioneer
mutual funds
[square bullet] Prospectuses for all the Pioneer funds
TDD 1-800-225-1997
If you have a hearing disability and access to TDD keyboard equipment, you can
contact our telephone representatives with questions about your account by
calling our TDD number between 8:30 a.m. and 5:30 p.m. Eastern time any weekday
that the New York Stock Exchange is open.
25
<PAGE>
Shareowner account policies
Signature guarantees and other requirements
You are required to obtain a signature guarantee when you are:
[square bullet] Requesting certain types of exchanges or sales of fund shares
[square bullet] Redeeming shares for which you hold a share certificate
[square bullet] Requesting certain types of changes for your existing account
You can obtain a signature guarantee from most broker-dealers, banks, credit
unions (if authorized under state law) and federal savings and loan
associations. You cannot obtain a signature guarantee from a notary public.
Fiduciaries and corporations are required to submit additional documents to sell
fund shares.
Minimum account size
The fund requires that you maintain a minimum account value of $500. If you hold
less than the minimum in your account because you have sold or exchanged some of
your shares, the fund will notify you of its intent to sell your shares and
close your account. You may avoid this by increasing the value of your account
to at least the minimum within six months of the notice from the fund.
Telephone access
You may have difficulty contacting the fund by telephone during times of market
volatility or disruption in telephone service. If you are unable to reach the
fund by telephone, you should communicate with the fund in writing.
Share certificates
Normally, your shares will remain on deposit with the transfer agent and
certificates will not be issued. If you are legally required to obtain a
certificate, you may request one for your Class A shares only. A fee may be
charged for this service.
Other policies
The fund may suspend transactions in shares when trading on the New York Stock
Exchange is closed or restricted, when an emergency exists that makes it
impracticable for the fund to sell or value its portfolio securities or with the
permission of the Securities and Exchange Commission.
The fund or the distributor may revise, suspend or terminate the account options
and services available to shareowners at any time.
26
<PAGE>
Dividends, capital gains and taxes
[SIDEBAR]
[COLUMN GRAPHIC]
- --------------------
Sales and
exchanges may be
taxable transactions
to shareowners.
- --------------------
[END SIDEBAR]
Dividends and capital gains
The fund declares a dividend daily. The dividend consists of substantially all
of the fund's net income. You begin to earn dividends on the first business day
following receipt of payment for shares. You continue to earn dividends up to
the date of sale. Dividends are normally paid on the lst business day of each
month. The fund makes distributions from long-term capital gains, if any,
annually, generally in November.
The fund may also pay dividends and distributions at other times if necessary
for the fund to avoid federal income or excise tax. If you invest in the fund
close to the time that the fund makes a capital gains distribution, generally
you will pay a higher price per share and you will pay taxes on the amount of
the capital gains distribution whether you reinvest the distribution or receive
it as cash.
Taxes
For federal income tax purposes, your distributions from the fund's net
long-term capital gains are considered long-term capital gains and may be
taxable to you at different maximum rates depending upon their source and other
factors. Dividends and short-term capital gain distributions are taxable as
ordinary income. Dividends and distributions are taxable, whether you take
payment in cash or reinvest them to buy additional fund shares. You may also
have tax consequences (generally, a capital gain or loss) when you sell or
exchange fund shares. Each year the fund will mail to you information about your
dividends and distributions for, and the shares you sold in, the previous
calendar year.
You must provide your social security number or other taxpayer identification
number to the fund along with the certifications required by the Internal
Revenue Service when you open an account. If you do not or if it is otherwise
legally required to do so, the fund will withhold 31% "backup withholding" tax
from your dividends and distributions, sales proceeds and any other payments to
you.
You should ask your own tax adviser about any federal or state tax
considerations, including possible additional withholding taxes for non-U.S.
shareholders. You may also consult the fund's statement of additional
information for a more detailed discussion of federal income tax considerations
that may affect the fund and its shareowners.
27
<PAGE>
Pioneer
Strategic Income Fund
You can obtain more free information about the fund from your investment firm or
by writing to Pioneering Services Corporation, 60 State Street, Boston,
Massachusetts 02109. You may also call 1-800-225-6292.
Shareowner reports
Annual and semiannual reports to shareowners provide information about the
fund's investments. The annual report discusses market conditions and investment
strategies that significantly affected the fund's performance during its last
fiscal year.
Statement of additional information
The statement of additional information provides more detailed information about
the fund. It is incorporated by reference into this prospectus.
Visit our website
www.pioneerfunds.com
You can also review the fund's shareowner reports, prospectus and statement of
additional information at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. or by calling 1-800-SEC-0330 to request a
copy. The Commission charges a fee for this service. You can get the same
information free from the Commission's Internet website (http://www.sec.gov).
(Investment Company Act file no. 811- )
0399-6146
(C) Pioneer Funds Distributor, Inc.
[PIONEER LOGO] Pioneer Funds Distributor, Inc.
60 State Street
Boston, MA 02109
www.pioneerfunds.com
<PAGE>
[PIONEER LOGO]
Pioneer
Strategic Income
Fund
Class Y Shares
Prospectus, April 8, 1999
No government securities commission or agency has approved the fund's
shares or determined whether this prospectus is accurate or complete.
Any representation to the contrary is a crime.
- ------------------------------------------
Contents
Basic information about the fund 1
Management 7
Buying, exchanging and selling shares 9
Dividends, capital gains and taxes 18
- ------------------------------------------
<PAGE>
Basic information about the fund
Investment objective
A high level of current income.
[SIDEBAR]
[MAGNIFYING GLASS GRAPHIC]
- ---------------------
Below investment grade debt
securities A debt security is
below investment grade if it is rated
BB or lower by Standard & Poor's
Rating Group or the equivalent rating by
a nationally recognized
securities rating organization or
determined to be of equivalent credit
quality by Pioneer.
- ---------------------
[END SIDEBAR]
Investment strategies
The fund has the flexibility to invest in a broad range of issuers and segments
of the market for debt securities. Pioneer Investment Management, Inc., the
fund's investment adviser, normally allocates the fund's investments among the
following three segments of the debt markets:
[square bullet] High yield securities
[square bullet] Investment grade securities of U.S. issuers
[square bullet] Investment grade and non-investment grade securities of
non-U.S. issuers
Normally, each of the sectors represent no less than 15% or more than 65% of the
fund's assets (at the time of purchase). Pioneer's allocations among these
segments of the debt markets depend upon its outlook on economic, interest rate
and political trends.
The fund invests primarily in:
[square bullet] Debt securities issued or guaranteed by the U.S. government,
its agencies or instrumentalities or non-U.S governmental
entities
[square bullet] Debt securities of U.S. and non-U.S. corporate issuers
[square bullet] Mortgage-backed and asset-backed securities
The fund's investments may have all types of interest rate payment and reset
terms, including fixed rate, adjustable rate, zero coupon, contingent, deferred,
payment in kind and auction rate features. The fund invests in securities with a
broad range of maturities.
Depending upon Pioneer's allocation among market segments, up to 70% of the
fund's assets may be held in securities rated below investment grade at the time
of purchase or determined to be of equivalent quality by Pioneer. Up to 20% of
the fund's assets may be invested in debt securities rated below CCC by Standard
& Poor's Rating Group or the equivalent by another nationally recognized rating
organization or determined to be of equivalent credit quality by Pioneer. Debt
securities rated below investment grade are commonly referred to as "junk bonds"
and are considered speculative. Lower quality debt securities involve greater
risk of loss, are subject to greater price volatility and are less liquid,
especially during periods of economic uncertainty or change, than higher rated
debt securities.
The fund may invest in securities of non-U.S. corporate and governmental
issuers, including debt securities of corporate and
- --------------------------------------------------------------------------------
An investment in the fund is not a bank deposit and is not insured or guaranteed
by the Federal Deposit Insurance Corporation or any other government agency.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Contact your investment professional to discuss how the fund fits into your
portfolio.
- --------------------------------------------------------------------------------
1
<PAGE>
governmental issuers in emerging markets. Non-U.S. investments includes
securities issued by non-U.S. governments, banks or corporations, foreign
branches of U.S. banks and certain supranational organizations, such as the
World Bank and the European Union.
Pioneer considers both macroeconomic and issuer specific factors in selecting a
portfolio designed to achieve the fund's investment objective. In assessing the
appropriate maturity, rating, sector and country weighing of the fund's
portfolio, Pioneer considers a variety of macroeconomic factors that are
expected to influence economic activity and interest rates. These factors
include fundamental economic indicators, Federal Reserve monetary policy and the
relative value of the U.S. dollar compared to other currencies. Once Pioneer
determines the preferable portfolio characteristic, Pioneer selects individual
securities based upon the terms of the securities (such as yields compared to
U.S. Treasuries or comparable issuers), liquidity and rating, sector and issuer
diversification. Pioneer also employs fundamental research and due diligence to
assess an issuer's credit quality, taking into account financial condition and
profitability, future capital needs, potential for change in rating, industry
outlook, the competitive environment and management ability. In making these
portfolio decisions, Pioneer relies on the knowledge, experience and judgment of
its own staff who have access to a wide variety of research.
Principal risks of investing in the fund
Even though the fund seeks a high level of current income, you could lose money
on your investment, or the fund could fail to generate current income, if:
[square bullet] Interest rates go up, causing the value of the fund's
investments to decline
[square bullet] The issuer of a security owned by the fund defaults on its
obligation to pay principal and/or interest or has its credit
rating downgraded
[square bullet] During periods of declining interests rates, the issuer of a
security may exercise its option to prepay principal earlier
than scheduled, forcing the fund to reinvest in lower yielding
securities. This is known as call or prepayment risk
[square bullet] During periods of rising interest rates, the average life of
certain types of securities may be extended because of slower
than expected principal payments. This may lock in a below
market interest rate, increase the security's duration and
reduce the value of the security. This is known as extension
risk
[square bullet] Pioneer's judgment about the attractiveness, relative value or
potential appreciation of a particular sector, security or
hedging strategy proves to be incorrect
To the extent the fund invests significantly in asset-backed and
mortgage-related securities, its exposure to prepayment and extension risks may
be greater than if it invested in other fixed income securities. Mortgage
derivatives held by the fund may have especially volatile prices and may have a
disproportionate effect on the fund's share price.
2
<PAGE>
Basic information about the fund
Investment in high yield securities involves substantial risk of loss.
These securities are considered speculative with respect to the issuer's ability
to pay interest and principal and are susceptible to default or decline in
market value due to adverse economic and business developments. The market
values for high yield securities tends to be very volatile, and these securities
are less liquid than investment grade debt securities. For these reasons, your
investment in the fund is subject to the following specific risks:
[square bullet] Increased price sensitivity to changing interest rates and
deteriorating economic environment
[square bullet] Greater risk of loss due to default or declining credit quality
[square bullet] Adverse company specific events are more likely to render the
issuer unable to make interest and/or principal payments
[square bullet] A negative perception of the high yield market develops,
depressing the price and liquidity of high yield securities.
This negative perception could last for a significant period of
time
Investing in non-U.S. issuers may involve unique risks compared to investing in
the securities of U.S. issuers. Some of these risks do not apply to larger more
developed countries. These risks are more pronounced to the extent the fund
invests in issuers in countries with emerging markets or of the fund invests
significantly in one country. These risks may include:
[square bullet] Less information about non-U.S. issuers or markets may be
available due to less rigorous disclosure and accounting
standards or regulatory practices
[square bullet] Many non-U.S. markets are smaller, less liquid and more
volatile than U.S. markets. In a changing market, Pioneer may
not be able to sell the fund's portfolio securities in amounts
and at prices Pioneer considers reasonable
[square bullet] The U.S. dollar may appreciate against non-U.S. currencies or a
non-U.S. government may impose restrictions on currency
conversion or trading
[square bullet] The economy of non-U.S. countries may grow at a slower rate than
expected or may experience a downturn or recession
[square bullet] Economic, political and social developments that adversely
affect the securities markets
[square bullet] Non-U.S. governmental obligations involve the risk of debt
moratorium, repudiation or renegotiation and the fund may
be unable to enforce its rights against the issuers
3
<PAGE>
Fees and expenses
These are the fees and expenses, based upon estimated expenses for the current
fiscal year, you may pay if you invest in the fund.
<TABLE>
<CAPTION>
Annual fund operating expenses
paid from the assets of the fund
as a percentage of average daily net assets Class Y
- --------------------------------------------------------------------------------
<S> <C>
Management Fee (1) 0.75%
- --------------------------------------------------------------------------------
Distribution and Service (12b-1) Fee None
- --------------------------------------------------------------------------------
Other Expenses %
- --------------------------------------------------------------------------------
Total Annual Fund Operating Expenses %
- --------------------------------------------------------------------------------
</TABLE>
(1) Pioneer has agreed not to impose all or a portion of its management fee and,
if necessary, to limit other operating expenses of the fund to the extent
required to reduce Class A expenses to % of the average daily net assets
attributable to Class A shares; the portion of fund expenses attributable to
Class Y shares will be reduced only to the extent such expenses are reduced
for Class A shares. This agreement is voluntary and temporary and may be
revised or terminated at any time.
Example
This example helps you compare the costs of investing in the fund with the cost
of investing in other mutual funds. It assumes that: a) you invest $10,000 in
the fund for the time periods shown, b) you reinvest all dividends and
distributions, c) your investment has a 5% return each year and d) the fund's
operating expenses remain the same.
Although your actual costs may be higher or lower, under these assumptions your
costs would be:
<TABLE>
<CAPTION>
Number of years you own your shares
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 3 5 10
- --------------------------------------------------------------------------------
$ $ $ $
- --------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
Basic information about the fund
Other investment strategies
As discussed, the fund invests primarily in a broad range of debt
securities to achieve a high level of current income.
This section describes additional investments that the fund may make or
strategies that it may pursue to a lesser degree to achieve the fund's goal.
Some of the fund's secondary investment policies also entail risks. To learn
more about these investments and risks, you should obtain and read the statement
of additional information (SAI).
Investments other than debt securities
The fund may invest up to up to 20% of its assets in equity securities,
including common stocks, preferred stocks, warrants, convertible debt securities
and depository receipts. Equity securities rank junior in a company's capital
structure to debt securities and consequently may entail greater risk of loss
than fixed income securities.
The fund may enter into mortgage dollar roll transactions to earn additional
income. In these transactions, the fund sells a U.S. agency mortgage-backed
security and simultaneously agrees to repurchase at a future date another U.S.
agency mortgage-backed security with the same interest rate and maturity date,
but generally backed by a different pool of mortgages. The fund loses the right
to receive interest and principal payments on the security it sold. However, the
fund benefits from the interest earned on investing the proceeds of the sale and
may receive a fee or a lower repurchase price. The benefits from these
transactions depend upon Pioneer's ability to forecast mortgage prepayment
patterns on different mortgage pools. The fund may lose money if, during the
period between the time it agrees to the forward purchase of the mortgage
securities and the settlement date, these securities decline in value due to
market conditions or prepayments on the underlying mortgages.
Additional information about debt securities
The fund may invest in mortgage-backed and asset-backed securities.
Mortgage-related securities may be issued by private companies or by agencies of
the U.S. government and represent direct or indirect participation in, or are
collateralized by and payable from, mortgage loans secured by real property.
Asset-backed securities represent participations in, or are secured by and
payable from, assets such as installment sales or loan contracts, leases, credit
card receivables and other categories of receivables.
Certain debt instruments may only pay principal at maturity or may only
represent the right to receive payments of principal or payments of interest on
underlying pools of mortgage or government securities, but not both. The value
of these types of instruments may change more drastically than debt securities
that pay both principal and interest during periods of changing interest rates.
Principal only mortgage backed securities are particularly subject to prepayment
risk. Interest only instruments are particularly subject to extension risk. For
mortgage derivatives and structured securities that have imbedded leverage
features, small changes in interest or prepayment rates may cause large and
sudden price movements.
5
<PAGE>
Mortgage derivatives can also become illiquid and hard to value in declining
markets.
For purposes of the fund's credit quality policies, if a security receives
different ratings from nationally recognized rating organizations, the fund will
use the highest rating assigned to that security.
Temporary investments
Normally, the fund invests substantially all of its assets to meet its
investment objectives. The fund may invest the remainder of its assets in
securities with a remaining maturity of less than one year, cash equivalents or
may hold cash. For temporary defensive purposes, the fund may depart from its
principal investment strategies and invest part or all of its assets in these
securities. During such periods, the fund may not be able to achieve its
investment objective. The fund intends to adopt a defensive strategy only when
Pioneer believes debt securities in which the fund normally invests have
extraordinary risks due to political or economic factors.
Short-term trading
The fund usually does not trade for short-term profits. The fund will sell an
investment, however, even if it has only been held for a short time, if it no
longer meets the fund's investment criteria. If the fund does a lot of trading,
it may incur additional operating expenses, which would reduce performance, and
could cause shareowners to incur a higher level of taxable income or capital
gains.
Derivatives
The fund may use futures, options, forward foreign currency exchange contracts
and other derivatives. A derivative is a security or instrument whose value is
determined by reference to the value or the change in value of one or more
securities, currencies, indices or other financial instruments. The fund does
not use derivatives as a primary investment technique and generally limits their
use to hedging. However, the fund may use derivatives for a variety of purposes,
including:
[square bullet] As a hedge against adverse changes in interest rates or
currency exchange rates
[square bullet] As a substitute for purchasing or selling securities
[square bullet] To increase the fund's return
Even a small investment in derivatives can have a significant impact on the
fund's exposure to stock market values, interest rates or currency exchange
rates. If changes in a derivative's value do not correspond to changes in the
value of the fund's other investments, the fund may not fully benefit from or
could lose money on the derivative position. In addition, some derivatives
involve risk of loss if the person who issued the derivative defaults on its
obligation. Certain derivatives may be less liquid and more difficult to value.
6
<PAGE>
Management
Pioneer, the fund's investment adviser,
selects the fund's investments and oversees the fund's operations.
Pioneer Group
The Pioneer Group, Inc. and its subsidiaries are engaged in financial services
businesses in the United States and many foreign countries. As of December 31,
1998, the firm had more than $23 billion in assets under management worldwide
including more than $22 billion in U.S. mutual funds. The firm's U.S. mutual
fund investment history includes creating in 1928 one of the first mutual funds.
John F. Cogan, chairman of the board and president of The Pioneer Group, Inc.
owns approximately 14% of the firm. He is also an officer and director of each
of the Pioneer mutual funds.
Investment adviser
Pioneer manages a family of U.S. and international stock funds, bond funds and
money market funds. Pioneer is a subsidiary of The Pioneer Group, Inc. Its main
office is at 60 State Street, Boston, Massachusetts 02109.
Portfolio manager
Day-to-day management of the fund's portfolio is the responsibility of a team of
fixed income portfolio managers and analysts supervised by Sherman B. Russ and
Kenneth J. Taubes.
Mr. Russ and Mr. Taubes are jointly responsible for overseeing Pioneer's U.S.
and global fixed income team. Mr. Russ is a senior vice president of Pioneer. He
joined Pioneer in 1983 and has been an investment professional since 1962. Mr.
Taubes joined Pioneer as a senior vice president in September 1998 and has been
an investment professional since 1986. Prior to joining Pioneer, Mr. Taubes had
served since 1991 as a senior vice president and senior portfolio manager for
several Putnam Investments institutional accounts and mutual funds.
Mr. Russ, Mr. Taubes and their team operate under the supervision of Theresa A.
Hamacher. Ms. Hamacher is chief investment officer of Pioneer. She joined
Pioneer in 1997 and has been an investment professional since 1984.
7
<PAGE>
Management fee
The fund pays Pioneer a fee for managing the fund and to cover the cost of
providing certain services to the fund. Pioneer's annual fee is equal to
0.75% of the fund's average daily net assets up to $100 million, 0.70% of the
next $400 million, 0.65% of the next $500 million and 0.60% on assets over
$1 billion. The fee is normally computed daily and paid monthly.
Distributor and transfer agent
Pioneer Funds Distributor, Inc. is the fund's distributor. Pioneering Services
Corporation is the fund's transfer agent. The fund compensates the distributor
and transfer agent for their services. The distributor and the transfer agent
are subsidiaries of The Pioneer Group, Inc.
Year 2000
Information technology experts are concerned about computer and other electronic
systems' ability to process date-related information on and after January 1,
2000. This scenario, commonly referred to as the "Year 2000 problem," could have
an adverse impact on the fund and the provision of services to its shareowners.
Pioneer is addressing the Year 2000 problem with respect to its systems and
those used by the distributor and transfer agent. During 1999, Pioneer expects
to finish addressing all material Year 2000 issues and to participate in
industry-wide testing. The fund has obtained assurances from its other service
providers that they are taking appropriate Year 2000 measures and Pioneer is
monitoring their efforts. Although the fund does not expect the Year 2000
problem to adversely impact it, the fund cannot guarantee that its, or the
fund's service providers', efforts will be successful.
8
<PAGE>
Buying, exchanging and selling shares
Net asset value
The fund's net asset value is the value of its portfolio of securities plus any
other assets minus its operating expenses and any other liabilities. The fund
calculates a net asset value for each class of shares every day the New York
Stock Exchange is open when regular trading closes (normally 4:00 p.m. Eastern
time).
The fund generally values its portfolio securities based on market prices or
quotations. When market prices are not available or are considered by Pioneer to
be unreliable, the fund may use an asset's fair value. Fair value is determined
in accordance with procedures approved by the fund's trustees. International
securities markets may be open on days when the U.S. markets are closed. For
this reason, the values of any international securities owned by the fund could
change on a day when you cannot buy or sell shares of the fund.
You buy or sell Class Y shares at the net asset value per share calculated on
the day of your transaction.
Distribution of Class Y shares
The distributor incurs the expenses of distributing the fund's Class Y shares,
none of which are reimbursed or paid for by the fund or the Class Y shareowners.
Distribution expenses include fees paid to broker-dealers which have sales
agreements with the distributor and other parties, advertising expenses and the
cost of printing and mailing prospectuses to potential investors.
The distributor or its affiliates may make payments out of its own resources to
dealers and other persons who distribute Class Y shares. Such payments may be
based upon the value of Class Y shares sold. The distributor may impose
conditions on the payment of such fees.
9
<PAGE>
Opening your account
If you are an individual or other non-institutional investor, open your Class Y
share account by completing an account application and sending it to the
transfer agent by mail or by fax. If you are any other type of investor, please
call the transfer agent to obtain a Class Y share account set-up kit and an
account number.
The transfer agent must receive your account application before you send your
initial check or federal funds wire. In addition, you must provide a bank wire
address of record when you establish your account.
If your shares are held in your investment firm's name, the options and services
available to you may be different from those discussed in this prospectus. Ask
your investment professional for more information.
Account options
Use your account application to select options and privileges for your account.
You can change your selections at any time by sending a completed account
options form to the transfer agent. You may be required to obtain a signature
guarantee to make certain changes to an existing account.
Call or write to the fund's transfer agent for account applications, account
options forms and other account information:
Pioneering Services Corporation
P.O. Box 9014
Boston, Massachusetts 02205-9014
Telephone 1-888-294-4480
Telephone transaction privileges
If your account is registered in your name, you can exchange or sell Class Y
shares by telephone. If you do not want your account to have telephone
transaction privileges, you must indicate that choice on your account
application or by writing to the transfer agent.
When you request a telephone transaction the transfer agent will try to confirm
that the request is genuine. The transfer agent records the call, requires the
caller to provide the personal identification number for the account and sends
you a written confirmation. The fund may implement other confirmation procedures
from time to time. Different procedures may apply if you have a non-U.S. account
or if your account is registered in the name of an institution, broker-dealer or
other third party.
[SIDEBAR]
[TELEPHONE GRAPHIC]
- -----------------------
By phone
If you want to
place your telephone
transaction by speaking
to a shareowner
services
representative, call
1-888-294-4480
between 9:00 a.m.
and 6:00 p.m.
Eastern time on any
weekday that the
New York Stock
Exchange is open.
- -----------------------
[END SIDEBAR]
10
<PAGE>
Buying, exchanging and selling shares
General rules on buying, exchanging and selling
your fund shares
Share price
When you place an order to purchase, exchange or sell Class Y shares it must be
received in good order by the transfer agent or by your broker-dealer by the
close of regular trading on the New York Stock Exchange (currently 4:00 p.m.
Eastern time) in order to purchase shares at the price determined on that day.
If you place your order through a broker-dealer, you must place the order before
the close of regular trading on the New York Stock Exchange and your
broker-dealer must submit the order to the distributor prior to the
distributor's close of business (usually 5:30 p.m. Eastern time) for your share
price to be determined at the close of regular trading on the date your order is
received. Your broker-dealer is responsible for transmitting your order to the
distributor. In all other cases except as described below for wire transfers,
your share price will be calculated at the close of the New York Stock Exchange
after the distributor receives your order.
Buying
You can buy Class Y shares at net asset value per share. The fund does not
impose any initial, contingent deferred or asset based sales charge on Class Y
shares. The distributor may reject any order until it has confirmed it in
writing and received payment.
Minimum investment amount
Your initial Class Y share investment must be at least $5 million. This amount
may be invested in one or more of the Pioneer mutual funds that currently offer
Class Y shares. There is no minimum additional investment amount.
Waivers of the minimum investment amount
The fund will accept an initial investment of less than $5 million if:
(a) The investment is made by a trust
company or bank trust department
which is initially investing at least
$1 million in any of the Pioneer mutual
funds and, at the time of the purchase,
such assets are held in a fiduciary,
advisory, custodial or similar capacity
over which the trust company or bank
trust department has full or shared
investment discretion; or
(b) The investment is made by an
employer-sponsored retirement plan
that meets the requirements of
Sections 401, 403 or 457 of the
Internal Revenue Code, provided that the number of
employees covered by the plan is 5,000 or more,
or the plan has assets of $25 million or more; or
(c) The investment is at least $1 million
in any of the Pioneer mutual funds and
the purchaser is an insurance company
separate account; or
(d) The investment is made by an
employer-sponsored retirement plan
established for the benefit of
(1) employees of The Pioneer Group,
Inc. or employees of its affiliates, or
(2) employees or the affiliates of broker-dealers
who have a Class Y shares sales agreement with the distributor.
11
<PAGE>
Exchanging
You may exchange your Class Y shares for the Class Y shares of another Pioneer
mutual fund.
Your exchange request must be for at least $1,000 unless the fund you are
exchanging into has a different minimum. The fund allows you to exchange your
Class Y shares at net asset value without charging you either an initial or
contingent deferred sales charge.
Before you request an exchange, consider each fund's investment objective and
policies as described in the fund's prospectus.
Selling
Your Class Y shares will be sold at net asset value per share next calculated
after the fund receives your request in good order. If a signature guarantee is
required, you must submit your request in writing.
The fund generally will send your sale proceeds by check, bank wire or
electronic funds transfer. Normally you will be paid within seven days. If you
recently purchased the shares being sold, the fund may delay payment of the sale
proceeds until your payment has cleared. This may take up to 15 calendar days
from the purchase date.
If you are selling shares from a non-retirement account or certain IRAs, you may
use any of the methods described below. If you are selling shares from a
retirement account other than an IRA, you must make your request in writing.
[SIDEBAR]
[COLUMN GRAPHIC]
- --------------------
You may have to
pay federal income
taxes on a sale or
an exchange.
- --------------------
[END SIDEBAR]
- --------------------------------------------------------------------------------
Good order means that:
[square bullet] You have provided adequate instructions
[square bullet] There are no outstanding claims against your account
[square bullet] There are no transaction limitations on your account
[square bullet] If you have any fund share certificates, you submit them and
they are signed by each record owner exactly as the shares are
registered
[square bullet] Your request includes a signature guarantee if you:
- Are selling over $100,000 worth of shares and
Want the sale proceeds sent to an address other than your
bank account of record or
The account registration, address of record or bank account
of record has changed within the last 30 days
- Are selling over $5 million worth of shares
- Want the sale proceeds to be:
Mailed by check to an address other than the address of
record
Made payable to someone other than the account's record
owners
- Are transferring the sale proceeds to a Pioneer mutual fund
account with a different registration
- --------------------------------------------------------------------------------
12
<PAGE>
Buying, exchanging and selling shares
<TABLE>
<CAPTION>
--------------------------------------- --------------------------------------
Buying shares Exchanging shares
--------------------------------------- --------------------------------------
<S> <C> <C>
In writing, You can purchase Class Y shares by You can exchange Class Y shares by
by mail mailing a check to the transfer agent. mailing or faxing a letter of
or by fax Make your check payable to the fund. instruction to the transfer agent. You
Neither initial nor subsequent can exchange fund shares directly
investments should be made by third through the fund only if your account
party check. Your check must be in U.S. is registered in your name. However,
dollars and drawn on a U.S. bank. you may not fax an exchange request
Include in your purchase request the for more than $5 million. Include in
fund's name, the account number and the your letter:
name or names in the account
registration.
[square bullet] The names and
signatures of all
If you are registering an account in registered owners
the name of a corporation or other
fiduciary, you must send your completed
account set-up forms to the transfer [square bullet] A signature
agent prior to making your initial guarantee for each
purchase. registered owner
if the amount of
the exchange is
more than $5
million
[square bullet] The name of the
fund out of which
you are exchanging
and the name of
the fund into
which you are
exchanging
[square bullet] The dollar amount
or number of Class
Y shares you are
exchanging
--------------------------------------- --------------------------------------
By phone By wire By phone
or wire If you have an existing Class Y After you establish your Class Y
account, you may wire funds to purchase account, you can exchange fund shares
Class Y shares. Note, however, that: by phone if:
[square bullet] State Street Bank [square bullet] You are using the
must receive your exchange to
wire no later than establish a new
by 11:00 a.m. account, provided
Eastern time on the the new account
business day after has a registration
the fund receives identical to the
your request to original account
purchase shares
[square bullet] The fund into
[square bullet] If State Street which you are
Bank does not exchanging offers
receive your wire Class Y shares
by 11:00 a.m.
Eastern time on the
next business day, [square bullet] You are not
your transaction exchanging more
will be canceled at than $5 million
your expense and worth of shares
risk per account per day
[square bullet] Wire transfers [square bullet] You can provide
normally take two the proper account
or more hours to identification
complete and a fee information
may be charged by
the sending bank
[square bullet] Wire transfers may be
restricted on holidays
and at certain other times
Instruct your bank to wire funds to:
Receiving Bank: State Street Bank
and Trust Company
Address: 225 Franklin Street,
Boston, MA 02101
ABA Routing No. 011000028
For further credit to:
Shareholder Name
Existing Pioneer Account No.
Pioneer Strategic Income Fund
--------------------------------------- --------------------------------------
Through your Consult your investment professional Consult your investment professional
investment firm for more information. for more information about exchanging
your shares.
</TABLE>
13
<PAGE>
- ---------------
Selling shares
- ---------------
You can sell some or all of your Class Y shares by writing directly to the fund
only if your account is registered in your name. Include in your request your
name, the fund's name, your fund account number, the dollar amount or number of
Class Y shares to be sold and any other applicable requirements as described
below.
[square bullet] If your account is registered in the name of a corporation or
other fiduciary you must include the name of an authorized
person and a certified copy of a current corporate resolution,
certificate of incumbency or similar legal document showing that
the named individual is authorized to act on behalf of the
record owner
[square bullet] The transfer agent will send the sale proceeds to your address
of record unless you provide other instructions
[square bullet] Your request must be signed by all registered owners and be in
good order
[square bullet] The transfer agent will not process your request until it is
received in good order
By fax
[square bullet] You may sell up to $5 million per account per day if the
proceeds are directed to your bank account of record
[square bullet] You may sell up to $100,000 per account per day if the proceeds
are not directed to your bank account of record
- --------------------------------------------------------------------------------
By phone
[square bullet] You may sell up to $5 million per account per day if the
proceeds are directed to your bank account of record
[square bullet] You may sell up to $100,000 per account per day if the proceeds
are not directed to your bank account of record
You may sell fund shares held in a retirement plan account by phone only if your
account is an IRA. You may not sell your shares by phone if you have changed
your address (for checks) or your bank information (for wires and transfers) in
the last 30 days.
You may receive your sale proceeds:
[square bullet] By check, provided the check is made payable exactly as your
account is registered
[square bullet] By bank wire or by electronic funds transfer, provided the sale
proceeds are being sent to your bank address of record
Consult your investment professional for more information. The fund has
authorized the distributor to act as its agent in the repurchase of fund shares
from qualified investment firms. The fund reserves the right to terminate this
procedure at any time.
- -------------------------------------------
How to contact us
By phone [PHONE GRAPHIC]
For information or to request a telephone
transaction between 9:00 a.m. and 6:00 p.m.
(Eastern time) by speaking with a
shareholder services representative call
1-888-294-4480
To use FactFone(SM) call
1-800-225-4321
By mail [ENVELOPE GRAPHIC]
Send your written instructions to:
Pioneering Services Corporation
P.O.Box 9014
Boston, Massachusetts 02205-9014
By fax [FAX MACHINE GRAPHIC]
Fax your exchange and sale requests to:
1-888-294-4485
- -------------------------------------------
- --------------------------------------------------------------------------------
Exchange privilege
The fund and the distributor 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. Abuses include frequent trading in
response to short-term market fluctuations and a pattern of trading that appears
to be an attempt to "time the market." In addition, the fund and the distributor
reserve the right to charge a fee for exchanges or to modify, limit, suspend or
discontinue the exchange privilege.
- --------------------------------------------------------------------------------
14
<PAGE>
Buying, exchanging and selling shares
Account options
Distribution options
The fund offers three distribution options. Any fund shares you buy by
reinvesting distributions will be priced at the applicable net asset value per
share.
(1) Unless you indicate another option on your account application, any
dividends and capital gain distributions paid to you by the fund will
automatically be invested in additional fund shares.
(2) You may elect to have the amount of any dividends paid to you in cash and
any capital gain distributions reinvested in additional shares.
(3) You may elect to have the full amount of any dividends and/or capital gain
distributions paid to you in cash.
Options (2) or (3) are not available to retirement plan accounts or accounts
with a current value of less than $500.
If your distribution check is returned to the transfer agent or you do not cash
the check for six months or more, the transfer agent may reinvest the amount of
the check in your account and automatically change the distribution option on
your account to option (1) until you request a different option in writing.
These additional shares will be purchased at the then current net asset value.
15
<PAGE>
Shareowner services
FactFone(SM) 1-800-225-4321 You can use FactFone(SM) to:
[square bullet] Obtain current information on your Pioneer mutual fund accounts
[square bullet] Inquire about the prices and yields of all publicly available
Pioneer mutual funds
[square bullet] Request account statements
If your account is registered in the name of a broker-dealer or other third
party, you may not be able to use FactFone(SM) to obtain account information.
Confirmation statements
The transfer agent maintains an account for each investment firm or individual
shareowner and records all account transactions. You will be sent confirmation
statements showing the details of your transactions as they occur, except
automatic investment plan transactions, which are confirmed quarterly. If you
have more than one Pioneer mutual fund account registered in your name, the
Pioneer combined account statement will be mailed to you each quarter.
Tax information
In January of each year, the fund will mail you information about the tax status
of the dividends and distributions paid to you by the fund.
Pioneer website
www.pioneerfunds.com
The website includes a full selection of information on mutual fund investing.
You can also use the website to get:
[square bullet] Your current account information
[square bullet] Prices, returns and yields of all publicly available Pioneer
mutual funds
[square bullet] Prospectuses for all the Pioneer funds
16
<PAGE>
Buying, exchanging and selling shares
Shareowner account policies
Signature guarantees and other requirements
You are required to obtain a signature guarantee when you are:
[square bullet] Requesting certain types of exchanges or sales of fund shares
[square bullet] Redeeming shares for which you hold a share certificate
[square bullet] Requesting certain types of changes for your existing account
You can obtain a signature guarantee from most broker-dealers, banks, credit
unions (if authorized under state law) and federal savings and loan
associations. You cannot obtain a signature guarantee from a notary public.
Fiduciaries and corporations are required to submit additional documents to sell
fund shares.
Minimum account size
The fund requires that you maintain a minimum account value of $500. If you hold
less than the minimum in your account because you have sold or exchanged some of
your shares, the fund will notify you of its intent to sell your shares and
close your account. You may avoid this by increasing the value of your account
to at least the minimum within six months of the notice from the fund.
Telephone access
You may have difficulty contacting the fund by telephone during times of market
volatility or disruption in telephone service. If you are unable to reach the
fund by telephone, you should communicate with the fund in writing.
Share certificates
Normally, your shares will remain on deposit with the transfer agent and
certificates will not be issued.
Other policies
The fund may suspend transactions in shares when trading on the New York Stock
Exchange is closed or restricted, when an emergency exists that makes it
impracticable for the fund to sell or value its portfolio securities or with the
permission of the Securities and Exchange Commission.
The fund or the distributor may revise, suspend or terminate the account options
and services available to shareowners at any time.
The fund reserves the right to stop offering Class Y shares.
17
<PAGE>
Dividends, capital gains and taxes
Dividends and capital gains
The fund declares a dividend daily. The dividend consists of substantially all
of the fund's net income. You begin to earn dividends on the first business day
following receipt of payment for shares. You continue to earn dividends up to
the date of sale. Dividends are normally paid on the lst business day of each
month. The fund makes distributions from long-term capital gains, if any,
annually, generally in November.
The fund may also pay dividends and distributions at other times if necessary
for the fund to avoid federal income or excise tax. If you invest in the fund
close to the time that the fund makes a capital gains distribution, generally
you will pay a higher price per share and you will pay taxes on the amount of
the capital gains distribution whether you reinvest the distribution or receive
it as cash.
Taxes
For federal income tax purposes, your distributions from the fund's net
long-term capital gains are considered long-term capital gains and may be
taxable to you at different maximum rates depending upon their source and other
factors. Dividends and short-term capital gain distributions are taxable as
ordinary income. Dividends and distributions are taxable, whether you take
payment in cash or reinvest them to buy additional fund shares. You may also
have tax consequences (generally, a capital gain or loss) when you sell or
exchange fund shares. Each year the fund will mail to you information about your
dividends and distributions for, and the shares you sold in, the previous
calendar year.
You must provide your social security number or other taxpayer identification
number to the fund along with the certifications required by the Internal
Revenue Service when you open an account. If you do not or if it is otherwise
legally required to do so, the fund will withhold 31% "backup withholding" tax
from your dividends and distributions, sales proceeds and any other payments to
you.
You should ask your own tax adviser about any federal or state tax
considerations, including possible additional withholding taxes for non-U.S.
shareholders. You may also consult the fund's statement of additional
information for a more detailed discussion of federal income tax considerations
that may affect the fund and its shareowners.
[SIDEBAR]
[COLUMN GRAPHIC]
- --------------------
Sales and
exchanges may
be taxable
transactions
to shareowners.
- --------------------
[END SIDEBAR]
19
<PAGE>
Pioneer
Strategic Income Fund
You can obtain more free information about the fund from your investment firm or
by writing to Pioneering Services Corporation, 60 State Street, Boston,
Massachusetts 02109. You may also call 1-888-294-4480.
Shareowner reports
Annual and semiannual reports to shareowners provide information about the
fund's investments. The annual report discusses market conditions and investment
strategies that significantly affected the fund's performance during its last
fiscal year.
Statement of additional information
The statement of additional information provides more detailed information about
the fund. It is incorporated by reference into this prospectus.
Visit our website
www.pioneerfunds.com
You can also review the fund's shareowner reports, prospectus and statement of
additional information at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. or by calling 1-800-SEC-0330 to request a
copy. The Commission charges a fee for this service. You can get the same
information free from the Commission's Internet website (http://www.sec.gov).
(Investment Company Act file no. 811- )
0399-6147
(C) Pioneer Funds Distributor, Inc.
[PIONEER LOGO] Pioneer Funds Distributor, Inc.
60 State Street
Boston, MA 02109
www.pioneerfunds.com
<PAGE>
PIONEER STRATEGIC INCOME FUND
60 State Street
Boston, Massachusetts 02109
STATEMENT OF ADDITIONAL INFORMATION
CLASS A, CLASS B, CLASS C AND CLASS Y SHARES
APRIL 1, 1999
This statement of additional information is not a prospectus. It should be read
in conjunction with the fund's Class A, Class B and Class C shares prospectus
and its Class Y shares prospectus each dated April 1, 1999, as supplemented or
revised from time to time. A copy of each prospectus can be obtained free of
charge by calling Shareholder Services at 1-800-225-6292 or by written request
to the fund at 60 State Street, Boston, Massachusetts 02109. You can also obtain
a copy of the fund's Class A, Class B and Class C shares prospectus from our
website at: www.pioneerfunds.com.
TABLE OF CONTENTS
PAGE
1. Fund History........................................................ 2
2. Investment Policies, Risks and Restrictions......................... 2
3. Management of the Fund...............................................24
4. Investment Adviser...................................................28
5. Principal Underwriter and Distribution Plans.........................30
6. Shareholder Servicing/Transfer Agent.................................34
7. Custodian............................................................34
8. Independent Public Accountants.......................................34
9. Portfolio Transactions...............................................35
10. Description of Shares................................................36
11. Sales Charges........................................................38
12. Redeeming Shares.....................................................41
13. Telephone Transactions...............................................42
14. Pricing of Shares....................................................43
15. Tax Status...........................................................44
16. Investment Results...................................................49
17. Financial Statements.................................................52
18. Appendix A - Annual Fee, Expense and Other Information...............53
19. Appendix B - Description of Short-term Debt, Corporate Bond and
Preferred Stock Ratings..............................................55
20. Appendix C - Performance Statistics..................................62
21. Appendix D - Other Pioneer Information...............................74
<PAGE>
1. FUND HISTORY
The fund is a diversified open-end management investment company. The fund was
organized as a Delaware business trust on January 21, 1999.
2. INVESTMENT POLICIES, RISKS AND RESTRICTIONS
The prospectuses present the investment objective and the principal investment
strategies and risks of the fund. This section supplements the disclosure in the
fund's prospectuses and provides additional information on the fund's investment
policies or restrictions. Restrictions or policies stated as a maximum
percentage of the fund's assets are only applied immediately after a portfolio
investment to which the policy or restriction is applicable. Accordingly, any
later increase or decrease resulting from a change in values, net assets or
other circumstances will not be considered in determining whether the investment
complies with the fund's restrictions and policies.
PRIMARY INVESTMENTS
Under normal circumstances, the fund invests at least 80% of its total assets in
debt securities.
DEBT SECURITIES RATING CRITERIA
Investment grade debt securities are those rated "BBB" or higher by Standard &
Poor's Ratings Group ("Standard & Poor's"), the equivalent rating of other
national statistical rating organizations or determined to be of equivalent
credit quality by Pioneer Investment Management, Inc. ("Pioneer"). Debt
securities rated BBB are considered medium grade obligations with speculative
characteristics, and adverse economic conditions or changing circumstances may
weaken the issuer's ability to pay interest and repay principal.
Below investment grade debt securities are those rated "BB" and below by
Standard & Poor's or the equivalent rating of other national statistical rating
organizations. See Appendix B for a description of rating categories.
Below investment grade debt securities or comparable unrated securities are
commonly referred to as "junk bonds" and are considered predominantly
speculative and may be questionable as to principal and interest payments.
Changes in economic conditions are more likely to lead to a weakened capacity to
make principal payments and interest payments. The amount of junk bond
securities outstanding has proliferated as an increasing number of issuers have
used junk bonds for corporate financing. An economic downturn could severely
affect the ability of highly leveraged issuers to service their debt obligations
or to repay their obligations upon maturity. Factors having an adverse impact on
the market value of lower quality securities will have an adverse effect on the
fund's net asset value to the extent that it invests in such securities. In
addition, the fund may incur additional expenses to the extent it is required to
seek recovery upon a default in payment of principal or interest on its
portfolio holdings.
The secondary market for junk bond securities, which is concentrated in
relatively few market makers, may not be as liquid as the secondary market for
more highly rated securities, a factor which may have an adverse effect on the
fund's ability to dispose of a particular security when necessary to meet its
liquidity needs. Under adverse market or economic conditions, the secondary
market for junk bond
2
<PAGE>
securities could contract further, independent of any specific adverse
changes in the condition of a particular issuer. As a result, the fund could
find it more difficult to sell these securities or may be able to sell the
securities only at prices lower than if such securities were widely traded.
Prices realized upon the sale of such lower rated or unrated securities, under
these circumstances, may be less than the prices used in calculating the fund's
net asset value.
Since investors generally perceive that there are greater risks associated with
lower quality debt securities of the type in which the fund may invest a portion
of its assets, the yields and prices of such securities may tend to fluctuate
more than those for higher rated securities. In the lower quality segments of
the debt securities market, changes in perceptions of issuers' creditworthiness
tend to occur more frequently and in a more pronounced manner than do changes in
higher quality segments of the debt securities market, resulting in greater
yield and price volatility.
Lower rated and comparable unrated debt securities tend to offer higher yields
than higher rated securities with the same maturities because the historical
financial condition of the issuers of such securities may not have been as
strong as that of other issuers. However, lower rated securities generally
involve greater risks of loss of income and principal than higher rated
securities. Pioneer will attempt to reduce these risks through portfolio
diversification and by analysis of each issuer and its ability to make timely
payments of income and principal, as well as broad economic trends and corporate
developments.
DEBT OBLIGATIONS OF FOREIGN GOVERNMENTS
An investment in debt obligations of foreign governments and their political
subdivisions (sovereign debt) involve special risks that are not present in
corporate debt obligations. The foreign issuer of the sovereign debt or the
foreign governmental authorities that control the repayment of the debt may be
unable or unwilling to repay principal or interest when due, and a fund may have
limited recourse in the event of a default. During periods of economic
uncertainty, the market prices of sovereign debt may be more volatile than
prices of debt obligations of U.S. issues. In the past, certain foreign
countries have encountered difficulties in servicing their debt obligations,
withheld payments of principal and interest and declared moratoria on the
payment of principal and interest on their sovereign debt.
A sovereign debtor's willingness or ability to repay principal and pay interest
in a timely manner may be affected by, among other factors, its cash flow
situation, the extent of its foreign currency reserves, the availability of
sufficient foreign exchange, the relative size of the debt service burden, the
sovereign debtor's policy toward its principal international lenders and local
political constraints. Sovereign debtors may also be dependent on expected
disbursements from foreign governments, multilateral agencies and other entities
to reduce principal and interest arrearages on their debt. The failure of a
sovereign debtor to implement economic reforms, achieve specified levels of
economic performance or repay principal or interest when due may result in the
cancellation of third-party commitments to lend funds to the sovereign debtor,
which may further impair such debtor's ability or willingness to service its
debts.
EURODOLLAR INSTRUMENTS AND SAMURAI AND YANKEE BONDS. The fund may invest in
Eurodollar instruments and Samurai and Yankee bonds. Eurodollar instruments are
bonds of corporate and government issuers that pay interest and principal in
U.S. dollars but are issued in markets outside the United States, primarily in
Europe. Samurai bonds are yen-denominated bonds sold in Japan by non-
3
<PAGE>
Japanese issuers. Yankee bonds are U.S. dollar denominated bonds typically
issued in the U.S. by foreign governments and their agencies and foreign banks
and corporations. The fund may also invest in Eurodollar Certificates of Deposit
("ECDs"), Eurodollar Time Deposits ("ETDs") and Yankee Certificates of Deposit
("Yankee CDs"). ECDs are U.S. dollar-denominated certificates of deposit issued
by foreign branches of domestic banks; ETDs are U.S. dollar-denominated deposits
in a foreign branch of a U.S. bank or in a foreign bank; and Yankee CDs are U.S.
dollar-denominated certificates of deposit issued by a U.S. branch of a foreign
bank and held in the U.S. These investments involve risks that are different
from investments in securities issued by U.S. issuers, including potential
unfavorable political and economic developments, foreign withholding or other
taxes, seizure of foreign deposits, currency controls, interest limitations or
other governmental restrictions which might affect payment of principal or
interest.
RISKS OF NON-U.S. INVESTMENTS
To the extent that the fund invests in the securities of non-U.S. issuers, those
investments involve considerations and risks not typically associated with
investing in the securities of issuers in the U.S. These risks are heightened
with respect to investments in countries with emerging markets and economies.
The risks of investing in securities of non-U.S. issuers or issuers with
significant exposure to non-U.S. markets may be related, among other things, to
(i) differences in size, liquidity and volatility of, and the degree and manner
of regulation of, the securities markets of certain non-U.S. markets compared to
the securities markets in the U.S.; (ii) economic, political and social factors;
and (iii) foreign exchange matters, such as restrictions on the repatriation of
capital, fluctuations in exchange rates between the U.S. dollar and the
currencies in which the fund's portfolio securities are quoted or denominated,
exchange control regulations and costs associated with currency exchange. The
political and economic structures in certain non-U.S. countries, particularly
emerging markets, are expected to undergo significant evolution and rapid
development, and such countries may lack the social, political and economic
stability characteristic of more developed countries. Unanticipated political or
social developments may affect the values of the fund's investments in such
countries. The economies and securities and currency markets of many emerging
markets have experienced significant disruption and declines. There can be no
assurances that these economic and market disruptions will not continue.
FOREIGN SECURITIES MARKETS AND REGULATIONS. There may be less publicly available
information about non-U.S. markets and issuers than is available with respect to
U.S. securities and issuers. Non-U.S. companies generally are not subject to
accounting, auditing and financial reporting standards, practices and
requirements comparable to those applicable to U.S. companies. The trading
markets for most non-U.S. securities are generally less liquid and subject to
greater price volatility than the markets for comparable securities in the U.S.
The markets for securities in certain emerging markets are in the earliest
stages of their development. Even the markets for relatively widely traded
securities in certain non-U.S. markets, including emerging countries, may not be
able to absorb, without price disruptions, a significant increase in trading
volume or trades of a size customarily undertaken by institutional investors in
the U.S. Additionally, market making and arbitrage activities are generally less
extensive in such markets, which may contribute to increased volatility and
reduced liquidity. The less liquid a market, the more difficult it may be for
the fund to accurately price its portfolio securities or to dispose of such
securities at the times determined by Pioneer to be appropriate. The risks
associated with reduced liquidity may be particularly acute in situations in
which the fund's operations require cash, such as in order to meet redemptions
and to pay its expenses.
4
<PAGE>
ECONOMIC, POLITICAL AND SOCIAL FACTORS. Certain non-U.S. countries, including
emerging markets, may be subject to a greater degree of economic, political and
social instability than is the case in the U.S. and Western European countries.
Such instability may result from, among other things: (i) authoritarian
governments or military involvement in political and economic decision making;
(ii) popular unrest associated with demands for improved economic, political and
social conditions; (iii) internal insurgencies; (iv) hostile relations with
neighboring countries; and (v) ethnic, religious and racial disaffection and
conflict. Such economic, political and social instability could significantly
disrupt the financial markets in such countries and the ability of the issuers
in such countries to repay their obligations. Investing in emerging countries
also involves the risk of expropriation, nationalization, confiscation of assets
and property or the imposition of restrictions on foreign investments and on
repatriation of capital invested. In the event of such expropriation,
nationalization or other confiscation in any emerging country, the fund could
lose its entire investment in that country.
Certain emerging market countries restrict or control foreign investment in
their securities markets to varying degrees. These restrictions may limit the
fund's investment in those markets and may increase the expenses of the fund. In
addition, the repatriation of both investment income and capital from certain
markets in the region is subject to restrictions such as the need for certain
governmental consents. Even where this is no outright restriction on
repatriation of capital, the mechanics of repatriation may affect certain
aspects of the fund's operation.
Economies in individual non-U.S. countries may differ favorably or unfavorably
from the U.S. economy in such respects as growth of gross domestic product,
rates of inflation, currency valuation, capital reinvestment, resource
self-sufficiency and balance of payments positions. Many non-U.S. countries have
experienced substantial, and in some cases extremely high, rates of inflation
for many years. Inflation and rapid fluctuations in inflation rates have had,
and may continue to have, very negative effects on the economies and securities
markets of certain emerging countries.
Economies in emerging countries generally are dependent heavily upon
international trade and, accordingly, have been and may continue to be affected
adversely by trade barriers, exchange controls, managed adjustments in relative
currency values and other protectionist measures imposed or negotiated by the
countries with which they trade. These economies also have been, and may
continue to be, affected adversely by economic conditions in the countries with
which they trade.
CURRENCY RISKS. The value of the securities quoted or denominated in
international currencies may be adversely affected by fluctuations in the
relative currency exchange rates and by exchange control regulations. The fund's
investment performance may be negatively affected by a devaluation of a currency
in which the fund's investments are quoted or denominated. Further, the fund's
investment performance may be significantly affected, either positively or
negatively, by currency exchange rates because the U.S. dollar value of
securities quoted or denominated in another currency will increase or decrease
in response to changes in the value of such currency in relation to the U.S.
dollar.
CUSTODIAN SERVICES AND RELATED INVESTMENT COSTS. Custodial services and other
costs relating to investment in international securities markets generally are
more expensive than in the U.S. Such markets have settlement and clearance
procedures that differ from those in the U.S. In certain markets there have been
times when settlements have been unable to keep pace with the volume of
securities transactions, making it difficult to conduct such transactions. The
inability of the fund to make intended securities purchases due to settlement
problems could cause the fund to miss attractive investment opportunities.
Inability to dispose of a portfolio security caused by settlement problems
5
<PAGE>
could result either in losses to the fund due to a subsequent decline in
value of the portfolio security or could result in possible liability to the
fund. In addition, security settlement and clearance procedures in some emerging
countries may not fully protect the fund against loss or theft of its assets.
WITHHOLDING AND OTHER TAXES. The fund will be subject to taxes, including
withholding taxes, on income (possibly including, in some cases, capital gains)
that are or may be imposed by certain non-U.S. countries with respect to the
fund's investments in such countries. These taxes will reduce the return
achieved by the fund. Treaties between the U.S. and such countries may not be
available to reduce the otherwise applicable tax rates.
U.S. GOVERNMENT SECURITIES
U.S. government securities in which the fund invests include debt obligations of
varying maturities issued by the U.S. Treasury or issued or guaranteed by an
agency or instrumentality of the U.S. government, including the Federal Housing
Administration, Federal Financing Bank, Farmers Home Administration,
Export-Import Bank of the U.S., Small Business Administration, Government
National Mortgage Association ("GNMA"), General Services Administration, Central
Bank for Cooperatives, Federal Farm Credit Banks, Federal Home Loan Banks,
Federal Home Loan Mortgage Corporation ("FHLMC"), Federal National Mortgage
Association ("FNMA"), Maritime Administration, Tennessee Valley Authority,
District of Columbia Armory Board, Student Loan Marketing Association,
Resolution Trust Corporation and various institutions that previously were or
currently are part of the Farm Credit System (which has been undergoing
reorganization since 1987). Some U.S. government securities, such as U.S.
Treasury bills, Treasury notes and Treasury bonds, which differ only in their
interest rates, maturities and times of issuance, are supported by the full
faith and credit of the United States. Others are supported by: (i) the right of
the issuer to borrow from the U.S. Treasury, such as securities of the Federal
Home Loan Banks; (ii) the discretionary authority of the U.S. Government to
purchase the agency's obligations, such as securities of the FNMA; or (iii) only
the credit of the issuer, such as securities of the Student Loan Marketing
Association. No assurance can be given that the U.S. government will provide
financial support in the future to U.S. government agencies, authorities or
instrumentalities that are not supported by the full faith and credit of the
United States. Securities guaranteed as to principal and interest by the U.S.
government, its agencies, authorities or instrumentalities include: (i)
securities for which the payment of principal and interest is backed by an
irrevocable letter of credit issued by the U.S. government or any of its
agencies, authorities or instrumentalities; and (ii) participations in loans
made to foreign governments or other entities that are so guaranteed. The
secondary market for certain of these participations is limited and, therefore,
may be regarded as illiquid.
U.S. government securities may include zero coupon securities that may be
purchased when yields are attractive and/or to enhance portfolio liquidity. Zero
coupon U.S. government securities are debt obligations that are issued or
purchased at a significant discount from face value. The discount approximates
the total amount of interest the security will accrue and compound over the
period until maturity or the particular interest payment date at a rate of
interest reflecting the market rate of the security at the time of issuance.
Zero coupon U.S. government securities do not require the periodic payment of
interest. These investments benefit the issuer by mitigating its need for cash
to meet debt service, but also require a higher rate of return to attract
investors who are willing to defer receipt of cash. These investments may
experience greater volatility in market value than U.S. government securities
that make regular payments of interest. The fund accrues income on these
investments for tax and accounting purposes, which is distributable to
shareholders and which, because no cash is
6
<PAGE>
received at the time of accrual, may require the liquidation of other
portfolio securities to satisfy the fund's distribution obligations, in which
case the fund will forego the purchase of additional income producing assets
with these funds. Zero coupon U.S. government securities include STRIPS and
CUBES, which are issued by the U.S. Treasury as component parts of U.S. Treasury
bonds and represent scheduled interest and principal payments on the bonds.
MUNICIPAL OBLIGATIONS
The term "municipal obligations" generally is understood to include debt
obligations issued by municipalities to obtain funds for various public
purposes, the interest on which is, in the opinion of bond counsel to the
issuer, excluded from gross income for federal income tax purposes. In addition,
if the proceeds from private activity bonds are used for the construction,
repair or improvement of privately operated industrial or commercial facilities,
the interest paid on such bonds may be excluded from gross income for federal
income tax purposes, although current federal tax laws place substantial
limitations on the size of these issues. The fund's distributions of any
interest it earns on municipal obligations will be taxable to shareholders as
ordinary income.
The two principal classifications of municipal obligations are "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its faith, credit, and taxing power for the payment of
principal and interest. Revenue bonds are payable from the revenues derived from
a particular facility or class of facilities or, in some cases, from the
proceeds of a special excise or other specific revenue source, but not from the
general taxing power. Sizable investments in these obligations could involve an
increased risk to the fund should any of the related facilities experience
financial difficulties. Private activity bonds are in most cases revenue bonds
and do not generally carry the pledge of the credit of the issuing municipality.
There are, of course, variations in the security of municipal obligations, both
within a particular classification and between classifications.
ECONOMIC MONETARY UNION (EMU)
January 1, 1999, 11 European countries adopted by a single currency - the Euro.
The conversion to the Euro is being phased in over a three-year period. During
this time, valuation, systems and other operational problems may occur in
connection with the fund's investment quoted in the Euro. For participating
countries, EMU will mean sharing a single currency and single official interest
rate and adhering to agreed upon limits on government borrowing. Budgetary
decisions will remain in the hands of each participating country, but will be
subject to each country's commitment to avoid "excessive deficits" and other
more specific budgetary criteria. A European Central Bank is responsible for
setting the official interest rate to maintain price stability within the Euro
zone.
EMU is driven by the expectation of a number of economic benefits, including
lower transaction cost, reduced exchange risk, greater competition, and a
broadening and depending of European financial markets. However, there are a
number of significant risks associated with EMU. Monetary and economic union on
this scale has never been attempted before. There is a significant degree of
uncertainty as to whether participating countries will remain committed to EMU
in the face of changing economic conditions. This uncertainty my increase the
volatility of European markets.
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MORTGAGE-BACKED SECURITIES
The fund may invest in mortgage pass-through certificates and multiple-class
pass-through securities, such as real estate mortgage investment conduits
("REMIC") pass-through certificates, collateralized mortgage obligations and
stripped mortgage-backed securities ("SMBS"), and other types of
"mortgage-backed securities" that may be available in the future. A
mortgage-backed security is an obligation of the issuer backed by a mortgage or
pool of mortgages or a direct interest in an underlying pool of mortgages. Some
mortgage-backed securities, such as collateralized mortgage obligations (CMOs),
make payments of both principal and interest at a variety of intervals; others
make semiannual interest payments at a predetermined rate and repay principal at
maturity (like a typical bond). Mortgage-backed securities are based on
different types of mortgages including those on commercial real estate or
residential properties. Mortgage-backed securities often have stated maturities
of up to thirty years when they are issued, depending upon the length of the
mortgages underlying the securities. In practice, however, unscheduled or early
payments of principal and interest on the underlying mortgages may make the
securities' effective maturity shorter than this, and the prevailing interest
rates may be higher or lower than the current yield of the fund's portfolio at
the time the fund receives the payments for reinvestment. Mortgage-backed
securities may have less potential for capital appreciation than comparable
fixed income securities, due to the likelihood of increased prepayments of
mortgages as interest rates decline. If the fund buys mortgage-backed securities
at a premium, mortgage foreclosures and prepayments of principal by mortgagors
(which may be made at any time without penalty) may result in some loss of the
fund's principal investment to the extent of the premium paid.
The value of mortgage-backed securities may also change due to shifts in the
market's perception of issuers. In addition, regulatory or tax changes may
adversely affect the mortgage securities markets as a whole. Non-governmental
mortgage-backed securities may offer higher yields than those issued by
government entities, but also may be subject to greater price changes than
governmental issues.
GUARANTEED MORTGAGE PASS-THROUGH SECURITIES. Guaranteed mortgage pass-through
securities represent participation interests in pools of residential mortgage
loans and are issued by U.S. Governmental or private lenders and guaranteed by
the U.S. Government or one of its agencies or instrumentalities, including but
not limited to GNMA, FNMA and FHLMC. GNMA certificates are guaranteed by the
full faith and credit of the U.S. government for timely payment of principal and
interest on the certificates. FNMA certificates are guaranteed by FNMA, a
federally chartered and privately owned corporation, for full and timely payment
of principal and interest on the certificates. FHLMC certificates are guaranteed
by FHLMC, a corporate instrumentality of the U.S. government, for timely payment
of interest and the ultimate collection of all principal of the related mortgage
loans.
Commercial banks, savings and loan institutions, private mortgage insurance
companies, mortgage bankers and other secondary market issuers also create
pass-through pools of conventional residential mortgage loans. Such issuers may,
in addition, be the originators and/or servicers of the underlying mortgage
loans as well as the guarantors of the mortgage-related securities. Because
there are no direct or indirect government or agency guarantees of payments in
pools created by such non-governmental issuers, they generally offer a higher
rate of interest than government and government-related pools. Timely payment of
interest and principal of these pools may be supported by insurance or
guarantees, including individual loan, title, pool and hazard insurance and
letters of credit. The insurance and guarantees are issued by governmental
entities, private insurers and the
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mortgage poolers. There can be no assurance that the private insurers or
guarantors can meet their obligations under the insurance policies or guarantee
arrangements.
Mortgage-related securities without insurance or guarantees may be
purchased if Pioneer determines that the securities meet the fund's quality
standards. Mortgage-related securities issued by certain private organizations
may not be readily marketable.
MULTIPLE-CLASS PASS-THROUGH SECURITIES AND COLLATERALIZED MORTGAGE OBLIGATIONS.
CMOs and REMIC pass-through or participation certificates may be issued by,
among others, U.S. government agencies and instrumentalities as well as private
issuers. REMICs are CMO vehicles that qualify for special tax treatment under
the Internal Revenue Code of 1986, as amended (the "Code") and invest in
mortgages principally secured by interests in real property and other
investments permitted by the Code. CMOs and REMIC certificates are issued in
multiple classes and the principal of and interest on the mortgage assets may be
allocated among the several classes of CMOs or REMIC certificates in various
ways. Each class of CMOs or REMIC certificates, often referred to as a
"tranche," is issued at a specific adjustable or fixed interest rate and must be
fully retired no later than its final distribution date. Generally, interest is
paid or accrues on all classes of CMOs or REMIC certificates on a monthly basis.
Typically, CMOs are collateralized by GNMA, FNMA or FHLMC certificates but also
may be collateralized by other mortgage assets such as whole loans or private
mortgage pass-through securities. Debt service on CMOs is provided from payments
of principal and interest on collateral of mortgaged assets and any reinvestment
income thereon.
STRIPPED MORTGAGE-BACKED SECURITIES. SMBS are multiple-class mortgage-backed
securities that are created when a U.S. government agency or a financial
institution separates the interest and principal components of a mortgage-backed
security and sells them as individual securities. The fund only invests SMBS
that are usually structured with two classes that receive different proportions
of interest and principal distributions on a pool of mortgage assets. A typical
SMBS will have one class receiving some of the interest and most of the
principal, while the other class will receive most of the interest and the
remaining principal. The holder of the "principal-only" security (PO) receives
the principal payments made by the underlying mortgage-backed security, while
the holder of the "interest-only" security (IO) receives interest payments from
the same underlying security. The prices of stripped mortgage-backed securities
may be particularly affected by changes in interest rates. As interest rates
fall, prepayment rates tend to increase, which tends to reduce prices of IOs and
increase prices of POs. Rising interest rates can have the opposite effect.
Although the market for these securities is increasingly liquid, Pioneer may
determine that certain stripped mortgage-backed securities issued by the U.S.
government, its agencies or instrumentalities are not readily marketable. If so,
these securities, together with privately-issued stripped mortgage-backed
securities, will be considered illiquid for purposes of the fund's limitation on
investments in illiquid securities. The yields and market risk of interest only
and principal only SMBS, respectively, may be more volatile than those of other
fixed income securities.
The fund also may invest in planned amortization class ("PAC") and target
amortization class ("TAC") CMO bonds which involve less exposure to prepayment,
extension and interest rate risks than other mortgage-backed securities,
provided that prepayment rates remain within expected prepayment ranges or
"collars." To the extent that the prepayment rates remain within these
prepayment ranges, the
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residual or support tranches of PAC and TAC CMOs assume the extra
prepayment, extension and interest rate risks associated with the underlying
mortgage assets.
RISK FACTORS ASSOCIATED WITH MORTGAGE-BACKED SECURITIES. Investing in
mortgage-backed securities involves certain risks, including the failure of a
counterparty to meet its commitments, adverse interest rate changes and the
effects of prepayments on mortgage cash flows. In addition, investing in the
lowest tranche of CMOs and REMIC certificates involves risks similar to those
associated with investing in equity securities. However, due to adverse tax
consequences under current tax laws, the fund does not intend to acquire
"residual" interests in REMICs. Further, the yield characteristics of
mortgage-backed securities differ from those of traditional fixed income
securities. The major differences typically include more frequent interest and
principal payments (usually monthly), the adjustability of interest rates of the
underlying instrument, and the possibility that prepayments of principal may be
made substantially earlier than their final distribution dates.
Prepayment rates are influenced by changes in current interest rates and a
variety of economic, geographic, social and other factors and cannot be
predicted with certainty. Both adjustable rate mortgage loans and fixed rate
mortgage loans may be subject to a greater rate of principal prepayments in a
declining interest rate environment and to a lesser rate of principal
prepayments in an increasing interest rate environment. Under certain interest
rate and prepayment rate scenarios, the fund may fail to recoup fully its
investment in mortgage-backed securities notwithstanding any direct or indirect
governmental, agency or other guarantee. When the fund reinvests amounts
representing payments and unscheduled prepayments of principal, it may obtain a
rate of interest that is lower than the rate on existing adjustable rate
mortgage pass-through securities. Thus, mortgage-backed securities, and
adjustable rate mortgage pass-through securities in particular, may be less
effective than other types of U.S. government securities as a means of "locking
in" interest rates.
ASSET-BACKED SECURITIES
The fund may invest in asset-backed securities, which are securities that
represent a participation in, or are secured by and payable from, a stream of
payments generated by particular assets, most often a pool or pools of similar
assets (e.g., trade receivables). The credit quality of these securities depends
primarily upon the quality of the underlying assets and the level of credit
support and/or enhancement provided.
The underlying assets (e.g., loans) are subject to prepayments which shorten the
securities' weighted average maturity and may lower their return. If the credit
support or enhancement is exhausted, losses or delays in payment may result if
the required payments of principal and interest are not made. The value of these
securities also may change because of changes in the market's perception of the
creditworthiness of the servicing agent for the pool, the originator of the
pool, or the financial institution or trust providing the credit support or
enhancement.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES
The fund may purchase securities, including U.S. government securities, on a
when-issued basis or may purchase or sell securities for delayed delivery. In
such transactions, delivery of the securities occurs beyond the normal
settlement period, but no payment or delivery is made by the fund prior to the
actual delivery or payment by the other party to the transaction. The purchase
of securities on a when-issued or delayed delivery basis involves the risk that
the value of the securities purchased will
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decline prior to the settlement date. The sale of securities for delayed
delivery involves the risk that the prices available in the market on the
delivery date may be greater than those obtained in the sale transaction.
When-issued and delayed delivery transactions will be fully collateralized by
segregated liquid assets. See "Asset Segregation."
WARRANTS
The fund may invest in warrants, which are securities permitting, but not
obligating, their holder to subscribe for other securities. Warrants do not
carry with them the right to dividends or voting rights with respect to the
securities that they entitle their holders to purchase, and they do not
represent any rights in the assets of the issuer. As a result, an investment in
warrants may be considered more speculative than certain other types of
investments. In addition, the value of a warrant does not necessarily change
with the value of the underlying securities, and a warrant expires worthless if
it is not exercised on or prior to its expiration date.
PREFERRED SHARES
The fund may invest in preferred shares of beneficial interest of trust
instruments. Preferred shares are equity securities, but they have many
characteristics of fixed income securities, such as a fixed dividend payment
rate and/or a liquidity preference over the issuer's common shares. However,
because preferred shares are equity securities, they may be more susceptible to
risks traditionally associated with equity investments than the fund's fixed
income securities.
ILLIQUID SECURITIES
The fund will not invest more than 15% of its net assets in illiquid and other
securities that are not readily marketable. Repurchase agreements maturing in
more than seven days will be included for purposes of the foregoing limit.
Securities subject to restrictions on resale under the Securities Act of 1933,
as amended (the "1933 Act"), are considered illiquid unless they are eligible
for resale pursuant to Rule 144A or another exemption from the registration
requirements of the 1933 Act and are determined to be liquid by Pioneer. Pioneer
determines the liquidity of Rule 144A and other restricted securities according
to procedures adopted by the Board of Trustees. The Board of Trustees monitors
Pioneer's application of these guidelines and procedures. The inability of the
fund to dispose of illiquid investments readily or at reasonable prices could
impair the fund's ability to raise cash for redemptions or other purposes.
REAL ESTATE INVESTMENT TRUSTS ("REITS") AND ASSOCIATED RISK FACTORS
REITs are pooled investment vehicles which invest primarily in income producing
real estate or real estate related loans or interests. REITs are generally
classified as equity REITs, mortgage REITs or a combination of equity and
mortgage REITs. Equity REITs invest the majority of their assets directly in
real property and derive income primarily from the collection of rents. Equity
REITs can also realize capital gains by selling properties that have appreciated
in value. Mortgage REITs invest the majority of their assets in real estate
mortgages and derive income from the collection of interest payments. REITs are
not taxed on income distributed to shareholders provided they comply with the
applicable requirements of the Code. Debt securities issued by REITs, for the
most part, are general and unsecured obligations and are subject to risks
associated with REITs.
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Investing in REITs involves certain unique risks in addition to those risks
associated with investing in the real estate industry in general. An equity REIT
may be affected by changes in the value of the underlying properties owned by
the REIT. A mortgage REIT may be affected by changes in interest rates and the
ability of the issuers of its portfolio mortgages to repay their obligations.
REITs are dependent upon the skills of their managers and are not diversified.
REITs are generally dependent upon maintaining cash flows to repay borrowings
and to make distributions to shareholders and are subject to the risk of default
by lessees or borrowers. REITs whose underlying assets are concentrated in
properties used by a particular industry, such as health care, are also subject
to risks associated with such industry.
REITs (especially mortgage REITs) are also subject to interest rate risks. When
interest rates decline, the value of a REIT's investment in fixed rate
obligations can be expected to rise. Conversely, when interest rates rise, the
value of a REIT's investment in fixed rate obligations can be expected to
decline. If the REIT invests in adjustable rate mortgage loans the interest
rates on which are reset periodically, yields on a REIT's investments in such
loans will gradually align themselves to reflect changes in market interest
rates. This causes the value of such investments to fluctuate less dramatically
in response to interest rate fluctuations than would investments in fixed rate
obligations.
REITs may have limited financial resources, may trade less frequently and in a
limited volume and may be subject to more abrupt or erratic price movements than
larger company securities. Historically REITs have been more volatile in price
than the larger capitalization stocks included in Standard & Poor's 500 Stock
Index (the "S&P 500").
OTHER INVESTMENT COMPANIES
The fund may invest in the securities of other investment companies to the
extent that such investments are consistent with the fund's investment objective
and policies and permissible under the Investment Company Act of 1940, as
amended (the "1940 Act"). Under the 1940 Act, the fund may not acquire the
securities of other domestic or foreign investment companies if, as a result,
(i) more than 10% of the fund's total assets would be invested in securities of
other investment companies, (ii) such purchase would result in more than 3% of
the total outstanding voting securities of any one investment company being held
by the fund, or (iii) more than 5% of the fund's total assets would be invested
in any one investment company. These limitations do not apply to the purchase of
shares of any investment company in connection with a merger, consolidation,
reorganization or acquisition of substantially all the assets of another
investment company. The fund will not invest in other investment companies for
which Pioneer or any of its affiliates act as an investment adviser or
distributor.
The fund, as a holder of the securities of other investment companies, will bear
its pro rata portion of the other investment companies' expenses, including
advisory fees. These expenses are in addition to the direct expenses of the
fund's own operations.
REPURCHASE AGREEMENTS
The fund may enter into repurchase agreements with broker-dealers, member banks
of the Federal Reserve System and other financial institutions. Repurchase
agreements are arrangements under which the fund purchases securities and the
seller agrees to repurchase the securities within a specific time and at a
specific price. The repurchase price is generally higher than the fund's
purchase price, with
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the difference being income to the fund. The Board of Trustees reviews and
monitors the creditworthiness of any institution which enters into a repurchase
agreement with the fund. The counterparty's obligations under the repurchase
agreement are collateralized with U.S. Treasury and/or agency obligations with a
market value of not less than 100% of the obligations, valued daily. Collateral
is held by the fund's custodian in a segregated, safekeeping account for the
benefit of the fund. Repurchase agreements afford the fund an opportunity to
earn income on temporarily available cash at low risk. In the event of
commencement of bankruptcy or insolvency proceedings with respect to the seller
of the security before repurchase of the security under a repurchase agreement,
the fund may encounter delay and incur costs before being able to sell the
security. Such a delay may involve loss of interest or a decline in price of the
security. If the court characterizes the transaction as a loan and the fund has
not perfected a security interest in the security, the fund may be required to
return the security to the seller's estate and be treated as an unsecured
creditor of the seller. As an unsecured creditor, the fund would be at risk of
losing some or all of the principal and interest involved in the transaction.
SHORT SALES AGAINST THE BOX
The fund may sell securities "short against the box." A short sale involves the
fund borrowing securities from a broker and selling the borrowed securities. The
fund has an obligation to return securities identical to the borrowed securities
to the broker. In a short sale against the box, the fund at all times owns an
equal amount of the security sold short or securities convertible into or
exchangeable for, with or without payment of additional consideration, an equal
amount of the security sold short. The fund intends to use short sales against
the box to hedge. For example, when the fund believes that the price of a
current portfolio security may decline, the fund may use a short sale against
the box to lock in a sale price for a security rather than selling the security
immediately. In such a case, any future losses in the fund's long position
should be offset by a gain in the short position and, conversely, any gain in
the long position should be reduced by a loss in the short position.
If the fund effects a short sale against the box at a time when it has an
unrealized gain on the security, it may be required to recognize that gain as if
it had actually sold the security (a "constructive sale") on the date it effects
the short sale. However, such constructive sale treatment may not apply if the
fund closes out the short sale with securities other than the appreciated
securities held at the time of the short sale provided that certain other
conditions are satisfied. Uncertainty regarding certain tax consequences of
effecting short sales may limit the extent to which the fund may make short
sales against the box.
ASSET SEGREGATION
The 1940 Act requires that the fund segregate assets in connection with certain
types of transactions that may have the effect of leveraging the fund's
portfolio. If the fund enters into a transaction requiring segregation, such as
a forward commitment, the custodian or Pioneer will segregate liquid assets in
an amount required to comply with the 1940 Act. Such segregated assets will be
valued at market daily. If the aggregate value of such segregated assets
declines below the aggregate value required to satisfy the 1940 Act, additional
liquid assets will be segregated.
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PORTFOLIO TURNOVER
It is the policy of the fund not to engage in trading for short-term profits
although portfolio turnover rate is not considered a limiting factor in the
execution of investment decisions for the fund.
FOREIGN CURRENCY TRANSACTIONS
The fund may engage in foreign currency transactions. These transactions may be
conducted at the prevailing spot rate for purchasing or selling currency in the
foreign exchange market. The fund also has authority to enter into forward
foreign currency exchange contracts involving currencies of the different
countries in which the fund invests as a hedge against possible variations in
the foreign exchange rates between these currencies and the U.S. dollar. This is
accomplished through contractual agreements to purchase or sell a specified
currency at a specified future date and price set at the time of the contract.
Transaction hedging is the purchase or sale of forward foreign currency
contracts with respect to specific receivables or payables of the fund, accrued
in connection with the purchase and sale of its portfolio securities quoted in
foreign currencies. Portfolio hedging is the use of forward foreign currency
contracts to offset portfolio security positions denominated or quoted in such
foreign currencies. There is no guarantee that the fund will be engaged in
hedging activities when adverse exchange rate movements occur. The fund will not
attempt to hedge all of its foreign portfolio positions and will enter into such
transactions only to the extent, if any, deemed appropriate by Pioneer.
Hedging against a decline in the value of a currency does not eliminate
fluctuations in the prices of portfolio securities or prevent losses if the
prices of such securities decline. Such transactions also limit the opportunity
for gain if the value of the hedged currency should rise. Moreover, it may not
be possible for the fund to hedge against a devaluation that is so generally
anticipated that the fund is not able to contract to sell the currency at a
price above the devaluation level it anticipates.
The fund may also engage in cross-hedging by using forward contracts in one
currency to hedge against fluctuations in the value of securities denominated in
a different currency, if Pioneer determines that there is a pattern of
correlation between the two currencies. Cross-hedging may also include entering
into a forward transaction involving two foreign currencies, using one foreign
currency as a proxy for the U.S. dollar to hedge against variations in the other
foreign currency, if Pioneer determines that there is a pattern of correlation
between the proxy currency and the U.S. dollar.
The cost to the fund of engaging in foreign currency transactions varies with
such factors as the currency involved, the size of the contract, the length of
the contract period, differences in interest rates between the two currencies
and the market conditions then prevailing. Since transactions in foreign
currency and forward contracts are usually conducted on a principal basis, no
fees or commissions are involved. The fund may close out a forward position in a
currency by selling the forward contract or by entering into an offsetting
forward contract.
The precise matching of the forward contract amounts and the value of the
securities involved will not generally be possible because the future value of
such securities in foreign currencies will change as a consequence of market
movements in the value of those securities between the date on which the
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contract is entered into and the date it matures. Using forward contracts to
protect the value of the fund's portfolio securities against a decline in the
value of a currency does not eliminate fluctuations in the underlying prices of
the securities. It simply establishes a rate of exchange which the fund can
achieve at some future point in time. The precise projection of short-term
currency market movements is not possible, and short-term hedging provides a
means of fixing the U.S. dollar value of only a portion of the fund's foreign
assets.
While the fund will enter into forward contracts to reduce currency exchange
rate risks, transactions in such contracts involve certain other risks. While
the fund may benefit from such transactions, unanticipated changes in currency
prices may result in a poorer overall performance for the fund than if it had
not engaged in any such transactions. Moreover, there may be imperfect
correlation between the fund's portfolio holdings of securities quoted or
denominated in a particular currency and forward contracts entered into by the
fund. Such imperfect correlation may cause the fund to sustain losses which will
prevent the fund from achieving a complete hedge or expose the fund to risk of
foreign exchange loss.
Over-the-counter markets for trading foreign forward currency contracts offer
less protection against defaults than is available when trading in currency
instruments on an exchange. Since a forward foreign currency exchange contract
is not guaranteed by an exchange or clearinghouse, a default on the contract
would deprive the fund of unrealized profits or force the fund to cover its
commitments for purchase or resale, if any, at the current market price.
If the fund enters into a forward contract to purchase foreign currency, the
custodian or Pioneer will segregate liquid assets. See "Asset Segregation."
OPTIONS ON FOREIGN CURRENCIES
The fund may purchase and write options on foreign currencies for hedging
purposes in a manner similar to that of transactions in forward contracts. For
example, a decline in the dollar value of a foreign currency in which portfolio
securities are quoted or denominated will reduce the dollar value of such
securities, even if their value in the foreign currency remains constant. In an
attempt to protect against such decreases in the value of portfolio securities,
the fund may purchase put options on the foreign currency. If the value of the
currency declines, the fund will have the right to sell such currency for a
fixed amount of dollars which exceeds the market value of such currency. This
would result in a gain that may offset, in whole or in part, the negative effect
of currency depreciation on the value of the fund's securities quoted or
denominated in that currency.
Conversely, if a rise in the dollar value of a currency is projected for those
securities to be acquired, thereby increasing the cost of such securities, the
fund may purchase call options on such currency. If the value of such currency
increases, the purchase of such call options would enable the fund to purchase
currency for a fixed amount of dollars which is less than the market value of
such currency. Such a purchase would result in a gain that may offset, at least
partially, the effect of any currency related increase in the price of
securities the fund intends to acquire. As in the case of other types of options
transactions, however, the benefit the fund derives from purchasing foreign
currency options will be reduced by the amount of the premium and related
transaction costs. In addition, if currency exchange rates do not move in the
direction or to the extent anticipated, the fund could sustain losses on
transactions in foreign currency options which would deprive it of a portion or
all of the benefits of advantageous changes in such rates.
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The fund may also write options on foreign currencies for hedging purposes. For
example, if the fund anticipated a decline in the dollar value of securities
quoted or denominated in a foreign currency because of declining exchange rates,
it could, instead of purchasing a put option, write a covered call option on the
relevant currency. If the expected decline occurs, the option will most likely
not be exercised, and the decrease in value of portfolio securities will be
partially offset by the amount of the premium received by the fund.
Similarly, the fund could write a put option on the relevant currency,
instead of purchasing a call option, to hedge against an anticipated increase in
the dollar cost of securities to be acquired. If exchange rates move in the
manner projected, the put option will expire unexercised and allow the fund to
offset such increased cost up to the amount of the premium. However, as in the
case of other types of options transactions, the writing of a foreign currency
option will constitute only a partial hedge up to the amount of the premium,
only if rates move in the expected direction. If unanticipated exchange rate
fluctuations occur, the option may be exercised and the fund would be required
to purchase or sell the underlying currency at a loss which may not be fully
offset by the amount of the premium. As a result of writing options on foreign
currencies, the fund also may be required to forego all or a portion of the
benefits which might otherwise have been obtained from favorable movements in
currency exchange rates.
A call option written on foreign currency by the fund is "covered" if the fund
owns the underlying foreign currency subject to the call, or if it has an
absolute and immediate right to acquire that foreign currency without additional
cash consideration. A call option is also covered if the fund holds a call on
the same foreign currency for the same principal amount as the call written
where the exercise price of the call held is (a) equal to or less than the
exercise price of the call written or (b) greater than the exercise price of the
call written if the amount of the difference is maintained by the fund in cash
or liquid securities. See "Asset Segregation."
The fund may close out its position in a currency option by either selling the
option it has purchased or entering into an offsetting option. An
exchange-traded options position may be closed out only on an options exchange
which provides a secondary market for an option of the same series. Although the
fund will generally purchase or write only those options for which there appears
to be an active secondary market, there is no assurance that a liquid secondary
market on an exchange will exist for any particular option, or at any particular
time. For some options no secondary market on an exchange may exist. In such
event, it might not be possible to effect closing transactions in particular
options, with the result that the fund would have to exercise its options in
order to realize any profit and would incur transaction costs upon the sale of
underlying currencies pursuant to the exercise of put options. If the fund as a
covered call option writer is unable to effect a closing purchase transaction in
a secondary market, it will not be able to sell the underlying currency (or
security quoted or denominated in that currency) until the option expires or it
delivers the underlying currency upon exercise.
The fund may also use options on currencies to cross-hedge, which involves
writing or purchasing options on one currency to hedge against changes in
exchange rates of a different currency with a pattern of correlation. Cross
hedging may also include using a foreign currency as a proxy for the U.S.
dollar, if Pioneer determines that there is a pattern of correlation between
that currency and the U.S. dollar.
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The fund may purchase and write over-the-counter options to the extent
consistent with its limitation on investments in illiquid securities. Trading in
over-the-counter options is subject to the risk that the other party will be
unable or unwilling to close out options purchased or written by the fund.
OPTIONS ON SECURITIES AND SECURITIES INDICES
The fund may purchase put and call options on any security in which it may
invest or options on any securities index based on securities in which it may
invest. The fund would also be able to enter into closing sale transactions in
order to realize gains or minimize losses on options it has purchased.
WRITING CALL AND PUT OPTIONS ON SECURITIES. A call option written by the fund
obligates the fund to sell specified securities to the holder of the option at a
specified price if the option is exercised at any time before the expiration
date. All call options written by the fund are covered, which means that the
fund will own the securities subject to the options as long as the options are
outstanding, or the fund will use the other methods described below. The fund's
purpose in writing covered call options is to realize greater income than would
be realized on portfolio securities transactions alone. However, the fund may
forego the opportunity to profit from an increase in the market price of the
underlying security.
A put option written by the fund would obligate the fund to purchase specified
securities from the option holder at a specified price if the option is
exercised at any time before the expiration date. All put options written by the
fund would be covered, which means that the fund would have segregated assets
with a value at least equal to the exercise price of the put option. The purpose
of writing such options is to generate additional income for the fund. However,
in return for the option premium, the fund accepts the risk that it may be
required to purchase the underlying security at a price in excess of its market
value at the time of purchase.
Call and put options written by the fund will also be considered to be covered
to the extent that the fund's liabilities under such options are wholly or
partially offset by its rights under call and put options purchased by the fund.
In addition, a written call option or put may be covered by entering into an
offsetting forward contract and/or by purchasing an offsetting option or any
other option which, by virtue of its exercise price or otherwise, reduces the
fund's net exposure on its written option position.
WRITING CALL AND PUT OPTIONS ON SECURITIES INDICES. The fund may also write
(sell) covered call and put options on any securities index composed of
securities in which it may invest. Options on securities indices are similar to
options on securities, except that the exercise of securities index options
requires cash payments and does not involve the actual purchase or sale of
securities. In addition, securities index options are designed to reflect price
fluctuations in a group of securities or segments of the securities market
rather than price fluctuations in a single security.
The fund may cover call options on a securities index by owning securities whose
price changes are expected to be similar to those of the underlying index, or by
having an absolute and immediate right to acquire such securities without
additional cash consideration (or for additional consideration if cash in such
amount is segregated) upon conversion or exchange of other securities in its
portfolio. The fund may cover call and put options on a securities index by
segregated assets with a value equal to the exercise price.
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PURCHASING CALL AND PUT OPTIONS. The fund would normally purchase call options
in anticipation of an increase in the market value of securities of the type in
which it may invest. The purchase of a call option would entitle the fund, in
return for the premium paid, to purchase specified securities at a specified
price during the option period. The fund would ordinarily realize a gain if,
during the option period, the value of such securities exceeded the sum of the
exercise price, the premium paid and transaction costs; otherwise the fund would
realize either no gain or a loss on the purchase of the call option.
The fund would normally purchase put options in anticipation of a decline in the
market value of securities in its portfolio ("protective puts") or in securities
in which it may invest. The purchase of a put option would entitle the fund, in
exchange for the premium paid, to sell specified securities at a specified price
during the option period. The purchase of protective puts is designed to offset
or hedge against a decline in the market value of the fund's securities. Put
options may also be purchased by the fund for the purpose of affirmatively
benefiting from a decline in the price of securities which it does not own. The
fund would ordinarily realize a gain if, during the option period, the value of
the underlying securities decreased below the exercise price sufficiently to
more than cover the premium and transaction costs; otherwise the fund would
realize either no gain or a loss on the purchase of the put option. Gains and
losses on the purchase of protective put options would tend to be offset by
countervailing changes in the value of the underlying portfolio securities.
RISKS OF TRADING OPTIONS. There is no assurance that a liquid secondary market
on an options exchange will exist for any particular exchange-traded option, or
at any particular time. If the fund is unable to effect a closing purchase
transaction with respect to covered options it has written, the fund will not be
able to sell the underlying securities or dispose of its segregated assets until
the options expire or are exercised. Similarly, if the fund is unable to effect
a closing sale transaction with respect to options it has purchased, it will
have to exercise the options in order to realize any profit and will incur
transaction costs upon the purchase or sale of underlying securities.
Reasons for the absence of a liquid secondary market on an exchange include the
following: (i) there may be insufficient trading interest in certain options;
(ii) restrictions may be imposed by an exchange on opening or closing
transactions or both; (iii) trading halts, suspensions or other restrictions may
be imposed with respect to particular classes or series of options; (iv) unusual
or unforeseen circumstances may interrupt normal operations on an exchange; (v)
the facilities of an exchange or the Options Clearing Corporation (the "OCC")
may not at all times be adequate to handle current trading volume; or (vi) one
or more exchanges could, for economic or other reasons, decide or be compelled
at some future date to discontinue the trading of options (or a particular class
or series of options), in which event the secondary market on that exchange (or
in that class or series of options) would cease to exist, although outstanding
options on that exchange, if any, that had been issued by the OCC as a result of
trades on that exchange would continue to be exercisable in accordance with
their terms.
The fund may terminate its obligations under an exchange-traded call or put
option by purchasing an option identical to the one it has written. Obligations
under over-the-counter options may be terminated only by entering into an
offsetting transaction with the counterparty to such option. Such purchases are
referred to as "closing purchase transactions."
The fund may purchase and sell both options that are traded on U.S. and foreign
exchanges and options traded over the counter with broker-dealers who make
markets in these options. The ability to terminate over-the-counter options is
more limited than with exchange-traded options and may involve
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the risk that broker-dealers participating in such transactions will not
fulfill their obligations. Until such time as the staff of the Securities and
Exchange Commission (the "SEC") changes its position, the fund will treat
purchased over-the-counter options and all assets used to cover written
over-the-counter options as illiquid securities, except that with respect to
options written with primary dealers in U.S. Government securities pursuant to
an agreement requiring a closing purchase transaction at a formula price, the
amount of illiquid securities may be calculated with reference to the formula.
Transactions by the fund in options on securities and indices will be subject to
limitations established by each of the exchanges, boards of trade or other
trading facilities governing the maximum number of options in each class which
may be written or purchased by a single investor or group of investors acting in
concert. Thus, the number of options which the fund may write or purchase may be
affected by options written or purchased by other investment advisory clients of
Pioneer. An exchange, board of trade or other trading facility may order the
liquidations of positions found to be in excess of these limits, and it may
impose certain other sanctions.
The writing and purchase of options is a highly specialized activity which
involves investment techniques and risks different from those associated with
ordinary portfolio securities transactions. The successful use of protective
puts for hedging purposes depends in part on Pioneer's ability to predict future
price fluctuations and the degree of correlation between the options and
securities markets.
The hours of trading for options may not conform to the hours during which the
underlying securities are traded. To the extent that the options markets close
before the markets for the underlying securities, significant price movements
can take place in the underlying markets that cannot be reflected in the options
markets.
In addition to the risks of imperfect correlation between the fund's portfolio
and the index underlying the option, the purchase of securities index options
involves the risk that the premium and transaction costs paid by the fund in
purchasing an option will be lost. This could occur as a result of unanticipated
movements in the price of the securities comprising the securities index on
which the option is based.
FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS
To hedge against changes in securities prices or currency exchange rates or to
seek to increase total return, the fund may purchase and sell various kinds of
futures contracts, and purchase and write (sell) call and put options on any of
such futures contracts. The fund may also enter into closing purchase and sale
transactions with respect to any of such contracts and options. The futures
contracts may be based on various securities (such as U.S. Government
securities), securities indices, foreign currencies and other financial
instruments and indices. The fund will engage in futures and related options
transactions for bona fide hedging and non-hedging purposes as described below.
All futures contracts entered into by the fund are traded on U.S. exchanges or
boards of trade that are licensed and regulated by the Commodity Futures Trading
Commission (the "CFTC") or on foreign exchanges.
FUTURES CONTRACTS. A futures contract may generally be described as an agreement
between two parties to buy and sell particular financial instruments for an
agreed price during a designated month (or to deliver the final cash settlement
price, in the case of a contract relating to an index or otherwise not calling
for physical delivery at the end of trading in the contract).
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When interest rates are rising or securities prices are falling, the fund can
seek to offset a decline in the value of its current portfolio securities
through the sale of futures contracts. When interest rates are falling or
securities prices are rising, the fund, through the purchase of futures
contracts, can attempt to secure better rates or prices than might later be
available in the market when it effects anticipated purchases. Similarly, the
fund can sell futures contracts on a specified currency to protect against a
decline in the value of such currency and a decline in the value of its
portfolio securities which are denominated in such currency. The fund can
purchase futures contracts on a foreign currency to establish the price in U.S.
dollars of a security denominated in such currency that the fund has acquired or
expects to acquire.
Positions taken in the futures markets are not normally held to maturity but are
instead liquidated through offsetting transactions which may result in a profit
or a loss. While futures contracts on securities or currency will usually be
liquidated in this manner, the fund may instead make, or take, delivery of the
underlying securities or currency whenever it appears economically advantageous
to do so. A clearing corporation associated with the exchange on which futures
on securities or currency are traded guarantees that, if still open, the sale or
purchase will be performed on the settlement date.
HEDGING STRATEGIES. Hedging, by use of futures contracts, seeks to establish
with more certainty the effective price, rate of return and currency exchange
rate on portfolio securities and securities that the fund owns or proposes to
acquire. The fund may, for example, take a "short" position in the futures
market by selling futures contracts in order to hedge against an anticipated
rise in interest rates or a decline in market prices or foreign currency rates
that would adversely affect the value of the fund's portfolio securities. Such
futures contracts may include contracts for the future delivery of securities
held by the fund or securities with characteristics similar to those of the
fund's portfolio securities. Similarly, the fund may sell futures contracts in a
foreign currency in which its portfolio securities are denominated or in one
currency to hedge against fluctuations in the value of securities denominated in
a different currency if there is an established historical pattern of
correlation between the two currencies. If, in the opinion of Pioneer, there is
a sufficient degree of correlation between price trends for the fund's portfolio
securities and futures contracts based on other financial instruments,
securities indices or other indices, the fund may also enter into such futures
contracts as part of its hedging strategies. Although under some circumstances
prices of securities in the fund's portfolio may be more or less volatile than
prices of such futures contracts, Pioneer will attempt to estimate the extent of
this volatility difference based on historical patterns and compensate for any
such differential by having the fund enter into a greater or lesser number of
futures contracts or by attempting to achieve only a partial hedge against price
changes affecting the fund's portfolio securities. When hedging of this
character is successful, any depreciation in the value of portfolio securities
will be substantially offset by appreciation in the value of the futures
position. On the other hand, any unanticipated appreciation in the value of the
fund's portfolio securities would be substantially offset by a decline in the
value of the futures position.
On other occasions, the fund may take a "long" position by purchasing futures
contracts. This may be done, for example, when the fund anticipates the
subsequent purchase of particular securities when it has the necessary cash, but
expects the prices or currency exchange rates then available in the applicable
market to be less favorable than prices or rates that are currently available.
OPTIONS ON FUTURES CONTRACTS. The acquisition of put and call options on futures
contracts will give the fund the right (but not the obligation) for a specified
price to sell or to purchase, respectively, the underlying futures contract at
any time during the option period. As the purchaser of an option on a
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futures contract, the fund obtains the benefit of the futures position if
prices move in a favorable direction but limits its risk of loss in the event of
an unfavorable price movement to the loss of the premium and transaction costs.
The writing of a call option on a futures contract generates a premium which may
partially offset a decline in the value of the fund's assets. By writing a call
option, the fund becomes obligated, in exchange for the premium, to sell a
futures contract (if the option is exercised), which may have a value higher
than the exercise price. Conversely, the writing of a put option on a futures
contract generates a premium which may partially offset an increase in the price
of securities that the fund intends to purchase. However, the fund becomes
obligated to purchase a futures contract (if the option is exercised) which may
have a value lower than the exercise price. Thus, the loss incurred by the fund
in writing options on futures is potentially unlimited and may exceed the amount
of the premium received. The fund will incur transaction costs in connection
with the writing of options on futures.
The holder or writer of an option on a futures contract may terminate its
position by selling or purchasing an offsetting option on the same series. There
is no guarantee that such closing transactions can be effected. The fund's
ability to establish and close out positions on such options will be subject to
the development and maintenance of a liquid market.
OTHER CONSIDERATIONS. The fund will engage in futures and related options
transactions only for bona fide hedging or non-hedging purposes in accordance
with CFTC regulations which permit principals of an investment company
registered under the 1940 Act to engage in such transactions without registering
as commodity pool operators. The fund will determine that the price fluctuations
in the futures contracts and options on futures used for hedging purposes are
substantially related to price fluctuations in securities held by the fund or
which the fund expects to purchase. Except as stated below, the fund's futures
transactions will be entered into for traditional hedging purposes--i.e.,
futures contracts will be sold to protect against a decline in the price of
securities (or the currency in which they are denominated) that the fund owns,
or futures contracts will be purchased to protect the fund against an increase
in the price of securities (or the currency in which they are denominated) it
intends to purchase. As evidence of this hedging intent, the fund expects that
on 75% or more of the occasions on which it takes a long futures or option
position (involving the purchase of futures contracts), the fund will have
purchased, or will be in the process of purchasing, equivalent amounts of
related securities or assets denominated in the related currency in the cash
market at the time when the futures or option position is closed out. However,
in particular cases, when it is economically advantageous for the fund to do so,
a long futures position may be terminated or an option may expire without the
corresponding purchase of securities or other assets.
As an alternative to literal compliance with the bona fide hedging definition, a
CFTC regulation permits the fund to elect to comply with a different test, under
which the sum of the amounts of initial margin deposits on the fund's existing
non-hedging futures contracts and premiums paid for options on futures entered
into for non-hedging purposes (net of the amount the positions are "in the
money") would not exceed 5% of the market value of the fund's total assets. The
fund will engage in transactions in futures contracts and related options only
to the extent such transactions are consistent with the requirements of the Code
for maintaining its qualification as a regulated investment company for federal
income tax purposes.
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Futures contracts and related options involve brokerage costs, require margin
deposits and, in the case of contracts and options obligating the fund to
purchase securities or currencies, require the fund to segregate assets to cover
such contracts and options.
While transactions in futures contracts and options on futures may reduce
certain risks, such transactions themselves entail certain other risks. Thus,
while the fund may benefit from the use of futures and options on futures,
unanticipated changes in interest rates, securities prices or currency exchange
rates may result in a poorer overall performance for the fund than if it had not
entered into any futures contracts or options transactions. In the event of an
imperfect correlation between a futures position and a portfolio position which
is intended to be protected, the desired protection may not be obtained and the
fund may be exposed to risk of loss. It is not possible to hedge fully or
perfectly against the effect of currency fluctuations on the value of foreign
securities because currency movements impact the value of different securities
in differing degrees.
LENDING OF PORTFOLIO SECURITIES
The fund may lend portfolio securities to member firms of the New York Stock
Exchange (the "Exchange") under agreements which require that the loans be
secured continuously by collateral in cash, cash equivalents or U.S. Treasury
bills maintained on a current basis at an amount at least equal to the market
value of the securities loaned. The fund continues to receive the equivalent of
the interest or dividends paid by the issuer on the securities loaned as well as
the benefit of an increase and the detriment of any decrease in the market value
of the securities loaned and would also receive compensation based on investment
of the collateral. The fund would not, however, have the right to vote any
securities having voting rights during the existence of the loan, but would call
the loan in anticipation of an important vote to be taken among holders of the
securities or of the giving or withholding of consent on a material matter
affecting the investment.
As with other extensions of credit, there are risks of delay in recovery or even
loss of rights in the collateral should the borrower of the securities fail
financially. The fund will lend portfolio securities only to firms that have
been approved in advance by the Board of Trustees, which will monitor the
creditworthiness of any such firms. At no time would the value of the securities
loaned exceed 30% of the value of the fund's total assets.
LOAN PARTICIPATIONS. The fund may invest a portion of its assets in loan
participations ("Participations") and other direct claims against a borrower. By
purchasing a Participation, the fund acquires some or all of the interest of a
bank or other lending institution in a loan to a corporate or government
borrower. The Participations typically will result in the fund having a
contractual relationship only with the lender not the borrower. The fund will
have the right to receive payments of principal, interest and any fees to which
it is entitled only from the lender selling the Participation and only upon
receipt by the lender of the payments from the borrower. Many such loans are
secured, although some may be unsecured. Such loans may be in default at the
time of purchase. Loans that are fully secured offer a fund more protection than
an unsecured loan in the event of non-payment of scheduled interest or
principal. However, there is no assurance that the liquidation of collateral
from a secured loan would satisfy the corporate borrower's obligation, or that
the collateral can be liquidated.
MORTGAGE DOLLAR ROLLS. The fund may enter into mortgage "dollar rolls" in which
the fund sells securities for delivery in the current month and simultaneously
contracts with the same counterparty to repurchase similar (same type, coupon
and maturity), but not identical securities on a specified future
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date. During the roll period, the Fund loses the right to receive principal
and interest paid on the securities sold. However, the Fund would benefit to the
extent of any difference between the price received for the securities sold and
the lower forward price for the future purchase (often referred to as the
"drop") or fee income plus the interest earned on the cash proceeds of the
securities sold until the settlement date of the forward purchase. Unless such
benefits exceed the income, capital appreciation and gain or loss due to
mortgage prepayments that would have been realized on the securities sold as
part of the mortgage dollar roll, the use of this technique will diminish the
investment performance of the fund compared with what such performance would
have been without the use of mortgage dollar rolls. All cash proceeds will be
invested in instruments that are permissible investments for the fund. The fund
will hold and maintain in a segregated account until the settlement date cash or
liquid, high grade debt securities in an amount equal to its forward purchase
price.
For financial reporting and tax purposes, the fund treats mortgage dollar rolls
as two separate transactions; one involving the purchase of a security and a
separate transaction involving a sale. The fund does not currently intend to
enter into mortgage dollar rolls that are accounted for as a financing.
Mortgage dollar rolls involve certain risks including the following: if the
broker-dealer to whom the fund sells the security becomes insolvent, the fund's
right to purchase or repurchase the mortgage-related securities subject to the
mortgage dollar roll may be restricted and the instrument which the fund is
required to repurchase may be worth less than an instrument which the fund
originally held. Successful use of mortgage dollar rolls will depend upon
Pioneer's ability to manage its interest rate and mortgage prepayments exposure.
For these reasons, there is no assurance that mortgage dollar rolls can be
successfully employed.
MONEY MARKET INSTRUMENTS. The fund may invest in short term money market
instruments including commercial bank obligations and commercial paper. These
instruments may be denominated in both U.S. and non-U.S. currency. The fund's
investment in commercial bank obligations include certificates of deposit
("CDs"), time deposits ("TDs") and bankers' acceptances. Obligations of foreign
branches of U.S. banks and of foreign banks may be general obligations of the
parent bank in addition to the issuing bank, or may be limited by the terms of a
specific obligation and by government regulation. As with investment in non-U.S.
securities in general, investments in the obligations of foreign branches of
U.S. banks and of foreign banks may subject the fund to investment risks that
are different in some respects from those of investments in obligations of
domestic issuers.
The fund's investments in commercial paper consist of short-term (usually from 1
to 270 days) unsecured promissory notes issued by corporations in order to
finance their current operations. The fund may also invest in variable amount
master demand notes (which is a type of commercial paper) which represents a
direct borrowing arrangement involving periodically fluctuating rates of
interest under a letter agreement between a commercial paper issuer and an
institutional lender, pursuant to which the lender may determine to invest
varying amounts. Transfer of such notes is usually restricted by the issuer, and
there is no secondary trading market for such notes. To the extent the fund
invests in master demand notes, these investments will be included in the fund's
limitation on illiquid securities.
INVESTMENT RESTRICTIONS
With the exception of forward foreign currency exchange contracts, forward
commitments and repurchase agreements, the fund does not intend to invest more
than 5% of its assets during the current
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fiscal year in any of the investments permitted by the exceptions set forth
in paragraph (7) below.
FUNDAMENTAL INVESTMENT RESTRICTIONS. The fund has adopted certain investment
restrictions which, along with the fund's investment objective, may not be
changed without the affirmative vote of the holders of a "majority of the
outstanding voting securities" (as defined in the 1940 Act) of the fund. The
fund may not:
(1) Issue senior securities, except as permitted by the 1940 Act and the rules
and interpretive positions of the Commission thereunder.
(2) Borrow money, except the Fund may: (a) borrow from banks or through reverse
repurchase agreements in an amount up to 33 1/3% of the Fund's total assets
(including the amount borrowed); (b) to the extent permitted by applicable law,
borrow up to an additional 5% of the Fund's assets for temporary purposes; (c)
obtain such short-term credits as are necessary for the clearance of portfolio
transactions; (d) the Fund may purchase securities on margin to the extent
permitted by applicable law; and (e) engage in transactions in mortgage dollar
rolls that are accounted for as financings.
(3) Invest in real estate, except that the Fund may invest in securities of
issuers that invest in real estate or interests therein, securities that are
secured by real estate or interests therein, securities of real estate
investment trusts and mortgage-backed securities.
(4) Make loans, except by the purchase of debt obligations, by entering into
repurchase agreements or through the lending of portfolio securities.
(5) Invest in commodities or commodity contracts, except that the Fund may
invest in currency instruments and contracts and financial instruments and
contracts that might be deemed to be commodities and commodity contracts.
(6) Make any investment inconsistent with the Fund's status as a diversified
investment company under the 1940 Act.
(7) Act as an underwriter, except as it may be deemed to be an underwriter in a
sale of restricted securities held in its portfolio.
NON-FUNDAMENTAL INVESTMENT RESTRICTIONS. The following restriction has been
designated as non-fundamental and may be changed by a vote of the fund's Board
of Trustees without approval of shareholders.
The fund may not:
(a) Purchase securities while borrowings are in excess of 5% of total assets.
3. MANAGEMENT OF THE FUND
The fund's Board of Trustees provides broad supervision over the affairs of the
fund. The officers of the fund are responsible for the fund's operations. The
Trustees and executive officers of the fund are listed below, together with
their principal occupations during the past five years. An asterisk indicates
those Trustees who are interested persons of the fund within the meaning of the
1940 Act.
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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 Pioneer and Pioneer Funds Distributor, Inc.
("PFD"); Director of Pioneering Services Corporation ("PSC"), Pioneer Capital
Corporation ("PCC"), Pioneer Real Estate Advisors, Inc., Pioneer Forest, Inc.,
Pioneer Explorer, Inc., Pioneer Management (Ireland) Ltd. ("PMIL") and Closed
Joint Stock Company "Forest-Starma"; President and Director of 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 First Polish Investment Fund Joint Stock Company, S.A.
and Pioneer Czech Investment Company, A.S.; Chairman, President and Trustee of
all of the Pioneer mutual funds; Director of Pioneer Global Equity Fund Plc,
Pioneer Global Bond Fund Plc, Pioneer Euro Reserve Fund Plc, Pioneer European
Equity Fund Plc, Pioneer Emerging Europe Fund Plc, Pioneer US Real Estate Fund
Plc and Pioneer U.S. Growth Fund Plc (collectively, the "Irish Funds"); and
Partner, Hale and Dorr LLP (counsel to PGI and the fund).
MARY K. BUSH, TRUSTEE, DOB: APRIL 1948
4201 CATHEDRAL AVENUE, NW, WASHINGTON, DC 20016
President, Bush & Co. (international financial advisory firm); Director and/or
Trustee of Mortgage Guaranty Insurance Corporation, Novecon Management Company,
Hoover Institution, Folger Shakespeare Library, March of Dimes, Project 2000,
Inc. (not-for-profit educational organization), Small Enterprise Assistance
Fund, Wilberforce University and Texaco, Inc.; Advisory Board Member, Washington
Mutual Investors Fund (registered investment company); and Trustee of all the
Pioneer mutual funds, except Pioneer Variable Contracts Trust.
RICHARD H. EGDAHL, M.D., TRUSTEE, DOB: DECEMBER 1926
BOSTON UNIVERSITY HEALTH POLICY INSTITUTE, 53 BAY STATE ROAD, BOSTON, MA 02215
Alexander Graham Bell Professor of Health Care Entrepreneurship, Boston
University; 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; University Professor, Boston
University; Director, Boston University Health Policy Institute, Boston
University Program for Health Care Entrepreneurship, CORE (management of
workers' compensation and disability costs - Nasdaq National Market), and
WellSpace (provider of complementary health care); Trustee, Boston Medical
Center; 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, The 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 and Associate
Dean, Boston University School of Management, from 1989 to 1993; and Trustee of
all 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, George Washington University; Director, American
Productivity and Quality Center; Adjunct Scholar, American Enterprise Institute;
Economic Consultant; and Trustee of all of the Pioneer mutual funds, except
Pioneer Variable Contracts Trust.
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MARGUERITE A. PIRET, TRUSTEE, DOB: MAY 1948
ONE BOSTON PLACE, SUITE 2635, BOSTON, MA 02108
President, Newbury, Piret & Company, Inc. (merchant banking firm); Trustee of
Boston Medical Center; Member of the Board of Governors of the Investment
Company Institute; and Trustee of all of the Pioneer mutual funds.
DAVID D. TRIPPLE*, TRUSTEE AND EXECUTIVE VICE PRESIDENT, DOB: FEBRUARY 1944
Executive Vice President and a Director of PGI; President and a Director of
Pioneer and PFD; Director of PCC, PIntl, First Russia, Omega, Pioneer SBIC
Corporation ("Pioneer SBIC"), PMIL and the Irish Funds; 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
Of Counsel, Sullivan & Cromwell (law firm); Director, Kleinwort Benson
Australian Income Fund, Inc. since May 1997 and The Swiss Helvetia Fund, Inc.
since 1995 (mutual funds), AMVESCAP PLC (investment managers) since 1997 and
American Insurance Holdings, Inc; 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. (energy sales, services and distribution); and Trustee of all of the
Pioneer mutual funds, except Pioneer Variable Contracts Trust.
JOHN A. BOYNTON, TREASURER, DOB: JANUARY 1954
Executive Vice President, Treasurer and Chief Financial Officer of PGI;
Treasurer of PFD and all of the Pioneer mutual funds. Prior to joining PGI in
November 1998, Mr. Boynton was a Senior Vice President of The Quaker Oats
Company.
JOSEPH P. BARRI, SECRETARY, DOB: AUGUST 1946
Corporate Secretary of PGI and most of its subsidiaries; Secretary of all of the
Pioneer mutual funds; and Partner, Hale and Dorr LLP.
ERIC W. RECKARD, ASSISTANT TREASURER, DOB: JUNE 1956
Manager of Business Planning and Internal Audit of PGI since September 1996;
Manager of Fund Accounting of Pioneer 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
Senior Vice President, General Counsel and Assistant Secretary of PGI since
1995; Assistant Secretary of Pioneer, certain other PGI subsidiaries and all of
the Pioneer mutual funds; Assistant Clerk of PFD and PSC; and junior partner of
Hale and Dorr LLP prior to 1995.
The business address of all officers is 60 State Street, Boston, Massachusetts
02109.
All of the outstanding capital stock of PFD, Pioneer and PSC is owned, directly
or indirectly, by PGI, a publicly owned Delaware corporation. Pioneer, the
fund's investment adviser, serves as the
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investment adviser for the Pioneer mutual funds and manages the investments
of certain institutional accounts.
The table below lists all of the U.S.-registered Pioneer mutual funds currently
offered to the public and the investment adviser and principal underwriter for
each fund.
<TABLE>
<CAPTION>
PRINCIPAL
FUND NAME INVESTMENT ADVISER UNDERWRITER
<S> <C> <C>
Pioneer International Growth Fund Pioneer PFD
Pioneer Europe Fund Pioneer PFD
Pioneer World Equity Fund Pioneer PFD
Pioneer Emerging Markets Fund Pioneer PFD
Pioneer Indo-Asia Fund Pioneer PFD
Pioneer Capital Growth Fund Pioneer PFD
Pioneer Mid-Cap Fund Pioneer PFD
Pioneer Growth Shares Pioneer PFD
Pioneer Small Company Fund Pioneer PFD
Pioneer Independence Fund Pioneer Note 1
Pioneer Micro-Cap Fund Pioneer PFD
Pioneer Gold Shares Pioneer PFD
Pioneer Balanced Fund Pioneer PFD
Pioneer Equity-Income Fund Pioneer PFD
Pioneer Fund Pioneer PFD
Pioneer II Pioneer PFD
Pioneer Real Estate Shares Pioneer PFD
Pioneer Short-Term Income Trust Pioneer PFD
Pioneer America Income Trust Pioneer PFD
Pioneer Bond Fund Pioneer PFD
Pioneer Tax-Free Income Fund Pioneer PFD
Pioneer Cash Reserves Fund Pioneer PFD
Pioneer Interest Shares Pioneer Note 2
Pioneer Variable Contracts Trust Pioneer Note 3
Pioneer Strategic Income Fund Pioneer PFD
Note 1 This fund is available to the general public only through Pioneer
Independence Plans, a systematic investment plan sponsored by PFD.
Note 2 This fund is a closed-end fund.
Note 3 This is a series of 12 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.
</TABLE>
SHARE OWNERSHIP
See Appendix A for annual information on the ownership of fund shares by the
Trustees, the fund's officers and owners in excess of 5% of any class of shares
of the fund.
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COMPENSATION OF OFFICERS AND TRUSTEES
The fund pays no salaries or compensation to any of its officers. The fund
compensates each Trustee who is not affiliated with PGI, Pioneer, PFD or PSC
with a base fee, a variable fee calculated on the basis of average net assets of
the fund, per meeting fees, and annual committee participation fees for each
committee member or chairperson that are based on percentages of his or her
aggregate annual fee. See the fee table in Appendix A.
SALES LOADS. Current and former Trustees and officers of the fund and other
qualifying persons may purchase the fund's Class A shares without an initial
sales charge.
4. INVESTMENT ADVISER
The fund has contracted with Pioneer to act as its investment adviser. Pioneer
is a wholly owned subsidiary of PGI. PGI is engaged in the financial services
business in the U.S. and other countries. Certain Trustees or officers of the
fund are also directors and/or officers of PGI and its subsidiaries (see
management biographies above).
As the fund's investment adviser, Pioneer provides the fund with investment
research, advice and supervision and furnishes an investment program for the
fund consistent with the fund's investment objective and policies, subject to
the supervision of the fund's Trustees. Pioneer determines what portfolio
securities will be purchased or sold, arranges for the placing of orders for the
purchase or sale of portfolio securities, selects brokers or dealers to place
those orders, maintains books and records with respect to the fund's securities
transactions, and reports to the Trustees on the fund's investments and
performance.
Under the terms of its contract with the fund, Pioneer pays all the operating
expenses, including executive salaries and the rental of office space, relating
to its services for the fund, with the exception of the following, which are 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 Pioneer, or its affiliates, office space and
facilities and personnel compensation, training and benefits; (b) the charges
and expenses of auditors; (c) the charges and expenses of any custodian,
transfer agent, plan agent, dividend disbursing agent and registrar appointed by
the fund; (d) issue and transfer taxes, chargeable to the fund in connection
with securities transactions to which the fund is a party; (e) insurance
premiums, interest charges, dues and fees for membership in trade associations
and all taxes and corporate fees payable by the fund to federal, state or other
governmental agencies; (f) fees and expenses involved in registering and
maintaining registrations of the fund and/or its shares with the SEC, state or
blue sky securities agencies 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) any distribution fees paid by
the fund in accordance with Rule 12b-1 promulgated by the SEC pursuant to the
1940 Act; (j) compensation of those Trustees of the fund who are not affiliated
with or interested persons of Pioneer, the fund (other than as Trustees), 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 brokers' and underwriting commissions chargeable to the fund in
connection with securities transactions to which the fund is a party. The
Trustees' approval of and the
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<PAGE>
terms, continuance and termination of the management contract are governed
by the 1940 Act and the Investment Advisers Act of 1940, as applicable. Pursuant
to the management contract, Pioneer will not be liable for any error of judgment
or mistake of law or for any loss sustained by reason of the adoption of any
investment policy or the purchase, sale or retention of any securities on the
recommendation of Pioneer. Pioneer, however, is not protected against liability
by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of its reckless disregard of its
obligations and duties under the management contract.
ADVISORY FEE. As compensation for its management services and expenses incurred,
Pioneer is entitled to an annual fee at the rate of 0.75% of the fund's average
daily net assets up to $100 million; 0.70% of the next $400 million; 0.65% of
the next $500 million; and 0.75% of the excess over $1 billion. This fee is
computed daily and paid monthly.
ADMINISTRATION AGREEMENT. The fund has entered into an administration agreement
with Pioneer pursuant to which certain accounting and legal services which are
expenses payable by the fund under the management contract are performed by
Pioneer and pursuant to which Pioneer is reimbursed for its costs of providing
such services.
POTENTIAL CONFLICT OF INTEREST. The fund is managed by Pioneer which also serves
as investment adviser to other Pioneer mutual funds and private accounts with
investment objectives identical or similar to those of the fund. Securities
frequently meet the investment objectives of the fund, the other Pioneer mutual
funds and such 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 more than one of the Pioneer
mutual funds or a private account managed by Pioneer seeks to acquire the same
security at about the same time, the fund may not be able to acquire as large a
position in such security as it desires or it may have to pay a higher price for
the security. Similarly, the fund may not be able to obtain as large an
execution of an order to sell or as high a price for any particular portfolio
security if Pioneer decides to sell on behalf of another account the same
portfolio security at the same time. On the other hand, if the same securities
are bought or sold at the same time by more than one fund or account, the
resulting participation in volume transactions could produce better executions
for the fund. In the event more than one account purchases or sells the same
security on a given date, the purchases and sales will normally be made as
nearly as practicable on a pro rata basis in proportion to the amounts desired
to be purchased or sold by each account. Although the other Pioneer mutual funds
may have the same or similar investment objectives and policies as the fund,
their portfolios do not generally consist of the same investments as the fund or
each other, and their performance results are likely to differ from those of the
fund.
PERSONAL SECURITIES TRANSACTIONS. In an effort to avoid conflicts of interest
with the fund, the fund and Pioneer have adopted a code of ethics that is
designed to maintain a high standard of personal
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<PAGE>
conduct by directing that all personnel defer to the interests of the fund
and its shareholders in making personal securities transactions.
5. PRINCIPAL UNDERWRITER AND DISTRIBUTION PLANS
PRINCIPAL UNDERWRITER
PFD, 60 State Street, Boston, Massachusetts 02109, is the principal underwriter
for the fund in connection with the continuous offering of its shares. PFD is an
indirect wholly owned subsidiary of PGI.
The fund entered into an underwriting agreement with PFD which provides that PFD
will bear expenses for the distribution of the fund's shares, except for
expenses incurred by PFD for which it is reimbursed or compensated by the fund
under the distribution plans (discussed below). PFD bears all expenses it incurs
in providing services under the underwriting agreement. Such expenses include
compensation to its employees and representatives and to securities dealers for
distribution-related services performed for the fund. PFD also pays certain
expenses in connection with the distribution of the fund's shares, including the
cost of preparing, printing and distributing advertising or promotional
materials, and the cost of printing and distributing prospectuses and
supplements to prospective shareholders. The fund bears the cost of registering
its shares under federal and state securities law and the laws of certain
foreign countries. Under the underwriting agreement, PFD will use its best
efforts in rendering services to the fund.
See "Class A Share Sales Charges" for the schedule of initial sales charge
reallowed to dealers as a percentage of the offering price of the fund's Class A
shares.
See the tables in Appendix A for commissions retained by PFD and reallowed to
dealers in connection with PFD's offering of the fund's Class A shares during
recently completed fiscal years.
The fund will not generally issue fund shares for consideration other than cash.
At the fund's sole discretion, however, it may issue fund shares for
consideration other than cash in connection with a bona fide reorganization,
statutory merger or other acquisition of portfolio securities.
The redemption price of shares of beneficial interest of the fund may, at
Pioneer's discretion, be paid in cash or portfolio securities. The fund has,
however, elected to be governed by Rule 18f-1 under the 1940 Act pursuant to
which the fund is obligated to redeem shares solely in cash up to the lesser of
$250,000 or 1% of the fund's net asset value during any 90-day period for any
one shareholder. Should the amount of redemptions by any shareholder exceed such
limitation, the fund will have the option of redeeming the excess in cash or
portfolio securities. In the latter case, the securities are taken
at their value employed in determining the fund's net asset value. A
shareholder whose shares are redeemed in-kind may incur brokerage charges in
selling the securities received in-kind. The selection of such securities will
be made in such manner as the Board of Trustees deems fair and reasonable.
DISTRIBUTION PLANS
The fund has adopted a plan of distribution pursuant to Rule 12b-1 under the
1940 Act with respect to its Class A shares (the "Class A Plan") and a plan of
distribution with respect to its Class B shares (the "Class B Plan") and a plan
of distribution with respect to its Class C shares (the "Class C Plan")
(together, the "Plans"), pursuant to which certain distribution and service fees
are paid to PFD. The fund has not adopted a plan of distribution with respect to
its Class Y shares. Because of the Plans, long-term shareholders may pay more
than the economic equivalent of the maximum sales charge permitted by the
National Association of Securities Dealers, Inc. (the "NASD") regarding
investment companies.
CLASS A PLAN. Pursuant to the Class A Plan the fund reimburses PFD for its
actual expenditures to finance any activity primarily intended to result in the
sale of Class A shares or to provide services to holders of Class A shares,
provided the categories of expenses for which reimbursement is made are approved
by the Board of Trustees. The Board of Trustees has approved the following
categories of
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<PAGE>
expenses that may be reimbursed under the Class A Plan: (i) a
service fee to be paid to qualified broker-dealers in an amount not to exceed
0.25% per annum of the fund's daily net assets attributable to Class A shares;
(ii) reimbursement to PFD for its expenditures for broker-dealer commissions and
employee compensation on certain sales of the fund's Class A shares with no
initial sales charge; and (iii) reimbursement to PFD for expenses incurred in
providing services to Class A shareholders and supporting broker-dealers and
other organizations (such as banks and trust companies) in their efforts to
provide such services. Banks are currently prohibited under the Glass-Steagall
Act from providing certain underwriting or distribution services. If a bank is
prohibited from acting in any capacity or providing any of the described
services, management will consider what action, if any, would be appropriate.
The expenses of the fund pursuant to the Class A Plan are accrued daily at a
rate which may not exceed the annual rate of 0.25% of the fund's average daily
net assets attributable to Class A shares. 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. The
limited carryover provision in the Class A Plan may result in an expense
invoiced to the fund in one fiscal year being paid in the subsequent fiscal year
and thus being treated for purposes of calculating the maximum expenditures of
the fund as having been incurred in the subsequent fiscal year. In the event of
termination or non-continuance of the Class A Plan, the fund has 12 months to
reimburse any expense which it incurs prior to such termination or
non-continuance, provided that payments by the fund during such 12-month period
shall not exceed 0.25% of the fund's average daily net assets attributable to
Class A shares during such period. See Appendix A for the amount, if any, of
carryover of distribution expenses as of the end of the most recent calendar
year.
CLASS B PLAN. Commissions on the sale of Class B shares equal to 4.00% of the
amount invested are paid to broker-dealers who have sales agreements with PFD.
PFD may also advance to dealers the first-year service fee payable under the
Class B Plan at a rate up to 0.25% of the purchase price of such shares. As
compensation for such advance of the service fee, PFD may retain the service fee
paid by the fund with respect to such shares for the first year after purchase.
The Class 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. Commencing in the 13th month following the purchase of Class B shares,
dealers will become eligible for additional annual service fees of up to 0.25%
of the net asset value of such shares. Dealers may from time to time be required
to meet certain other criteria in order to receive service fees. PFD or its
affiliates are entitled to retain all service fees payable under the Class 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 with respect to Class B shares of
the fund. PFD pays commissions to dealers as
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<PAGE>
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. When a broker-dealer sells Class B shares and
elects, with PFD's approval, to waive its right to receive the commission
normally paid at the time of the sale, PFD may cause all or a portion of the
distribution fees described above to be paid to the broker-dealer.
The Class B Plan and underwriting agreement permit PFD to sell its right to
receive distribution fees under the Class B Plan and CDSCs to third parties. PFD
enters into such transactions to finance the payment of commissions to brokers
at the time of sale and other distribution-related expenses. In connection with
such amendments, the fund has agreed that the distribution fee will not be
terminated or modified (including a modification by change in the rules relating
to the conversion of Class B shares into Class A shares) with respect to Class B
shares (a) issued prior to the date of any termination or modification or (b)
attributable to Class B shares issued through one or a series of exchanges of
shares of another investment company for which PFD acts as principal underwriter
which were initially issued prior to the date of such termination or
modification or (c) issued as a dividend or distribution upon Class B shares
initially issued or attributable to Class B shares issued prior to the date of
any such termination or modification except:
(i) to the extent required by a change in the 1940 Act, the rules or
regulations under the 1940 Act, the Conduct Rules of the NASD or an order of any
court or governmental agency;
(ii) in connection with a Complete Termination (as defined in the Class
B Plan); or
(iii) on a basis, determined by the Board of Trustees acting in good
faith, so long as from and after the effective date of such modification or
termination: neither the fund, the adviser nor certain affiliates pay, directly
or indirectly, a fee to any person for the provision of personal and account
maintenance services (as such terms are used in the Conduct Rules of the NASD)
to the holders of Class B shares of the fund and the termination or modification
of the distribution fee applies with equal effect to all Class B shares
outstanding from time to time.
The Class B Plan also provides that PFD shall be deemed to have performed all
services required to be performed in order to be entitled to receive the
distribution fee, if any, payable with respect to Class B shares sold through
PFD upon the settlement date of the sale of such Class B shares or in the case
of Class B shares issued through one or a series of exchanges of shares of
another investment company for which PFD acts as principal underwriter or issued
as a dividend or distribution upon Class B shares, on the settlement date of the
first sale on a commission basis of a Class B share from which such Class B
share was derived.
In the underwriting agreement, the fund agreed that subsequent
to the issuance of a Class B share, it would not take any action to waive or
change any CDSC (including a change in the rules applicable to conversion of
Class B shares into another class) in respect of such Class B shares, except (i)
as provided in the fund's prospectus or statement of additional information, or
(ii) as required by a change in the 1940 Act and the rules and regulations
thereunder, the Conduct Rules of the NASD or any order of any court or
governmental agency.
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CLASS C PLAN. Commissions on the sale of Class C shares of up to 0.75% of the
amount invested in Class C shares are paid to broker-dealers who have sales
agreements with PFD. PFD may also advance to dealers the first-year service fee
payable under the Class C Plan at a rate up to 0.25% of the purchase price of
such shares. As compensation for such advance of the service fee, PFD may retain
the service fee paid by the fund with respect to such shares for the first year
after purchase.
The Class C Plan provides that the fund will pay PFD, as the fund's distributor
for its Class C shares, a distribution fee accrued daily and paid quarterly,
equal on an annual basis to 0.75% of the fund's average daily net assets
attributable to Class C shares and will pay PFD a service fee equal to 0.25% of
the fund's average daily net assets attributable to Class C shares. PFD will in
turn pay to securities dealers which enter into a sales agreement with PFD a
distribution fee and a service fee at rates of up to 0.75% and 0.25%,
respectively, of the fund's average daily net assets attributable to Class C
shares owned by investors for whom that securities dealer is the holder or
dealer of record. The service fee is intended to be in consideration of personal
services and/or account maintenance services rendered by the dealer with respect
to Class C shares. PFD will advance to dealers the first-year service fee at a
rate equal to 0.25% of the amount invested. As compensation therefor, PFD may
retain the service fee paid by the fund with respect to such shares for the
first year after purchase. Commencing in the 13th month following the purchase
of Class C shares, dealers will become eligible for additional annual
distribution fees and service fees of up to 0.75% and 0.25%, respectively, of
the net asset value of such shares. Dealers may from time to time be required to
meet certain other criteria in order to receive service fees. PFD or its
affiliates are entitled to retain all service fees payable under the Class C
Plan for which there is no dealer of record or for which qualification standards
have not been met as partial consideration for personal services and/or account
maintenance services performed by PFD or its affiliates for shareholder
accounts.
The purpose of distribution payments to PFD under the Class C Plan is to
compensate PFD for its distribution services with respect to Class C shares of
the fund. PFD pays commissions to dealers as well as expenses of printing
prospectuses and reports used for sales purposes, expenses with respect to the
preparation and printing of sales literature and other distribution-related
expenses, including, without limitation, the cost necessary to provide
distribution-related services, or personnel, travel, office expenses and
equipment. The Class C Plan also provides that PFD will receive all CDSCs
attributable to Class C shares. When a broker-dealer sells Class C shares and
elects, with PFD's approval, to waive its right to receive the commission
normally paid at the time of the sale, PFD may cause all or a portion of the
distribution fees described above to be paid to the broker-dealer.
GENERAL
In accordance with the terms of each Plan, PFD provides to the fund for review
by the Trustees a quarterly written report of the amounts expended under the
Plan and the purposes for which such expenditures were made. In the Trustees'
quarterly review of the Plans, they will consider the continued appropriateness
and the level of reimbursement or compensation the Plans provide.
No interested person of the fund, nor any Trustee of the fund who is not an
interested person of the fund, has any direct or indirect financial interest in
the operation of the Plans except to the extent that PFD and certain of its
employees may be deemed to have such an interest as a result of receiving a
portion of the amounts expended under the Plans by the fund and except to the
extent certain officers may have an interest in PFD's ultimate parent, PGI.
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Each Plan's adoption, terms, continuance and termination are governed by Rule
12b-1 under the 1940 Act. The Board of Trustees believes that there is a
reasonable likelihood that the Plans will benefit the fund and its current and
future shareholders. The Plans may not be amended to increase materially the
annual percentage limitation of average net assets which may be spent for the
services described therein without approval of the shareholders of the fund
affected thereby, and material amendments of the Plans must also be approved by
the Trustees as provided in Rule 12b-1.
See Appendix A for fund expenses under the Class A Plan, Class B Plan and Class
C Plan and CDSCs paid to PFD for the most recently completed fiscal year.
Upon redemption, Class A shares may be subject to a 1% CDSC, Class B shares are
subject to a CDSC at a rate declining from a maximum 4% of the lower of the cost
or market value of the shares and Class C shares may be subject to a 1% CDSC.
6. SHAREHOLDER SERVICING/TRANSFER AGENT
The fund has contracted with PSC, 60 State Street, Boston, Massachusetts 02109,
to act as shareholder servicing and transfer agent for the fund.
Under the terms of its contract with the fund, 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 the fund's portfolio; and (iii) maintaining account records and
responding to shareholder inquiries.
PSC receives an annual fee of $22.75 for each Class A, Class B and Class C [AND
CLASS Y] 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 fund may compensate entities which have agreed to provide
certain sub-accounting services such as specific transaction processing and
recordkeeping services. Any such payments by the fund would be in lieu of the
per account fee which would otherwise be paid by the fund to PSC.
7. CUSTODIAN
Brown Brothers Harriman & Co., 40 Water Street, Boston, Massachusetts 02109, is
the custodian of the fund's assets. The custodian's responsibilities include
safekeeping and controlling the fund's cash and securities, handling the receipt
and delivery of securities, and collecting interest and dividends on the fund's
investments.
8. INDEPENDENT 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 SEC.
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9. PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on behalf
of the fund by Pioneer pursuant to authority contained in the fund's management
contract. Pioneer seeks to obtain the best execution on portfolio trades. The
price of securities and any commission rate paid are always factors, but
frequently not the only factors, in judging best execution. In selecting brokers
or dealers, Pioneer considers various relevant factors, including, but not
limited to, the size and type of the transaction; the nature and character of
the markets for the security to be purchased or sold; the execution efficiency,
settlement capability and financial condition of the dealer; the dealer's
execution services rendered on a continuing basis; and the reasonableness of any
dealer spreads. Transactions in foreign equity securities are executed by
broker-dealers in foreign countries in which commission rates are fixed and,
therefore, are not negotiable (as such rates are in the U.S.).
Pioneer may select broker-dealers that provide brokerage and/or research
services to the fund and/or other investment companies or other accounts managed
by Pioneer. In addition, consistent with Section 28(e) of the Securities
Exchange Act of 1934, as amended, if Pioneer determines in good faith that the
amount of commissions charged by a broker-dealer is reasonable in relation to
the value of the brokerage and research services provided by such broker, the
fund may pay commissions to such broker-dealer in an amount greater than the
amount another firm may charge. Such services may include advice concerning the
value of securities; the advisability of investing in, purchasing or selling
securities; the availability of securities or the purchasers or sellers of
securities; providing stock quotation services, credit rating service
information and comparative fund statistics; furnishing analyses, electronic
information services, manuals and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategy, and performance of
accounts and particular investment decisions; and effecting securities
transactions and performing functions incidental thereto (such as clearance and
settlement). Pioneer maintains a listing of broker-dealers who provide such
services on a regular basis. However, because many transactions on behalf of the
fund and other investment companies or accounts managed by Pioneer are placed
with broker-dealers (including broker-dealers on the listing) without regard to
the furnishing of such services, it is not possible to estimate the proportion
of such transactions directed to such dealers solely because such services were
provided. Pioneer believes that no exact dollar value can be calculated for such
services.
The research received from broker-dealers may be useful to Pioneer in rendering
investment management services to the fund as well as other investment companies
or other accounts managed by Pioneer, although not all such research may be
useful to the fund. Conversely, such information provided by brokers or dealers
who have executed transaction orders on behalf of such other accounts may be
useful to Pioneer in carrying out its obligations to the fund. The receipt of
such research has not reduced Pioneer's normal independent research activities;
however, it enables Pioneer to avoid the additional expenses which might
otherwise be incurred if it were to attempt to develop comparable information
through its own staff.
In circumstances where two or more broker-dealers offer comparable prices and
executions, preference may be given to a broker-dealer which has sold shares of
the fund as well as shares of other investment companies managed by Pioneer.
This policy does not imply a commitment to execute all portfolio transactions
through all broker-dealers that sell shares of the fund.
The fund has also entered into expense offset arrangements, resulting
in further-reduction in the fund's total expenses.
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See the table in Appendix A for aggregate brokerage and underwriting commissions
paid by the fund in connection with its portfolio transactions during recently
completed fiscal years. The Board of Trustees periodically reviews Pioneer's
performance of its responsibilities in connection with the placement of
portfolio transactions on behalf of the fund.
10. DESCRIPTION OF SHARES
As an open-end management investment company, the fund continuously offers its
shares to the public and under normal conditions must redeem its shares upon the
demand of any shareholder at the next determined net asset value per share less
any applicable CDSC. See "Sales Charges." When issued and paid for in accordance
with the terms of the prospectus and statement of additional information, shares
of the fund are fully paid and non-assessable. Shares will remain on deposit
with the fund's transfer agent and certificates will not normally be issued. The
fund reserves the right to charge a fee for the issuance of Class A share
certificates; certificates will not be issued for Class B, Class C or Class Y
shares.
The fund's Agreement and Declaration of Trust, dated as of January 5, 1999 (the
"Declaration"), permits the Board of Trustees to authorize the issuance of an
unlimited number of full and fractional shares of beneficial interest which may
be divided into such separate series as the Trustees may establish. Currently,
the fund consists of only one series. The Trustees may, however, establish
additional series of shares and may divide or combine the shares into a greater
or lesser number of shares without thereby changing the proportionate beneficial
interests in the fund. The Declaration further authorizes the Trustees to
classify or reclassify any series of the shares into one or more classes.
Pursuant thereto, the Trustees have authorized the issuance of four classes of
shares of the fund, designated as Class A shares, Class B shares, Class C shares
and Class Y shares. Each share of a class of the fund represents an equal
proportionate interest in the assets of the fund allocable to that class. Upon
liquidation of the fund, shareholders of each class of the fund are entitled to
share pro rata in the fund's net assets allocable to such class available for
distribution to shareholders. The fund reserves the right to create and issue
additional series or classes of shares, in which case the shares of each class
of a series would participate equally in the earnings, dividends and assets
allocable to that class of the particular series.
The shares of each class represent an interest in the same portfolio of
investments of the fund. Each class has equal rights as to voting, redemption,
dividends and liquidation, except that each class bears different distribution
and transfer agent fees and may bear other expenses properly attributable to the
particular class. Class A and Class B shareholders have exclusive voting rights
with respect to the Rule 12b-1 Plans adopted by holders of those shares in
connection with the distribution of shares.
Shareholders are entitled to one vote for each share held and may vote in the
election of Trustees and on other matters submitted to a meeting of
shareholders. Although Trustees are not elected annually by the shareholders,
shareholders have, under certain circumstances, the right to remove one or more
Trustees. The fund is not required, and does not intend, to hold annual
shareholder meetings although special meetings may be called for the purpose of
electing or removing Trustees, changing fundamental investment restrictions or
approving a management contract.
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The shares of each series of the fund are entitled to vote separately to approve
investment advisory agreements or changes in investment restrictions, but
shareholders of all series vote together in the election and selection of
Trustees and accountants. Shares of all series of the fund vote together as a
class on matters that affect all series of the fund in substantially the same
manner. As to matters affecting a single series or class, shares of such series
or class will vote separately. No amendment adversely affecting the rights of
shareholders may be made to the Declaration without the affirmative vote of a
majority of the fund's shares. Shares have no preemptive or conversion rights
except that under certain circumstances Class B shares may convert to Class A
shares.
As a Delaware business trust, the fund's operations are governed by the
Declaration. Generally, Delaware business trust shareholders are not personally
liable for obligations of the Delaware business trust under Delaware law. The
Delaware Business Trust Act (the "Delaware Act") provides that a shareholder of
a Delaware business trust shall be entitled to the same limitation of liability
extended to shareholders of private for-profit corporations. The Declaration
expressly provides that the fund is organized under the Delaware Act and that
the Declaration is to be governed by Delaware law. There is nevertheless a
possibility that a Delaware business trust, such as the fund, might become a
party to an action in another state whose courts refused to apply Delaware law,
in which case the fund's shareholders could become subject to personal
liability.
To guard against this risk, the Declaration (i) contains an express disclaimer
of shareholder liability for acts or obligations of the fund and provides that
notice of such disclaimer may be given in each agreement, obligation or
instrument entered into or executed by the fund or its Trustees, (ii) provides
for the indemnification out of fund property of any shareholders held personally
liable for any obligations of the fund or any series of the fund and (iii)
provides that the fund shall, upon request, assume the defense of any claim made
against any shareholder for any act or obligation of the fund and satisfy any
judgment thereon. Thus, the risk of a shareholder incurring financial loss
beyond his or her investment because of shareholder liability is limited to
circumstances in which all of the following factors are present: (1) a court
refused to apply Delaware law; (2) the liability arose under tort law or, if
not, no contractual limitation of liability was in effect; and (3) the fund
itself would be unable to meet its obligations. In light of Delaware law, the
nature of the fund's business and the nature of its assets, the risk of personal
liability to a fund shareholder is remote.
In addition to the requirements under Delaware law, the Declaration provides
that a shareholder of the fund may bring a derivative action on behalf of the
fund only if the following conditions are met: (a) shareholders eligible to
bring such derivative action under Delaware law who hold at least 10% of the
outstanding shares of the fund, or 10% of the outstanding shares of the series
or class to which such action relates, shall join in the request for the
Trustees to commence such action; and (b) the Trustees must be afforded a
reasonable amount of time to consider such shareholder request and investigate
the basis of such claim. The Trustees shall be entitled to retain counsel or
other advisers in considering the merits of the request and shall require an
undertaking by the shareholders making such request to reimburse the fund for
the expense of any such advisers in the event that the Trustees determine not to
bring such action.
The Declaration further provides that the fund shall indemnify each of its
Trustees and officers against liabilities and expenses reasonably incurred by
them in connection with, or arising out of, any action, suit or proceeding,
threatened against or otherwise involving such Trustee or officer, directly or
indirectly, by reason of being or having been a Trustee or officer of the fund.
The Declaration does not authorize the fund to indemnify any Trustee or officer
against any liability to which he or she
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would otherwise be subject by reason of or for willful misfeasance, bad
faith, gross negligence or reckless disregard of such person's duties.
The Declaration provides that any Trustees who is not an "interested person" of
Pioneer shall be considered to be independent for purposes of Delaware law
notwithstanding the fact that such trustees receive compensation for serving as
a trustee of the fund or other investment companies for which Pioneer acts as
investment adviser.
11. SALES CHARGES
The fund continuously offers four classes of shares designated as Class A, Class
B, Class C and Class Y shares as described in the prospectus.
CLASS A SHARE SALES CHARGES
You may buy Class A shares at the public offering price, including a sales
charge, as follows:
<TABLE>
<CAPTION>
SALES CHARGE AS A % OF
OFFERING NET AMOUNT DEALER
AMOUNT OF PURCHASE PRICE INVESTED REALLOWANCE
<S> <C> <C> <C>
Less than $100,000 4.50 4.71 4.00
$100,000 but less than $250,000 3.50 3.63 3.00
$250,000 but less than $500,000 2.50 2.56 2.00
$500,000 but less than $1,000,000 2.00 2.04 1.75
$1,000,000 or more 0.00 0.00 see below
</TABLE>
The schedule of sales charges above is applicable to purchases of Class A shares
of the fund by (i) an individual, (ii) an individual and his or her spouse and
children under the age of 21 and (iii) a trustee or other fiduciary of a trust
estate or fiduciary account or related trusts or accounts including pension,
profit-sharing and other employee benefit trusts qualified under Sections 401 or
408 of the Code although more than one beneficiary is involved. The sales
charges applicable to a current purchase of Class A shares of the fund by a
person listed above is determined by adding the value of shares to be purchased
to the aggregate value (at the then current offering price) of shares of any of
the other Pioneer mutual funds previously purchased and then owned, provided PFD
is notified by such person or his or her broker-dealer each time a purchase is
made which would qualify. Pioneer mutual funds include all mutual funds for
which PFD serves as principal underwriter. At the sole discretion of PFD,
holdings of funds domiciled outside the U.S., but which are managed by
affiliates of Pioneer, may be included for this purpose.
No sales charge is payable at the time of purchase on investments of $1 million
or more, or for purchases by participants in certain group plans described below
subject to a CDSC of 1% which may be imposed in the event of a redemption of
Class A shares within 12 months of purchase. PFD may, in its discretion, pay a
commission to broker-dealers who initiate and are responsible for such purchases
as follows: 1% on the first $5 million invested; 0.50% on the next $45 million
invested; and 0.25% on the excess over $50 million invested. These commissions
shall not be payable if the purchaser is affiliated with the broker-dealer or if
the purchase represents the reinvestment of a redemption made during the
previous 12 calendar months. Broker-dealers who receive a commission in
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connection with Class A share purchases at net asset value by 401(a) or 401(k)
retirement plans with 1,000 or more eligible participants or with at least $10
million in plan assets will be required to return any commissions paid or a pro
rata portion thereof if the retirement plan redeems its shares within 12 months
of purchase. Contingent upon the achievement of certain sales objectives, PFD
may pay 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.
LETTER OF INTENT ("LOI"). Reduced sales charges are available for purchases of
$50,000 or more of Class A shares (excluding any reinvestments of dividends and
capital gains distributions) made within a 13-month period pursuant to an LOI
which may be established by completing the Letter of Intent section of the
Account Application. The reduced sales charge will be the charge that would be
applicable to the purchase of the specified amount of Class A shares as if the
shares had all been purchased at the same time. A purchase not made pursuant to
an LOI may be included if the LOI is submitted to PSC within 90 days of such
purchase. You may also obtain the reduced sales charge by including the value
(at current offering price) of all your Class A shares in the fund and all other
Pioneer mutual funds held of record as of the date of your LOI in the amount
used to determine the applicable sales charge for the Class A shares to be
purchased under the LOI. Five percent of your total intended purchase amount
will be held in escrow by PSC, registered in your name, until the terms of the
LOI are fulfilled. When you sign the Account Application, you agree to
irrevocably appoint PSC your attorney-in-fact to surrender for redemption any or
all shares held in escrow with full power of substitution. An LOI is not a
binding obligation upon the investor to purchase, or the fund to sell, the
amount specified in the LOI.
If the total purchases, less redemptions, exceed the amount specified under the
LOI and are in an amount which would qualify for a further quantity discount,
all transactions will be recomputed on the expiration date of the LOI to effect
the lower sales charge. Any difference in the sales charge resulting from such
recomputation will be either delivered to you in cash or invested in additional
shares at the lower sales charge. The dealer, by signing the Account
Application, agrees to return to PFD, as part of such retroactive adjustment,
the excess of the commission previously reallowed or paid to the dealer over
that which is applicable to the actual amount of the total purchases under the
LOI.
If the total purchases, less redemptions, are less than the amount specified
under the LOI, you must remit to PFD any difference between the sales charge on
the amount actually purchased and the amount originally specified in the LOI.
When the difference is paid, the shares held in escrow will be deposited to your
account. If you do not pay the difference in sales charge within 20 days after
written request from PFD or your dealer, PSC, after receiving instructions from
PFD, will redeem the appropriate number of shares held in escrow to realize the
difference and release any excess.
CLASS B SHARES
You may buy Class B shares at the net asset value per share next computed after
receipt of a purchase order without the imposition of an initial sales charge;
however, Class B shares redeemed within six years of purchase will be subject to
a CDSC at the rates shown in the table below. The charge will be assessed on the
amount equal to the lesser of the current market value or the original purchase
cost of the shares being redeemed. No CDSC will be imposed on increases in
account value above the initial
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<PAGE>
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 month will be aggregated and deemed to have been made on the
first day of that month. 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:
<TABLE>
<CAPTION>
CDSC AS A % OF DOLLAR
YEAR SINCE PURCHASE AMOUNT SUBJECT TO CDSC
<S> <C>
First 4.0
Second 4.0
Third 3.0
Fourth 3.0
Fifth 2.0
Sixth 1.0
Seventh and thereafter 0.0
</TABLE>
Proceeds from the CDSC are paid to PFD and are used in whole or in part to
defray PFD's expenses related to providing distribution-related services to the
fund in connection with the sale of Class B shares, including the payment of
compensation to broker-dealers.
Class B shares will automatically convert into Class A shares at the beginning
of the calendar month that is five years after the purchase date, except as
noted below. Class B shares acquired by exchange from Class B shares of another
Pioneer mutual fund will convert into Class A shares based on the date of the
initial purchase and the applicable CDSC. Class B shares acquired through
reinvestment of distributions will convert into Class A shares based on the date
of the initial purchase to which such shares relate. For this purpose, Class B
shares acquired through reinvestment of distributions will be attributed to
particular purchases of Class B shares in accordance with such procedures as the
Trustees may determine from time to time. The conversion of Class B shares to
Class A shares is subject to the continuing availability of a ruling from the
Internal Revenue Service (the "IRS") or an opinion of counsel that such
conversions will not constitute taxable events for federal tax purposes. The
conversion of Class B shares to Class A shares will not occur if such ruling or
opinion is not available and, therefore, Class B shares would continue to be
subject to higher expenses than Class A shares for an indeterminate period.
CLASS C SHARES
You may buy Class C shares at net asset value per share next computed after
receipt of a purchase order without the imposition of an initial sales charge;
however, Class C shares redeemed within one year of purchase will be subject to
a CDSC of 1%. 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
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<PAGE>
derived from the reinvestment of dividends or capital gains distributions.
Class C shares do not convert to any other class of fund shares.
For the purpose of determining the time of any purchase, all payments during a
month will be aggregated and deemed to have been made on the first day of that
month. In processing redemptions of Class C shares, the fund will first redeem
shares not subject to any CDSC and then shares held for the shortest period of
time during the one-year period. As a result, you will pay the lowest possible
CDSC.
Proceeds from the CDSC are paid to PFD and are used in whole or in part to
defray PFD's expenses related to providing distribution-related services to the
fund in connection with the sale of Class C shares, including the payment of
compensation to broker-dealers.
12. REDEEMING SHARES
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 for shareholders that are
subject to U.S. federal income tax. The net asset value per share received upon
redemption or repurchase may be more or less than the cost of shares to an
investor, depending on the market value of the portfolio at the time of
redemption or repurchase.
SYSTEMATIC WITHDRAWAL PLAN(S) ("SWP") (CLASS A, CLASS B AND CLASS C SHARES). A
SWP is designed to provide a convenient method of receiving fixed payments at
regular intervals from fund share accounts having a total value of not less than
$10,000. You must also be reinvesting all dividends and capital gains
distributions to use the SWP option.
Periodic payments of $50 or more will be deposited monthly, quarterly,
semiannually or annually directly into a bank account designated by the
applicant or will be sent by check to the applicant, or any person designated by
the applicant. Payments can be made either by check or electronic funds transfer
to a bank account designated by you. Class B accounts must meet the minimum
initial investment requirement prior to establishing a SWP. Withdrawals from
Class B and Class C share accounts are limited to 10% of the value of the
account at the time the SWP is established. See "Qualifying for a reduced sales
charge" in the prospectus. If you direct that withdrawal payments be paid to
another person, want to change the bank where payments are sent or designate an
address that is different from the account's address of record after you have
opened your account, a signature guarantee must accompany your instructions.
Withdrawals under the SWP are redemptions that may have tax consequences for
you.
Purchases of Class A shares of the fund at a time when you have a SWP in effect
may result in the payment of unnecessary sales charges and may, therefore, be
disadvantageous. SWP redemptions reduce and may ultimately exhaust the number of
shares in your account. In addition, the amounts received by a shareholder
cannot be considered as yield or income on his or her investment because part of
such payments may be a return of his or her investment.
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<PAGE>
A 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 in the shareholder's account have
been redeemed.
You may obtain additional information by calling PSC at 1-800-225-6292.
REINSTATEMENT PRIVILEGE (CLASS A SHARES). If you redeem all or part of your
Class A shares of the fund, you may reinvest all or part of the redemption
proceeds without a sales charge in Class A shares of the fund if you send a
written request to PSC not more than 90 days after your shares were redeemed.
Your redemption proceeds will be reinvested at the next determined net asset
value of the Class A shares of the fund after receipt of the written request for
reinstatement. You may realize a gain or loss for federal income tax purposes as
a result of the redemption, and special tax rules may apply if a reinstatement
occurs. For example, if a redemption resulted in a loss and an investment is
made in shares of the fund within 30 days before or after the redemption, you
may not be able to recognize the loss for federal income tax purposes. Subject
to the provisions outlined in the prospectus, you may also reinvest in Class A
shares of other Pioneer mutual funds; in this case you must meet the minimum
investment requirements for each fund you enter.
The 90-day reinstatement period may be extended by PFD for periods of up to one
year for shareholders living in areas that have experienced a natural disaster,
such as a flood, hurricane, tornado or earthquake.
13. TELEPHONE TRANSACTIONS
You may purchase, exchange or sell Class A, Class B or Class C shares by
telephone. Class Y shares may not be purchased by telephone. See the prospectus
for more information. For personal assistance, call 1-800-225-6292 between 8:00
a.m. and 9:00 p.m. (Class Y account holders should contact Pioneer's Group Plans
Department at 1-888-294-4480 between 9:00 a.m. and 6:00 p.m.) Eastern time on
weekdays. Computer-assisted transactions may be available to shareholders who
have prerecorded certain bank information (see "FactFoneSM"). YOU ARE STRONGLY
URGED TO CONSULT WITH YOUR INVESTMENT PROFESSIONAL PRIOR TO REQUESTING ANY
TELEPHONE TRANSACTION.
To confirm that each transaction instruction received by telephone is genuine,
the fund will record each telephone transaction, require the caller to provide
the personal identification number ("PIN") for the account and send you a
written confirmation of each telephone transaction. Different procedures may
apply to accounts that are registered to non-U.S. citizens or that are held in
the name of an institution or in the name of an investment broker-dealer or
other third party. If reasonable procedures, such as those described above, are
not followed, the fund may be liable for any loss due to unauthorized or
fraudulent instructions. The fund may implement other procedures from time to
time. In all other cases, neither the fund, PSC nor PFD will be responsible for
the authenticity of instructions received by telephone; therefore, you bear the
risk of loss for unauthorized or fraudulent telephone transactions.
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 purchase, exchange or redemption. You should
communicate with the fund in writing if you are unable to reach the fund by
telephone.
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<PAGE>
FACTFONE(SM). FactFoneSM is an automated inquiry and telephone transaction
system available to Pioneer mutual fund shareholders by dialing 1-800-225-4321.
FactFoneSM allows shareholder access to current information on Pioneer mutual
fund accounts and to the prices and yields of all publicly available Pioneer
mutual funds. In addition, you may use FactFoneSM to make computer-assisted
telephone purchases, exchanges or redemptions from your Pioneer mutual fund
accounts, access your account balances and last three transactions and order a
duplicate statement if you have activated your PIN. Telephone purchases or
redemptions require the establishment of a bank account of record.
Computer-assisted Class Y share telephone purchases, exchanges and redemptions
and certain other FactFoneSM features for Class Y shareholders are not currently
available through FactFoneSM. YOU ARE STRONGLY URGED TO CONSULT WITH YOUR
INVESTMENT PROFESSIONAL PRIOR TO REQUESTING ANY TELEPHONE TRANSACTION.
Shareholders whose accounts are registered in the name of a broker-dealer or
other third party may not be able to use FactFoneSM. Call PSC for assistance.
FactFoneSM allows shareholders to hear the following recorded fund information:
o net asset value prices for all Pioneer mutual funds;
o annualized 30-day yields on Pioneer's fixed income funds;
o annualized 7-day yields and 7-day effective (compound) yields for Pioneer's
money market fund; and
o dividends and capital gains distributions on all Pioneer mutual funds.
Yields are calculated in accordance with SEC mandated standard formulas.
All performance numbers communicated through FactFoneSM represent past
performance, and figures include the maximum applicable sales charge. A
shareholder's actual yield and total return will vary with changing market
conditions. The value of Class A, Class B, Class C and Class Y shares (except
for Pioneer Cash Reserves Fund, which seeks to maintain a stable $1.00 share
price) will also vary, and such shares may be worth more or less at redemption
than their original cost.
14. PRICING OF SHARES
The net asset value per share of each class of the fund is determined as of the
close of regular trading on the Exchange (normally 4:00 p.m. Eastern time) on
each day on which the Exchange is open for trading. As of the date of this
statement of additional information, the Exchange is open for trading every
weekday except for the following holidays: New Year's Day, Martin Luther King,
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day. The net asset value per share of each
class of the fund is also determined on any other day on which the level of
trading in its portfolio securities is sufficiently high that the current net
asset value per share might be materially affected by changes in the value of
its portfolio securities. The fund is not required to determine its net asset
value per share on any day on which no purchase orders in good order for fund
shares are received and no shares are tendered and accepted for redemption.
Securities are valued at the last sale price on the principal exchange or market
where they are traded. Securities which have not traded on the date of valuation
or securities for which sales prices are not generally reported are valued at
the mean between the current bid and asked prices. Securities quoted
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<PAGE>
in foreign currencies are converted to U.S. dollars utilizing foreign
exchange rates employed by the fund's independent pricing services. Generally,
trading in foreign securities is substantially completed each day at various
times prior to the close of regular trading on the Exchange. The values of such
securities used in computing the net asset value of the fund's shares are
determined as of such times. Foreign currency exchange rates are also generally
determined prior to the close of regular trading on the Exchange. Occasionally,
events which affect the values of such securities and such exchange rates may
occur between the times at which they are determined and the close of regular
trading on the Exchange and will therefore not be reflected in the computation
of the fund's net asset value. If events materially affecting the value of such
securities occur during such period, then these securities may be valued at
their fair value as determined in good faith by the Trustees. All assets of the
fund for which there is no other readily available valuation method are valued
at their fair value as determined in good faith by the Trustees, although the
actual computations may be made by persons acting pursuant to the direction of
the Board of Trustees.
The net asset value per share of each class of the fund is computed by taking
the value of all of the fund's assets attributable to a class, less the fund's
liabilities attributable to that class, and dividing the result by the number of
outstanding shares of that class. For purposes of determining net asset value,
expenses of the classes of the fund are accrued daily and taken into account.
The fund's maximum offering price per Class A share is determined by adding the
maximum sales charge to the net asset value per Class A share. Class B, Class C
and Class Y shares are offered at net asset value without the imposition of an
initial sales charge (Class B and Class C shares may be subject to a CDSC).
15. TAX STATUS
The fund intends to elect to be treated and to qualify each year as a "regulated
investment company" under Subchapter M of the Code so that it will not pay
federal income tax on income and capital gains distributed to shareholders as
required under the Code. If the fund did not qualify as a regulated investment
company, it would be treated as a U.S. corporation subject to federal income
tax. Under the Code, the fund will be subject to a nondeductible 4% federal
excise tax on a portion of its undistributed ordinary income and capital gains
if it fails to meet certain distribution requirements with respect to each
calendar year. The fund intends to make distributions in a timely manner and
accordingly does not expect to be subject to the excise tax.
The fund's policy is to pay to shareholders dividends from net long-term capital
gains, if any, in November. The fund pays income dividends and distributions
from net short-term capital gains, if any, quarterly in March, June, September
and December. Dividends from income and/or capital gains may also be paid at
such other times as may be necessary for the fund to avoid federal income or
excise tax.
In order to qualify as a regulated investment company under Subchapter M, the
fund must, among other things, derive at least 90% of its gross income for each
taxable year from dividends, interest, payments with respect to securities
loans, gains from the sale or other disposition of stock, securities or foreign
currencies, or other income (including gains from options, futures and forward
contracts) derived with respect to its business of investing in such stock,
securities or currencies (the "90% income test") and satisfy certain annual
distribution and quarterly diversification requirements. For purposes of the 90%
income test, income the fund earns from equity interests in certain entities
that are not treated as corporations (e.g., are treated as partnerships or
trusts) for U.S. tax purposes will generally have the same character for the
fund as in the hands of such entities. Consequently, the fund
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<PAGE>
may be required to limit its equity investments in such entities that earn
fee income, rental income or other nonqualifying income.
Unless shareholders specify otherwise, all distributions will be automatically
reinvested in additional full and fractional shares of the fund. For federal
income tax purposes, all dividends are taxable as described below whether a
shareholder takes them in cash or reinvests them in additional shares of the
fund. Dividends from investment company taxable income, which includes net
investment income, net short-term capital gain in excess of net long-term
capital loss and certain net foreign exchange gains, are taxable as ordinary
income. Dividends from net long-term capital gain in excess of net short-term
capital loss ("net capital gain"), if any, are taxable 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.
Foreign exchange gains and losses realized by the fund in connection with
certain transactions involving foreign currency-denominated debt securities,
certain options and futures contracts relating to foreign currency, foreign
currency forward contracts, foreign currencies, or payables or receivables
denominated in a foreign currency are subject to Section 988 of the Code, which
generally causes such gains and losses to be treated as ordinary income and
losses and may affect the amount, timing and character of distributions to
shareholders. Under future regulations, any such transactions that are not
directly related to the fund's investments in stock or securities (or its
options contracts or futures contracts with respect to stock or securities) may
need to be limited in order to enable the fund to satisfy the 90% income test.
If the net foreign exchange loss for a year were to exceed the fund's investment
company taxable income (computed without regard to such loss), the resulting
ordinary loss for such year would not be deductible by the fund or its
shareholders in future years.
If the fund acquires any equity interest (under proposed regulations, generally
including not only stock but also an option to acquire stock such as is inherent
in a convertible bond) in certain foreign corporations that receive at least 75%
of their annual gross income from passive sources (such as interest, dividends,
certain rents and royalties, or capital gains) or hold at least 50% of their
assets in investments producing such passive income ("passive foreign investment
companies"), the fund could be subject to federal income tax and additional
interest charges on "excess distributions" received from such companies or gain
from the sale of stock in such companies, even if all income or gain actually
received by the fund is timely distributed to its shareholders. The fund would
not be able to pass through to its shareholders any credit or deduction for such
a tax. An election may generally be available that would ameliorate these
adverse tax consequences, but any such election could require the fund to
recognize taxable income or gain (subject to tax distribution requirements)
without the concurrent receipt of cash. These investments could also result in
the treatment of associated capital gains as ordinary income. The fund may limit
and/or manage its holdings in passive foreign investment companies to limit its
tax liability or maximize its return from these investments.
The fund may invest to a significant extent in debt obligations that are in the
lowest rating categories or are unrated, including debt obligations of issuers
not currently paying interest or who are in default. Investments in debt
obligations that are at risk of or in default present special tax issues for the
fund. Tax rules are not entirely clear about issues such as when the fund may
cease to accrue interest,
45
<PAGE>
original issue discount or market discount when and to
what extent deductions may be taken for bad debts or worthless securities, how
payments received on obligations in default should be allocated between
principal and income and whether exchanges of debt obligations in a workout
context are taxable. These and other issues will be addressed by the fund, in
the event it invests in such securities, in order to seek to ensure that it
distributes sufficient income to preserve its status as a regulated investment
company and does not become subject to federal income or excise tax.
If the fund invests in certain pay-in-kind securities, zero coupon securities,
deferred interest securities or, in general, any other securities with original
issue discount (or with market discount if the fund elects to include market
discount in income currently), the fund must accrue income on such investments
for each taxable year, which generally will be prior to the receipt of the
corresponding cash payments. However, the fund must distribute, at least
annually, all or substantially all of its net income, including such accrued
income, to shareholders to qualify as a regulated investment company under the
Code and avoid federal income and excise taxes. Therefore, the fund may have to
dispose of its portfolio securities under disadvantageous circumstances to
generate cash, or may have to leverage itself by borrowing the cash, to satisfy
distribution requirements.
For federal income tax purposes, the fund is permitted to carry forward a net
capital loss for any year to offset its capital gains, if any, during the eight
years following the year of the loss. To the extent subsequent capital gains are
offset by such losses, they would not result in federal income tax liability to
the fund and are not expected to be distributed as such to shareholders.
At the time of an investor's purchase of fund shares, a portion of the purchase
price may be attributable to realized or unrealized appreciation in the fund's
portfolio or undistributed taxable income of the fund. Consequently, subsequent
distributions by the fund on these shares from such appreciation or income may
be taxable to such investor even if the net asset value of the investor's shares
is, as a result of the distributions, reduced below the investor's cost for such
shares and the distributions economically represent a return of a portion of the
investment.
Redemptions and exchanges are taxable events for shareholders that are subject
to tax. Shareholders should consult their own tax advisers with reference to
their individual circumstances to determine whether any particular transaction
in fund shares is properly treated as a sale for tax purposes, as the following
discussion assumes, and the tax treatment of any gains or losses recognized in
such transactions. Any loss realized by a shareholder upon the redemption,
exchange or other disposition of shares with a tax holding period of six months
or less will be treated as a long-term capital loss to the extent of any amounts
treated as distributions of long-term capital gain with respect to such shares.
In addition, if Class A shares redeemed or exchanged have been held for less
than 91 days, (1) in the case of a reinvestment in the fund or another mutual
fund at net asset value pursuant to the reinvestment privilege, or (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 reduced pursuant to the
reinvestment or exchange privilege. In either case, the portion of the sales
charge not included in the tax basis of the shares redeemed or surrendered in an
exchange is included in the tax basis of the shares acquired in the reinvestment
or exchange. Losses on redemptions or other dispositions of shares may be
disallowed under "wash sale" rules in the event of other investments in the fund
(including those made pursuant to reinvestment of dividends and/or capital gain
distributions) within a period of 61 days beginning 30 days before and
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<PAGE>
ending 30 days after a redemption or other disposition of shares. In such a
case, the disallowed portion of any loss would be included in the federal tax
basis of the shares acquired in the other investments.
Options written or purchased and futures contracts entered into by the fund on
certain securities, indices and foreign currencies, as well as certain forward
foreign currency contracts, may cause the fund to recognize gains or losses from
marking-to-market even though such options may not have lapsed, been closed out,
or exercised or such futures or forward contracts may not have been performed or
closed out. The tax rules applicable to these contracts may affect the
characterization as long-term or short-term of some capital gains and losses
realized by the fund. Certain options, futures and forward contracts relating to
foreign currency may be subject to Section 988, as described above, and
accordingly produce ordinary income or loss. Additionally, the fund may be
required to recognize gain if an option, futures contract, forward contract,
short sale or other transaction that is not subject to the mark-to-market rules
is treated as a "constructive sale" of an "appreciated financial position" held
by the fund under Section 1259 of the Code. Any net mark-to-market gains and/or
gains from constructive sales may also have to be distributed to satisfy the
distribution requirements referred to above even though no corresponding cash
amounts may concurrently be received, possibly requiring the disposition of
portfolio securities or borrowing to obtain the necessary cash. Losses on
certain options, futures or forward contracts and/or offsetting positions
(portfolio securities or other positions with respect to which the fund's risk
of loss is substantially diminished by one or more options, futures or forward
contracts) may also be deferred under the tax straddle rules of the Code, which
may also affect the characterization of capital gains or losses from straddle
positions and certain successor positions as long-term or short-term. Certain
tax elections may be available that would enable the fund to ameliorate some
adverse effects of the tax rules described in this paragraph. The tax rules
applicable to options, futures, forward contracts and straddles may affect the
amount, timing and character of the fund's income and gains or losses and hence
of its distributions to shareholders.
For purposes of the 70% dividends-received deduction generally available to
corporations under the Code, dividends received by the fund from U.S.
corporations in respect of any share of stock with a tax holding period of at
least 46 days (91 days in the case of certain preferred stock) extending before
and after each dividend held in an unleveraged position and distributed and
designated by the fund 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 and, to
the extent such basis would be reduced below zero, current recognition of income
may be required. In order to qualify for the deduction, corporate shareholders
must meet the minimum holding period requirement stated above with respect to
their fund shares, taking into account any holding period reductions from
certain hedging or other transactions or positions that diminish their risk of
loss with respect to their fund shares, and, if they borrow to acquire or
otherwise incur debt attributable to fund shares, they may be denied a portion
of the dividends-received deduction. The entire qualifying dividend, including
the otherwise deductible amount, will be included in determining the excess, if
any, of a corporation's adjusted current earnings over its alternative minimum
taxable income, which may increase a corporation's alternative minimum tax
liability.
The fund may be subject to withholding and other taxes imposed by foreign
countries, including taxes on interest, dividends and capital gains with respect
to its investments in those countries, which would, if imposed, reduce the yield
on or return from those investments. Tax conventions between certain countries
and the U.S. may reduce or eliminate such taxes in some cases. The fund does not
expect to satisfy the requirements for passing through to its shareholders their
pro rata shares of qualified foreign
47
<PAGE>
taxes paid by the fund, with the result that shareholders will not include
such taxes in their gross incomes and will not be entitled to a tax deduction or
credit for such taxes on their own tax returns.
A state income (and possibly local income and/or intangible property) tax
exemption is generally available to the extent the fund's distributions are
derived from interest on (or, in the case of intangible property taxes, the
value of its assets is attributable to) certain U.S. Government obligations,
provided in some states that certain thresholds for holdings of such obligations
and/or reporting requirements are satisfied. The fund will not seek to satisfy
any threshold or reporting requirements that may apply in particular taxing
jurisdictions, although the fund may in its sole discretion provide relevant
information to shareholders.
Different tax treatment, including penalties on certain excess contributions and
deferrals, certain pre-retirement and post-retirement distributions and certain
prohibited transactions, is accorded to accounts maintained as qualified
retirement plans. Shareholders should consult their tax advisers for more
information.
Federal law requires that the fund withhold (as "backup withholding") 31% of
reportable payments, including dividends, capital gain distributions and the
proceeds of redemptions (including exchanges) or repurchases of fund shares paid
to shareholders who have not complied with IRS regulations. In order to avoid
this withholding requirement, shareholders must certify on their Account
Applications, or on separate IRS Forms W-9, that the Social Security Number or
other Taxpayer Identification Number they provide is their correct number and
that they are not currently subject to backup withholding, or that they are
exempt from backup withholding. The fund may nevertheless be required to
withhold if it receives notice from the IRS or a broker that the number provided
is incorrect or backup withholding is applicable as a result of previous
underreporting of interest or dividend income.
If, as anticipated, the fund qualifies as a regulated investment company under
the Code, it will not be required to pay any Massachusetts income, corporate
excise or franchise taxes or any Delaware corporation income tax.
The description of certain federal tax provisions above relates only to U.S.
federal income tax consequences for shareholders who are U.S. persons, i.e.,
U.S. citizens or residents or U.S. corporations, partnerships, trusts or
estates, and who are subject to U.S. federal income tax. This description does
not address the special tax rules that may be applicable to particular types of
investors, such as financial institutions, insurance companies, securities
dealers, or tax-exempt or tax-deferred plans, accounts or entities. Investors
other than U.S. persons may be subject to different U.S. tax treatment,
including a possible 30% non-resident alien U.S. withholding tax (or
non-resident alien withholding tax at a lower treaty rate) on amounts treated as
ordinary dividends from the fund and, unless an effective IRS Form W-8, Form
W-8BEN, or other authorized withholding certificate is on file, to 31% backup
withholding on certain other payments from the fund. Shareholders should consult
their own tax advisers on these matters and on state, local and other applicable
tax laws.
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<PAGE>
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 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 Exchange; or the Russell U.S. Equity Indexes
or the Wilshire Total Market Value Index, which are 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 indexes or indicators of
economic activity, e.g., inflation or interest rates. The fund may also include
securities industry or comparative performance information generally and in
advertising or materials marketing the fund's shares. Performance rankings and
listings reported in newspapers or national business and financial publications,
such as BARRON'S, BUSINESS WEEK, CONSUMERS DIGEST, CONSUMER REPORTS, FINANCIAL
WORLD, FORBES, FORTUNE, INVESTORS BUSINESS DAILY, KIPLINGER'S PERSONAL FINANCE
MAGAZINE, MONEY MAGAZINE, NEW YORK TIMES, SMART MONEY, USA TODAY, U.S. NEWS AND
WORLD REPORT, THE WALL STREET JOURNAL and WORTH may also be cited (if the fund
is listed in any such publication) or used for comparison, as well as
performance listings and rankings from various other sources including Bloomberg
Financial Markets, CDA/Wiesenberger, Donoghue's Mutual Fund Almanac, Ibbotson
Associates, Investment Company Data, Inc., Johnson's Charts, Kanon Bloch Carre
and Co., Lipper 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 of more classes of the fund since
inception.
In presenting investment results, the fund may also include references to
certain financial planning concepts, including (a) an investor's need to
evaluate his financial assets and obligations to determine how much to invest;
(b) his need to analyze the objectives of various investments to determine where
to invest; and (c) his need to analyze his time frame for future capital needs
to determine how long to invest. The investor controls these three factors, all
of which affect the use of investments in building assets.
STANDARDIZED YIELD QUOTATIONS
The yield of a class is computed by dividing the class' net investment income
per share during a base period of 30 days, or one month, by the maximum offering
price per share of the class on the last day of such base period in accordance
with the following formula:
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<PAGE>
a-b
YIELD = 2[ ( ----- +1)6[superscript] - 1]
cd
Where:
a = interest earned during the period
b = net expenses accrued for the period
c = the average daily number of shares outstanding
during the period that were entitled to receive
dividends
d = the maximum offering price per share on the last day of the period
For purposes of calculating interest earned on debt obligations as provided in
item "a" above:
(i) The yield to maturity of each obligation held by the fund is
computed based on the market value of the obligation (including actual accrued
interest, if any) at the close of business each day during the 30-day base
period, or, with respect to obligations purchased during the month, the purchase
price (plus actual accrued interest, if any) on settlement date, and with
respect to obligations sold during the month the sale price (plus actual accrued
interest, if any) between the trade and settlement dates.
(ii) The yield to maturity of each obligation is then divided by 360
and the resulting quotient is multiplied by the market value of the obligation
(including actual accrued interest, if any) to determine the interest income on
the obligation for each day. The yield to maturity calculation has been made on
each obligation during the 30 day base period.
(iii) Interest earned on all debt obligations during the 30-day or one
month period is then totaled.
(iv) The maturity of an obligation with a call provision(s) is the next
call date on which the obligation reasonably may be expected to be called or, if
none, the maturity date.
With respect to the treatment of discount and premium on mortgage- or other
receivables-backed obligations which are expected to be subject to monthly
payments of principal and interest ("pay downs"), the fund accounts for gain or
loss attributable to actual monthly pay downs as an increase or decrease to
interest income during the period. In addition, the fund may elect (i) to
amortize the discount or premium remaining on a security, based on the cost of
the security, to the weighted average maturity date, if such information is
available, or to the remaining term of the security, if the weighted average
maturity date is not available, or (ii) not to amortize the remaining discount
or premium on a security.
For purposes of computing yield, interest income is recognized by accruing 1/360
of the stated interest rate of each obligation in the fund's portfolio each day
that the obligation is in the portfolio. Expenses of Class A and Class B accrued
during any base period, if any, pursuant to the respective Distribution Plans
are included among the expenses accrued during the base period.
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<PAGE>
STANDARDIZED AVERAGE ANNUAL TOTAL RETURN QUOTATIONS
One of the primary methods used to measure the performance of a class of the
fund is "total return." Total return will normally represent the percentage
change in value of an account, or of a hypothetical investment in a class of the
fund, over any period up to the lifetime of that class of the fund. Total return
calculations will usually assume the reinvestment of all dividends and capital
gain distributions and will be expressed as a percentage increase or decrease
from an initial value for the entire period or for one or more specified periods
within the entire period. Total return percentages for periods of less than one
year will usually be annualized; total return percentages for periods longer
than one year will usually be accompanied by total return percentages for each
year within the period and/or by the average annual compounded total return for
the period. The income and capital components of a given return may be separated
and portrayed in a variety of ways in order to illustrate their relative
significance. Performance may also be portrayed in terms of cash or investment
values without percentages. Past performance cannot guarantee any particular
future result.
The fund's average annual total return quotations for each of its classes as
that information may appear in the fund's prospectus, this statement of
additional information or in advertising are calculated by standard methods
prescribed by the SEC. Average annual total return quotations for each class of
shares are computed by finding the average annual compounded rates of return
that would cause a hypothetical investment in the class made on the first day of
a designated period (assuming all dividends and distributions are reinvested) to
equal the ending redeemable value of such hypothetical investment on the last
day of the designated period in accordance with the following formula:
P(1+T)n[superscript] = 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 and Class C
shares at the end of the period; for Class Y shares,
no sales load or CDSC applies
T = average annual total return
n = number of years
ERV = ending redeemable value of the hypothetical $1,000 initial payment
made at the beginning of the designated period (or fractional portion
thereof)
For purposes of the above computation, it is assumed that all dividends and
distributions made by the fund are reinvested at net asset value during the
designated period. The average annual total return quotation is determined to
the nearest 1/100 of 1%.
In determining the average annual total return (calculated as provided above),
recurring fees, if any, that are charged to all shareholder accounts of a
particular class of shares are taken into consideration.
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<PAGE>
For any account fees that vary with the size of the account, the account
fee used for purposes of the above computation is assumed to be the fee that
would be charged to the class' mean account size.
See Appendix A for the annual total returns for each class of fund shares as of
the most recently completed fiscal year.
17. FINANCIAL STATEMENTS
[To be filed by amendment.]
To the extent permitted by the SEC, if members of the same family hold shares of
the fund and have the same address of record, the fund will only send one copy
of its shareholders report to such address, unless the shareholders at same
address request otherwise.
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<PAGE>
18. APPENDIX A - ANNUAL FEE, EXPENSE AND OTHER INFORMATION
PORTFOLIO TURNOVER
Not applicable.1
SHARE OWNERSHIP
Not applicable.1
COMPENSATION OF OFFICERS AND TRUSTEES
The following table sets forth certain information with respect to the
compensation of each Trustee of the fund.
<TABLE>
<CAPTION>
AGGREGATE PENSION OR RETIREMENT TOTAL COMPENSATION FROM
COMPENSATION FROM BENEFITS ACCRUED AS THE FUND AND OTHER
NAME OF TRUSTEE FUND * PART OF FUND EXPENSES PIONEER MUTUAL FUNDS*
<S> <C> <C> <C>
John F. Cogan, Jr.** $0 $0 $ 18,750.00
Mary K. Bush 0 0 77,125.00
Richard H. Egdahl, M.D. 0 0 79,125.00
Margaret B.W. Graham 0 0 81,750.00
John W. Kendrick 0 0 65,900.00
Marguerite A. Piret 0 0 98,750.00
David D. Tripple** 0 0 18,750.00
Stephen K. West 0 0 85,050.00
John Winthrop 0 0 85,875.00
- - ---------
$0 $0 $614,155.00
- ------------------------
* For the calendar year ended December 31, 1998. The fund did not pay
any compensation during 1998 because it had not yet been organized.
** Under the management contract, Pioneer reimburses the fund for any
Trustees fees paid by the fund.
</TABLE>
APPROXIMATE MANAGEMENT FEES THE FUND PAID OR OWED PIONEER
Not applicable.1
CARRYOVER OF DISTRIBUTION PLAN EXPENSES
Not applicable.1
- ------------------------
1 As of the date of this statement of additional information, the fund had
not yet completed a fiscal year.
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<PAGE>
APPROXIMATE NET UNDERWRITING COMMISSIONS RETAINED BY PFD
Not applicable.1
APPROXIMATE COMMISSIONS REALLOWED TO DEALERS
Not applicable.1
FUND EXPENSES UNDER THE DISTRIBUTION PLANS
Not applicable.1
CDSCS
Not applicable.1
APPROXIMATE BROKERAGE AND UNDERWRITING COMMISSIONS (PORTFOLIO TRANSACTIONS)
Not applicable.1
CAPITAL LOSS CARRYFORWARDS
Not applicable.1
AVERAGE ANNUAL TOTAL RETURNS
Not applicable.1
- ------------------------
1 As of the date of this statement of additional information, the fund had
not yet completed a fiscal year.
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<PAGE>
19. APPENDIX B - DESCRIPTION OF SHORT-TERM DEBT, CORPORATE BOND AND
PREFERRED STOCK RATINGS1
MOODY'S INVESTORS SERVICE, INC. ("MOODY'S") PRIME RATING SYSTEM
Moody's short-term debt ratings are opinions of the ability of issuers to repay
punctually senior debt obligations. These obligations have an original maturity
not exceeding one year, unless explicitly noted.
Moody's employs the following three designations, all judged to be investment
grade, to indicate the relative repayment ability of rated issuers:
Prime-1: Issuers rated Prime-1 (or supporting institutions) have a superior
ability for repayment of senior short-term debt obligations. Prime-1 repayment
ability will often be evidenced by many of the following characteristics:
Leading market positions in well-established industries.
High rates of return on funds employed.
Conservative capitalization structure with moderate reliance on debt
and ample asset protection.
Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.
Well-established access to a range of financial markets and assured
sources of alternate liquidity.
Prime-2: Issuers rated Prime-2 (or supporting institutions) have a strong
ability for repayment of senior short-term debt obligations. This will normally
be evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.
Prime-3: Issuers rated Prime-3 (or supporting institutions) have an acceptable
ability for repayment of senior short-term obligations. The effect of industry
characteristics and market compositions may be more pronounced. Variability in
earnings and profitability may result in changes in the level of debt protection
measurements and may require relatively high financial leverage. Adequate
alternate liquidity is maintained.
Not Prime: Issuers rated Not Prime do not fall within any of the Prime rating
categories.
Obligations of a branch of a bank are considered to be domiciled in the country
in which the branch is located. Unless noted as an exception, Moody's rating on
a bank's ability to repay senior obligations
- --------
1 The ratings indicated herein are believed to be the most recent ratings
available at the date of this statement of additional information for the
securities listed. Ratings are generally given to securities at the time of
issuance. While the rating agencies may from time to time revise such ratings,
they undertake no obligation to do so, and the ratings indicated do not
necessarily represent ratings which will be given to these securities on the
date of the fund's fiscal year-end.
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<PAGE>
extends only to branches located in countries which carry a Moody's
Sovereign Rating for Bank Deposits. Such branch obligations are rated at the
lower of the bank's rating or Moody's Sovereign Rating for Bank Deposits for the
country in which the branch is located.
When the currency in which an obligation is denominated is not the same as the
currency of the country in which the obligation is domiciled, Moody's ratings do
not incorporate an opinion as to whether payment of the obligation will be
affected by actions of the government controlling the currency of denomination.
In addition, risks associated with bilateral conflicts between an investor's
home country and either the issuer's home country or the country where an
issuer's branch is located are not incorporated into Moody's short-term debt
ratings.
If an issuer represents to Moody's that its short-term debt obligations are
supported by the credit of another entity or entities, then the name or names of
such supporting entity or entities are listed within the parenthesis beneath the
name of the issuer, or there is a footnote referring the reader to another page
for the name or names of the supporting entity or entities. In assigning ratings
to such issuers, Moody's evaluates the financial strength of the affiliated
corporations, commercial banks, insurance companies, foreign governments or
other entities, but only as one factor in the total rating assessment.
MOODY'S DEBT RATINGS
Aaa: Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edged." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risk appear somewhat larger than the Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper-medium-grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Baa: Bonds which are rated Baa are considered as medium-grade obligations (i.e.,
they are neither highly protected nor poorly secured). Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba: Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
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<PAGE>
B: Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca: Bonds which are rated Ca represent obligations which are speculative in
a high degree. Such issues are often in default or have other marked
shortcomings.
C: Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
Note: Moody's applies numerical modifiers 1, 2 and 3 in each generic rating
classification from Aa through Caa. The modifier 1 indicated that the obligation
ranks in the higher end of its generic rating category; the modifier 2 indicated
a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of
that generic rating category.
MOODY'S PREFERRED STOCK RATINGS
Because of the fundamental differences between preferred stocks and bonds, a
variation of Moody's familiar bond rating symbols is used in the quality ranking
of preferred stock. The symbols, presented below, are designed to avoid
comparison with bond quality in absolute terms. It should always be borne in
mind that preferred stock occupies a junior position to bonds within a
particular capital structure and that these securities are rated within the
universe of preferred stocks.
aaa: An issue which is rated aaa is considered to be a top-quality preferred
stock. This rating indicates good asset protection and the least risk of
dividend impairment within the universe of preferred stocks.
aa: An issue which is rated aa is considered a high-grade preferred stock. This
rating indicates that there is a reasonable assurance the earnings and asset
protection will remain relatively well maintained in the foreseeable future.
a: An issue which is rated a is considered to be an upper-medium grade preferred
stock. While risks are judged to be somewhat greater then in the aaa and aa
classification, earnings and asset protection are, nevertheless, expected to be
maintained at adequate levels.
baa: An issue which is rated baa is considered to be a medium-grade preferred
stock, neither highly protected nor poorly secured. Earnings and asset
protection appear adequate at present but may be questionable over any great
length of time.
ba: An issue which is rated ba is considered to have speculative elements and
its future cannot be considered well assured. Earnings and asset protection may
be very moderate and not well safeguarded during adverse periods.
Uncertainty of position characterizes preferred stocks in this class.
b: An issue which is rated b generally lacks the characteristics of a desirable
investment. Assurance of dividend payments and maintenance of other terms of the
issue over any long period of time may be small.
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caa: An issue which is rated caa is likely to be in arrears on dividend
payments. This rating designation does not purport to indicate the future status
of payments.
ca: An issue which is rated ca is speculative in a high degree and is likely to
be in arrears on dividends with little likelihood of eventual payments.
c: This is the lowest rated class of preferred or preference stock. Issues so
rated can thus be regarded as having extremely poor prospects of ever attaining
any real investment standing.
Note: Moody's applies numerical modifiers 1, 2 and 3 in each rating
classification: the modifier 1 indicates that the security ranks in the higher
end of its generic rating category; the modifier 2 indicates a mid-range ranking
and the modifier 3 indicates that the issue ranks in the lower end of its
generic rating category.
STANDARD & POOR'S SHORT-TERM ISSUE CREDIT RATINGS
A-1: A short-term obligation rated A-1 is rated in the highest category by
Standard & Poor's. The obligor's capacity to meet its financial commitment on
the obligation is strong. Within this category, certain obligations are
designated with a plus sign (+). This indicates that the obligor's capacity to
meet its financial commitment on these obligations is extremely strong.
A-2: A short-term obligation rated A-2 is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
obligations in higher rating categories. However, the obligor's capacity to meet
its financial commitment on the obligation is satisfactory.
A-3: A short-term obligation rated A-3 exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances are more likely
to lead to a weakened capacity of the obligor to meet its financial commitment
on the obligation.
B: A short-term obligation rated B is regarded as having significant speculative
characteristics. The obligor currently has the capacity to meet its financial
commitment on the obligation; however, it faces major ongoing uncertainties
which could lead to the obligor's inadequate capacity to meet its financial
commitment on the obligation.
C: A short-term obligation rated C is currently vulnerable to nonpayment and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation.
D: A short-term obligation rated D is in payment default. The D rating category
is used when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period. The D rating also will be
used upon the filing of a bankruptcy petition or the taking of a similar action
if payments on an obligation are jeopardized.
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STANDARD & POOR'S LONG-TERM ISSUE CREDIT RATINGS
Issue credit ratings are based, in varying degrees, on the following
considerations:
Likelihood of payment-capacity and willingness of the obligor to meet
its financial commitment on an obligation in accordance with the terms
of the obligation;
Nature of and provisions of the obligation;
Protection afforded by, and relative position of, the obligation in the
event of bankruptcy, reorganization, or other arrangement under the
laws of bankruptcy and other laws affecting creditors' rights.
The issue rating definitions are expressed in terms of default risk. As such,
they pertain to senior obligations of an entity. Junior obligations are
typically rated lower than senior obligations, to reflect the lower priority in
bankruptcy, as noted above. (Such differentiation applies when an entity has
both senior and subordinated obligations, secured and unsecured obligations, or
operating company and holding company obligations.) Accordingly, in the case of
junior debt, the rating may not conform exactly with the category definition.
AAA: An obligation rated AAA has the highest rating assigned by Standard &
Poor's. The obligor's capacity to meet its financial commitment on the
obligation is extremely strong.
AA: An obligation rated AA differs from the highest-rated obligations only
in small degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.
A: An obligation rated A is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in
higher-rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.
BBB: An obligation rated BBB exhibits adequate protection parameters. However,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity of the obligor to meet its financial commitment on the
obligation.
Obligations rated BB, B, CCC, CC, and C are regarded as having significant
speculative characteristics. BB indicates the least degree of speculation and C
the highest. While such obligations will likely have some quality and protective
characteristics, these may be outweighed by large uncertainties or major
exposures to adverse conditions.
BB: An obligation rated BB is less vulnerable to nonpayment than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to the
obligor's capacity to meet its financial commitment on the obligation.
B: An obligation rated B is more vulnerable to nonpayment than obligations rated
BB, but the obligor currently has the capacity to meet its financial commitment
on the obligation. Adverse business, financial, or economic conditions will
likely impair the obligor's capacity or willingness to meet its financial
commitment on the obligation.
CCC: An obligation rated CCC is currently vulnerable to nonpayment and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the
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obligation. In the event of adverse business, financial, or economic
conditions, the obligor is not likely to have the capacity to meet its financial
commitment on the obligation.
CC: An obligation rated CC is currently highly vulnerable to nonpayment.
C: The C rating may be used to cover a situation where a bankruptcy petition has
been filed or similar action has been taken, but payments on this obligation are
being continued. D: An obligation rated D is in payment default. The D rating
category is used when payments on an obligation are not made on the date due
even if the applicable grace period has not expired, unless Standard & Poor's
believes that such payments will be made during such grace period. The D rating
also will be used upon the filing of a bankruptcy petition or the taking of a
similar action if payments are jeopardized.
Plus (+) or Minus (-): The rating from AA to CCC may be modified by the addition
of a plus or minus sign to show relative standing within the major categories.
r: This symbol is attached to the ratings of instruments with significant
noncredit risks. It highlights risks to principal or volatility of expected
returns which are not addressed in the credit rating. Examples include:
obligations linked or indexed to equities, currencies, or commodities;
obligations exposed to severe prepayment risk, such as interest-only or
principal-only mortgage securities; and obligations with unusually risky
interest terms, such as inverse floaters.
STANDARD & POOR'S PREFERRED STOCK RATINGS
A Standard & Poor's preferred stock rating is an assessment of the capacity and
willingness of an issuer to pay preferred stock dividends and any applicable
sinking fund obligations. A preferred stock rating differs from a bond rating
inasmuch as it is assigned to an equity issue, which is intrinsically different
from, and subordinated to, a debt issue. Therefore, to reflect this difference,
the preferred stock rating symbol will normally not be higher than the debt
rating symbol assigned to, or that would be assigned to, the senior debt of the
same issuer.
Preferred stock ratings are based on the following considerations:
Likelihood of payment-capacity and willingness of the issuer to meet
the timely payment of preferred stock dividends and any applicable
sinking fund requirements in accordance with the terms of the
obligation;
Nature of, and provisions of, the issue;
Relative position of the issue in the event of bankruptcy, reorganization,
or other arrangement under the laws of bankruptcy and other laws affecting
creditors' rights.
AAA: This is the highest rating that may be assigned by Standard & Poor's to a
preferred stock issue and indicates an extremely strong capacity to pay the
preferred stock obligations.
AA: A preferred stock issue rated AA also qualifies as a high-quality,
fixed-income security. The capacity to pay preferred stock obligations is very
strong, although not as overwhelming as for issues rated AAA.
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A: An issue rated A is backed by a sound capacity to pay the preferred stock
obligations, although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions.
BBB: An issue rated BBB is regarded as backed by an adequate capacity to pay the
preferred stock obligations. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to make payments for a preferred stock in
this category than for issues in the A category.
BB, B, CCC: Preferred stock rated BB, B, and CCC are regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay preferred
stock obligations. BB indicates the lowest degree of speculation and CCC the
highest. While such issues will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.
CC: The rating CC is reserved for a preferred stock issue that is in arrears on
dividends or sinking fund payments, but that is currently paying.
C: A preferred stock rated C is a nonpaying issue.
D: A preferred stock rated D is a nonpaying issue with the issuer in default on
debt instruments.
N.R.: This indicates that no rating has been requested, that there is
insufficient information on which to base a rating, or that Standard & Poor's
does not rate a particular type of obligation as a matter of policy.
Plus (+) or Minus (-): To provide more detailed indications of preferred stock
quality, ratings from AA to CCC may be modified by the addition of a plus or
minus sign to show relative standing within the major rating categories.
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20. APPENDIX C - PERFORMANCE STATISTICS
COMPARATIVE PERFORMANCE INDEX DESCRIPTIONS
The following securities indices are well known, unmanaged measures of market
performance. Advertisements and sales literature for the fund may refer to these
indices or may present comparisons between the performance of the fund and one
or more of the indices. Other indices may also be used, if appropriate. The
indices are not available for direct investment. The data presented are not
meant to be indicative of the performance of the fund, do not reflect past
performance and do not guarantee future results.
S&P 500. This index is a readily available, carefully constructed, market value
weighted benchmark of common stock performance. Currently, the S&P 500 includes
500 of the largest stocks (in terms of stock market value) in the U.S.
DOW JONES INDUSTRIAL AVERAGE. This is a total return index based on the
performance of stocks of 30 blue chip companies widely held by individuals and
institutional investors. The 30 stocks represent about a fifth of the $8
trillion-plus market value of all U.S. stocks and about a fourth of the value of
stocks listed on the New York Stock Exchange (NYSE).
U.S. SMALL STOCK INDEX. This index is a market value weighted index of the
ninth and tenth deciles of the NYSE, plus stocks listed on the American Stock
Exchange and over the counter 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 according to price-to-book ratios. The Growth
Index contains stocks with higher price-to-book ratios, and the Value Index
contains stocks with lower price-to-book ratios. Both indexes are market
capitalization weighted.
MERRILL LYNCH MICRO-CAP INDEX. The Merrill Lynch Micro-Cap Index represents the
performance of 2,036 stocks ranging in market capitalization from $50 million to
$220 million. Index returns are calculated monthly.
LONG-TERM U.S. GOVERNMENT BONDS. The total returns on long-term government bonds
after 1977 are constructed with data from The Wall Street Journal and are
calculated as the change in the flat price or and-interest price. From 1926 to
1976, data are obtained from the government bond file at the Center for Research
in Security Prices (CRSP), Graduate School of Business, University of Chicago.
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
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special redemption or call privileges. Where callable bonds had to be used,
the term of the bond was assumed to be a simple average of the maturity and
first call dates minus the current date. The bond was "held" for the calendar
year and returns were computed.
INTERMEDIATE-TERM U.S. GOVERNMENT BONDS. Total returns of intermediate-term
government bonds after 1987 are calculated from The Wall Street Journal prices,
using the change in flat price. Returns from 1934 to 1986 are obtained from the
CRSP government bond file.
Each year, one-bond portfolios are formed, the bond chosen is the shortest
noncallable bond with a maturity not less than five 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 to 1942, almost all bonds
with maturities near five years were partially or fully 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 to 1933, there are few bonds suitable for construction
of a series with a five-year maturity. For this period, five-year bond yield
estimates are used.
MORGAN STANLEY CAPITAL INTERNATIONAL ("MSCI"). These indices are in US dollar
terms with gross dividends reinvested. MSCI All Country indices represent both
the developed and the emerging markets for a particular region. These indices
are unmanaged. The free indices exclude shares which are not readily purchased
by non-local investors. MSCI's international indices are based on the share
prices of approximately 1,700 companies listed on stock exchanges in the 22
countries that make up the MSCI World Index. MSCI's emerging market indices are
comprised of approximately 1000 stocks from 26 countries.
Countries in the MSCI EAFE Index are: Australia, Austria, Belgium, Denmark,
Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, Malaysia,
Netherlands, New Zealand, Norway, Singapore, Spain, Sweden, Switzerland and
United Kingdom.
Countries in the MSCI Emerging Markets Free Index are: Argentina, Brazil, Chile,
China Free, Czech Republic, Colombia, Greece, Hungary, India, Indonesia Free,
Israel, Jordan, Korea (at 50%), Malaysia Free, Mexico Free, Pakistan, Peru,
Philippines Free, Poland, Portugal, South Africa, Sri Lanka, Taiwan (at 50%),
Thailand Free, Turkey and Venezuela.
MSCI ALL COUNTRY (AC) ASIA FREE EX JAPAN: This index is made up of the following
12 countries: China Free, Hong Kong, India, Indonesia Free, Korea @50%, Malaysia
Free, Pakistan, Philippines Free, Singapore Free, Sri Lanka, Taiwan @50% and
Thailand Free.
MSCI ALL COUNTRY (AC) ASIA PACIFIC FREE EX JAPAN: This index is made up of the
following 14 countries: Australia, China Free, Hong Kong, India, Indonesia Free,
Korea @50%, Malaysia Free, New Zealand, Pakistan, Philippines Free, Singapore
Free, Sri Lanka, Taiwan @50% and Thailand Free.
6-MONTH CDS. Data sources include the Federal Reserve Bulletin and The Wall
Street Journal.
LONG-TERM U.S. CORPORATE BONDS. Since 1969, corporate bond total returns are
represented by the Salomon Brothers Long-Term High-Grade Corporate Bond Index.
As most large corporate bond
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transactions take place over the counter, a major dealer is the natural
source of these data. The index includes nearly all Aaa- and Aa-rated bonds with
at least 10 years to maturity. 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.
From 1926 to 1968 the total returns were calculated by summing the capital
appreciation returns and the income returns. For the period 1946 to 1968,
Ibbotson and Sinquefield backdated the Salomon Brothers' index, using Salomon
Brothers' monthly yield data with a methodology similar to that used by Salomon
Brothers for 1969 to 1995. Capital appreciation returns were calculated from
yields assuming (at the beginning of each monthly holding period) a 20-year
maturity, a bond price equal to par, and a coupon equal to the
beginning-of-period yield. For the period 1926 to 1945, Standard & Poor's
monthly high-grade corporate composite yield data were used, assuming a 4%
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 Westerfield, Randolph W., 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 after 1977; the CRSP 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.
NATIONAL ASSOCIATION OF REAL ESTATE INVESTMENT TRUSTS ("NAREIT") EQUITY REIT
INDEX. All of the data are based upon the last closing price of the month for
all tax-qualified REITs listed on the NYSE, AMEX and NASDAQ. The data are
market-value-weighted. 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 weighting 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 U.S. EQUITY INDEXES. The Russell 3000(R) Index (the "Russell 3000") is
comprised of the 3,000 largest U.S. companies as determined by market
capitalization representing approximately 98% of the U.S. equity market. The
average market capitalization is approximately $2.8 billion. The Russell 2500TM
Index measures performance of the 2,500 smallest companies in the Russell 3000.
The average market capitalization is approximately $733.4 million, and the
largest company in the index has an approximate market capitalization of $2.9
billion. The Russell 2000(R) Index measures performance of the 2,000 smallest
stocks in the Russell 3000; the largest company in the index has a market
capitalization of approximately $1.1 billion. The Russell 1000(R) Index (the
"Russell 1000") measures the performance of the 1,000 largest companies in the
Russell 3000. The average market capitalization is approximately $7.6 billion.
The smallest company in the index has an approximate market capitalization of
$1.1 billion. The Russell MidcapTM Index measures performance of the 800
smallest companies in the Russell 1000. The largest company in the index has an
approximate market capitalization of $8.0 billion.
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The Russell indexes are reconstituted annually as of July 1, based on May 31
market capitalization rankings.
WILSHIRE REAL ESTATE SECURITIES INDEX. The Wilshire Real Estate Securities Index
is a market capitalization weighted index of 120 publicly traded real estate
securities, such as REITs, real estate operating companies ("REOCs") and
partnerships.
The index contains performance data on five major categories of property:
office, retail, industrial, apartment and miscellaneous. The companies in the
index are 91.66% equity and hybrid REITs and 8.33% REOCs.
STANDARD & POOR'S MIDCAP 400 INDEX. The S&P 400 is a
market-capitalization-weighted index. The performance data for the index were
calculated by taking the stocks presently in the 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 S&P 400 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.
LIPPER BALANCED FUNDS INDEX. This index represents equally weighted performance,
adjusted for capital gains distributions and income dividends, of approximately
30 of the largest funds with a primary objective of conserving principal by
maintaining at all times a balanced portfolio of stocks and bonds. Typically,
the stock/bond ratio ranges around 60%/40%.
LEHMAN AGGREGATE BOND INDEX. Composed of the Lehman Government/Corporate Index
and the Mortgage-Backed Securities Index and includes treasury issues, agency
issues, corporate bond issues and mortgage backed securities.
BANK SAVINGS ACCOUNT. Data sources include the U.S. League of Savings
Institutions Sourcebook; average annual yield on savings deposits in FSLIC
[FDIC] insured savings institutions for the years 1963 to 1987; and The Wall
Street Journal thereafter.
Sources: Ibbotson Associates, Towers Data Systems, Lipper Analytical Services,
Inc. and PGI
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<TABLE>
<CAPTION>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
DOW S&P/ S&P/
JONES U.S. SMALL BARRA BARRA MERRILL LYNCH
S&P INDUSTRIAL STOCK U.S. 500 500 MICRO-CAP
500 AVERAGE INDEX INFLATION GROWTH VALUE INDEX
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Dec 1925 N/A N/A N/A N/A N/A N/A N/A
Dec 1926 11.62 N/A 0.28 -1.49 N/A N/A N/A
Dec 1927 37.49 N/A 22.10 -2.08 N/A N/A N/A
Dec 1928 43.61 55.38 39.69 -0.97 N/A N/A N/A
Dec 1929 -8.42 -13.64 -51.36 0.20 N/A N/A N/A
Dec 1930 -24.90 -30.22 -38.15 -6.03 N/A N/A N/A
Dec 1931 -43.34 -49.03 -49.75 -9.52 N/A N/A N/A
Dec 1932 -8.19 -16.88 -5.39 -10.30 N/A N/A N/A
Dec 1933 53.99 73.71 142.87 0.51 N/A N/A N/A
Dec 1934 -1.44 8.07 24.22 2.03 N/A N/A N/A
Dec 1935 47.67 43.77 40.19 2.99 N/A N/A N/A
Dec 1936 33.92 30.23 64.80 1.21 N/A N/A N/A
Dec 1937 -35.03 -28.88 -58.01 3.10 N/A N/A N/A
Dec 1938 31.12 33.16 32.80 -2.78 N/A N/A N/A
Dec 1939 -0.41 1.31 0.35 -0.48 N/A N/A N/A
Dec 1940 -9.78 -7.96 -5.16 0.96 N/A N/A N/A
Dec 1941 -11.59 -9.88 -9.00 9.72 N/A N/A N/A
Dec 1942 20.34 14.13 44.51 9.29 N/A N/A N/A
Dec 1943 25.90 19.06 88.37 3.16 N/A N/A N/A
Dec 1944 19.75 17.19 53.72 2.11 N/A N/A N/A
Dec 1945 36.44 31.60 73.61 2.25 N/A N/A N/A
Dec 1946 -8.07 -4.40 -11.63 18.16 N/A N/A N/A
Dec 1947 5.71 7.61 0.92 9.01 N/A N/A N/A
Dec 1948 5.50 4.27 -2.11 2.71 N/A N/A N/A
Dec 1949 18.79 20.92 19.75 -1.80 N/A N/A N/A
Dec 1950 31.71 26.40 38.75 5.79 N/A N/A N/A
Dec 1951 24.02 21.77 7.80 5.87 N/A N/A N/A
Dec 1952 18.37 14.58 3.03 0.88 N/A N/A N/A
Dec 1953 -0.99 2.02 -6.49 0.62 N/A N/A N/A
Dec 1954 52.62 51.25 60.58 -0.50 N/A N/A N/A
Dec 1955 31.56 26.58 20.44 0.37 N/A N/A N/A
Dec 1956 6.56 7.10 4.28 2.86 N/A N/A N/A
Dec 1957 -10.78 -8.63 -14.57 3.02 N/A N/A N/A
Dec 1958 43.36 39.31 64.89 1.76 N/A N/A N/A
Dec 1959 11.96 20.21 16.40 1.50 N/A N/A N/A
Dec 1960 0.47 -6.14 -3.29 1.48 N/A N/A N/A
Dec 1961 26.89 22.60 32.09 0.67 N/A N/A N/A
Dec 1962 -8.73 -7.43 -11.90 1.22 N/A N/A N/A
Dec 1963 22.80 20.83 23.57 1.65 N/A N/A N/A
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PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
DOW S&P/ S&P/
JONES U.S. SMALL BARRA BARRA MERRILL LYNCH
S&P INDUSTRIAL STOCK U.S. 500 500 MICRO-CAP
500 AVERAGE INDEX INFLATION GROWTH VALUE INDEX
- ----------------------------------------------------------------------------------------------------------------------
Dec 1964 16.48 18.85 23.52 1.19 N/A N/A N/A
Dec 1965 12.45 14.39 41.75 1.92 N/A N/A N/A
Dec 1966 -10.06 -15.78 -7.01 3.35 N/A N/A N/A
Dec 1967 23.98 19.16 83.57 3.04 N/A N/A N/A
Dec 1968 11.06 7.93 35.97 4.72 N/A N/A N/A
Dec 1969 -8.50 -11.78 -25.05 6.11 N/A N/A N/A
Dec 1970 4.01 9.21 -17.43 5.49 N/A N/A N/A
Dec 1971 14.31 9.83 16.50 3.36 N/A N/A N/A
Dec 1972 18.98 18.48 4.43 3.41 N/A N/A N/A
Dec 1973 -14.66 -13.28 -30.90 8.80 N/A N/A N/A
Dec 1974 -26.47 -23.58 -19.95 12.20 N/A N/A N/A
Dec 1975 37.20 44.75 52.82 7.01 31.72 43.38 N/A
Dec 1976 23.84 22.82 57.38 4.81 13.84 34.93 N/A
Dec 1977 -7.18 -12.84 25.38 6.77 -11.82 -2.57 N/A
Dec 1978 6.56 2.79 23.46 9.03 6.78 6.16 27.76
Dec 1979 18.44 10.55 43.46 13.31 15.72 21.16 43.18
Dec 1980 32.42 22.17 39.88 12.40 39.40 23.59 32.32
Dec 1981 -4.91 -3.57 13.88 8.94 -9.81 0.02 9.18
Dec 1982 21.41 27.11 28.01 3.87 22.03 21.04 33.62
Dec 1983 22.51 25.97 39.67 3.80 16.24 28.89 42.44
Dec 1984 6.27 1.31 -6.67 3.95 2.33 10.52 -14.97
Dec 1985 32.16 33.55 24.66 3.77 33.31 29.68 22.89
Dec 1986 18.47 27.10 6.85 1.13 14.50 21.67 3.45
Dec 1987 5.23 5.48 -9.30 4.41 6.50 3.68 -13.84
Dec 1988 16.81 16.14 22.87 4.42 11.95 21.67 22.76
Dec 1989 31.49 32.19 10.18 4.65 36.40 26.13 8.06
Dec 1990 -3.17 -0.56 -21.56 6.11 0.20 -6.85 -29.55
Dec 1991 30.55 24.19 44.63 3.06 38.37 22.56 57.44
Dec 1992 7.67 7.41 23.35 2.90 5.07 10.53 36.62
Dec 1993 9.99 16.94 20.98 2.75 1.68 18.60 31.32
Dec 1994 1.31 5.06 3.11 2.67 3.13 -0.64 1.81
Dec 1995 37.43 36.84 34.46 2.54 38.13 36.99 30.70
Dec 1996 23.07 28.84 17.62 3.32 23.96 21.99 13.88
Dec 1997 33.36 24.88 22.78 1.92 36.52 29.98 24.61
67
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
MSCI
LONG- INTERMEDIATE- EAFE LONG-
TERM TERM U.S. INDEX 6- TERM U.S. U.S.
U.S. GOV'T GOVERNMENT (NET OF MONTH CORPORATE T-BILL
BONDS BONDS TAXES) CDS BONDS (30-DAY)
- ------------------------------------------------------------------------------------------------------
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 0.10 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
68
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
MSCI
LONG- INTERMEDIATE- EAFE LONG-
TERM TERM U.S. INDEX 6- TERM U.S. U.S.
U.S. GOV'T GOVERNMENT (NET OF MONTH CORPORATE T-BILL
BONDS BONDS TAXES) CDS BONDS (30-DAY)
- ------------------------------------------------------------------------------------------------------
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
Dec 1966 3.65 4.69 N/A 5.76 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 29.10 -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 19.30 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 16.80 11.21 5.21 27.20 5.60
Dec 1996 -0.93 2.10 6.05 5.21 1.40 5.21
Dec 1997 15.85 8.38 1.78 5.71 12.95 5.26
69
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
NAREIT WILSHIRE LIPPER MSCI
EQUITY RUSSELL REAL ESTATE BALANCED EMERGING BANK
REIT 2000 SECURITIES S&P FUND MARKETS SAVINGS
INDEX INDEX INDEX 400 INDEX FREE INDEX ACCOUNT
- -----------------------------------------------------------------------------------------------------------------------
Dec 1925 N/A N/A N/A N/A N/A N/A N/A
Dec 1926 N/A N/A N/A N/A N/A N/A N/A
Dec 1927 N/A N/A N/A N/A N/A N/A N/A
Dec 1928 N/A N/A N/A N/A N/A N/A N/A
Dec 1929 N/A N/A N/A N/A N/A N/A N/A
Dec 1930 N/A N/A N/A N/A N/A N/A 5.30
Dec 1931 N/A N/A N/A N/A N/A N/A 5.10
Dec 1932 N/A N/A N/A N/A N/A N/A 4.10
Dec 1933 N/A N/A N/A N/A N/A N/A 3.40
Dec 1934 N/A N/A N/A N/A N/A N/A 3.50
Dec 1935 N/A N/A N/A N/A N/A N/A 3.10
Dec 1936 N/A N/A N/A N/A N/A N/A 3.20
Dec 1937 N/A N/A N/A N/A N/A N/A 3.50
Dec 1938 N/A N/A N/A N/A N/A N/A 3.50
Dec 1939 N/A N/A N/A N/A N/A N/A 3.40
Dec 1940 N/A N/A N/A N/A N/A N/A 3.30
Dec 1941 N/A N/A N/A N/A N/A N/A 3.10
Dec 1942 N/A N/A N/A N/A N/A N/A 3.00
Dec 1943 N/A N/A N/A N/A N/A N/A 2.90
Dec 1944 N/A N/A N/A N/A N/A N/A 2.80
Dec 1945 N/A N/A N/A N/A N/A N/A 2.50
Dec 1946 N/A N/A N/A N/A N/A N/A 2.20
Dec 1947 N/A N/A N/A N/A N/A N/A 2.30
Dec 1948 N/A N/A N/A N/A N/A N/A 2.30
Dec 1949 N/A N/A N/A N/A N/A N/A 2.40
Dec 1950 N/A N/A N/A N/A N/A N/A 2.50
Dec 1951 N/A N/A N/A N/A N/A N/A 2.60
Dec 1952 N/A N/A N/A N/A N/A N/A 2.70
Dec 1953 N/A N/A N/A N/A N/A N/A 2.80
Dec 1954 N/A N/A N/A N/A N/A N/A 2.90
Dec 1955 N/A N/A N/A N/A N/A N/A 2.90
Dec 1956 N/A N/A N/A N/A N/A N/A 3.00
Dec 1957 N/A N/A N/A N/A N/A N/A 3.30
Dec 1958 N/A N/A N/A N/A N/A N/A 3.38
Dec 1959 N/A N/A N/A N/A N/A N/A 3.53
Dec 1960 N/A N/A N/A N/A 5.77 N/A 3.86
Dec 1961 N/A N/A N/A N/A 20.59 N/A 3.90
70
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
NAREIT WILSHIRE LIPPER MSCI
EQUITY RUSSELL REAL ESTATE BALANCED EMERGING BANK
REIT 2000 SECURITIES S&P FUND MARKETS SAVINGS
INDEX INDEX INDEX 400 INDEX FREE INDEX ACCOUNT
- -----------------------------------------------------------------------------------------------------------------------
Dec 1962 N/A N/A N/A N/A -6.80 N/A 4.08
Dec 1963 N/A N/A N/A N/A 13.10 N/A 4.17
Dec 1964 N/A N/A N/A N/A 12.36 N/A 4.19
Dec 1965 N/A N/A N/A N/A 9.80 N/A 4.23
Dec 1966 N/A N/A N/A N/A -5.86 N/A 4.45
Dec 1967 N/A N/A N/A N/A 15.09 N/A 4.67
Dec 1968 N/A N/A N/A N/A 13.97 N/A 4.68
Dec 1969 N/A N/A N/A N/A -9.01 N/A 4.80
Dec 1970 N/A N/A N/A N/A 5.62 N/A 5.14
Dec 1971 N/A N/A N/A N/A 13.90 N/A 5.30
Dec 1972 8.01 N/A N/A N/A 11.13 N/A 5.37
Dec 1973 -15.52 N/A N/A N/A -12.24 N/A 5.51
Dec 1974 -21.40 N/A N/A N/A -18.71 N/A 5.96
Dec 1975 19.30 N/A N/A N/A 27.10 N/A 6.21
Dec 1976 47.59 N/A N/A N/A 26.03 N/A 6.23
Dec 1977 22.42 N/A N/A N/A -0.72 N/A 6.39
Dec 1978 10.34 N/A 13.04 N/A 4.80 N/A 6.56
Dec 1979 35.86 43.09 70.81 N/A 14.67 N/A 7.29
Dec 1980 24.37 38.58 22.08 N/A 19.70 N/A 8.78
Dec 1981 6.00 2.03 7.18 N/A 1.86 N/A 10.71
Dec 1982 21.60 24.95 24.47 22.68 30.63 N/A 11.19
Dec 1983 30.64 29.13 27.61 26.10 17.44 N/A 9.71
Dec 1984 20.93 -7.30 20.64 1.18 7.46 N/A 9.92
Dec 1985 19.10 31.05 22.20 35.58 29.83 N/A 9.02
Dec 1986 19.16 5.68 20.30 16.21 18.43 N/A 7.84
Dec 1987 -3.64 -8.77 -7.86 -2.03 4.13 N/A 6.92
Dec 1988 13.49 24.89 24.18 20.87 11.18 40.43 7.20
Dec 1989 8.84 16.24 2.37 35.54 19.70 64.96 7.91
Dec 1990 -15.35 -19.51 -33.46 -5.12 0.66 -10.55 7.80
Dec 1991 35.70 46.05 20.03 50.10 25.83 59.91 4.61
Dec 1992 14.59 18.41 7.36 11.91 7.46 11.40 2.89
Dec 1993 19.65 18.91 15.24 13.96 11.95 74.83 2.73
Dec 1994 3.17 -1.82 1.64 -3.57 -2.05 -7.32 4.96
Dec 1995 15.27 28.44 13.65 30.94 24.89 -5.21 5.24
Dec 1996 35.26 16.49 36.87 19.20 13.01 6.03 4.95
Dec 1997 20.29 22.36 19.80 32.26 20.05 -11.59 5.17
71
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
MSCI ALL COUNTRY (AC) MSCI ALL COUNTRY
ASIA FREE EX JAPAN (AC) ASIA PACIFIC
FREE EX JAPAN
- ------------------------------------------------------------
Dec 1925 N/A N/A
Dec 1926 N/A N/A
Dec 1927 N/A N/A
Dec 1928 N/A N/A
Dec 1929 N/A N/A
Dec 1930 N/A N/A
Dec 1931 N/A N/A
Dec 1932 N/A N/A
Dec 1933 N/A N/A
Dec 1934 N/A N/A
Dec 1935 N/A N/A
Dec 1936 N/A N/A
Dec 1937 N/A N/A
Dec 1938 N/A N/A
Dec 1939 N/A N/A
Dec 1940 N/A N/A
Dec 1941 N/A N/A
Dec 1942 N/A N/A
Dec 1943 N/A N/A
Dec 1944 N/A N/A
Dec 1945 N/A N/A
Dec 1946 N/A N/A
Dec 1947 N/A N/A
Dec 1948 N/A N/A
Dec 1949 N/A N/A
Dec 1950 N/A N/A
Dec 1951 N/A N/A
Dec 1952 N/A N/A
Dec 1953 N/A N/A
Dec 1954 N/A N/A
Dec 1955 N/A N/A
Dec 1956 N/A N/A
Dec 1957 N/A N/A
Dec 1958 N/A N/A
Dec 1959 N/A N/A
Dec 1960 N/A N/A
Dec 1961 N/A N/A
72
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
MSCI ALL COUNTRY (AC) MSCI ALL COUNTRY
ASIA FREE EX JAPAN (AC) ASIA PACIFIC
FREE EX JAPAN
- ------------------------------------------------------------
Dec 1962 N/A N/A
Dec 1963 N/A N/A
Dec 1964 N/A N/A
Dec 1965 N/A N/A
Dec 1966 N/A N/A
Dec 1967 N/A N/A
Dec 1968 N/A N/A
Dec 1969 N/A N/A
Dec 1970 N/A N/A
Dec 1971 N/A N/A
Dec 1972 N/A N/A
Dec 1973 N/A N/A
Dec 1974 N/A N/A
Dec 1975 N/A N/A
Dec 1976 N/A N/A
Dec 1977 N/A N/A
Dec 1978 N/A N/A
Dec 1979 N/A N/A
Dec 1980 N/A N/A
Dec 1981 N/A N/A
Dec 1982 N/A N/A
Dec 1983 N/A N/A
Dec 1984 N/A N/A
Dec 1985 N/A N/A
Dec 1986 N/A N/A
Dec 1987 N/A N/A
Dec 1988 30.00 30.45
Dec 1989 32.13 21.43
Dec 1990 -6.54 -11.86
Dec 1991 30.98 32.40
Dec 1992 21.81 9.88
Dec 1993 103.39 84.94
Dec 1994 -16.94 -12.59
Dec 1995 4.00 10.00
Dec 1996 10.05 8.08
Dec 1997 -40.31 -34.20
Source: Lipper Analytical Services, Inc.
</TABLE>
73
<PAGE>
21. APPENDIX D - OTHER PIONEER INFORMATION
The Pioneer group of mutual funds was established in 1928 with the creation of
Pioneer Fund. Pioneer is one of the oldest and most experienced money managers
in the U.S.
As of June 30, 1998, Pioneer employed a professional investment staff of 75.
Total assets of all Pioneer mutual funds at December 31, 1998, were
approximately $22 billion representing 1,363,446 shareholder accounts, 890,148
non-retirement accounts and 473,298 retirement accounts.
74
<PAGE>
PART C - OTHER INFORMATION
Item 23. Exhibits
(a) Agreement and Declaration of Trust and Certificate
of Trust. (1)
(b) By-Laws. (1)
(c) None.
(d) Form of Management Contract between the Fund and Pioneer
Investment Management, Inc. (1)
(e)(1) Form of Underwriting Agreement between the Fund
and Pioneer Funds Distributor, Inc. (1)
(e)(2) Form of Dealer Sales Agreement. (1)
(f) None.
(g) Form of Custodian Agreement between the Fund and Brown
Brothers Harriman & Co. (1)
(h)(1) Form of Investment Company Service Agreement between the Fund
and Pioneering Services Corporation. (1)
(h)(2) Administration Agreement between the Fund and Pioneer
Investment Management, Inc. (1)
(i) Opinion of Counsel. (1)
(j) Consent of Independent Public Accountants.(2)
(k) None.
(l) Share Purchase Agreement. (2)
(m)(1) Form of Class A Distribution Plan. (1)
(m)(2) Form of Class B Distribution Plan. (1)
(m)(3) Form of Class C Distribution Plan. (1)
(n) Financial Data Schedules. (2)
(o) Form of Multiple Class Plan for Class A, Class B, Class C
and Class Y Shares pursuant to Rule 18f-3. (1)
N/A Powers of Attorney. (1)
- ------------------------
(1) Filed herewith.
(2) To be filed by amendment.
Item 24. Persons Controlled by or Under Common Control with the Fund
None.
Item 25. Indemnification
Except for the Agreement and Declaration of Trust, dated January 5,
1999 (the "Declaration"), establishing the Fund as a business trust under
Delaware law, there is no contract, arrangement or statute under which any
Trustee, officer, underwriter or affiliated person of the Fund is insured or
indemnified. The Declaration provides that no Trustee or officer will be
indemnified against any liability to which the Fund 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 "1933 Act"), may be available to Trustees, officers
and controlling persons of the Fund pursuant to the foregoing provisions, or
otherwise, the Fund has been advised that in the opinion of the Securities
C-1
<PAGE>
and Exchange Commission such indemnification is against public policy as
expressed in the 1933 Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Fund of expenses incurred or paid by a Trustee, officer or controlling
person of the Fund in the successful defense of any action, suit or proceeding)
is asserted by such Trustee, officer or controlling person in connection with
the securities being registered, the Fund will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1933 Act and will be governed by the
final adjudication of such issue.
Item 26. Business and Other Connections of Investment Adviser
Pioneer Investment Management, Inc. ("Pioneer Investments") is a registered
investment adviser under the Investment Advisers Act of 1940, as amended, and is
a wholly owned subsidiary of The Pioneer Group, Inc. ("Pioneer"). Pioneer
Investments manages investment companies, pension and profit sharing plans,
trusts, estates or charitable organizations and other corporations or
business entities.
To the knowledge of the Fund, none of Pioneer Investments' directors
or executive officers is or has been during their employment with Pioneer
Investments engaged in any other business, profession, vocation or employment
of a substantial nature for the past two fiscal years, except as noted below.
Certain directors and officers, however, may hold or may have held various
positions with, and engage or have engaged in business for, the investment
companies that Pioneer Investments manages, Pioneer and/or other Pioneer
subsidiaries.
OTHER BUSINESS, PROFESSION, VOCATION OR
EMPLOYMENT OF SUBSTANTIAL NATURE WITHIN LAST TWO
NAME OF DIRECTOR/OFFICER FISCAL YEARS
John F. Cogan, Jr. Senior Partner, Hale and Dorr LLP, 60 State
Street, Boston, Massachusetts 02109
Joseph P. Barri Senior Partner, Hale and Dorr LLP, 60 State
Street, Boston, Massachusetts 02109
Item 27. Principal Underwriters
(a) See "Management of the Fund" in the Statement of Additional
Information.
(b) Directors and officers of Pioneer Funds Distributor, Inc.:
POSITIONS AND OFFICES WITH POSITIONS AND OFFICES WITH
NAME UNDERWRITER FUND
John F. Cogan, Jr. Director and Chairman Chairman of the Board,
President and Trustee
David D. Tripple Director and President Executive Vice President and
Trustee
Stephen W. Long Director and Executive
Vice President None
Steven M. Graziano Executive Vice President None
William A. Misata Senior Vice President None
Constance D. Spiros Senior Vice President None
Marcy L. Supovitz Senior Vice President None
Mark R. Kiniry Vice President, Regional
Director, Sales None
Barry G. Knight Vice President None
C-2
<PAGE>
William H. Spencer Vice President, Regional
Director, Sales None
Elizabeth A. Watson Vice President, Compliance None
Steven R. Berke Assistant Vice President,
Blue Sky None
John A. Boynton Treasurer Treasurer
Roy P. Rossi Assistant Treasurer None
Joseph P. Barri Clerk Secretary
Robert P. Nault Assistant Clerk Assistant Secretary
The principal business address of each of these individuals is 60 State Street,
Boston, Massachusetts 02109-1820.
(c) Not applicable.
Item 28. Location of Accounts and Records
The accounts and records are maintained at the Fund's office at
60 State Street, Boston, Massachusetts 02109; contact the Treasurer.
Item 29. Management Services
Not applicable.
Item 30. Undertakings
Not applicable.
C-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Fund has duly caused this registration
statement to be signed on its behalf by the undersigned, duly authorized, in the
City of Boston and The Commonwealth of Massachusetts on the 4th day of
February, 1999.
PIONEER STRATEGIC INCOME FUND
By: /s/ David D. Tripple
David D. Tripple
Executive Vice 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
John F. Cogan, Jr.* Chairman of the Board )
John F. Cogan, Jr. and President )
(Principal Executive )
Officer) )
)
)
/s/ John A. Boynton Chief Financial Officer )
John A. Boynton and Treasurer (Principal )
Financial and Accounting )
Officer) )
)
)
Trustees: )
)
)
Mary K. Bush* )
Mary K. Bush )
)
)
John F. Cogan, Jr.* )
John F. Cogan, Jr. )
)
)
)
Richard H. Egdahl* )
Richard H. Egdahl )
)
)
Margaret BW Graham* )
Margaret B. W. Graham )
)
)
John W. Kendrick* )
John W. Kendrick )
)
)
Marguerite A. Piret* )
Marguerite A. Piret )
)
)
/s/ David D. Tripple )
David D. Tripple )
)
)
Stephen K. West* )
Stephen K. West )
)
)
John Winthrop* )
John Winthrop )
)
)
*By: /s/ David D. Tripple Dated: February 4, 1999)
David D. Tripple
Attorney-in-fact
<PAGE>
Exhibit Index
Exhibit
Letter Document Title
(a) Agreement and Declaration of Trust and Certificate
of Trust
(b) By-Laws
(d) Form of Management Contract between the Fund and Pioneer
Investment Management, Inc.
(e)(1) Form of Underwriting Agreement between the Fund
and Pioneer Funds Distributor, Inc.
(e)(2) Form of Dealer Sales Agreement
(g) Form of Custodian Agreement between the Fund and Brown
Brothers Harriman & Co.
(h)(1) Form of Investment Company Service Agreement between the Fund
and Pioneering Services Corporation
(h)(2) Administration Agreement between the Fund and Pioneer
Investment Management, Inc.
(i) Opinion of Counsel
(m)(1) Form of Class A Distribution Plan
(m)(2) Form of Class B Distribution Plan
(m)(3) Form of Class C Distribution Plan
(o) Multiple Class Plan for Class A, Class B, Class C
and Class Y Shares pursuant to Rule 18f-3
N/A Powers of Attorney
PIONEER STRATEGIC INCOME FUND
AGREEMENT AND
DECLARATION OF TRUST
This AGREEMENT AND DECLARATION OF TRUST is made on January 5, 1999 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 Strategic Income 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.
<PAGE>
(f) "CUSTODIAN" means any Person other than the Trust who has custody
of any Trust Property as required by Section 17(f) of the 1940 Act, but does not
include a system for the central handling of securities described in said
Section 17(f).
(g) "DECLARATION" shall mean this Agreement and Declaration of Trust,
as amended or restated from time to time. Reference in this Declaration of Trust
to "Declaration," "hereof," "herein," and "hereunder" shall be deemed to refer
to this Declaration rather than exclusively to the article or section in which
such words appear.
(h) "DELAWARE ACT" means Chapter 38 of Title 12 of the Delaware Code
entitled "Treatment of Delaware Business Trusts," as amended from time to time.
(i) "DISTRIBUTOR" means the party, other than the Trust, to the
contract described in Article III, Section 1 hereof.
(j) "HIS" shall include the feminine and neuter, as well as the
masculine, genders.
(k) "INVESTMENT ADVISER" means the party, other than the Trust, to the
contract described in Article III, Section 2 hereof.
(l) "NET ASSET VALUE" means the net asset value of each Series of the
Trust, determined as provided in Article VI, Section 3.
(m) "PERSON" means and includes individuals, corporations,
partnerships, trusts, associations, joint ventures, estates and other entities,
and governments and agencies and political subdivisions, thereof, whether
domestic or foreign.
(n) "SERIES" means a series of Shares established pursuant to
Article V.
(o) "SHAREHOLDER" means a record owner of Outstanding Shares;
(p) "SHARES" means the equal proportionate transferable units of
interest into which the beneficial interest of each Series or Class is divided
from time to time (including whole Shares and fractions of Shares). "Outstanding
Shares" means Shares shown in the books of the Trust or its transfer agent as
then issued and outstanding, but does not include Shares which have been
repurchased or redeemed by the Trust and which are held in the treasury of the
Trust.
(q) "TRANSFER AGENT" means any Person other than the Trust who
maintains the Shareholder records of the Trust, such as the list of
Shareholders, the number of Shares credited to each account, and the like.
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(r) "TRUST" means Pioneer Strategic Income 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.
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.
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(b) To invest in, hold for investment, or reinvest in, cash;
securities, including common, preferred and preference stocks; warrants;
subscription rights; profit-sharing interests or participations and all other
contracts for or evidence of equity interests; bonds, debentures, bills, time
notes and all other evidences of indebtedness; negotiable or non-negotiable
instruments; government securities, including securities of any state,
municipality or other political subdivision thereof, or any governmental or
quasi-governmental agency or instrumentality; and money market instruments
including bank certificates of deposit, finance paper, commercial paper,
bankers' acceptances and all kinds of repurchase agreements, of any corporation,
company, trust, association, firm or other business organization however
established, and of any country, state, municipality or other political
subdivision, or any governmental or quasi-governmental agency or
instrumentality; or any other security, property or instrument in which the
Trust or any of its Series shall be authorized to invest.
(c) To acquire (by purchase, subscription or otherwise), to hold, to
trade in and deal in, to acquire any rights or options to purchase or sell, to
sell or otherwise dispose of, to lend and to pledge any such securities, to
enter into repurchase agreements, reverse repurchase agreements, firm commitment
agreements and forward foreign currency exchange contracts, to purchase and sell
options on securities, securities indices, currency and other financial assets,
futures contracts and options on futures contracts of all descriptions and to
engage in all types of hedging and risk-management transactions.
(d) To exercise all rights, powers and privileges of ownership or
interest in all securities and repurchase agreements included in the Trust
Property, including the right to vote thereon and otherwise act with respect
thereto and to do all acts for the preservation, protection, improvement and
enhancement in value of all such securities and repurchase agreements.
(e) To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, develop and dispose of (by sale or otherwise) any property, real or
personal, including cash or foreign currency, and any interest therein.
(f) To borrow money or other property in the name of the Trust
exclusively for Trust purposes and in this connection issue notes or other
evidence of indebtedness; to secure borrowings by mortgaging, pledging or
otherwise subjecting as security the Trust Property; and to endorse, guarantee,
or undertake the performance of any obligation or engagement of any other Person
and to lend Trust Property.
(g) To aid by further investment any corporation, company, trust,
association or firm, any obligation of or interest in which is included in the
Trust Property or in the affairs of which the Trustees have any direct or
indirect interest; to
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do all acts and things designed to protect, preserve, improve or enhance
the value of such obligation or interest; and to guarantee or become surety on
any or all of the contracts, stocks, bonds, notes, debentures and other
obligations of any such corporation, company, trust, association or firm.
(h) To adopt By-laws not inconsistent with this Declaration providing
for the conduct of the business of the Trust and to amend and repeal them to the
extent such right is not reserved to the Shareholders.
(i) To elect and remove such officers and appoint and terminate such
agents as they deem appropriate.
(j) To employ as custodian of any assets of the Trust, subject to any
provisions herein or in the By-laws, one or more banks, trust companies or
companies that are members of a national securities exchange, or other entities
permitted by the Commission to serve as such.
(k) To retain one or more transfer agents and shareholder servicing
agents, or both.
(l) To provide for the distribution of Shares either through a
Principal Underwriter as provided herein or by the Trust itself, or both, or
pursuant to a distribution plan of any kind.
(m) To set record dates in the manner provided for herein or in the
By-laws.
(n) To delegate such authority as they consider desirable to any
officers of the Trust and to any agent, independent contractor, manager,
investment adviser, custodian or underwriter.
(o) To hold any security or other property (i) in a form not indicating
any trust, whether in bearer, book entry, unregistered or other negotiable form,
or (ii) either in the Trust's or Trustees' own name or in the name of a
custodian or a nominee or nominees, subject to safeguards according to the usual
practice of business trusts or investment companies.
(p) To establish separate and distinct Series with separately defined
investment objectives and policies and distinct investment purposes, and with
separate Shares representing beneficial interests in such Series, and to
establish separate Classes, all in accordance with the provisions of Article V.
(q) To the full extent permitted by Section 3804 of the Delaware Act,
to allocate assets, liabilities and expenses of the Trust to a particular Series
and assets, liabilities and expenses to a particular Class or to apportion the
same between or
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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.
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(y) To sell or exchange any or all of the assets of the Trust, subject
to Article IX, Section 4.
(z) To enter into joint ventures, partnerships and other combinations
and associations.
(aa) To join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to deposit any
security with, or transfer any security to, any such committee, depositary or
trustee, and to delegate to them such power and authority with relation to any
security (whether or not so deposited or transferred) as the Trustees shall deem
proper, and to agree to pay, and to pay, such portion of the expenses and
compensation of such Committee, depositary or trustee as the Trustees shall deem
proper;
(bb) To purchase and pay for entirely out of Trust Property such
insurance as the Trustees may deem necessary or appropriate for the conduct of
the business, including, without limitation, insurance policies insuring the
assets of the Trust or payment of distributions and principal on its portfolio
investments, and, subject to applicable law and any restrictions set forth in
the By-laws, insurance policies insuring the Shareholders, Trustees, officers,
employees, agents, investment advisers, Principal Underwriters, or independent
contractors of the Trust, individually, against all claims and liabilities of
every nature arising by reason of holding Shares, holding, being or having held
any such office or position, or by reason of any action alleged to have been
taken or omitted by any such Person as Trustee, officer, employee, agent,
investment adviser, Principal underwriter, or independent contractor, including
any action taken or omitted that may be determined to constitute negligence,
whether or not the Trust would have the power to indemnify such Person against
liability;
(cc) To adopt, establish and carry out pension, profit-sharing, share
bonus, share purchase, savings, thrift and other retirement, incentive and
benefit plans and trusts, including the purchasing of life insurance and annuity
contracts as a means of providing such retirement and other benefits, for any or
all of the Trustees, officers, employees and agents of the Trust;
(dd) To enter into contracts of any kind and description;
(ee) To interpret the investment policies, practices or limitations
of any Series or Class; and
(ff) To guarantee indebtedness and contractual obligations of
others.
The clauses above shall be construed as objects and powers, and the
enumeration of specific powers shall not limit in any way the general powers of
the Trustees. Any action by one or more of the Trustees in their capacity as
such
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hereunder shall be deemed an action on behalf of the Trust or the
applicable Series, and not an action in an individual capacity. No one dealing
with the Trustees shall be under any obligation to make any inquiry concerning
the authority of the Trustees, or to see to the application of any payments made
or property transferred to the Trustees or upon their order. In construing this
Declaration, the presumption shall be in favor of a grant of power to the
Trustees.
Section 3. CERTAIN TRANSACTIONS. Except as prohibited by applicable
law, the Trustees may, on behalf of the Trust, buy any securities from or sell
any securities to, or lend any assets of the Trust to, any Trustee or officer of
the Trust or any firm of which any such Trustee or officer is a member acting as
principal, or have any such dealings with any investment adviser, administrator,
distributor or transfer agent for the Trust or with any Interested Person of
such person. The Trust may employ any such person or entity in which such person
is an Interested Person, as broker, legal counsel, registrar, investment
adviser, administrator, distributor, transfer agent, dividend disbursing agent,
custodian or in any other capacity upon customary terms.
Section 4. INITIAL TRUSTEES; ELECTION AND NUMBER OF TRUSTEES. The
initial Trustees shall be the 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
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occur because of the retirement, resignation or removal of a
Trustee, or an increase in number of Trustees, provided that such appointment
shall become effective only at or after the expected vacancy occurs. As soon as
any such Trustee has accepted his appointment in writing, the trust estate shall
vest in the new Trustee, together with the continuing Trustees, without any
further act or conveyance, and he shall be deemed a Trustee hereunder. The
Trustees' power of appointment is subject to Section 16(a) of the 1940 Act.
Whenever a vacancy in the number of Trustees shall occur, until such vacancy is
filled as provided in this Article II, the Trustees in office, regardless of
their number, shall have all the powers granted to the Trustees and shall
discharge all the duties imposed upon the Trustees by the Declaration. The
death, declination to serve, resignation, retirement, removal or incapacity of
one or more Trustees, or all of them, shall not operate to annul the Trust or to
revoke any existing agency created pursuant to the terms of this Declaration of
Trust.
Section 7. TEMPORARY VACANCY OR ABSENCE. Whenever a vacancy in the
Board of Trustees shall occur, until such vacancy is filled, or while any
Trustee is absent from his domicile (unless that Trustee has made arrangements
to be informed about, and to participate in, the affairs of the Trust during
such absence), or is physically or mentally incapacitated, the remaining
Trustees shall have all the powers hereunder and their certificate as to such
vacancy, absence, or incapacity shall be conclusive. Any Trustee may, by power
of attorney, delegate his powers as Trustee for a period not exceeding six (6)
months at any one time to any other Trustee or Trustees.
Section 8. CHAIRMAN. The Trustees shall appoint one of their number to
be Chairman of the Board of Trustees. The Chairman shall preside at all meetings
of the Trustees, shall be responsible for the execution of policies established
by the Trustees and the administration of the Trust, and may be the chief
executive, financial and/or accounting officer of the Trust.
Section 9. ACTION BY THE TRUSTEES. (a) 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
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written consent or waiver may be provided and delivered to the Trust by
facsimile or other similar electronic mechanism.
(b) A Trustee who with respect to the Trust is not an Interested Person
shall be deemed to be independent and disinterested when making any
determinations or taking any action as a Trustee, whether pursuant to the 1940
Act, the Delaware Act or otherwise.
Section 10. OWNERSHIP OF TRUST PROPERTY. The Trust Property of the
Trust and of each Series shall be held separate and apart from any assets now or
hereafter held in any capacity other than as Trustee hereunder by the Trustees
or any successor Trustees. Legal title in and beneficial ownership of all of the
assets of the Trust shall at all times be considered as vested in the Trust,
except that the Trustees may cause legal title in and beneficial ownership of
any Trust Property to be held by, or in the name of one or more of the Trustees
acting for and on behalf of the Trust, or in the name of any person as nominee
acting for and on behalf of the Trust. No Shareholder shall be deemed to have a
severable ownership in any individual asset of the Trust or of any Series or any
right of partition or possession thereof, but each Shareholder shall have, as
provided in Article V, a proportionate undivided beneficial interest in the
Trust or Series or Class thereof represented by Shares. The Shares shall be
personal property giving only the rights specifically set forth in this Trust
Instrument. The Trust, or at the determination of the Trustees one or more of
the Trustees or a nominee acting for and on behalf of the Trust, shall be deemed
to hold legal title and beneficial ownership of any income earned on securities
of the Trust issued by any business entities formed, organized, or existing
under the laws of any jurisdiction, including the laws of any foreign country.
Upon the resignation or removal of a Trustee, or his otherwise ceasing to be a
Trustee, he shall execute and deliver such documents as the remaining Trustees
shall require for the purpose of conveying to the Trust or the remaining
Trustees any Trust Property held in the name of the resigning or removed
Trustee. Upon the incapacity or death of any Trustee, his legal representative
shall execute and deliver on his behalf such documents as the remaining Trustees
shall require as provided in the preceding sentence.
Section 11. EFFECT OF TRUSTEES NOT SERVING. The death, resignation,
retirement, removal, incapacity or inability or refusal to serve of the
Trustees, or any one of them, shall not operate to annul the Trust or to revoke
any existing agency created pursuant to the terms of this Declaration.
Section 12. TRUSTEES, ETC. AS SHAREHOLDERS. Subject to any restrictions
in the By-laws, any Trustee, officer, agent or independent contractor of the
Trust may acquire, own and dispose of Shares to the same extent as any other
Shareholder; the Trustees may issue and sell Shares to and buy Shares from any
such person or any
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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
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from time to time consider desirable and all upon such terms and conditions
as the Trustees may in their discretion determine. Notwithstanding any
provisions of the Declaration, the Trustees may authorize the Investment
Advisers or persons to whom the Investment Adviser delegates certain or all of
their duties, or any of them, under any such contracts (subject to such general
or specific instructions as the Trustees may from time to time adopt) to effect
purchases, sales, loans or exchanges of portfolio securities and other
investments of the Trust on behalf of the Trustees or may authorize any officer,
employee or Trustee to effect such purchases, sales, loans or exchanges pursuant
to recommendations of such Investment Advisers, or any of them (and all without
further action by the Trustees). Any such purchases, sales, loans and exchanges
shall be deemed to have been authorized by all of the Trustees.
Section 3. ADMINISTRATION AGREEMENT. The Trustees may in their
discretion from time to time enter into an administration agreement or, if the
Trustees establish multiple Series or Classes, separate administration
agreements with respect to each Series or Class, whereby the other party to such
agreement shall undertake to manage the business affairs of the Trust or of a
Series or Class thereof of the Trust and furnish the Trust or a Series or a
Class thereof with office facilities, and shall be responsible for the ordinary
clerical, bookkeeping and recordkeeping services at such office facilities, and
other facilities and services, if any, and all upon such terms and conditions as
the Trustees may in their discretion determine.
Section 4. SERVICE AGREEMENT. The Trustees may in their discretion from
time to time enter into service agreements with respect to one or more Series or
Classes of Shares whereby the other parties to such Service Agreements will
provide administration and/or support services pursuant to administration plans
and service plans, and all upon such terms and conditions as the Trustees in
their discretion may determine.
Section 5. TRANSFER AGENT. The Trustees may in their discretion from
time to time enter into a transfer agency and shareholder service contract
whereby the other party to such contract shall undertake to furnish transfer
agency and shareholder services to the Trust. The contract shall have such terms
and conditions as the Trustees may in their discretion determine not
inconsistent with the Declaration. Such services may be provided by one or more
Persons.
Section 6. CUSTODIAN. The Trustees may appoint or otherwise engage one
or more banks or trust companies, each having 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
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requirements of applicable provisions of the 1940 Act, and upon such terms
and conditions as may be agreed upon between the Custodian and such
sub-custodian, to hold securities and other assets of the Trust and to perform
the acts and services of the Custodian, subject to applicable provisions of law
and resolutions adopted by the Trustees.
Section 7. AFFILIATIONS OF TRUSTEES OR OFFICERS, ETC. The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust
or any Series thereof is a shareholder, director, officer, partner,
trustee, employee, manager, adviser or distributor of or for any
partnership, corporation, trust, association or other organization or
of or for any parent or affiliate of any organization, with which a
contract of the character described in this Article III or for services
as Custodian, Transfer Agent or disbursing agent or for related
services may have been or may hereafter be made, or that any such
organization, or any parent or affiliate thereof, is a Shareholder of
or has an interest in the Trust, or that
(ii) any partnership, corporation, trust, association or other
organization with which a contract of the character described in
Sections 1, 2, 3 or 4 of this Article III or for services as Custodian,
Transfer Agent or disbursing agent or for related services may have
been or may hereafter be made also has any one or more of such
contracts with one or more other partnerships, corporations, trusts,
associations or other organizations, or has other business or
interests,
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same or create any liability or accountability to the Trust or its Shareholders.
ARTICLE IV
COMPENSATION, LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 1. COMPENSATION. The Trustees as such shall be entitled to
reasonable compensation from the Trust, and they may fix the amount of such
compensation. Nothing herein shall in any way prevent the employment of any
Trustee for advisory, management, legal, accounting, investment banking or other
services and payment for the same by the Trust.
Section 2. LIMITATION OF LIABILITY. All persons contracting with or
having any claim against the Trust or a particular Series shall look only to the
assets of all Series or such particular Series for payment under such contract
or claim; and neither the Trustees nor, when acting in such capacity, any of the
Trust's officers, employees or
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agents, whether past, present or future, shall be personally liable
therefor. Every written instrument or obligation on behalf of the Trust or any
Series shall contain a statement to the foregoing effect, but the absence of
such statement shall not operate to make any Trustee or officer of the Trust
liable thereunder. Provided they have exercised reasonable care and have acted
under the reasonable belief that their actions are in the best interest of the
Trust, the Trustees and officers of the Trust shall not be responsible or liable
for any act or omission or for neglect or wrongdoing of them or any officer,
agent, employee, investment adviser or independent contractor of the Trust, but
nothing contained in this Declaration or in the Delaware Act shall protect any
Trustee or officer of the Trust against liability to the Trust or to
Shareholders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office.
Section 3. INDEMNIFICATION. (a) Subject to the exceptions and
limitations contained in subsection (b) below:
(i) every person who is, or has been, a Trustee or an officer, employee
or agent of the Trust (including any individual who serves at its
request as director, officer, partner, trustee or the like of another
organization in which it has any interest as a shareholder, creditor or
otherwise) ("Covered Person") shall be indemnified by the Trust or the
appropriate Series to the fullest extent permitted by law against
liability and against all expenses reasonably incurred or paid by him
in connection with any claim, action, suit or proceeding in which he
becomes involved as a party or otherwise by virtue of his being or
having been a Covered Person and against amounts paid or incurred by
him in the settlement thereof; and
(ii) as used herein, the words "claim," "action," "suit," or
"proceeding" shall apply to all claims, actions, suits or proceedings
(civil, criminal or other, including appeals), actual or threatened,
and the words "liability" and "expenses" shall include, without
limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered Person:
(i) who shall have been adjudicated by a court or body before which the
proceeding was brought (A) to be liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of his office, or (B) not to have acted in good faith in the reasonable
belief that his action was in the best interest of the Trust; or
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(ii) in the event of a settlement, unless there has been a
determination that such Covered Person did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office; (A) by the court or other
body approving the settlement; (B) by at least a majority of those
Trustees who are neither Interested Persons of the Trust nor are
parties to the matter based upon a review of readily available facts
(as opposed to a full trial-type inquiry); (C) by written opinion of
independent legal counsel based upon a review of readily available
facts (as opposed to a full trial-type inquiry) or (D) by a vote of a
majority of the Outstanding Shares entitled to vote (excluding any
Outstanding Shares owned of record or beneficially by such individual).
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall not be
exclusive of or affect any other rights to which any Covered Person may now or
hereafter be entitled, and shall inure to the benefit of the heirs, executors
and administrators of a Covered Person.
(d) To the maximum extent permitted by applicable law, expenses in
connection with the preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in subsection (a) of this
Section may be paid by the Trust or applicable Series from time to time prior to
final disposition thereof upon receipt of an undertaking by or on behalf of such
Covered Person that such amount will be paid over by him to the Trust or
applicable Series if it is ultimately determined that he is not entitled to
indemnification under this Section; provided, however, that either (i) such
Covered Person shall have provided appropriate security for such undertaking,
(ii) the Trust is insured against losses arising out of any such advance
payments or (iii) either a majority of the Trustees who are neither Interested
Persons of the Trust nor parties to the matter, or independent legal counsel in
a written opinion, shall have determined, based upon a review of readily
available facts (as opposed to a full trial-type inquiry) that there is reason
to believe that such Covered Person will not be disqualified from
indemnification under this Section.
(e) Any repeal or modification of this Article IV by the Shareholders,
or adoption or modification of any other provision of the Declaration or By-laws
inconsistent with this Article, shall be prospective only, to the extent that
such repeal, or modification would, if applied retrospectively, adversely affect
any limitation on the liability of any Covered Person or indemnification
available to any Covered Person with respect to any act or omission which
occurred prior to such repeal, modification or adoption.
Section 3. INDEMNIFICATION OF SHAREHOLDERS. If any Shareholder or
former Shareholder of any Series shall be held personally liable solely by
reason of his being
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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
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employees or by the Investment Adviser, the Administrator, the Distributor,
Transfer Agent, selected dealers, accountants, appraisers or other experts or
consultants selected with reasonable care by the Trustees, officers or employees
of the Trust, regardless of whether such counsel or expert may also be a
Trustee.
ARTICLE V
SERIES; CLASSES; SHARES
Section 1. ESTABLISHMENT OF SERIES OR CLASS. The Trust shall consist of
one or more Series. 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 Strategic Income 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, Class C and Class Y 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.
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Section 2. SHARES. The beneficial interest in the Trust shall be
divided into transferable Shares of one or more separate and distinct Series or
Classes established by the Trustees. The number of Shares of each Series and
Class is unlimited and each Share shall have no par value per Share or such
other amount as the Trustees may establish. All Shares issued hereunder shall be
fully paid and nonassessable. Shareholders shall have no preemptive or other
right to subscribe to any additional Shares or other securities issued by the
Trust. The Trustees shall have full power and authority, in their sole
discretion and without obtaining Shareholder approval, to issue original or
additional Shares at such times and on such terms and conditions as they deem
appropriate; to issue fractional Shares and Shares held in the treasury; to
establish and to change in any manner Shares of any Series or Classes with such
preferences, terms of conversion, voting powers, rights and privileges as the
Trustees may determine (but the Trustees may not change Outstanding Shares in a
manner materially adverse to the Shareholders of such Shares); to divide or
combine the Shares of any Series or Classes into a greater or lesser number; to
classify or reclassify any unissued Shares of any Series or Classes into one or
more Series or Classes of Shares; to abolish any one or more Series or Classes
of Shares; to issue Shares to acquire other assets (including assets subject to,
and in connection with, the assumption of liabilities) and businesses; and to
take such other action with respect to the Shares as the Trustees may deem
desirable. Shares held in the treasury shall not confer any voting rights on the
Trustees and shall not be entitled to any dividends or other distributions
declared with respect to the Shares.
Section 3. INVESTMENT IN THE TRUST. The Trustees shall accept
investments in any Series or Class from such persons and on such terms as they
may from time to time authorize. At the Trustees' discretion, such investments,
subject to applicable law, may be in the form of cash or securities in which
that Series is authorized to invest, valued as provided in Article VI, Section
3. Investments in a Series shall be credited to each Shareholder's account in
the form of full Shares at the Net Asset Value per Share next determined after
the investment is received or accepted as may be determined by the Trustees;
provided, however, that the Trustees may, in their sole discretion, (a) impose a
sales charge upon investments in any Series or Class, (b) issue fractional
Shares, (c) determine the Net Asset Value per Share of the initial capital
contribution or (d) authorize the issuance of Shares at a price other than Net
Asset Value to the extent permitted by the 1940 Act or any rule, order or
interpretation of the Commission thereunder. The Trustees shall have the right
to refuse to accept investments in any Series at any time without any cause or
reason therefor whatsoever.
Section 4. ASSETS AND LIABILITIES OF SERIES. All consideration received
by the Trust for the issue or sale of Shares of a particular Series, together
with all assets in which such consideration is invested or reinvested, all
income, earnings, profits, and proceeds thereof (including any proceeds derived
from the sale, exchange or liquidation of such assets, and any funds or payments
derived from any reinvestment
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of such proceeds in whatever form the same may be), shall be held and
accounted for separately from the assets of every other Series and are referred
to as "assets belonging to" that Series. The assets belonging to a Series shall
belong only to that Series for all purposes, and to no other Series, subject
only to the rights of creditors of that Series. Any assets, income, earnings,
profits, and proceeds thereof, funds, or payments which are not readily
identifiable as belonging to any particular Series shall be allocated by the
Trustees between and among one or more Series as the Trustees deem fair and
equitable. Each such allocation shall be conclusive and binding upon the
Shareholders of all Series for all purposes, and such assets, earnings, income,
profits or funds, or payments and proceeds thereof shall be referred to as
assets belonging to that Series. The assets belonging to a Series shall be so
recorded upon the books of the Trust, and shall be held by the Trustees in trust
for the benefit of the Shareholders of that Series. The assets belonging to a
Series shall be charged with the liabilities of that Series and all expenses,
costs, charges and reserves attributable to that Series, except that liabilities
and expenses allocated solely to a particular Class shall be borne by that
Class. Any general liabilities, expenses, costs, charges or reserves of the
Trust which are not readily identifiable as belonging to any particular Series
or Class shall be allocated and charged by the Trustees between or among any one
or more of the Series or Classes in such manner as the Trustees deem fair and
equitable. Each such allocation shall be conclusive and binding upon the
Shareholders of all Series or Classes for all purposes.
Without limiting the foregoing, but subject to the right of the
Trustees to allocate general liabilities, expenses, costs, charges or reserves
as herein provided, the debts, liabilities, obligations and expenses incurred,
contracted for or otherwise existing with respect to a particular Series shall
be enforceable against the assets of such Series only, and not against the
assets of any other Series. Notice of this contractual limitation on liabilities
among Series may, in the Trustees' discretion, be set forth in the certificate
of trust of the Trust (whether originally or by amendment) as filed or to be
filed in the Office of the Secretary of State of the State of Delaware pursuant
to the Delaware Act, and upon the giving of such notice in the certificate of
trust, the statutory provisions of Section 3804 of the Delaware Act relating to
limitations on liabilities among Series (and the statutory effect under Section
3804 of setting forth such notice in the certificate of trust) shall become
applicable to the Trust and each Series. Any person extending credit to,
contracting with or having any claim against any Series may look only to the
assets of that Series to satisfy or enforce any debt, with respect to that
Series. No Shareholder or former Shareholder of any Series shall have a claim on
or any right to any assets allocated or belonging to any other Series.
Section 5. OWNERSHIP AND TRANSFER OF SHARES. The Trust or a transfer or
similar agent for the Trust shall maintain a register containing the names and
addresses of the Shareholders of each Series and Class thereof, the number of
Shares of each Series and Class held by such Shareholders, and a record of all
Share
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transfers. The register shall be conclusive as to the identity of
Shareholders of record and the number of Shares held by them from time to time.
The Trustees may authorize the issuance of certificates representing Shares and
adopt rules governing their use. The Trustees may make rules governing the
transfer of Shares, whether or not represented by certificates. Except as
otherwise provided by the Trustees, Shares shall be transferable on the books of
the Trust only by the record holder thereof or by his duly authorized agent upon
delivery to the Trustees or the Trust's transfer agent of a duly executed
instrument of transfer, together with a Share certificate if one is outstanding,
and such evidence or the genuineness of each such execution and authorization
and of such other matters as may be required by the Trustees. Upon such
delivery, and subject to any further requirements specified by the Trustees or
contained in the By-laws, the transfer shall be recorded on the books of the
Trust. Until a transfer is so recorded, the Shareholder of record of Shares
shall be deemed to be the holder of such Shares for all purposes hereunder and
neither the Trustees nor the Trust, nor any transfer agent or registrar or any
officer, employee or agent of the Trust, shall be affected by any notice of a
proposed transfer.
Section 6. STATUS OF SHARES; LIMITATION OF SHAREHOLDER LIABILITY.
Shares shall be deemed to be personal property giving Shareholders only the
rights provided in this Declaration. Every Shareholder, by virtue of having
acquired a Share, shall be held expressly to have assented to and agreed to be
bound by the terms of this Declaration and to have become a party hereto. No
Shareholder shall be personally liable for the debts, liabilities, obligations
and expenses incurred by, contracted for, or otherwise existing with respect to,
the Trust or any Series. The death, incapacity, dissolution, termination or
bankruptcy of a Shareholder during the existence of the Trust shall not operate
to terminate the Trust, nor entitle the representative of any such Shareholder
to an accounting or to take any action in court or elsewhere against the Trust
or the Trustees, but entitles such representative only to the rights of such
Shareholder under this Trust. Ownership of Shares shall not entitle the
Shareholder to any title in or to the whole or any part of the Trust Property or
right to call for a partition or division of the same or for an accounting, nor
shall the ownership of Shares constitute the Shareholders as partners. Neither
the Trust nor the Trustees shall have any power to bind any Shareholder
personally or to demand payment from any Shareholder for anything, other than as
agreed by the Shareholder. Shareholders shall have the same limitation of
personal liability as is extended to shareholders of a private corporation for
profit incorporated in the State of Delaware. Every written obligation of the
Trust or any Series shall contain a statement to the effect that such obligation
may only be enforced against the assets of the appropriate Series or all Series;
however, the omission of such statement shall not operate to bind or create
personal liability for any Shareholder or Trustee.
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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
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taxpayer identification number if required to do so, or to have the minimum
investment required, or to pay when due for the purchase of Shares issued to
him. To the extent permitted by law, the Trustees may retain the proceeds of any
redemption of Shares required by them for payment of amounts due and owing by a
Shareholder to the Trust or any Series or Class or any governmental authority.
Notwithstanding the foregoing, the Trustees may postpone payment of the
redemption price and may suspend the right of the Shareholders to require any
Series or Class to redeem Shares during any period of time when and to the
extent permissible under the 1940 Act.
Section 3. DETERMINATION OF NET ASSET VALUE. The Trustees shall cause
the Net Asset Value of Shares of each Series or Class to be determined from time
to time in a manner consistent with applicable laws and regulations. The
Trustees may delegate the power and duty to determine Net Asset Value per Share
to one or more Trustees or officers of the Trust or to a custodian, depository
or other agent appointed for such purpose. The Net Asset Value of Shares shall
be determined separately for each Series or Class at such times as may be
prescribed by the Trustees or, in the absence of action by the Trustees, as of
the close of regular trading on the New York Stock Exchange on each day for all
or part of which such Exchange is open for unrestricted trading.
Section 4. SUSPENSION OF RIGHT OF REDEMPTION. If, as referred to in
Section 2 of this Article, the Trustees postpone payment of the redemption price
and suspend the right of Shareholders to redeem their Shares, such suspension
shall take effect at the time the Trustees shall specify, but not later than the
close of business on the business day next following the declaration of
suspension. Thereafter Shareholders shall have no right of redemption or payment
until the Trustees declare the end of the suspension. If the right of redemption
is suspended, a Shareholder may either withdraw his request for redemption or
receive payment based on the Net Asset Value per Share next determined after the
suspension terminates.
Section 5. REPURCHASE BY AGREEMENT. The Trust may repurchase Shares
directly, or through the Distributor or another agent designated for the
purpose, by agreement with the owner thereof at a price not exceeding the Net
Asset Value per Share determined as of the time when the purchase or contract of
purchase is made or the Net Asset Value as of any time which may be later
determined, provided payment is not made for the Shares prior to the time as of
which such Net Asset Value is determined.
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ARTICLE VII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 1. VOTING POWERS. The Shareholders shall have power to vote
only with respect to (a) the election of Trustees as provided in Section 2 of
this Article; (b) the removal of Trustees as provided in Article II, Section
3(d); (c) any investment advisory or management contract as provided in Article
VIII, Section 1; (d) any termination of the Trust as provided in Article IX,
Section 4; (e) the amendment of this Declaration to the extent and as provided
in Article X, Section 8; and (f) such additional matters relating to the Trust
as may be required or authorized by law, this Declaration, or the By-laws or any
registration of the Trust with the Commission or any State, or as the Trustees
may consider desirable.
On any matter submitted to a vote of the Shareholders, all Shares shall
be voted by individual Series or Class, except (a) when required by the 1940
Act, Shares shall be voted in the aggregate and not by individual Series or
Class, and (b) when the Trustees have determined that the matter affects the
interests of more than one Series or Class, then the Shareholders of all such
Series or Classes shall be entitled to vote thereon. As determined by the
Trustees without the vote or consent of shareholders, on any matter submitted to
a vote of Shareholders either (i) each whole Share shall be entitled to one vote
as to any matter on which it is entitled to vote and each fractional Share shall
be entitled to a proportionate fractional vote or (ii) each dollar of net asset
value (number of Shares owned times net asset value per share of such Series or
Class, as applicable) shall be entitled to one vote on any matter on which such
Shares are entitled to vote and each fractional dollar amount shall be entitled
to a proportionate fractional vote. Without limiting the power of the Trustees
in any way to designate otherwise in accordance with the preceding sentence, the
Trustees hereby establish that each whole Share shall be entitled to one vote as
to any matter on which it is entitled to vote and each fractional Share shall be
entitled to a proportionate fractional vote. There shall be no cumulative voting
in the election of Trustees. Shares may be voted in person or by proxy or in any
manner provided for in the By-laws. The By-laws may provide that proxies may be
given by any electronic or telecommunications device or in any other manner, but
if a proposal by anyone other than the officers or Trustees is submitted to a
vote of the Shareholders of any Series or Class, or if there is a proxy contest
or proxy solicitation or proposal in opposition to any proposal by the officers
or Trustees, Shares may be voted only in person or by written proxy. Until
Shares of a Series are issued, as to that Series the Trustees may exercise all
rights of Shareholders and may take any action required or permitted to be taken
by Shareholders by law, this Declaration or the By-laws. Meetings of
Shareholders shall be called and notice thereof and record dates therefor shall
be given and set as provided in the By-laws.
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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.
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,
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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 binding upon everyone interested. Subject
to the provisions
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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
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which the Trust or Series invests, or economic developments or trends
having a significant adverse impact on the business or operations of the Trust
or such Series.
(c) Upon completion of the distribution of the remaining proceeds or
assets pursuant to subsection (a), the Trust or affected Series shall terminate
and the Trustees and the Trust shall be discharged of any and all further
liabilities and duties hereunder with respect thereto and the right, title and
interest of all parties therein shall be canceled and discharged. Upon
termination of the Trust, following completion of winding up of its business,
the Trustees shall cause a certificate of cancellation of the Trust's
certificate of trust to be filed in accordance with the Delaware Act, which
certificate of cancellation may be signed by any one Trustee.
Section 5. REORGANIZATION. (a) Notwithstanding anything else herein, to
change the Trust's form or place of organization the Trustees may, without
Shareholder approval unless such approval is required by applicable law, (i)
cause the Trust to merge or consolidate with or into one or more entities, if
the surviving or resulting entity is the Trust or another 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
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for convenience only and shall not affect the construction of this
Declaration of Trust. This Declaration of Trust may be executed in any number of
counterparts, each of which shall be deemed an original.
Section 7. APPLICABLE LAW. This Declaration and the Trust created
hereunder are governed by and construed and administered according to the
Delaware Act and the applicable laws of the State of Delaware; provided,
however, that there shall not be applicable to the Trust, the Trustees or this
Declaration of Trust (a) the provisions of Section 3540 of Title 12 of the
Delaware Code, or (b) any provisions of the laws (statutory or common) of the
State of Delaware (other than the Delaware Act) pertaining to trusts which
relate to or regulate (i) the filing with any court or governmental body or
agency of trustee accounts or schedules of trustee fees and charges, (ii)
affirmative requirements to post bonds for trustees, officers, agents or
employees of a trust, (iii) the necessity for obtaining court or other
governmental approval concerning the acquisition, holding or disposition of real
or personal property, (iv) fees or other sums payable to trustees, officers,
agents or employees of a trust, (v) the allocation of receipts and expenditures
to income or principal, (vi) restrictions or limitations on the permissible
nature, amount or concentration of trust investments or requirements relating to
the titling, storage or other manner of holding of trust assets, or (vii) the
establishment of fiduciary or other standards of responsibilities or limitations
on the acts or powers of trustees, which are inconsistent with the limitations
or liabilities or authorities and powers of the Trustees set forth or referenced
in this Declaration. The Trust shall be of the type commonly called a Delaware
business trust, and, without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust under
Delaware law. The Trust specifically reserves the right to exercise any of the
powers or privileges afforded to trusts or actions that may be engaged in by
trusts under the Delaware Act, and the absence of a specific reference herein to
any such power, privilege or action shall not imply that the Trust may not
exercise such power or privilege or take such actions.
Section 8. AMENDMENTS. The Trustees may, without any Shareholder vote,
amend or otherwise supplement this Declaration by making an amendment, a
Declaration of Trust supplemental hereto or an amended and restated trust
instrument; provided, that Shareholders shall have the right to vote on any
amendment (a) which would affect the voting rights of Shareholders granted in
Article VII, Section l, (b) to this Section 8, (c) required to be approved by
Shareholders by law or by the Trust's registration statement(s) filed with the
Commission, and (d) submitted to them by the Trustees in their discretion. Any
amendment submitted to Shareholders which the Trustees determine would affect
the Shareholders of any Series shall be authorized by vote of the Shareholders
of such Series and no vote shall be required of Shareholders of a Series not
affected. Notwithstanding anything else herein, any amendment to Article IV
which would have the effect of reducing the indemnification and other rights
provided thereby to
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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 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.
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IN WITNESS WHEREOF, the undersigned being all the Trustees of the Trust
have executed this instrument as of the date first written above.
/s/ Mary K. Bush
Mary K. Bush As Trustee and not individually
/s/ John F. Cogan, Jr.
John F. Cogan, Jr. As Trustee and not individually
/s/ Richard H. Egdahl
Richard H. Egdahl As Trustee and not individually
/s/ Margaret BW Graham
Margaret B.W. Graham As Trustee and not individually
/s/ John W. Kendrick
John W. Kendrick As Trustee and not individually
/s/ Marguerite A. Piret
Marguerite A. Piret As Trustee and not individually
/s/ David D. Tripple
David D. Tripple As Trustee and not individually
/s/ Stephen K. West
Stephen K. West As Trustee and not individually
/s/ John Winthrop
John Winthrop As Trustee and not individually
The address of each Trustee is
c/o Pioneer Strategic Income Fund
60 State Street, Boston, Massachusetts 02109
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CERTIFICATE OF TRUST
THIS Certificate of Trust of Pioneer Strategic Income Fund (the
"Trust"), dated January 5, 1999, is being duly executed and filed by the
undersigned trustees, 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
Strategic Income 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.
<PAGE>
IN WITNESS WHEREOF, the undersigned being all the Trustees of the Trust
have executed this instrument as of the date first written above.
/s/ Mary K. Bush
Mary K. Bush As Trustee and not individually
/s/ John F. Cogan, Jr.
John F. Cogan, Jr. As Trustee and not individually
/s/ Richard H. Egdahl
Richard H. Egdahl As Trustee and not individually
/s/ Margaret BW Graham
Margaret B.W. Graham As Trustee and not individually
/s/ John W. Kendrick
John W. Kendrick As Trustee and not individually
/s/ Marguerite A. Piret
Marguerite A. Piret As Trustee and not individually
/s/ David D. Tripple
David D. Tripple As Trustee and not individually
/s/ Stephen K. West
Stephen K. West As Trustee and not individually
/s/ John Winthrop
John Winthrop As Trustee and not individually
/netuser12/phelan/op/71976.114\strategic\cert.wpf
BY-LAWS
OF
PIONEER STRATEGIC INCOME FUND
ARTICLE I
DEFINITIONS
All capitalized terms have the respective meanings given them in the
Agreement and Declaration of Trust of Pioneer Strategic Income Fund dated
January 5, 1999, as amended or restated from time to time.
ARTICLE II
OFFICES
SECTION 1. PRINCIPLES 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 Trustee 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.
<PAGE>
SECTION 2 NOTICE OF MEETINGS. Notice of all meetings of the
Shareholders, stating the time, place and purposes of the meeting, shall be
given by the Trustees by mail or telegraphic or electronic means to each
Shareholder at his address as recorded on the register of the Trust mailed at
least (10) days and not more than ninety (90) days before the meeting, PROVIDED,
HOWEVER, that notice of a meeting need not be given to a Shareholder to whom
such notice need not be given under the proxy rules of the Commission under the
1940 Act and the Securities Exchange Act of 1934, as amended. Only the business
stated in the notice of the meeting shall be considered at such meeting. Any
adjourned meeting may be held a 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 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
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share shall be entitled to one vote as to any matter on which it is
entitled by the Declaration of Trust to vote and fractional shares shall be
entitled to a proportionate fractional vote. When any Share is held jointly by
several persons, any one of them may vote at any meeting in person or by proxy
in respect of such Share, but if more than one of them shall be present at such
meeting in person or by proxy, and such joint owners or their proxies so present
disagree as to any vote to be cast, such vote shall not be received in respect
of such Share. A proxy purporting to be executed by or on behalf of a
Shareholder shall be deemed valid unless challenged at or prior to its exercise,
and the burden of proving invalidity shall rest on the challenger. If the holder
of any such share is a minor or a person of unsound mind, and subject to
guardianship or the legal control of any other person as regards the charge or
management of such Share, he may vote by his guardian or such other person
appointed or having such control, and such vote may be given in person or by
proxy.
SECTION 5. ABSTENTIONS AND BROKER NON-VOTES. Outstanding Shares
represented in person or by proxy (including Shares which abstain or do not vote
with respect to one or more of any proposals presented for Shareholder approval)
will be counted for purposes of determining whether a quorum is present at a
meeting. Abstentions will be treated as Shares that are present and entitled to
vote for purposes of determining the number of Shares that are present and
entitled to vote with respect to any particular proposal, but will not be
counted as a vote in favor of such proposal. If a broker or nominee holding
Shares in "street name" indicates on the proxy that it does not have
discretionary authority to vote as to a particular proposal, those Shares will
not be considered as present and entitled to vote with respect to such proposal.
SECTION 6. INSPECTION OF RECORDS. The records of the Trust
shall be open to inspection by Shareholders to the same extent as is permitted
shareholders of a Delaware business corporation.
SECTION 7. ACTION WITHOUT MEETING. Any action which may be taken by
Shareholders may be taken without a meeting if a majority of Outstanding Shares
entitled to vote on the matter (or such larger proportion thereof as shall be
required by law) consent to the action in writing and the written consents are
filed with the records of the meetings of Shareholders. Such consents shall be
treated for all purposes as a vote taken at a meeting of Shareholders.
ARTICLE IV
TRUSTEES
SECTION 1. MEETINGS OF THE TRUSTEES. The Trustees may in their
discretion provide for regular or stated meetings of the Trustees. Notice of
regular or stated meetings need not be given. Meetings of the Trustees other
than regular or stated meetings shall be held whenever called by the president,
the Chairman or by any one of
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the Trustees, at the time being in office. Notice of the time and place of
each meeting other than regular or stated meetings shall be given by the
Secretary or an Assistant Secretary or by the officer or Trustee calling the
meeting and shall be mailed to each Trustee at least two days before the
meeting, or shall be given by telephone, cable, wireless, facsimile or other
electronic mechanism to each Trustee at his business address, or personally
delivered to him at least one day before the meeting. Such notice may, however,
be waived by any Trustee. Notice of a meeting need not be given to any Trustee
if a written waiver of notice, executed by him before or after the meeting, is
filed with the records of the meeting, or to any Trustee who attends the meeting
without protesting prior thereto or at its commencement the lack of notice to
him. A notice or waiver of notice need not specify the purpose of any meeting.
The Trustees may meet by means of a telephone conference circuit or similar
communications equipment by means of which all persons participating in the
meeting can hear each other at the same time and participation by such means
shall be deemed to have been held at a place designated by the Trustees at the
meeting. participation in a telephone conference meeting shall constitute
presence in person at such meeting. Any action required or permitted to be taken
at any meeting of the Trustees may be taken by the Trustees without a meeting if
a majority of the Trustees consent to the action in writing and the written
consents are filed with the records of the Trustees' meetings. Such consents
shall be treated as a vote for all purposes.
SECTION 2. QUORUM AND MANNER OF ACTING. A majority of the Trustees
shall be present in person at any regular or special meeting of the Trustees in
order to constitute a quorum for the transaction of business at such meeting and
(except as otherwise required by law, the Declaration of Trust or these By-laws)
the act of a majority of the Trustees present at any such meeting, at which a
quorum is present, shall be the act of the Trustees. In the absence of a quorum,
a majority of the Trustees present may adjourn the meeting from time to time
until a quorum shall be present. Notice of an adjourned meeting need not be
given.
ARTICLE V
COMMITTEES
SECTION 1. EXECUTIVE AND OTHER COMMITTEES. The Trustees by vote of a
majority of all the Trustees may elect from their own number an Executive
Committee to consist of not less than three (3) members to hold office at the
pleasure of the Trustees, which shall have the power to conduct the current and
ordinary business of the Trust while the Trustees are not in session, including
the purchase and sale of securities and the designation of securities to be
delivered upon redemption of Shares of the Trust or a Series thereof, and such
other powers of the Trustees as the Trustees may delegate to them, from time to
time, except those powers which by law, the Declaration of Trust or these
By-laws they are prohibited from delegating. The Trustees may also elect from
their own number other Committees from time to time; the number composing such
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Committees, the powers conferred upon the same (subject to the same limitations
as with respect to the Executive Committee) and the term of membership on such
Committees to be determined by the Trustees. The Trustees may designate a
chairman of any such Committee. In the absence of such designation the Committee
may elect its own Chairman.
SECTION 2. MEETINGS QUORUM AND MANNER OF ACTING. The Trustees may (1)
provide for stated meetings of any Committee, (2) specify the manner of calling
and notice required for special meetings of any Committee, (3) specify the
number of members of a Committee required to constitute a quorum and the number
of members of a Committee required to exercise specified powers delegated to
such Committee, (4) authorize the making of decisions to exercise specified
powers by written assent of the requisite number of members of a Committee
without a meeting, and (5) authorize the members of a Committee to meet by means
of a telephone conference circuit.
The Executive Committee shall keep regular minutes of its meetings and
records of decisions taken without a meeting and cause them to be recorded in a
book designated for that purpose and kept in the office of the Trust.
ARTICLE VI
OFFICERS
SECTION 1. GENERAL PROVISIONS. The officers of the Trust shall be a
President, a Treasurer and a Secretary, who shall be elected by the Trustees.
The Trustees may elect or appoint such other officers or agents as the business
of the Trust may require, including one or more Vice Presidents, one or more
Assistant Secretaries, and one or more Assistant Treasurers. The Trustees may
delegate to any officer or committee the power to appoint any subordinate
officers or agents.
SECTION 2. TERM OF OFFICE AND QUALIFICATIONS. Except as otherwise
provided by law, the Declaration of Trust or these Bylaws, 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
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Trustees then in office. Any officer or agent appointed by an officer or
committee may be removed with or without cause by such appointing officer or
committee.
SECTION 4. POWERS AND DUTIES OF THE CHAIRMAN. The Trustees may, but
need not, appoint from among their number a Chairman. When present he shall
preside at the meetings of the Shareholders and of the Trustees. He may call
meetings of the Trustees and of any committee thereof whenever he deems it
necessary. He shall be an executive officer of the Trust and shall have, with
the President, general supervision over the business and policies of the Trust,
subject to the limitations imposed upon the President, as provided in Section 5
of this Article VI.
SECTION 5. POWERS AND DUTIES OF THE PRESIDENT. The President may call
meetings of the Trustees and of any Committee thereof when he deems it necessary
and shall preside at all meetings of the Shareholders. Subject to the control of
the Trustees and to the control of any Committees of the Trustees, within their
respective spheres, as provided by the Trustees, he shall at all times exercise
a general supervision and direction over the affairs of the Trust. He shall have
the power to employ attorneys and counsel for the Trust or any Series or Class
thereof and to employ such subordinate officers, agents, clerks and employees as
he may find necessary to transact the business of the Trust or any Series or
Class thereof. He shall also have the power to grant, issue, execute or sign
such powers of attorney, proxies or other documents as may be deemed advisable
or necessary in furtherance of the interests of the Trust or any Series thereof.
The President shall have such other powers and duties, as from time to time may
be conferred upon or assigned to him by the Trustees.
SECTION 6. POWERS AND DUTIES OF VICE PRESIDENTS. In the absence or
disability of the President, the Vice President or, if there be more than one
Vice President, any Vice President designated by the Trustees, shall perform all
the duties and may exercise any of the powers of the President, subject to the
control of the Trustees. Each Vice President shall perform such other duties as
may be assigned to him from time to time by the Trustees and the President.
SECTION 7. POWERS AND DUTIES OF THE TREASURER.The Treasurer shall be
the principal financial and accounting officer of the Trust. He shall deliver
all funds of the Trust or any Series or Class thereof which may come into his
hands to such Custodian as the Trustees may employ. He shall render a statement
of condition of the finances of the Trust or any Series or Class thereof to the
Trustees as often as they shall require the same and he shall in general perform
all the duties incident to the office of a Treasurer and such other duties as
from time to time may be assigned to him by the Trustees. The Treasurer shall
give a bond for the faithful discharge of his duties, if required so to do by
the Trustees, in such sum and with such surety or sureties as the Trustees shall
require.
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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 November
in each year and shall end on the last day of October 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.
7
<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
8
MANAGEMENT CONTRACT
THIS AGREEMENT dated this __ day of ___________, 1999 between Pioneer
Strategic Income Fund, a Delaware business trust (the "Trust"), and Pioneer
Investment Management, Inc., a Delaware corporation (the "Manager").
WITNESSETH
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 Trust currently issues only one series of shares (the
"Portfolio")
WHEREAS, the parties hereto deem it mutually advantageous that the
Manager should be engaged, subject to the supervision of the Trust's Board of
Trustees and officers, to manage the Portfolio.
NOW, THEREFORE, in consideration of the mutual covenants and benefits
set forth herein, the Trust and the Manager do hereby agree as follows:
1 (a) The Manager will regularly provide the Trust with investment
research, advice and supervision and will furnish continuously an investment
program for the Portfolio, consistent with the investment objectives and
policies of the Portfolio. The Manager will determine from time to time what
securities shall be purchased for the Portfolio, what securities shall be held
or sold by the Portfolio and what portion of the Portfolio's assets shall be
held uninvested as cash, subject always to the provisions of the Trust's
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 Portfolio, as each of
the same shall be from time to time in effect, and subject, further, to such
policies and instructions as the Board of Trustees of the Trust may from time to
time establish. To carry out such determinations, the Manager will exercise full
discretion and act for the Portfolio in the same manner and with the same force
and effect as the Trust itself might or could do with respect to purchases,
sales or other transactions, as well as with respect to all other things
necessary or incidental to the furtherance or conduct of such purchases, sales
or other transactions.
(b) The Manager will, to the extent reasonably required in the conduct of
the business of the Portfolio and upon the Trust's request, furnish to the
Portfolio research, statistical and advisory reports upon the industries,
businesses,
<PAGE>
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
Portfolio's securities transactions required by subparagraphs (b)(5), (6), (9)
and (10) and paragraph (f) of Rule 31a-1 under the 1940 Act (other than those
records being maintained by the custodian or transfer agent appointed by the
Trust with respect to the Portfolio) 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.
2. The Manager recognizes that the fund may from time to time create
additional investment portfolios, that this agreement relates only to the
management of the assets of the Portfolio, and that the management of the assets
of any additional portfolio of the Fund are subject, or will be subject, to one
or more separate investment management agreements.
3. (a) Except as otherwise provided herein, the Manager, at its own
expense, shall furnish to the Trust office space in the offices of the Manager
or in such other place as may be agreed upon from time to time, and all
necessary office facilities, equipment and personnel for managing the
Portfolio'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 or the Portfolio where such expenses are incurred by the Manager or by the
Trust or the Portfolio in connection with the management of the affairs of, and
the investment and reinvestment of the assets of, the Portfolio.
(c) The Trust shall assume and shall pay: (i) charges and expenses for fund
accounting, pricing and appraisal services and related overhead, including, to
the extent such services are performed by personnel of the Manager, or its
affiliates, office space and facilities and personnel compensation, training and
benefits; (ii) the charges and expenses of auditors; (iii) the charges and
expenses of any custodian, transfer agent, plan agent, dividend disbursing agent
and registrar appointed by the Trust with respect to the Portfolio; (iv) issue
and transfer taxes chargeable to the Trust in connection with securities
transactions to which the Trust
-2-
<PAGE>
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 3(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.
4. (a) The Fund shall pay to the Manager, as compensation for the Manger's
services hereunder, a fee equal on an annual basis to the following percentages
of the Fund's average daily net assets:
NET ASSETS FEE
- ---------- ---
On the first $100 million 0.75%
On the next $400 million 0.70%
On the next $500 million 0.65%
On assets over $1 billion 0.60%
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 the
extent required by such laws or regulations. If amounts have already been
advanced to the Manager under
-3-
<PAGE>
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.
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, the Portfolio or its
shareholders by reason of willful misfeasance, bad faith or gross negligence in
the performance of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement.
6. (a) Nothing in this Agreement will in any way limit or restrict the
Manager or any of its officers, directors, or employees from buying, selling or
trading in any securities for its or their own accounts or other accounts. The
Manager may act as an investment advisor to any other person, firm or
corporation, and may perform management and any other services for any other
person, association, corporation, firm or other entity pursuant to any contract
or otherwise, and take any action or do any thing in connection therewith or
related thereto; and no such performance of management or other services or
taking of any such action or doing of any such thing shall be in any manner
restricted or otherwise affected by any aspect of any relationship of the
Manager to or with the Trust or deemed to violate or give rise to any duty or
obligation of the Manager to the Trust except as otherwise imposed by law. The
Trust recognizes that 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 Portfolio, neither the Manager nor any of its Directors, officers or
employees will act as a principal or agent or receive any commission except as
permitted by the 1940 Act. The Manager shall arrange for the placing of all
orders for the purchase and sale of securities for the Portfolio's account with
brokers or dealers selected by the Manager. In the selection of such brokers or
dealers and the placing of such orders, the Manager is directed at all times to
seek for the Portfolio the most
-4-
<PAGE>
favorable execution and net price available except as described herein. It
is also understood that it is desirable for the Portfolio that the Manager have
access to supplemental investment and market research and security and economic
analyses provided by brokers who may execute brokerage transactions at a higher
cost to the Portfolio than may result when allocating brokerage to other brokers
on the basis of seeking the most favorable price and efficient execution.
Therefore, the Manager is authorized to place orders for the purchase and sale
of securities for the Portfolio with such brokers, subject to review by the
Trust's Trustees from time to time with respect to the extent and continuation
of this practice. It is understood that the services provided by such brokers
may be useful to the Manager in connection with its or its affiliates' services
to other clients. In addition, subject to the Manager's obligation to seek the
most favorable execution and net price available, the Manager may consider the
sale of Portfolio shares in selecting brokers and dealers.
(c) On occasions when the Manager deems the purchase or sale of a security
to be in the best interest of the Portfolio as well as other clients, the
Manager, to the extent permitted by applicable laws and regulations, may
aggregate the securities to be sold or purchased in order to obtain the best
execution and lower brokerage commissions, if any. In such event, allocation of
the securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Manager in the manner it considers to be the
most equitable and consistent with its fiduciary obligations to the Portfolio
and to such clients.
7. This Agreement shall become effective on the date hereof -and shall
remain in force until _____, 2000 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 Portfolio, 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) of
the Portfolio 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 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
-5-
<PAGE>
advice to its clients concerning the shares of the Portfolio, the Manager
will act solely as investment counsel for such clients and not in any way on
behalf of the Trust or any series thereof.
11. 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.
12. This Agreement and all performance hereunder shall be governed by and
construed in accordance with the laws of The Commonwealth of Massachusetts.
13. Any term or provision of this Agreement which is invalid 19. 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.
14. 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 STRATEGIC INCOME FUND
_____________________________ By: _____________________________
Joseph P. Barri John F. Cogan, Jr.
Secretary Chairman and President
ATTEST: PIONEER INVESTMENT MANAGEMENT, INC.
_____________________________ By: _____________________________
Joseph P. Barri David D. Tripple
Secretary President
-6-
UNDERWRITING AGREEMENT
THIS UNDERWRITING AGREEMENT, dated this __ day of _______________, 1999
by and between Pioneer Strategic Income Fund, a Delaware business trust
("Trust"), and Pioneer Funds Distributor, Inc., a Massachusetts corporation (the
"Underwriter")
WITNESSETH
WHEREAS, the Trust is registered as an open-end, 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 the Trust which the Trustees may establish from time
to time (individually, a "Portfolio" and collectively, the "Portfolios"); and
NOW, THEREFORE, in consideration of the mutual covenants and benefits
set forth herein, the Trust and the Underwriter do hereby agree as follows:
1. The Trust hereby grant to the Underwriter the right and option to purchase
shares of beneficial interest of each class of each Portfolio of the Trust (the
"Shares") for sale to investors either directly or indirectly through other
broker-dealers. The Underwriter is not required to purchase any specified number
of Shares, but will purchase from the Trust only a sufficient number of Shares
as may be necessary to fill unconditional orders received from time to time by
the Underwriter from investors and dealers.
2. The Underwriter shall offer Shares to the public at an offering price based
upon the net asset value of the Shares, to be calculated for each class of
shares as described in the Registration Statement, including the Prospectus,
filed with the Commission and in effect at the time of the offering, plus sales
charges as approved by the Underwriter
<PAGE>
and the Trustees of the Trust and as further outlined in Pioneer's
Prospectus. The offering price shall be subject to any provisions set forth in
the Prospectus from time to time with respect thereto, including, without
limitation, rights of accumulation, letters of intention, exchangeability of
shares, reinstatement privileges, net asset value purchases by certain persons
and reinvestments of dividends and capital gain distributions.
3. In the case of all Shares sold to investors through other
broker-dealers, a portion of applicable sales charges will be reallowed to such
broker-dealers who are members of the NASD or, in the case of certain sales by
banks or certain sales to foreign nationals, to brokers or dealers exempt from
registration with the Commission. The concession reallowed to broker-dealers
shall be set forth in a written sales agreement and shall be generally the same
for broker-dealers providing comparable levels of sales and service.
4. This Agreement shall terminate on any anniversary hereof if its terms
and renewal have not been approved by a majority vote of the Trustees of the
Trust voting in person, including a majority of its Trustees who are not
"interested persons" of the Trust and who have no direct or indirect financial
interest in the operation of the Underwriting Agreement (the "Qualified
Trustees"), at a meeting of Trustees called for the purpose of voting on such
approval. This Agreement may also be terminated at any time, without payment of
any penalty, by the Trust or 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 the Trust upon five (5) days' written notice to the Underwriter provided
either of the following events has occurred: (i) the NASD has expelled the
Underwriter or suspended its membership in that organization; or (ii) the
qualification, registration, license or right of the Underwriter to sell Shares
in a particular state has been suspended or cancelled in a state in which sales
of the Shares of the Trust during the most recent 12 month period exceeded 10%
of all Shares of the Trusts old by the Underwriter during such period.
5. The compensation for the services of the Underwriter as a principal
underwriter under this Agreement shall be:
With respect to Class A shares (i) that part of the sales charge which
is retained by the Underwriter after allowance of discounts to dealers
as set forth, if required, in the Registration Statement, including
the Prospectus, filed with the Commission and in effect at the time of
the offering, as amended, and (ii) those amounts payable to the
Underwriter as reimbursement of expenses pursuant to any distribution
plan for the Trust which may be in effect.
With respect to Class B shares (i) the Underwriter's Allocable Portion
(as defined in Section 9) of the Distribution Fee, if any, payable
from time to time to the
2
<PAGE>
Underwriter under the Pioneer's Class B Distribution Plan and (ii) the
contingent deferred sales charge payable with respect to Class B
shares of the Trust sold through the Underwriter as set forth in the
Registration Statement, including the Prospectus, filed with the
Commission and in effect at the time of the sale of such Class B
shares.
With respect to Class C shares (i) the Distribution Fee, if any,
payable from time to time to the Underwriter under the Pioneer's Class
C Distribution Plan and (ii) the contingent deferred sales charge
payable with respect to Class C shares of the Trust sold through the
Underwriter as set forth in the Registration Statement, including the
Prospectus, filed with the Commission and in effect at the time of the
sale so such Class C shares.
With respect to Class Y shares, the Underwriter shall not be entitled
to any compensation.
With respect to any future class of shares, the Underwriter shall be
entitled to such consideration as the Trust and the Underwriter shall
agree at the time such class of shares is established.
Notwithstanding anything to the contrary herein, subsequent to the issuance of a
Class B Share the Trust agrees not take any action to waive or change any
contingent deferred sales charge (including, without limitation, by change in
the rules applicable to conversion of Class B Shares into another class) in
respect of such Class B Shares, except (i) as provided in the Trust's prospectus
or statement of additional information in effect on ___________________________,
1999, or (ii) as required by a change in the 1940 Act and the rules and
regulations thereunder, the Conduct Rules of the NASD or any order of any court
or governmental agency enacted, issued or promulgated after
___________________________, 1999. Neither the termination of the Underwriter's
role as principal underwriter of the Class B Shares nor the termination of this
Agreement nor the termination or modification of the Class B Distribution Plan
shall terminate the Underwriter's right to the contingent deferred sales charge
with respect to Class B Shares sold through said Underwriter or Class B Shares
issued through one or a series of exchanges of shares of another investment
company for which the Underwriter acts as principal underwriter, in each case
with respect to Class B Shares or their predecessors initially issued prior to
such termination or modification ("Pre-Amendment Class B Shares"). Except as
provided in the preceding sentences and notwithstanding any other provisions of
the Agreement or the Class B Distribution Plan, the Underwriter is entitled to
its Allocable Portion of the contingent deferred sales charge payable in respect
of the Pre-Amendment Class B Shares shall be absolute and unconditional and
shall not be subject to dispute, offset, counterclaim or any defense whatsoever,
at law or equity, including, without limitation, any of the foregoing based on
the insolvency or bankruptcy of such Underwriter.
3
<PAGE>
6. Notwithstanding anything to the contrary set forth in the Distribution Plan
or this Agreement, the Trust agrees to comply with respect to pre-amendment
shares (as such term is defined in the Distribution Plan) with the provision of
Sections 1(b), (d), (g) and (h) and Section 4 and Section 6 of the Trust's
Amended and Restated Class B Distribution Plan as though such provision were set
forth in this Agreement.
7. Nothing contained herein shall relieve the Trust or any obligation under its
management contract or any other contract with any affiliate of the Underwriter.
8. Notwithstanding anything to the contrary set forth in the Class B
Distribution Plan or this Agreement the Trust acknowledges that the Underwriter
may assign, sell or pledge (collectively, "Transfer") its rights to Distribution
Fees and contingent deferred sales charges with respect to Class B shares. Upon
receipt of notice of such Transfer, the Trust shall pay to the assignee,
purchaser or pledgee (collectively with their subsequent transferees,
"Transferees"), as third party beneficiaries, such portion of the Distribution
Fees and contingent deferred sales charges payable to the Underwriter as
provided in written instructions (the "Allocation Instructions") from the
Underwriter to the Trust and shall pay the balance, if any, to the Underwriter.
In the absence of Allocation Instructions, the Trust shall have no obligations
to a Transferee.
9. Payments of the Distribution Fee and contingent deferred sales charges with
respect to Class B shares shall be allocated between the Underwriter (or its
Transferee) and such co- or successor principal underwriter (each an "Allocable
Portion"), as provided in the Allocation Procedures attached hereto.
10. The parties to this Agreement acknowledge and agree that all liabilities
arising hereunder, whether direct or indirect, of any nature whatsoever,
including without limitation, liabilities arising in connection with any
agreement of the Trustor its Trustees as set forth herein to indemnify any party
to this Agreement or any other person, if any, shall be satisfied out of the
assets of the Trust and that no Trustee, officer or holder of shares of
beneficial interest of the Trust 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
responsibilities and limitations on liability of the Trustees, officers, and
holders of Shares of beneficial interest.
11. This Agreement shall automatically terminate in the event of its assignment
(as that term is defined in the 1940 Act).
12. In the event of any dispute between the parties, this Agreement shall be
construed according to the laws of The Commonwealth of Massachusetts.
4
<PAGE>
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 STRATEGIC INCOME FUND
By:
Joseph P. Barri John F. Cogan, Jr.
Secretary President
ATTEST: PIONEER FUNDS DISTRIBUTOR, INC.
By:
Joseph P. Barri
Clerk President
[5]
<PAGE>
[ALLOCATION PROCEDURES]
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.
<PAGE>
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 STRATEGIC INCOME 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 _________, 199_, between PIONEER STRATEGIC INCOME 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.
-5-
<PAGE>
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
-6-
<PAGE>
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
-7-
<PAGE>
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
-8-
<PAGE>
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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<PAGE>
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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<PAGE>
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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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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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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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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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 STRATEGIC INCOME FUND BROWN BROTHERS HARRIMAN & CO.
By_________________________________ per pro________________________________
-32-
INVESTMENT COMPANY SERVICE AGREEMENT
_______, 199_
Pioneer Strategic Income 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.
-3-
<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
-4-
<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.
ADMINISTRATION AGREEMENT
THIS ADMINISTRATION AGREEMENT dated this 9th day of October, 1998
between the Pioneer Funds, listed on Exhibit 1 hereto (the "Funds"), and
Pioneering Management Corporation, a Delaware corporation (the "Manager").
W I T N E S S E T H
WHEREAS, the Funds are registered as open-end, diversified, management
investment companies under the Investment Company Act of 1940, as amended (the
"1940 Act"), and has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (the "Registration Statement") for the
purpose of registering its shares for public offering under the Securities Act
of 1933, as amended (the "1933 Act");
WHEREAS, the parties hereto are parties to Management Contracts (the
"Management Contracts");
WHEREAS, the Management Contracts provide that the Manager will bear
all of the Funds' expenses other than those provided in Section 2(c) and 2(d) of
the Management Contracts;
WHEREAS, Section 2(c)(i) provides that the Funds shall pay charges and
expenses for Fund accounting, pricing and appraisal services and, for those
Funds noted with an asterisk on Exhibit 2 hereto, related overhead, including,
to the extent that such services were performed by personnel of the Manager or
its affiliates, office space and facilities, and personnel compensation,
training and benefits;
WHEREAS, Section 2(c)(vi) and (vii) provide that the Funds shall pay
(i) fees and expenses involved in registering and maintaining registrations of
the Funds and/or their shares with the Commission, state or blue sky securities
agencies and foreign countries, including the preparation of prospectuses and
statements of additional information for filing with the Commission and (ii) all
expenses of shareholders and Trustees' meetings and of preparing, printing and
distributing prospectuses, notices, proxy statements and all reports to
shareholders and to governmental agencies; and
WHEREAS, certain of these activities, as set forth on Exhibit 3 hereto,
can be performed by members of the Manager's legal, accounting and
administrative staff working at the direction and under the supervision of the
Board of Trustees and Fund counsel.
NOW THEREFORE, in consideration of the mutual covenants and benefits
set forth herein, the Funds and the Manager do hereby agree as follows:
<PAGE>
1. The Funds authorize the Manager to perform fund accounting services
on behalf of the Funds, subject to the supervision and direction of the Board of
Trustees. Such services, determined as of the date of this Agreement, are set
forth on Exhibit 2 hereto. These services (the "Bookkeeping Services") may be
revised from time to time on mutual agreement of the parties.
2. The Funds authorize the Manager to assist with the performance of
the legal services listed on Exhibit 3 hereto (the "Legal Services"). The Legal
Services shall at all times be subject to the supervision and direction of the
Board of Trustees and Fund counsel.
3. The Trustees recognize that the Bookkeeping Services and the Legal
Services can be performed efficiently by the Manager. The Funds are entering
into this Agreement to achieve the operating and expense benefits of such
efficiency. In authorizing such activities on behalf of the Funds, the Funds
expressly do not delegate to the Manager or its personnel the authority to
render legal advice to, or legal judgments on behalf of, the Funds. Between
meetings of the Trustees, Fund counsel is authorized to determine the services
that may appropriately be provided by the Manager pursuant to this Agreement.
4. In consideration of its services under this Agreement, the Manager
shall be entitled to be reimbursed for the allocable portion of the direct costs
of the Bookkeeping Services and the Legal Expenses (collectively, the
"Services"). Such allocation shall be based upon the proportion of personnel
time devoted to the Services authorized to be performed on behalf of the Funds
to the total time worked by such personnel, in each case as estimated in good
faith by the Manager and reviewed and approved annually by the Board of
Trustees. Direct costs shall include any out-of-pocket expenses of the Manager
incurred in connection with the Services, the salaries and benefits of personnel
of the Manager who are engaged in the Services pursuant to this Agreement and,
with respect to the Services, a reasonable allocation of overhead (to the extent
permitted under the Management Contracts) associated with the performance of the
Bookkeeping Services. The Manager shall estimate such direct costs and overhead
(as appropriate) in good faith and the Funds shall be entitled to such
supporting information as the Trustees shall reasonably request from time to
time. Allocations of reimbursements paid hereunder among the Funds shall be
subject to annual approval of the Board of Trustees.
5. The Manager will not be liable for any error of judgment or mistake
of law in the performance of its services under the Agreement, but nothing
contained herein will be construed to protect the Manager against any liability
to the Funds or its shareholders by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement.
6. Either party hereto may, without penalty, terminate this Agreement
by the giving of 60 days' written notice to the other party.
2
<PAGE>
7. The Manager is an independent contractor and not an employee of the
Funds for any purpose. If any occasion should arise in which the Manager gives
any advice to its clients concerning the shares of the Funds, the Manager will
act solely as investment counsel for such clients and not in any way on behalf
of the Funds or any series thereof.
8. This Agreement states the entire agreement of the parties hereto
with respect to the subject matter of this Agreement and its intended to be the
complete and exclusive statement of the terms hereof. It may not be added to or
changed orally, and may not be modified or rescinded except by a writing signed
by the parties hereto and in accordance with the 1940 Act, when applicable.
9. This Agreement and all performance hereunder shall be governed by
and construed in accordance with the laws of the Commonwealth of Massachusetts.
10. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms or provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction.
11. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by this duly authorized officers and their seal to be hereto affixed as
of the day and year first above written.
Attest: The Pioneer Funds Listed on Exhibit 1 hereto
By: /s/ John F. Cogan, Jr.
/s/ Joseph P. Barri John F. Cogan, Jr.
Joseph P. Barri President
Secretary
PIONEERING MANAGEMENT CORPORATION
Attest:
/s/ Joseph P. Barri By: /s/ David D. Tripple
Joseph P. Barri David D. Tripple
Secretary President
<PAGE>
EXHIBIT 1
(amended as of January 2, 1999)
Pioneer America Income Trust
Pioneer Balanced Fund
Pioneer Bond Fund
Pioneer Capital Growth Fund
Pioneer Cash Reserves Fund
Pioneer Emerging Markets Fund
Pioneer Equity-Income Fund
Pioneer Europe Fund
Pioneer Fund
Pioneer Gold Shares
Pioneer Growth Shares
Pioneer Independence Fund
Pioneer India Fund
Pioneer Interest Shares
Pioneer Intermediate Tax-Free Fund
Pioneer International Growth Fund
Pioneer Micro-Cap Fund
Pioneer Mid-Cap Fund
Pioneer Real Estate Shares
Pioneer Short-Term Income Trust
Pioneer Small Company Fund
Pioneer Strategic Income Fund
Pioneer Tax-Free Income Fund
Pioneer II
Pioneer Variable Contracts Trust
International Growth Portfolio
Capital Growth Portfolio
Real Estate Growth Portfolio
Equity Income Portfolio
Balanced Portfolio
America Income Portfolio
Money Market Portfolio
Swiss Franc Bond Portfolio
Growth and Income Portfolio
Growth Shares Portfolio
Europe Portfolio
Emerging Markets Portfolio
Pioneer World Equity Fund
Updated January, 1999
<PAGE>
EXHIBIT 2
PIONEERING MANAGEMENT CORP.
Fund Accounting, Administration and Custody Services (FAACS)
LIST OF SERVICES PROVIDED TO PIONEER MUTUAL FUNDS
SERVICES LISTED BY FAACS TEAM, OR FUNCTIONAL AREA. PLEASE SEE
ATTACHED CHART FOR ORGANIZATIONAL STRUCTURE.
PERCENTAGES FOLLOWING FAACS TEAM NAMES INDICATE EACH TEAM'S
AGGREGATE COMPENSATION AND BENEFITS PERCENTAGE BILLABLE TO THE FUNDS.
FAACS Administration (70%):
. Provide direction, supervision and administrative support to all FAACS
teams
. Prepare or review and submit all tax reports for Funds
. Oversee fund distributions for regulatory compliance
. Assist in planning for new product introductions
Fund Accounting (91%):
. Maintain all accounting records for Funds
. Calculate and report daily net asset values per share and yields
. Recommend income and capital gains distribution rates
. Prepare funds' financial statements and assist in fund audits
. Maintain accounting records for institutional portfolios
. Perform periodic tests to verify each Fund's compliance with its prospectus
and applicable regulations
GlobalCustody and Settlements Division (20%):
. Enter portfolio trades into Fund Accounting records
. Support corporate actions analyses Validate trade data and communicate them
to Custodian Banks
. Act as liaison with Custodian Banks for trade settlements, security
position reconciliations and relaying global market updates to Investment
Advisor
. Provide daily cash reporting to portfolio managers
. Resolve trade disputes with counter-parties
Pricing and Corporate Actions (95%):
. Ensure accuracy and timeliness of prices supplied by external sources to
provide daily valuations of all security positions held by every Fund
. Validate and communicate corporate/class action information to Fund
Accounting
. Present monthly valuation report to Funds' Board of Trustees
. Provide valuation and corporate actions services for securities held by
institutional portfolios, but not by Funds
PAGE 1
<PAGE>
List of FAACS Services (continued)
- - ----------------------
FAACS Systems (51%):
. Provide systems support to users of fund accounting and portfolio pricing
software, and manage relationships with applicable software and hardware
vendors
. Develop and maintain custom applications and systems interfaces for FAACS
teams
. Manage Year 2000 project
. Provide user support and vendor liaison for trading, compliance and
analysis systems
. Implement and manage systems interfaces with Investment Advisor, Custodian
Banks and other service providers
Shareholder Reporting and Audit Liaison (82%):
. Review and complete Funds' financial statements
. Manage the Fund Audit process to ensure timely completion of shareholder
reports
. Prepare reports related to contract renewals and soft dollar payments for
Board of Trustees' review
. Provide financial information to Legal Department for prospectus updates
and other regulatory filings
. Prepare regulatory reports such as N-SAR, Form S and EDGAR filings
. Provide financial information to Pioneer management and industry trade
groups
. Provide liquidity, commission and soft dollar reporting to Pioneer
management
Funds Controller (93%):
. Manage fund expense payment cycles (e.g., timeliness and accuracy of
payments, allocation of costs among portfolios)
. Coordinate and standardize fund expense accruals and forecasting
. Provide expense reporting to Fund Accounting, FAACS management and auditors
. Compile daily reports of shareholder transactions from all sources (e.g.,
PSC, PMIL, BFDS, variable annuity agents, 401(k) administrators, third
party record keepers) for entry into fund records
. Provide daily reconciliation of receivable, payable and share accounts
between fund records and entities listed above
. Manage the daily estimating process to minimize "as of" gains and losses
to Funds
. Communicate daily fund prices and yields to PSC, PMIL, etc.
. Provide fund-related analyses to Pioneer management
- --------------------------------------------------------------------------------
OVERALL WEIGHTED FAACS AVERAGE COMPENSATION AND BENEFITS RATE = 70%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Key:
. Service provided under the Pioneer Funds Administration Agreement,
for which the Investment Advisor is entitled to reimbursement from the
Funds
- --------------------------------------------------------------------------------
PAGE 2
<PAGE>
- --------------------------------------------------------------------------------
. Service provided to the Funds which would fall within the scope of
the Advisory Agreement with the Funds and which is therefore not
directly billable to the Funds
- --------------------------------------------------------------------------------
PAGE 3
<PAGE>
EXHIBIT 3
THE PIONEER GROUP, INC. - LEGAL DEPARTMENT
I. LIST OF REIMBURSABLE LEGAL SERVICES PROVIDED TO PIONEER MUTUAL FUNDS
Filings under Investment Company Act of 1940 and Securities Act of 1933
o Prepare and File (via EDGAR) Rule 24f-2 Notices (coordination with
Pioneer Fund Accounting and Hale and Dorr LLP as necessary)
o SEC Electronic Filing (EDGAR) Responsibilities
o Prepare Fund Registration Statements and Related Filings
for filing on EDGAR and complete filings
o Maintain and develop enhancements to Pioneer's EDGAR
systems and procedures, including contingency planning
o Maintain EDGAR related databases and document archives
o Liaison with third party EDGAR agents when necessary
o Prepare proxy statements and related materials for filing
on EDGAR and complete filings
Blue Sky Administration (State Registration)
o Principal liaison with Blue Sky vendor (Bluesky MLS, Inc.)
o Coordinate SEC filing schedule and fund documentation with Blue Sky
vendor
o Monitor status of state filings with Blue Sky vendor
o Transfer Agent coordination
o Review vendor statements and invoices
o Conduct vendor due diligence, as appropriate
Hiring oversight
In-person meetings
Arthur Andersen audit
Miscellaneous Services
o Assist Pioneer Fund Accounting in the preparation of Fund Form N-SARs
o Managing internal participation in prospectus simplification
project. Charge Funds only for portion that relates to Funds--this
excludes work on behalf of distribution or management companies,
including coordination internally.
<PAGE>
II. LIST OF NON-REIMBURSABLE LEGAL SERVICES PROVIDED TO PIONEER MUTUAL FUNDS
Filings under Investment Company Act of 1940 and Securities Act of 1933
o Maintain Pioneer Mutual Funds SEC Filing Calendar
o Interact as necessary with the staff of the investment adviser,
distribution company and transfer agent to ensure awareness of
Fund disclosure requirements
o Coordinate internal review of Prospectuses and SAIs
o Coordinate Hale and Dorr LLP review and internal review of Hale and
Dorr LLP material
o Identify business and other situations that trigger requirement to
supplement Prospectuses and SAIs
Proxy Statements
o Assist Hale and Dorr LLP in the preparation of proxy statements
o Coordinate internal review of proxy statements and related documents
o Review proxy related materials prepared by the distribution
company to ensure compliance with regulatory requirements
o Review the transfer agent's proxy solicitation efforts to ensure
compliance with regulatory requirements
o Act as liaison between Hale and Dorr LLP and transfer agency staff
with respect to the proxy solicitation process
Miscellaneous Services
o Monitor the preparation of shareholder reports by the distribution
company
o Prepare and File (via EDGAR) Section 16 filings (re: Pioneer
Interest Shares)
o Maintain Officer and Trustee Securities Holdings (Fund and non-Fund
related)
o Code of Ethics Administration (as it relates to Disinterested
Trustees)
Regulatory Oversight
o Monitor proposed changes in applicable regulation and inform
appropriate Pioneer personnel of the proposals and impact on Funds
o Act as liaison with Hale and Dorr LLP in the implementation of
changes
Special Projects
o Coordinate implementation of Document Directions software system
(for prospectus production) purchased by Pioneer in late 1997
<PAGE>
o Provide advice with respect to Year 2000 issues
o Prospectus simplification efforts on behalf of distribution or
management companies, including internal coordination
Hale and Dorr LLP
Counsellors at Law
60 State Street, Boston, Massachusetts 02109
617-526-6000 [bullet] fax 617-526-5000
February 4, 1999
Pioneer Strategic Income Fund
60 State Street
Boston, Massachusetts 02109
Ladies and Gentlemen:
Pioneer Strategic Income Fund (the "Trust") was established as a
Delaware business trust under an Agreement and Declaration of Trust dated
January 5, 1999, as amended from time to time (as so amended, the "Declaration
of Trust"). The beneficial interests thereunder are represented by transferable
shares of beneficial interest, no par value.
The Trustees have the powers set forth in the Declaration of Trust,
subject to the terms, provisions and conditions therein provided. Pursuant to
Article V, Section 1 of the Declaration of Trust, the number of shares of
beneficial interest authorized to be issued under the Declaration of Trust is
unlimited and the Trustees are authorized to divide the shares into one or more
series of shares and one or more classes thereof as they deem necessary or
desirable. Pursuant to Article V, Section 4 of the Declaration of Trust, the
Trustees are empowered in their discretion to issue shares of any series for
such amount and type of consideration, including cash or property, and on such
terms as the Trustees may deem best (or for no consideration if pursuant to a
share dividend or split-up), all without action or approval of the shareholders.
As of the date of this opinion, the Trustees have divided the shares of the
Trust into four classes, designated as Class A, Class B, Class C and Class Y.
We have examined the Declaration of Trust and By-Laws, each as amended
from time to time, of the Trust, and such other documents as we have deemed
necessary or appropriate for the purposes of this opinion, including, but not
limited to, originals, or copies certified or otherwise identified to our
satisfaction, of such documents, Trust records and other instruments. In our
examination of the above documents, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals and
the conformity to original documents of all documents submitted to us as
certified of photostatic copies.
Any reference to "our knowledge", to any matter "known to us", "coming
to our attention" or "of which we are aware" or any variation of any of the
foregoing
Washington, DC Boston, MA London, UK*
- --------------------------------------------------------------------------------
HALE AND DORR LLP INCLUDES PROFESSIONAL CORPORATIONS
*BROBECK HALE AND DORR INTERNATIONAL (AN INTERNATIONAL JOINT VENTURE LAW FIRM)
<PAGE>
Pioneer Strategic Income Fund
February 4, 1999
Page 2
shall mean the conscious awareness of the attorneys in this firm who have
rendered substantive attention to the preparation of the Trust's Registration
Statement on Form N-1A or any amendments thereto, of the existence or absence of
any facts which would contradict the opinions set forth below. We have not
undertaken any independent investigation to determine the existence or absence
of such facts, and no inference as to our knowledge of the existence or absence
of such facts should be drawn from the fact of our representation of the Trust.
Without limiting the foregoing, we have not examined any dockets or records of
any court, administrative tribunal or other similar entity, or any electronic or
computer databases, in connection with our opinions expressed below.
Our opinions below are qualified to the extent that they may be subject
to or affected by (i) applicable bankruptcy, insolvency, reorganization,
fraudulent conveyance or transfer, moratorium or similar laws affecting the
rights and remedies of creditors generally, (ii) statutory or decisional law
concerning recourse by creditors to security in the absence of notice or hearing
and (iii) duties and standards imposed on creditors and parties to contracts,
including, without limitation, requirements of good faith, reasonableness and
fair dealing. Further, we do not express any opinion as to (i) the availability
of the remedy of specific performance or any other equitable remedy upon breach
of any provision of any agreement whether applied by a court of law or equity,
(ii) the successful assertion of any equitable defense, or (iii) the right of
any party to enforce the indemnification or contribution provisions of any
agreement.
In rendering the opinion below, insofar as it relates to the good
standing and valid existence of the Trust, we have relied solely on a
certificate of the Secretary of State of the State of Delaware, dated as of a
recent date, and such opinion is limited accordingly and is rendered as of the
date of such certificate.
This opinion is limited to the Delaware Business Trust Act, and we
express no opinion with respect to the laws of any other jurisdiction or to any
other laws of the State of Delaware. Further, we express no opinion as to
compliance with any state or federal securities laws, including the securities
laws of the State of Delaware.
Our opinion below, as it relates to the non-assessability of the shares
of the Trust, is qualified to the extent that any shareholder is, was or may
become a named Trustee of the Trust. It is also qualified to the extent that,
pursuant to Section 2 of Article VIII of the Declaration of Trust, the Trustees
have the power to cause shareholders, or shareholders of a particular series, to
pay certain custodian, transfer, servicing or similar agent charges by setting
off the same against declared but unpaid dividends or by reducing share
ownership (or by both means).
Subject to the foregoing, we are of the opinion that the Trust is a
duly organized and validly existing business trust in good standing under the
laws of the
<PAGE>
Pioneer Strategic Income Fund
February 4, 1999
Page 2
State of Delaware and that the shares of beneficial interest of the
Trust, when issued in accordance with the terms, conditions, requirements and
procedures set forth in the Declaration of Trust, the Trust's Registration
Statement on Form N-1A and the Underwriting Agreement between the Trust and
Pioneer Funds Distributor, Inc., will constitute legally and validly issued,
fully paid and non-assessable shares of beneficial interest in the Trust,
subject to compliance with the Securities Act of 1933, as amended, the
Investment Company Act of 1940, as amended, and the applicable state laws
regulating the sale of securities.
We are opining only as to the specific legal issues expressly set forth
herein, and no opinion should be inferred as to any other matters. We are
opining on the date hereof as to the law in effect on the date hereof, and we
disclaim any obligation to advise you of any change in any of these sources of
law or subsequent legal or factual developments which might affect any matters
or opinions set forth herein.
This opinion is furnished to you solely for your use and may not be
quoted to or relied upon by any other person or entity or used for any other
purpose, without our prior written consent.
We consent to your filing this opinion with the Securities and Exchange
Commission as an exhibit to any amendments to the Trust's registration statement
with the Commission. Except as provided in this paragraph, this opinion may not
be relied upon by, or filed with, any other parties or for any other purpose.
Very truly yours,
/s/ Hale and Dorr LLP
Hale and Dorr LLP
CLASS A SHARES DISTRIBUTION PLAN
PIONEER STRATEGIC INCOME FUND
CLASS A SHARES DISTRIBUTION PLAN, dated as of ___________, 1999, of
PIONEER STRATEGIC INCOME 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 each series of the Trust ("Portfolio") in accordance
with Rule 12b-l promulgated by the Securities and Exchange Commission under the
1940 Act ("Rule 12b- 1"), and desires to adopt this Class A distribution plan
(the "Class A Plan") as a plan of distribution pursuant to 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
<PAGE>
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 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-l, 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 of
each Portfolio per annum.
2. Subject to the limit in paragraph 1, the Trust shall reimburse PFD
for amounts expended by PFD to finance any activity which is primarily intended
to result in the sale of 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 each Portfolio's daily net assets attributable to Class A Shares; (ii)
reimbursement to PFD for its expenditures for broker-dealer commissions and
employee compensation on certain sales of the 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
real low 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
2
<PAGE>
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.
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 ___________ , 2000. This Class A Plan shall automatically terminate
upon assignment. In the event of termination or non-continuance of this Class A
Plan, each Portfolio has twelve months to reimburse any expense which it incurs
prior to such termination or non-continuance, PROVIDED that payments by such
Portfolio during such twelve-month period shall not exceed 0.25% of each
Portfolio'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.
3
<PAGE>
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.
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.
4
CLASS B SHARES DISTRIBUTION PLAN
PIONEER STRATEGIC INCOME FUND
CLASS B SHARES DISTRIBUTION PLAN, dated as of ______________, 1999 of
PIONEER STRATEGIC INCOME 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") or such other persons as may be appointed
principal underwriter from time to time, provide certain distribution services
for the Trust's Class B Shares in connection with the Class B Plan (PFD and any
successor principal underwriter of the Trust's shares being referred to as an
"Underwriter");
WHEREAS, the Trust has entered into an underwriting agreement (in a
form approved by the Trust's Board of Trustees in a manner specified in such
Rule 12b-1) with the Underwriter, whereby the Underwriter provides facilities
and personnel and renders services to the Trust in connection with the offering
and distribution of Class B Shares (the "Underwriting Agreement");
WHEREAS, the Trust also recognizes and agrees that (a) the Underwriter
may retain the services of firms or individuals to act as dealers or wholesalers
(collectively, the "Dealers") of the Class B Shares in connection with the
offering of Class B Shares, (b) the Underwriter may compensate any Dealer that
sells Class B Shares in the manner and at the rate or rates to be set forth in
an agreement between the Underwriter and such Dealer and (c) the Underwriter may
make such payments to the Dealers for distribution services out of the fee paid
to the Underwriter hereunder, any deferred sales charges imposed by the
Underwriter in connection with the repurchase of Class B Shares, its profits or
any other source available to it;
<PAGE>
WHEREAS, the Trust recognizes and agrees that the Underwriter may
impose certain deferred sales charges in connection with the repurchase of Class
B Shares by the Trust, and the Underwriter may retain (or receive from the
Trust, as the case may be) all such deferred sales charges; and
WHEREAS, the Board of Trustees of the Trust, in considering whether the
Trust should adopt and implement this Class B Plan, has evaluated such
information as it deemed necessary to an informed determination whether this
Class B Plan should be adopted and implemented and has considered such pertinent
factors as it deemed necessary to form the basis for a decision to use assets of
the Trust for such purposes, and has determined that there is a reasonable
likelihood that the adoption and implementation of this Class B Plan will
benefit the Trust and its Class B shareholders;
NOW, THEREFORE, the Board of Trustees of the Trust hereby adopts this
Class B Plan for the Trust as a plan of distribution of Class B Shares in
accordance with Rule 12b-1, on the following terms and conditions:
1. (a) The Trust is authorized to compensate the
Underwriter for (1) distribution services and (2) personal and
account maintenance services performed and expenses incurred by
the Underwriter in connection with the Trust's Class B Shares.
Such compensation shall be calculated and accrued daily and paid
monthly or at such other intervals as the Board of Trustees may
determine.
(b) The amount of compensation payable to the Underwriter
during any one year for distribution services with respect to
Class B Shares shall be its Allocable Portion (as defined in
Section 14 below) of .75% of the Trust's average daily net assets
attributable to Class B Shares for such year (the "Distribution
Fee"). Notwithstanding anything to the contrary set forth in
this Distribution Plan or any Underwriting Agreement, the
Distribution Fee shall not be terminated or modified (including a
modification by change in the rules relating to the conversion of
Class B Shares into Class A shares of the Trust) with respect to
Class B shares (or the assets of the Trust attributable to such
Class B Shares) either (x) issued prior to the date of any
termination or modification or (y) attributable to Class B shares
issued through one or a series of exchanges of shares of another
investment company for which the Underwriter acts as principal
underwriter which were initially issued prior to the date of such
termination or modification or (z) issued as a dividend or
distribution upon Class B Shares initially issued or attributable
to Class B Shares issued prior to the date of any such
termination or modification (the "Pre-Amendment Class B Shares")
except:
(i) to the extent required by a change in the
Investment Company Act of 1940 (the "Act"), the rules
or regulations under the Act, the
2
<PAGE>
Conduct Rules of
the National Association of Securities Dealers, Inc.,
(the "NASD") or an order of any court or governmental
agency, in each case enacted, issued or promulgated
after , 1999,
(ii) in connection with a "Complete Termination" of
this Plan. For purposes of this Plan, a "Complete
Termination" shall have occurred if: (x) this Plan
and the distribution plan for Class B Shares of any
successor trust or fund or any trust or fund
acquiring substantially all of the assets of the
Trust (collectively, the "Affected Funds") is
terminated with respect to all Class B Shares of the
Trust and each Affected Fund then outstanding or
subsequently issued, (y) the payment by the Trust of
Distribution Fees with respect to all Class B Shares
of the Trust and each Affected Fund is terminated and
(z) neither the Trust nor any Affected Fund
establishes concurrently with or subsequent to such
termination of this Plan another class of shares
which has substantially similar characteristics to
the current Class B Shares of the Trust, including
the manner of payment and amount of contingent
deferred sales charge paid directly or indirectly by
the holders of such shares (all of such classes of
shares "Class B Shares"), or
(iii) on a basis, determined by the Board of
Trustees, including a majority of the Qualified
Trustees (as hereinafter defined), acting in good
faith, so long as from and after the effective date
of such modification or termination: (x) neither (1)
the Trust, (2) any Affected Fund nor (3) the
investment advisor or any other sponsor entity (or
their affiliates) of the Trust or any Affected Fund
pay, directly or indirectly, a fee, a trailer fee, or
expense reimbursement to any person for the provision
of personal and account maintenance services (as such
terms is used in the Conduct Rules of the NASD) to
the holder of Class B Shares of the Trust or any
Affected Fund (but the forgoing shall not prevent
payments for transfer agency or subaccounting
services), and (y) the termination or modification of
the Distribution Fee applies with equal effect to
both Pre-Amendment Class B Shares and Post-Amendment
Class B Shares (as defined in Section 7) outstanding
from time to time of the Trust and all Affected
Funds.
(c) Distribution services and expenses for which an Underwriter
may be compensated pursuant to this Plan include, without limitation:
compensation to and expenses (including allocable overhead, travel and
telephone expenses) of (i) Dealers, brokers and other dealers who are
members of the NASD or their officers, sales representatives and
employees, (ii) the Underwriter and any of its affiliates and any of
their
3
<PAGE>
respective officers, sales representatives and employees, (iii)
banks and their officers, sales representatives and employees, who
engage in or support distribution of the Trust's Class B Shares;
printing of reports and prospectuses for other than existing
shareholders; and preparation, printing and distribution of sales
literature and advertising materials.
(d) The Underwriter shall be deemed to have performed all
services required to be performed in order to be entitled to receive
it[s] Allocable Portion of the Distribution Fee, if any, payable
with respect to Class B Shares sold through such Underwriter upon the
settlement date of the sale of such Class B Share or in the case of
Class B Shares issued through one or a series of exchanges of shares
of another investment company for which the Underwriter acts as
principal underwriter or issued as a dividend or distribution upon
Class B Shares, on the settlement date of the first sale on a
commission basis of a Class B Share from which such Class B share was
derived. The Trust's obligation to pay an Underwriter its Allocable
Portion of the Distribution Fees payable in respect of the Class B
Shares shall be absolute and unconditional and shall not be subject
to dispute, offset, counterclaim or any defense whatsoever, at law or
equity, including, without limitation, any of the foregoing based on
the insolvency or bankruptcy of such Underwriter. The foregoing
provisions of this Section 1(d) shall not limit the rights of the
Trust to modify or terminate payments under this Class B Plan as
provided in Section 1(b) with respect to Pre-Amendment Class B Shares
or Section 7 with respect to Post-Amendment Class B Shares.
(e) The amount of compensation paid during any one year for
personal and account maintenance services and expenses (the "Service
Fee") shall be .25% of the Trust's average daily net assets
attributable to Class B Shares for such year. As partial
consideration for personal services and/or account maintenance
services provided by the Underwriter to the Class B Shares, the
Underwriter shall be entitled to be paid any fees payable under this
clause (e) with respect to Class B Shares for which no dealer of
record exists, where less than all consideration has been paid to a
dealer of record or where qualification standards have not been met.
(f) Personal and account maintenance services for which the
Underwriter or any of its affiliates, banks or Dealers may be
compensated pursuant to this Plan include, without limitation:
payments made to or on account of the Underwriter or any of its
affiliates, banks, other brokers and dealers who are members of the
NASD, or their officers, sales representatives and employees, who
respond to inquiries of, and furnish assistance to, shareholders
regarding their ownership of Class B Shares or their accounts or who
provide similar services not otherwise provided by or on behalf of
the Trust.
4
<PAGE>
(g) The Underwriter may impose certain deferred sales charges in
connection with the repurchase of Class B Shares by the Trust
and the Underwriter may retain (or receive from the Trust as
the case may be) all such deferred sales charges.
(h) The Trust has agreed in the Underwriting Agreement to certain
restrictions on the Trust's ability to modify or waive certain
terms of the Trust's Class B Shares or the contingent deferred
sales charge with respect to Pre-Amendment Class B Shares.
(i) Appropriate adjustments to payments made pursuant to clauses
(b) and (d) of this paragraph 1 shall be made whenever necessary to
ensure that no payment is made by the Trust in excess of the
applicable maximum cap imposed on asset based, front-end and deferred
sales charges by Section 2830(d) the Conduct Rules of the NASD.
2. The Trust understands that agreements between the Underwriter and Dealers may
provide for payment of fees to Dealers in connection with the sale of Class B
Shares and the provision of services to shareholders of the Trust. Nothing in
this Class B Plan shall be construed as requiring the Trust to make any payment
to any Dealer or to have any obligations to any Dealer in connection with
services as a dealer of the Class B Shares. The Underwriter shall agree and
undertake that any agreement entered into between the Underwriter and any Dealer
shall provide that such Dealer shall look solely to the Underwriter for
compensation for its services thereunder and that in no event shall such Dealer
seek any payment from the Trust.
3. Notwithstanding anything to the contrary in this Distribution Plan or any
Underwriting Agreement, the Underwriter may assign, sell or pledge
(collectively, "Transfer") its rights to its Allocable Portion of any
Distribution Fees under this Plan. Upon receipt of notice of such Transfer, the
Trust shall pay to the assignee, purchaser or pledgee (collectively with their
subsequent transferees, "Transferees"), as third party beneficiaries, such
portion of the Distribution Fees payable to the Underwriter as provided in
written instructions (the "Allocation Instructions") from the Underwriter and
said Transferee to the Trust. In the absence of Allocation Instructions, the
Trust shall have no obligations to a Transferee.
4. Nothing herein contained shall be deemed to require the Trust to take any
action contrary to its Declaration of Trust, as it may be amended or restated
from time to time, or By-Laws or any applicable statutory or regulatory
requirement to which it is subject or by which it is bound, or to relieve or
deprive the Trust's Board of Trustees of the responsibility for and control of
the conduct of the affairs of the Trust; it being understood that actions taken
pursuant to Section 1(b) shall not be considered such an action described above.
5
<PAGE>
5. This Class B Plan shall become effective upon approval by a vote of the
Board of Trustees, including a majority of the Trustees who are not "interested
persons" of the Trust and who have no direct or indirect financial interest in
the operation of the Class B Plan or in any agreements related to the Class B
Plan (the "Qualified Trustees"), such votes to be cast in person at a meeting
called for the purpose of voting on this Class B Plan.
6. All of the terms of this Distribution Plan are intended to apply in
respect of all Pre-Amendment Class B Shares and to the Distribution Fees payable
in respect of any thereof. This Class B Plan will remain in effect indefinitely,
provided that such continuance is "specifically approved at least annually" by a
vote of both a majority of the Trustees of the Trust and a majority of the
Qualified Trustees. If such annual approval is not obtained, this Class B Plan
shall expire on the annual anniversary of the adoption of this Plan following
the last such approval.
7. Subject to the limitation set forth in Section 1(b) with respect to
Pre-Amendment Class B shares, this Class B Plan may be amended at any time by
the Board of Trustees with respect to Class B Shares (and the assets
attributable to such Class B Shares) which are not Pre-Amendment Class B Shares
("Post-Amendment Class B Shares"); PROVIDED that this Class B Plan may not be
amended to increase materially the limitations on the annual percentage of
average net assets which may be expended hereunder without the approval of
holders of a "majority of the outstanding voting securities" of Class B of the
Trust and may not be materially amended in any case without a vote of a majority
of both the Trustees and the Qualified Trustees. This Class B Plan may be
terminated at any time, subject to Section 1(b), by a vote of a majority of the
Qualified Trustees or by a vote of the holders of a "majority of the outstanding
voting securities" of Class B of the Trust.
8. The Trust and the Underwriter shall provide to the Trust's Board of
Trustees, and the Board of Trustees shall review, at least quarterly, a written
report of the amounts expended under this Class B Plan and the purposes for
which such expenditures were made.
9. While this Class B Plan is in effect, the selection and nomination of
Qualified Trustees shall be committed to the discretion of the Trustees who are
not "interested persons" of the Trust.
10. For the purposes of this Class B Plan, the terms "interested persons,"
"majority of the outstanding voting securities" and "specifically approved at
least annually" are used as defined in the 1940 Act.
11. The Trust shall preserve copies of this Class B Plan, and each
agreement related hereto and each report referred to in Paragraph 7 hereof
(collectively, the "Records"), for a period of not less than six (6) years from
the end of the fiscal year in which such
6
<PAGE>
Records were made and, for a period of two (2) years, each of such Records
shall be kept in an easily accessible place.
12. This Class B Plan shall be construed in accordance with the laws of The
Commonwealth of Massachusetts and the applicable provisions of the 1940 Act.
13. If any provision of this Class B Plan shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of the Class B Plan
shall not be affected thereby.
14. Payments under this Class B Plan shall be allocated between PFD and any
successor Underwriter or co-Underwriter (each an Underwriter's "Allocable
Portion) as provided in the Allocation Procedures appended hereto.
7
<PAGE>
[ALLOCATION PROCEDURES]
CLASS C SHARES DISTRIBUTION PLAN
PIONEER STRATEGIC INCOME FUND
CLASS C SHARES DISTRIBUTION PLAN, dated as of _____________, 1999 of
PIONEER STRATEGIC INCOME 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 C Shares") of the Trust in accordance with Rule 12b-1 promulgated by
the Securities and Exchange Commission under the 1940 Act ("Rule 12b-1"), and
desires to adopt this Class C Shares distribution plan (the "Class C Plan") as a
plan of distribution pursuant to such Rule;
WHEREAS, the Trust desires that Pioneer Funds Distributor, Inc., a
Massachusetts corporation ("PFD"), provide certain distribution services for the
Trust's Class C Shares in connection with the Class C Plan;
WHEREAS, the Trust has entered into an underwriting agreement (in a
form approved by the Trust's Board of Trustees in a manner specified in 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
C Shares (the "Underwriting Agreement");
WHEREAS, the Trust also recognizes and agrees that (a) PFD may retain
the services of firms or individuals to act as dealers or wholesalers
(collectively, the "Dealers") of the Class C Shares in connection with the
offering of Class C Shares, (b) PFD may compensate any Dealer that sells Class C
Shares in the manner and at the rate or rates to be set forth in an agreement
between PFD and such Dealer and (c) PFD may make such payments to the Dealers
for distribution services out of the fee paid to PFD hereunder, any deferred
sales charges imposed by PFD in connection with the repurchase of Class C
shares, its profits or any other source available to it;
WHEREAS, the Trust recognizes and agrees that PFD may impose certain
deferred sales charges in connection with the repurchase of Class C Shares by
the Trust, and PFD may retain (or receive from the Trust, as the case may be)
all such deferred sales charges; and
<PAGE>
WHEREAS, the Board of Trustees of the Trust, in considering whether
the Trust should adopt and implement this Class C Plan, has evaluated such
information as it deemed necessary to an informed determination whether this
Class C Plan should be adopted and implemented and has considered such pertinent
factors as it deemed necessary to form the basis for a decision to use assets of
the Trust for such purposes, and has determined that there is a reasonable
likelihood that the adoption and implementation of this Class C Plan will
benefit the Trust and its Class C shareholders;
NOW, THEREFORE, the Board of Trustees of the Trust hereby adopts this
Class C Plan for the Trust as a plan of distribution of Class C Shares in
accordance with Rule 12b-l, on the following terms and conditions:
1. (a) The Trust is authorized to compensate PFD for (1)
distribution services and (2) personal and account maintenance
services performed and expenses incurred by PFD in connection
with the Trust's Class C Shares. Such compensation shall be
calculated and accrued daily and paid monthly or at such other
intervals as the Board of Trustees may determine.
(b) The amount of compensation paid during any one year for
distribution services with respect to Class C Shares shall be
.75% of the Trust's average daily net assets attributable to
Class C Shares for such year.
(c) Distribution services and expenses for which PFD may be
compensated pursuant to this Plan include, without limitation:
compensation to and expenses (including allocable overhead,
travel and telephone expenses) of (i) Dealers, brokers and
other dealers who are members of the National Association of
Securities Dealers, Inc. ("NASD") or their officers, sales
representatives and employees, (ii) PFD and any of its
affiliates and any of their respective officers, sales
representatives and employees, (iii) banks and their officers,
sales representatives and employees, who engage in or support
distribution of the Trust's Class C Shares; printing of
reports and prospectuses for other than existing shareholders;
and preparation, printing and distribution of sales literature
and advertising materials.
(d) The amount of compensation paid during any one year for
personal and account maintenance services and expenses shall
be .25% of the Trust's average daily net assets attributable
to Class C Shares for such year. As partial consideration for
personal services and/or account maintenance services provided
by PFD to the Class C Shares, PFD shall be entitled to be paid
any fees payable under this clause (d) with respect to Class C
shares for which no dealer of record exists, where less than
all consideration has been paid to a dealer of record or where
qualification standards have not been met.
<PAGE>
(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 C Shares or
their accounts or who provide similar services not otherwise
provided by or on behalf of the Trust.
(f) PFD may impose certain deferred sales charges in
connection with the repurchase of Class C Shares by the Trust
and PFD may retain (or receive from the Trust as the case may
be) all such deferred sales charges.
(g) Appropriate adjustments to payments made pursuant to
clauses (b) and (d) of this paragraph 1 shall be made whenever
necessary to ensure that no payment is made by the Trust in
excess of the applicable maximum cap imposed on asset based,
front-end and deferred sales charges by 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 C
Shares and the provision of services to shareholders of the Trust. Nothing in
this Class C Plan shall be construed as requiring the Trust to make any payment
to any Dealer or to have any obligations to any Dealer in connection with
services as a dealer of the Class C Shares. PFD shall agree and undertake that
any agreement entered into between PFD and any Dealer shall provide that such
Dealer shall look solely to PFD for compensation for its services thereunder and
that in no event shall such Dealer seek any payment from the Trust.
3. Nothing herein contained shall be deemed to require the Trust to
take any action contrary to its Declaration of Trust, as it may be amended or
restated from time to time, or By-Laws or any applicable statutory or regulatory
requirement to which it is subject or by which it is bound, or to relieve or
deprive the Trust's Board of Trustees of the responsibility for and control of
the conduct of the affairs of the Trust.
4. This Class C Plan shall become effective upon approval by (i) a
"majority of the outstanding voting securities" of Class C 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 C Plan or in any agreements
related to the Class C 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 C Plan.
<PAGE>
5. This Class C Plan will remain in effect indefinitely, provided that
such continuance is "specifically approved at least annually" by a vote of both
a majority of the Trustees of the Trust and a majority of the Qualified
Trustees. If such annual approval is not obtained, this Class C Plan shall
expire on ________________, 2000.
6. This Class C Plan may be amended at any time by the Board of
Trustees, PROVIDED that this Class C Plan may not be amended to increase
materially the limitations on the annual percentage of average net assets which
may be expended hereunder without the approval of holders of a "majority of the
outstanding voting securities" of Class C of the Trust and may not be materially
amended in any case without a vote of a majority of both the Trustees and the
Qualified Trustees. This Class C Plan may be terminated at any time by a vote of
a majority of the Qualified Trustees or by a vote of the holders of a "majority
of the outstanding voting securities" of Class C of the Trust.
7. The Trust and PFD shall provide to the Trust's Board of Trustees,
and the Board of Trustees shall review, at least quarterly, a written report of
the amounts expended under this Class C Plan and the purposes for which such
expenditures were made.
8. While this Class C Plan is in effect, the selection and nomination
of Qualified Trustees shall be committed to the discretion of the Trustees who
are not "interested persons" of the Trust.
9. For the purposes of this Class C Plan, the terms "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 C Plan, and each
agreement related hereto and each report referred to in Paragraph 7 hereof
(collectively, the "Records"), for a period of not less than six (6) years from
the end of the fiscal year in which such Records were made and, for a period of
two (2) years, each of such Records shall be kept in an easily accessible place.
11. This Class C Plan shall be construed in accordance with the laws
of The Commonwealth of Massachusetts and the applicable provisions of the 1940
Act.
12. If any provision of this Class C Plan shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of the
Class C Plan shall not be affected thereby.
PIONEER STRATEGIC INCOME FUND
Multiple Class Plan Pursuant to Rule 18f-3
Class A Shares, Class B Shares, Class C Shares and Class Y Shares
________ __, 1999
Each class of shares of Pioneer Strategic Income Fund (the "Fund") will
have the same relative rights and privileges and be subject to the same sales
charges, fees and expenses, except as set forth below. The Board of Trustees may
determine in the future that other distribution arrangements, allocations of
expenses (whether ordinary or extraordinary) or services to be provided to a
class of shares are appropriate and amend this Plan accordingly without the
approval of shareholders of any class. Except as set forth in the Fund's
prospectus(es), shares may be exchanged only for shares of the same class of
another Pioneer mutual fund.
Article I. Class A Shares
Class A Shares are sold at net asset value and subject to the initial
sales charge schedule or contingent deferred sales charge ("CDSC") and minimum
purchase requirements as set forth in the Fund's prospectus. Class A Shares
shall be entitled to the shareholder services set forth from time to time in the
Fund's prospectus with respect to Class A Shares. Class A Shares are subject to
fees calculated as a stated percentage of the net assets attributable to Class A
Shares under the Fund's Class A Rule 12b-1 Distribution Plan as set forth in
such Distribution Plan. The Class A Shareholders have exclusive voting rights,
if any, with respect to the Class A Rule 12b-1 Distribution Plan. Transfer
agency fees are allocated to Class A Shares on a per account basis except to the
extent, if any, such an allocation would cause the Fund to fail to satisfy any
requirement necessary to obtain or rely on a private letter ruling from the
Internal Revenue Service ("IRS") relating to the issuance of multiple classes of
shares. Class A Shares shall bear the costs and expenses associated with
conducting a shareholder meeting for matters relating to Class A Shares.
The initial purchase date for Class A Shares acquired through (i)
reinvestment of dividends on Class A Shares or (ii) exchange from another
Pioneer mutual fund will be deemed to be the date on which the original Class A
shares were purchased.
Article II. Class B Shares
Class B Shares are sold at net asset value per share without the
imposition of an initial sales charge. However, Class B Shares redeemed within a
specified number of years of purchase will be subject to a CDSC as set forth in
the Fund's prospectus. Class B Shares are sold subject to the minimum purchase
requirements set forth in the Fund's prospectus. Class B Shares shall be
entitled to the shareholder services set forth from time to time in the Fund's
prospectus with respect to Class B Shares. Class B Shares are subject to fees
calculated as a stated percentage of the net assets attributable to Class B
Shares under the Class B Rule 12b-1 Distribution Plan as set forth in such
Distribution Plan. The Class B Shareholders of the Fund have exclusive voting
rights, if any, with respect to the Fund's Class B Rule 12b-1 Distribution Plan.
Transfer agency fees are allocated to Class B Shares on a per account basis
except to the extent, if any, such an allocation would cause the Fund to fail to
satisfy any requirement necessary to obtain or rely on a
<PAGE>
private letter ruling from the IRS relating to the issuance of multiple
classes of shares. Class B Shares shall bear the costs and expenses associated
with conducting a shareholder meeting for matters relating to Class B Shares.
Class B Shares will automatically convert to Class A Shares of the Fund
at the end of a specified number of years after the initial purchase date of
Class B Shares, except as provided in the Fund's prospectus. Such conversion
will occur at the relative net asset value per share of each class without the
imposition of any sales charge, fee or other charge. The conversion of Class B
Shares to Class A Shares may be suspended if it is determined that the
conversion constitutes or is likely to constitute a taxable event under federal
income tax law.
The initial purchase date for Class B Shares acquired through (i)
reinvestment of dividends on Class B Shares or (ii) exchange from another
Pioneer mutual fund will be deemed to be the date on which the original Class B
shares were purchased.
Article III. Class C Shares
Class C Shares are sold at net asset value 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 Fund's
prospectus. Class C Shares are sold subject to the minimum purchase requirements
set forth in the Fund's prospectus. Class C Shares shall be entitled to the
shareholder services set forth from time to time in the Fund's prospectus with
respect to Class C Shares. Class C Shares are subject to fees calculated as a
stated percentage of the net assets attributable to Class C Shares under the
Class C Rule 12b-1 Distribution Plan as set forth in such Distribution Plan. The
Class C Shareholders of the Fund have exclusive voting rights, if any, with
respect to the Fund's Class C Rule 12b-1 Distribution Plan. Transfer agency fees
are allocated to Class C Shares on a per account basis except to the extent, if
any, such an allocation would cause the Fund to fail to satisfy any requirement
necessary to obtain or rely on a private letter ruling from the IRS relating to
the issuance of multiple classes of shares. Class C Shares shall bear the costs
and expenses associated with conducting a shareholder meeting for matters
relating to Class C Shares.
The initial purchase date for Class C Shares acquired through (i)
reinvestment of dividends on Class C Shares or (ii) exchange from another
Pioneer mutual fund will be deemed to be the date on which the original Class C
shares were purchased.
Article IV. Class Y Shares
Class Y Shares are sold at net asset value per share without the
imposition of an initial sales charge. Class Y Shares are not subject to a CDSC
upon redemption regardless of the length of the period of time such shares are
held. Class Y Shares are sold subject to the minimum purchase requirements set
forth in the Fund's prospectus. Class Y Shares shall be entitled to the
shareholder services set forth from time to time in the Fund's prospectus with
respect to Class Y Shares.
2
<PAGE>
Class Y Shares are not subject to fees payable under a distribution or
other plan adopted pursuant to Rule 12b-1 under the Investment Company Act of
1940, as amended (the "Act"). The Class Y Shareholders of the Fund have
exclusive voting rights, if any, with respect to the Fund's possible future
adoption of a Class Y Rule 12b-1 Distribution Plan. Transfer agency fees are
allocated to Class Y Shares on a per account basis except to the extent, if any,
such an allocation would cause the Fund to fail to satisfy any requirement
necessary to obtain or rely on a private letter ruling from the IRS relating to
the issuance of multiple classes of shares. Class Y Shares shall bear the costs
and expenses associated with conducting a shareholder meeting for matters
relating to Class Y Shares.
The initial purchase date for Class Y Shares acquired through (i)
reinvestment of dividends on Class Y Shares or (ii) exchange from another
Pioneer mutual fund will be deemed to be the date on which the original Class Y
shares were purchased.
Article V. Approval by Board of Trustees
This Plan shall not take effect until it has been approved by the vote
of a majority (or whatever greater percentage may, from time to time, be
required under Rule 18f-3 under the Act) of (a) all of the Trustees of the Fund
and (b) those of the Trustees who are not "interested persons" (as such term may
be from time to time defined under the Act) of the Fund.
Article VI. Amendments
No material amendment to the Plan shall be effective unless it is
approved by the Board of Trustees in the same manner as is provided for approval
of this Plan in Article V.
3
POWER OF ATTORNEY
I hereby constitute and appoint John F. Cogan, Jr., David D. Tripple,
Joseph P. Barri and John A. Boynton, and each of them acting singly, with full
powers of substitution as my true and lawful attorneys and agents to execute in
my name and on my behalf in any and all capacities the Registration Statements
on Form N-1A, and any and all amendments thereto, filed by any of the Pioneer
mutual funds of which I am a Trustee (each a "Trust") with the Securities and
Exchange Commission (the "SEC") under the Investment Company Act of 1940, as
amended (the "1940 Act"), and the Securities Act of 1933, as amended (the "1933
Act"), with respect to the offering of the Trust's shares of beneficial
interest, any other documents and papers relating thereto, and any and all other
instruments which such attorneys and agents, or any of them, deem necessary or
advisable to enable the Trust to comply with the 1940 Act and/or the 1933 Act,
the rules, regulations and requirements of the SEC and the corporate, securities
or Blue Sky laws of any state or other jurisdiction, and I hereby ratify and
confirm as my own act and deed any and all acts that such attorneys and agents,
or any of them, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this 3rd day of
November, 1998.
/s/ Mary K. Bush
Mary K. Bush
/s/ Blake Eagle
Blake Eagle
/s/ Richard H. Egdahl
Richard H. Egdahl, M.D.
/s/ Margaret BW Graham
Margaret B.W. Graham
/s/ Stephen G. Kasnet
Stephen G. Kasnet
/s/ John W. Kendrick
John W. Kendrick
/s/ Marguerite A. Piret
Marguerite A. Piret
<PAGE>
/s/ Fred N. Pratt, Jr.
Fred N. Pratt, Jr.
/s/ Stephen K. West
Stephen K. West
/s/ John Winthrop
John Winthrop
<PAGE>
POWER OF ATTORNEY
I hereby constitute and appoint David D. Tripple, Joseph P. Barri and
John A. Boynton, and each of them acting singly, with full powers of
substitution as my true and lawful attorneys and agents to execute in my name
and on my behalf in any and all capacities the Registration Statements on Form
N-1A, and any and all amendments thereto, filed by any of the Pioneer mutual
funds of which I am a Trustee (each a "Trust") with the Securities and Exchange
Commission (the "SEC") under the Investment Company Act of 1940, as amended (the
"1940 Act"), and the Securities Act of 1933, as amended (the "1933 Act"), with
respect to the offering of the Trust's shares of beneficial interest, any other
documents and papers relating thereto, and any and all other instruments which
such attorneys and agents, or any of them, deem necessary or advisable to enable
the Trust to comply with the 1940 Act and/or the 1933 Act, the rules,
regulations and requirements of the SEC and the corporate, securities or Blue
Sky laws of any state or other jurisdiction, and I hereby ratify and confirm as
my own act and deed any and all acts that such attorneys and agents, or any of
them, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this 2nd day of
November, 1998.
/s/ John F. Cogan, Jr.
John F. Cogan, Jr.
<PAGE>
POWER OF ATTORNEY
I hereby constitute and appoint John F. Cogan, Jr., Joseph P. Barri and
John A. Boynton, and each of them acting singly, with full powers of
substitution as my true and lawful attorneys and agents to execute in my name
and on my behalf in any and all capacities the Registration Statements on Form
N-1A, and any and all amendments thereto, filed by any of the Pioneer mutual
funds of which I am a Trustee (each a "Trust") with the Securities and Exchange
Commission (the "SEC") under the Investment Company Act of 1940, as amended (the
"1940 Act"), and the Securities Act of 1933, as amended (the "1933 Act"), with
respect to the offering of the Trust's shares of beneficial interest, any other
documents and papers relating thereto, and any and all other instruments which
such attorneys and agents, or any of them, deem necessary or advisable to enable
the Trust to comply with the 1940 Act and/or the 1933 Act, the rules,
regulations and requirements of the SEC and the corporate, securities or Blue
Sky laws of any state or other jurisdiction, and I hereby ratify and confirm as
my own act and deed any and all acts that such attorneys and agents, or any of
them, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this 2nd day of
November, 1998.
/s/ David D. Tripple
David D. Tripple
<PAGE>
POWER OF ATTORNEY
I hereby constitute and appoint John F. Cogan, Jr., David D. Tripple
and Joseph P. Barri, and each of them acting singly, with full powers of
substitution as my true and lawful attorneys and agents to execute in my name
and on my behalf in any and all capacities the Registration Statements on Form
N-1A, and any and all amendments thereto, filed by any of the Pioneer mutual
funds of which I am Treasurer (each a "Trust") with the Securities and Exchange
Commission (the "SEC") under the Investment Company Act of 1940, as amended (the
"1940 Act"), and the Securities Act of 1933, as amended (the "1933 Act"), with
respect to the offering of the Trust's shares of beneficial interest, any other
documents and papers relating thereto, and any and all other instruments which
such attorneys and agents, or any of them, deem necessary or advisable to enable
the Trust to comply with the 1940 Act and/or the 1933 Act, the rules,
regulations and requirements of the SEC and the corporate, securities or Blue
Sky laws of any state or other jurisdiction, and I hereby ratify and confirm as
my own act and deed any and all acts that such attorneys and agents, or any of
them, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this 9th day of
November, 1998.
/s/ John A. Boynton
John A. Boynton
