File No. 2-62436
File No. 811-02864
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. ___)
Filed by the Registrant /x/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/x/ Definitive Proxy Statement
/x/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
/ / Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e) (2))
Pioneer Bond Fund
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/x/ No fee required.
<PAGE>
PIONEER BOND FUND
60 State Street
Boston, Massachusetts 02109
1-800-622-3265
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
SCHEDULED FOR MAY 4, 1999
This is the formal agenda for your fund's shareholder meeting. It tells you
the matters you will be asked to vote on and the time and place of the meeting,
in case you want to attend in person.
To the shareholders of Pioneer Bond Fund:
A meeting of shareholders of your fund will be held at the offices of Hale
and Dorr LLP, 60 State Street, 26th Floor, Boston, Massachusetts on Tuesday, May
4, 1999 at 2:00 p.m., Boston time, to consider the following:
1. To elect the nine (9) trustees named in the attached proxy statement
to serve on the board of trustees until their successors have been
duly elected and qualified.
2. A proposal to approve an Agreement and Plan of Reorganization
pursuant to which your fund, which is currently organized as a
Massachusetts business trust, would be reorganized as a Delaware
business trust.
3(a)-(l). Proposals to approve amendments to your fund's fundamental
investment objective, policies and restrictions, as described in the
attached proxy statement.
4. Any other business that may properly come before the meeting.
Shareholders of record as of the close of business on March 5, 1999 are
entitled to vote at the meeting and any related follow-up meetings.
By Order Of The Board of Trustees,
Joseph P. Barri, Secretary
Boston, Massachusetts
March 9, 1999
-----------------
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE AND RETURN THE
ENCLOSED PROXY CARD.
0399-6108
<PAGE>
<PAGE>
PROXY STATEMENT OF
PIONEER BOND FUND
60 State Street
Boston, Massachusetts 02109
1-800-225-6292
SPECIAL MEETING OF SHAREHOLDERS
This proxy statement contains the information you should know before voting
on the proposals as summarized below.
Pioneer Bond Fund will furnish without charge a copy of its Annual Report
or Semi-Annual Report to any shareholder upon request. Shareholders who want to
obtain a copy of these reports should direct all written requests to the
attention of the fund, at the address listed above, or should call Pioneering
Services Corporation, the fund's transfer agent, at 1-800-225-6292.
INTRODUCTION
This proxy statement is being used by the board of trustees of your fund to
solicit proxies to be voted at a special meeting of shareholders of your fund.
This meeting will be held at the offices of Hale and Dorr LLP, 60 State Street,
26th Floor, Boston, Massachusetts 02109, at 2:00 p.m., Boston time on Tuesday,
May 4, 1999, and at any adjournments of the meeting to a later date.
The purpose of this meeting is to consider:
1. The election of the nine (9) trustees named in this proxy statement
to serve on the board of trustees until their successors have been
duly elected and qualified.
2. A proposal to approve an Agreement and Plan of Reorganization
pursuant to which your fund, which is currently organized as a
Massachusetts business trust, would be reorganized as a Delaware
business trust.
3(a)-(l). Proposals to approve amendments to your fund's fundamental
investment objective, policies and restrictions, as described in this
proxy statement.
4. Any other business that may properly come before the meeting.
This proxy statement and proxy are being mailed to shareholders on or about
March 9, 1999. The Annual Report for the fund for the fiscal period ended June
30, 1998, was previously mailed to shareholders.
Who is Eligible to Vote?
Shareholders of record of the fund as of the close of business on March 5,
1999 (the "record date") are entitled to vote on all of the fund's business at
the meeting or any adjournments thereof. Each share is entitled to one vote.
Shares represented by properly executed proxies, unless revoked before or at the
meeting, will be voted according to shareholders' instructions. If you sign a
proxy, but do not fill in a vote, your shares will be voted to approve the
proposals. If any other business comes before the meeting, your shares will be
voted at the discretion of the persons named as proxies.
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PROPOSAL 1
ELECTION OF BOARD OF TRUSTEES
All of the nominees for election currently serve as trustees for your fund.
Each trustee will be elected to hold office until the next meeting of
shareholders or until his or her successor is elected and qualified. Each
nominee has consented to being named in this proxy statement and indicated his
or her willingness to serve if elected. If any nominee should be unable to
serve, an event which is not anticipated, the persons named as proxies may vote
for such other person as shall be designated by the board of trustees of the
fund. The persons named on the accompanying proxy card intend to vote at the
meeting (unless otherwise directed) FOR the election of the nine (9) nominees
named below as trustees of the fund.
The following table sets forth each nominee's position(s) with the fund,
and their age, address, principal occupation and employment during the past five
years and any other directorships held. The table also indicates the year during
which he or she first became a trustee of the fund and the number of shares of
the fund beneficially owned by each nominee, directly or indirectly, on February
26, 1999.
<TABLE>
<CAPTION>
Number of
Shares Owned
Name, Age, and Percentage
Position(s) with Principal Occupation First of Total Shares
the Fund or Employment Became a Outstanding on
and Address and Trusteeships(1) Trustee February 26, 1999
- ------------------------ ------------------------------------ ---------- ------------------
<S> <C> <C> <C>
John F. Cogan, Jr.* President, Chief Executive Officer 1990 206,702.613
(72) and a Director of The Pioneer 0.988%
Chairman of the Board, Group, Inc. ("PGI"); Chairman and
President and Trustee a Director of Pioneer Investment
60 State Street Management, Inc. ("Pioneer") and
Boston, MA 02109 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. ("Pint"), Pioneer First
Russia, Inc. ("First Russia") and
Pioneer Omega, Inc. ("Omega");
Chairman of the Board and
Director of Pioneer
</TABLE>
2
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<TABLE>
<CAPTION>
Number of
Shares Owned
Name, Age, and Percentage
Position(s) with Principal Occupation First of Total Shares
the Fund or Employment Became a Outstanding on
and Address and Trusteeships(1) Trustee February 26, 1999
- ------------------------ ------------------------------------ ---------- ------------------
<S> <C> <C> <C>
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 DM Cash 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 President, Bush & Co. 1997 0
(50) (international financial advisory
Trustee firm); Director and/or Trustee of
4201 Cathedral Ave. NW Mortgage Guaranty Insurance
Apt. 1016E Corporation, Novecon
Washington, DC 20016 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.
</TABLE>
3
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<TABLE>
<CAPTION>
Number of
Shares Owned
Name, Age, and Percentage
Position(s) with Principal Occupation First of Total Shares
the Fund or Employment Became a Outstanding on
and Address and Trusteeships(1) Trustee February 26, 1999
- ------------------------- ------------------------------------ ---------- ------------------
<S> <C> <C> <C>
Richard H. Egdahl, Alexander Graham Bell Professor 1992 1992 0
M.D. of Health Care Entrepreneurship,
(72) Boston University; Professor of
Trustee Management, Boston University School
Boston University of Management; Professor of Public
Health Policy Institute Health, Boston University School of
55 Bay State Road Public Health; Professor of Surgery,
Boston, MA 02215 Boston University School of
Medicine; 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 Founding Director, The Winthrop 1990 0
(51) Group, Inc. (consulting firm);
Trustee Manager of Research Operations,
The Keep Xerox Palo Alto Research Center,
P.O. Box 110 from 1991 to 1994; Professor of
Little Deer Isle, ME Operations Management and
04650 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 Professor Emeritus, George 1990 2,217.293
(81) Washington University; Director, 0.011%
Trustee American Productivity and Quality
636 Waterway Drive Center; Adjunct Scholar, American
Falls Church, VA 22044 Enterprise Institute; Economic
Consultant; and Trustee of all of
the Pioneer mutual funds, except
Pioneer Variable Contracts Trust
</TABLE>
4
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<TABLE>
<CAPTION>
Number of
Shares Owned
Name, Age, and Percentage
Position(s) with Principal Occupation First of Total Shares
the Fund or Employment Became a Outstanding on
and Address and Trusteeships(1) Trustee February 26, 1999
- -------------------------- ------------------------------------ ---------- ------------------
<S> <C> <C> <C>
Marguerite A. Piret President Newbury, Piret & 1990 27,054.806
(50) Company, Inc. (merchant banking 0.129%
Trustee firm); Trustee of Boston Medical
One Boston Place Center; Member of the Board of
Suite 2635 Governors of the Investment
Boston, MA 02108 Company Institute; and Trustee of
all of the Pioneer mutual funds.
David D. Tripple* Executive Vice President and a 1990 946.031
(55) Director of PGI; President and a 0%
Executive Vice President Director of Pioneer; Director of
and Trustee PFD, PCC, Pint, First Russia,
60 State Street Omega, Pioneer SBIC Corporation
Boston, MA 02109 ("Pioneer SBIC"), PMIL and the
Irish Funds; and Executive Vice
President and Trustee of all of
the Pioneer mutual funds.
Stephen K. West Of Counsel, Sullivan & Cromwell 1993 0
(70) (law firm); Director, Kleinwort
Trustee Benson Australian Income Fund,
125 Broad Street Inc., The Swiss Helvetia Fund, Inc.
New York, NY 10004 (mutual funds), AMVESCAP PLC
(investment managers) and American
Insurance Holdings, Inc.; Trustee,
The Winthrop Focus Funds (mutual
funds); and Trustee of all of the
Pioneer mutual funds.
John Winthrop President, John Winthrop & Co., 1990 7,490.132
(62) Inc. (private investment firm); 0.034%
Trustee Director, of NUI Corp. (energy
One North Adgers Wharf sales, services and distribution);
Charleston, SC 29401 and Trustee of all of the Pioneer
mutual funds; except Pioneer
Variable Contracts Trust.
</TABLE>
- ------------
* Messrs. Cogan and Tripple are "interested persons" of the fund and Pioneer
within the meaning of Section 2(a)(19) of the Investment Company Act of 1940
(the "1940 Act").
(1) Each nominee also serves as a trustee for each of the open-end investment
companies (mutual funds) in the Pioneer family of mutual funds, for Pioneer
Interest Shares, a closed-end investment company, and for each of the
portfolios of the Pioneer Variable Contracts Trust (except Messrs. Kendrick
and Winthrop and Mmes. Graham and Bush, who do not serve as trustees for
Pioneer Variable Contracts Trust). Except for Ms. Bush, each trustee was
most recently elected by the shareholders of the fund in 1995. Ms. Bush was
elected by the other trustees in 1997.
(2) As of February 26, 1999, the trustees and officers of the fund beneficially
owned, directly or indirectly, in the aggregate 1.17% of the fund's
outstanding shares (20,924,217.238 shares).
5
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Ms. Piret, Mr. West and Mr. Winthrop serve on the audit committee of the
board of trustees. The functions of the audit committee include recommending
independent auditors to the trustees, monitoring the independent auditors'
performance, reviewing the results of audits and responding to certain other
matters deemed appropriate by the trustees. Ms. Graham, Ms. Piret and Mr.
Winthrop also serve on the nominating committee of the board of trustees. The
primary responsibility of the nominating committee is the selection and
nomination of candidates to serve as independent trustees. The nominating
committee will also consider nominees recommended by shareholders to serve as
trustees provided that shareholders submitting such recommendations comply with
all relevant provisions of Rule 14a-8 under the Securities Exchange Act of
1934, as amended (the "Exchange Act").
During the fiscal year ended June 30, 1998, the board of trustees held
twelve meetings, the audit committee held eleven meetings and the nominating
committee held one meeting. All of the current trustees and committee members
then serving attended at least 75% of the meetings of the board of trustees or
applicable committee, if any, held during the fiscal year ended June 30, 1998.
Mr. Cogan is an officer of PGI and owns, as of February 26, 1999,
approximately 14% of the outstanding Common Stock of PGI. None of the other
nominees own more than 1% of the outstanding Common Stock of PGI.
Other Executive Officers
In addition to Messrs. Cogan and Tripple, who serve as executive officers
of the fund, the following table provides information with respect to the other
executive officers of the fund. Each executive officer is elected by the board
of trustees and serves until his successor is chosen and qualified or until his
resignation or removal by the board. The business address of all officers of the
fund is 60 State Street, Boston, Massachusetts 02109.
<TABLE>
<CAPTION>
Name, Age and Position with the Fund Principal Occupation(s)
- -------------------------------------- -----------------------------------------------
<S> <C>
John A. Boynton, (44), Treasurer Executive Vice President, Treasurer and Chief
Financial Officer of PGI; and Treasurer
of Pioneer, 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, (52), Secretary 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, (42), Assistant Vice President-Corporate Finance of PGI since
Treasurer February 1999; 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.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Name, Age and Position with the Fund Principal Occupation(s)
- -------------------------------------- -----------------------------------------------
<S> <C>
Robert P. Nault, (34), Assistant Senior Vice President, General Counsel and
Secretary 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.
</TABLE>
Remuneration of Trustees and Officers
The following table provides information regarding the compensation paid by
the fund and the other investment companies in the Pioneer family of mutual
funds to the trustees for their services as indicated below. Compensation paid
by the fund to Messrs. Cogan and Tripple, who are interested persons of Pioneer,
is reimbursed to the fund by Pioneer. The fund pays no salary or other
compensation to its officers.
<TABLE>
<CAPTION>
Total Compensation
from the
Fund and Other
Aggregate Funds in the
Compensation Pioneer Family
Trustee from the Fund+ of Mutual Funds++
- ----------------------------------------------------------------------
<S> <C> <C>
John F. Cogan, Jr. .............. $ 500* $ 18,750*
Mary K. Bush .................... 1,852 77,125
Richard H. Egdahl, M.D. ......... 1,851 79,125
Margaret B.W. Graham ............ 1,859 81,750
John W. Kendrick ................ 1,752 65,900
Marguerite A. Piret ............. 2,140 98,750
David D. Tripple ................ 500* 18,750*
Stephen K. West ................. 1,949 85,050
John Winthrop ................... 2,079 85,875
------- ---------
Totals .......................... $14,482 $ 611,075
======= =========
</TABLE>
- ------------
* Pioneer fully reimbursed the fund and the other mutual funds in the Pioneer
family of mutual funds for compensation paid to Messrs. Cogan and Tripple.
+ For the fiscal year ended June 30, 1998.
++ For the calendar year ended December 31, 1998.
Investment Adviser
Pioneer and Pioneer Funds Distributor, Inc., whose executive offices are
located at 60 State Street, Boston, Massachusetts 02109, serve as investment
adviser and principal underwriters, respectively, to the fund.
Required vote
In accordance with the fund's Agreement and Declaration of Trust, the vote
of a plurality of all of the shares of the fund voted at the meeting is
sufficient to elect the nominees. This means that the nine (9) nominees
receiving the greatest number of votes will be elected to the board.
7
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PROPOSAL 2
APPROVAL OF AN AGREEMENT AND PLAN PROVIDING FOR THE
REORGANIZATION OF THE FUND FROM A MASSACHUSETTS
BUSINESS TRUST TO A DELAWARE BUSINESS TRUST
General
At a meeting held on January 5, 1999, the trustees unanimously approved,
subject to the approval of shareholders of the fund, an Agreement and Plan of
Reorganization in the form attached to this proxy statement as Exhibit A. The
Plan of Reorganization provides for the reorganization of your fund, currently a
Massachusetts business trust, into a newly established Delaware business trust
(the "successor fund"). Prior to the reorganization, the newly established
Delaware business trust will have no assets or operations.
After the reorganization is complete, the successor fund will carry on the
business of your fund. If your fund's shareholders approve the proposed changes
to the fund's fundamental investment policies described in Proposals 3(a)-(l)
below, the successor fund's operations will change accordingly, to the extent
approved. If these changes are not approved, the successor fund will have
investment policies and restrictions that are identical to the investment
policies and restrictions of your fund. The successor fund will also enter into
a management contract and other service agreements which provide the same
services on the same terms as those applicable to your fund.
The principal differences between a Delaware business trust and a
Massachusetts business trust as forms of organization are discussed below under
the caption "Comparison of business trusts under Delaware law and Massachusetts
law." Approval of the reorganization also constitutes approval of the
termination of your fund in accordance with Massachusetts law. Following the
reorganization, Pioneer will serve as investment adviser for the successor fund
under a management contract which will have been approved by the board of
trustees of the successor fund and by your fund, each as a sole shareholder of
the successor fund, as further discussed below under the captions "Summary of
the plan of reorganization." The new management contract between the successor
fund and Pioneer will be identical to the existing management contract in all
material respects except for the date of execution and the fact that the
successor fund will be a Delaware business trust.
Reasons for the proposed reorganization
Your fund presently is organized as a Massachusetts business trust. The
proposed form of organization of your fund as a Delaware business trust offers
certain advantages over the current form of organization as a Massachusetts
business trust. The advantages include:
o clearer limitations upon liability for your fund's shareholders and
trustees
o greater flexibility in the methods of shareholder voting
o affording the trustees greater flexibility to amend the Delaware
Declaration of Trust without shareholder approval (although this advantage
could also be achieved under Massachusetts law by amending your fund's
Declaration of Trust)
8
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Comparison of business trust under Delaware law and Massachusetts law
Limitation of Shareholders' Series' Liability. Delaware law provides that
the shareholders of a Delaware business trust shall not be subject to liability
for the debts or obligations of the trust. Under Massachusetts law, shareholders
of a Massachusetts business trust (such as your fund's shareholders) may, under
certain circumstances, be liable for the debts and obligations of that trust.
Although the risk of liability of shareholders of a Massachusetts business trust
who do not participate in the management of the trust may be remote, the board
of trustees has determined that Delaware law affords greater protection against
potential shareholder liability. Similarly, Delaware law provides that, to the
extent that a Delaware business trust issues multiple series of shares, each
series shall not be liable for the debts or obligations of any other series,
another potential, although remote, risk in the case of multiple series of a
Massachusetts business trust. While the trustees believe that a series of a
Massachusetts business trust will only be liable for its own obligations, there
is no direct statutory or judicial support for that position. Your fund has not
issued multiple series of shares, and the trustees have no current intention to
issue such shares. However, to the extent the board of trustees determines that
the issuance of multiple series of shares is prudent, the trustees believe that
your fund would be better situated to do so as a Delaware business trust.
Limitation of trust liability. Delaware law provides that, except to the
extent otherwise provided in a fund's declaration of trust or bylaws, trustees
will not be personally liable to any person (other than the business trust or a
shareholder thereof) for any act, omission or obligation of the business trust
or any trustee thereof. Delaware law also provides that a trustee's actions
under a Delaware business trust's declaration of trust or bylaws will not
subject the trustee to liability to the business trust or its shareholders if
the trustee takes such action in good faith reliance on the provisions of the
business trust's declaration of trust or bylaws. The declaration of trust of a
Massachusetts business trust may limit liability of a trustee who is not also an
officer of the trust, for breach of fiduciary duty except for, among other
things, any act or omission not in good faith which involves intentional
misconduct or a knowing violation of law or any transaction from which the
trustee derives an improper direct or indirect financial benefit. The trustees
believe that such limitations on liability under Delaware law are consistent
with those applicable to directors of a corporation under Delaware law and will
be beneficial in attracting and retaining in the future qualified persons to act
as trustees.
Shareholder voting. Delaware law provides that a Delaware business trust's
declaration of trust or bylaws may set forth provisions related to voting in any
manner. This provision appears to permit trustee and shareholder voting though
computer or electronic media. For an investment company with a significant
number of institutional shareholders, all with access to computer or electronic
networks, the use of such voting methods could significantly reduce the costs of
shareholder voting. However, the advantage of such methods may not be realizable
unless the Securities and Exchange Commission ("SEC") modifies its proxy rules.
Also, as required by the 1940 Act, votes on certain matters by trustees would
still need to be taken at actual in-person meetings.
Board composition. Delaware law explicitly provides that separate boards
of trustees may be authorized for each series of a Delaware business trust.
Whether separate boards
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<PAGE>
of trustees can be authorized for series of a Massachusetts business trust is
unclear under Massachusetts law. As always, the establishment of any board of
trustees of a registered investment company must comply with applicable
securities laws, including the provision of the 1940 Act regarding the election
of trustees by shareholders. Establishing separate boards of trustees would,
among other things, enable the series of a Delaware business trust to be
governed by individuals who are more familiar with the series' particular
operations.
Comparison of your fund's Declaration of Trust under Massachusetts law and
Delaware Declarations of Trust under Delaware law
It is anticipated that the Delaware business trust will be required to hold
fewer shareholder meetings than the Massachusetts business trust, potentially
further reducing costs. Although neither a Delaware business trust nor a
Massachusetts business trust is required to hold annual shareholder meetings,
Delaware law affords to the trustees greater ability to adapt the Delaware
business trust to future contingencies without the necessity of holding a
special shareholder meeting. The trustees would have the power to amend the
business trust's governing instrument to create a class or series of beneficial
interest that was not previously outstanding; to dissolve the business trust; to
incorporate the Delaware business trust; to merge or consolidate with another
entity; to sell, lease, exchange, transfer, pledge or otherwise dispose of all
or any part of the business trust's assets; to cause any series to become a
separate trust; and to change the Delaware business trust's domicile -- all
without shareholder vote. Any exercise of authority by the trustees is subject
to applicable state and federal law. The flexibility of Delaware business trusts
should help to assure that the Delaware business trust always operates under the
most advantageous form of organization and may reduce the expense and frequency
of future shareholder meetings for non-investment-related operational issues.
Trustees' Recommendation
After considering the matters discussed above and other matters deemed to
be relevant, your board of trustees determined that the reorganization is in the
best interest of your fund and will not result in the dilution of the interest
of your fund's shareholders. The trustees present at the meeting held on January
5, 1999 unanimously voted to recommend that you vote FOR the reorganization.
Required Vote
Since the Board of Trustees recommends the reorganization, approval of the
Agreement and Plan of Reorganization requires the affirmative vote of a majority
of the shares of your fund outstanding and entitled to vote. For this purpose, a
majority of the outstanding shares of your fund means with respect to each
proposal the vote of the lesser of
(1) 67% or more of the shares present at the meeting, if the holders of more
than 50% of the shares of the fund are present or represented by proxy,
or
(2) more than 50% of the outstanding shares of the fund.
10
<PAGE>
In the event that the shareholders of your fund do not vote in favor of the
reorganization, the trustees will determine what further action, if any, to
take, including the possibility of resubmitting the proposal at a later time.
THE TRUSTEES RECOMMEND THAT THE SHAREHOLDERS OF YOUR FUND APPROVE THE
AGREEMENT AND PLAN OF REORGANIZATION PROVIDING FOR THE REORGANIZATION OF YOUR
FUND FROM A MASSACHUSETTS BUSINESS TRUST TO A DELAWARE BUSINESS TRUST.
Summary of the Plan of Reorganization
The following discussion summarizes certain terms of the Plan of
Reorganization. This summary of the Plan of Reorganization is qualified in its
entirety by the provisions of the form of Plan or Reorganization, which is
attached to this proxy statement as Exhibit A. Assuming the Plan of
Reorganization is approved, and your fund is able to obtain the necessary
consent, approval, authorization or order of any court or governmental
authority, it is currently contemplated that the Reorganization will become
effective at the close of business on or about May 17, 1999.
In order to accomplish the reorganization, a Delaware business trust has
been formed. On the closing date of the reorganization (the "Closing Date"),
your fund will transfer all of its assets to the successor fund in exchange for
the assumption by the successor fund of all the liabilities of your fund and the
issuance to your fund of shares of beneficial interest of the successor fund
("successor fund shares") equal to the value (as determined by using the
procedures set forth in your fund's current prospectus) on the date of the
exchange of your fund's net assets. Consequently, for each share of the fund
outstanding at the time of the reorganization, one successor fund share of the
same class will be issued to the fund. Your fund, as sole shareholder of the
successor fund, will then vote on certain matters that require shareholder
approval, as described below. Immediately thereafter, your fund will liquidate
and distribute successor fund shares to each shareholder pro rata in proportion
to the shareholder's beneficial interest in each class of your fund in exchange
for his or her current fund shares. After such distributions of successor fund
shares, your fund will, as soon as practicable thereafter, be wound up and
terminated. Certificates evidencing full or fractional successor fund shares
will not be mailed to shareholders. Upon completion of the reorganization, each
of your fund's shareholders will be the owner of full and fractional successor
fund shares of the same class and equal in number and net asset value to his or
her fund shares as of the date of the exchange.
As described above, the Plan of Reorganization authorizes your fund as the
then sole shareholder of the successor fund (i) to elect as trustees of the
Delaware business trust the persons who currently serve as trustees of the
Massachusetts business trust; (ii) to ratify the selection of the independent
accountants; (iii) to approve the Rule 12b-1 plans of distribution for the
successor fund and (iv) to approve the management contract for the successor
fund. With respect to the foregoing matter, the successor fund will vote after
the board of trustees of the successor fund has approved such matters.
The newly elected trustees will hold office without limit in time except
that (i) any trustee may resign; (ii) any trustee may be removed by written
instrument signed by at least
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a majority of the trustees prior to removal; and (iii) a trustee may be removed
at any special meeting of the shareholders of the successor fund by a vote of
two-thirds of the outstanding shares of the successor fund. In case a vacancy
shall exist for any reason, the remaining trustees of the successor fund for
which the vacancy exists will fill such vacancy by appointing another trustee so
long as, immediately after such appointment, at least two-thirds of the trustees
have been elected by the shareholders of the successor fund.
If, at any time prior to the Closing Date, (a) the trustees determine that
it would not be in the best interest of your fund or your fund's shareholders to
proceed with the execution of the Plan of Reorganization, or (b) your fund is
unable to obtain the consent, approval, authorization or order of any court or
governmental authority, the reorganization may not go forward, notwithstanding
the approval of the reorganization by the shareholders at the meeting. The
obligations of your fund under the Plan of Reorganization are subject to various
conditions as stated therein. In order to provide against unforeseen events, the
Plan of Reorganization may be terminated or amended at any time prior to the
reorganization by mutual agreement of the trustees of your fund and the
successor fund. Your fund and the successor fund may waive compliance with any
of the covenants and conditions contained in, or may amend the Plan of
Reorganization; provided that such waiver or amendment does not materially
adversely affect the interests of shareholders of your fund.
Securities and Exchange Commission registration
Under the reorganization, the successor fund will assume your fund's
existing registration statements under the Securities Act of 1933, as amended
(the "1933 Act") and the 1940 Act.
Continuation of shareholder accounts and services
The successor fund's transfer agent, Pioneering Services Corporation
("PSC"), will establish accounts for all shareholders of the successor fund
containing the appropriate number of successor fund shares to be received by the
shareholder under the Plan of Reorganization. Such account will be identical in
all material respects to the accounts currently maintained by PSC for each of
your fund's shareholders. Shareholders who have elected to receive a particular
service, such as telephone redemptions or exchanges or Pioneer Investomatic
Plans, will continue to receive such services as shareholders of the successor
fund without any further action.
Expenses of the reorganization
Pioneer will bear all expenses associated with the transactions
contemplated by the Plan of Reorganization.
Tax consequences of the reorganization
It is a condition to the consummation of the reorganization that your fund
receives on or before the Closing Date an opinion from counsel, Hale and Dorr
LLP, substantially
12
<PAGE>
to the effect that, among other things, for federal income tax purposes the
transactions contemplated by the Plan of Reorganization will constitute a
reorganization under Section 368(a)(1) of the Internal Revenue Code of 1986, as
amended, and that, consequently, no gain or loss will be recognized for federal
income tax purposes by your fund or its shareholders upon (1) the transfer of
all of the assets of your fund to the successor fund in exchange solely for
successor fund shares and the assumption by the successor fund of your fund's
liabilities and (2) the distribution by your fund of the successor fund shares,
in liquidation of your fund, to the shareholders in exchange for your fund's
shares. The opinion will further state, among other things, that (i) the federal
tax basis of successor fund shares to be received by shareholders of your fund
will be the same as the federal tax basis of the shares of your fund surrendered
in exchange therefor and (ii) each shareholder's federal tax holding period for
his or her successor fund shares will include such shareholder's holding period
for shares of your fund surrendered in exchange therefor, provided that such
shares were held as capital assets on the date of the exchange.
Description of certain provisions of the successor fund's Delaware
Declaration of Trust
The following is a summary of certain provisions of the successor fund's
Delaware Declaration of Trust.
Series and classes. As discussed above, the Delaware Declaration of Trust
would permit the successor fund to issue series of its shares which would
represent interests in separate portfolios of investments including the
corresponding current fund. No series would be entitled to share in the assets
of any other series or be liable for the expenses or liabilities of any other
series. The trustees would also be able to authorize the successor fund to issue
additional classes of shares without prior shareholder approval.
Limitations on Derivative Actions. In addition to the requirements under
Delaware law, the Delaware Declaration of Trust provides that a shareholder of
the successor fund may bring a derivative action on behalf of such successor
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 successor 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 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
successor fund for the expense of any such advisers in the event that the
trustees determine not to bring such action. Trustees who are not "interested
persons" as such term is used under the 1940 Act shall be deemed to be
independent for purposes of all action taken by the Trustees, including any
action taken with respect to a derivative action.
Shareholder meetings and voting rights. The successor fund is not required
to hold annual meetings of shareholders and does not intend to hold such
meetings. In the event that a meeting of shareholders is held for the successor
fund, each share of the successor
13
<PAGE>
fund shall be entitled to one vote on all matters presented to shareholders
including the election of trustees. Shareholders of the successor fund do not
have cumulative voting rights in connection with the election of trustees.
Meetings of shareholders of the successor fund, or any series or class thereof,
may be called by the trustees, certain officers or upon the written request of
holders of 10% or more of the shares entitled to vote at such meetings. The
shareholders of the successor fund shall only have the right to vote with
respect to the limited number of matters specified in the Delaware Declaration
of Trust and such other matters as the trustees shall determine or shall be
required by law.
Indemnification. The Delaware Declaration of Trust of the successor fund
provides for indemnification of trustees, officers and agents of the successor
fund provided that no such indemnification shall be provided to any person who
is adjudicated (i) to be liable by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
such person's office or (ii) not to have acted in good faith in the reasonable
belief that such person's actions were in the best interest of the Delaware
business trust.
The Delaware Declaration of Trust provides that if any present or former
shareholders of the successor fund, or any future series thereof, shall be held
personally liable solely by reason of that person being or having been a
shareholder and not because of such shareholder's act or omissions or for some
other reason that shareholder (or his or her 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 successor fund or series
thereof, to be held harmless from and indemnified against all loss and expense
arising from such liability. The successor fund, on its own behalf or on behalf
of any affected series, shall, upon request by the shareholder, assume the
defense of any claim made against the shareholder for any act or obligation of
the fund or series thereof, and satisfy any judgment thereon from the assets of
the fund or series thereof.
Termination. The Delaware Declarations of Trust would permit termination of
the successor fund or of any series or class of the successor fund (i) by a
majority of the shareholders at a meeting of shareholders of the successor fund,
series or class; or (ii) by a majority of the trustees without shareholder
approval if the trustees determine that such action is in the best interest of
the fund or its shareholders. The factors and events that the trustees may take
into account in making such determination include (i) the inability of the
successor fund, or any successor series or class to maintain their assets at an
appropriate size; (ii) changes in laws or regulations governing them or
affecting assets of the type in which they invest; or (iii) economic
developments or trends having a significant adverse impact on their business or
operations. Termination of your fund requires the affirmative 1940 Act majority
vote of the fund.
Merger, consolidation, sale of assets, etc. The Delaware Declaration of
Trust would authorize the trustees of the successor fund without shareholder
approval specifically to permit the successor fund, or any series thereof, to
merge or consolidate with any corporation, association, trust or other
organization or sell or exchange all or substantially all of the property
belonging to the successor fund, or any series thereof. The Massachu-
14
<PAGE>
setts Declaration of Trust does not specifically provide for mergers or
consolidations of your fund. A sale of assets of your fund would require an
affirmative 1940 Act majority vote of the fund. Shareholders of your fund would
thus lose their power to vote on the merger or consolidation of the successor
fund into another entity and on the sale of assets of the successor fund.
Amendments. The Delaware Declaration of Trust would permit the trustees to
amend the Delaware Declaration of Trust without a shareholder vote; provided
that shareholders of the successor fund shall have the right to vote on any
amendment (i) that would affect the voting rights of shareholders, (ii) with
respect to which shareholder approval is required by law; (iii) that would amend
this provision of the Declaration of Trust; and (iv) with respect to any other
matter that the trustees determine to submit to shareholders. Any amendment to
the your fund's Declaration of Trust, except an amendment changing the name of
the fund or supplying any omission, curing any ambiguity or curing, correcting
or supplementing any defective or inconsistent provision of the Declaration of
Trust, requires the affirmative 1940 Act majority vote of the fund.
PROPOSALS 3(a) THROUGH 3(l)
AMENDMENT TO THE FUND'S FUNDAMENTAL
INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS
Pioneer and your board of trustees recommend that a number of changes be
made to modernize your fund's fundamental investment objective, policies and
restrictions. The purpose of these changes is to afford your fund additional
flexibility to respond more quickly to a constantly changing investment
environment. Specifically, these changes are designed to give your fund the same
degree of flexibility that many other mutual funds that are in the same category
as your fund (i.e., investment grade bond funds) typically have without
increasing the risks associated with investing in the fund beyond the industry
norm for this type of bond fund. We are asking you to vote on these changes
because the objective, policies and restrictions described below are fundamental
and may be changed only with shareholder approval.
The 1940 Act requires mutual funds to adopt fundamental investment policies
and restrictions covering certain types of investment practices. Your fund,
however, is also subject to a number of other fundamental policies and
restrictions that are not required by the 1940 Act or any other current laws. In
fact, most of your fund's investment policies were designated as fundamental
when your fund was organized in 1978 because that was the standard practice in
the mutual fund industry at the time. The mutual fund industry has matured
significantly over the last 21 years, and the vast majority of mutual funds
which are organized today do not designate their investment policies (or even
investment objectives for that matter) as fundamental so that they will have
greater flexibility to respond to changes in the investment landscape.
Similarly, most of your fund's investment restrictions were adopted to reflect
certain regulatory, business or industry conditions which are no longer in
effect, especially the "blue sky" laws formerly imposed by state securities
regulations. It is also recommended that some of the fundamental restrictions
15
<PAGE>
be liberalized to the extent permitted under the 1940 Act in light of current
interpretive positions of the staff of the SEC. In order to ensure that these
proposed changes do not conflict with a possible interpretation of your fund's
investment objective, it is recommended that the investment objective be revised
to accommodate the added flexibility permitted by the changes.
Pioneer expects that you will benefit from these proposed changes to the
fund's fundamental objective, policies and investment restrictions in several
ways. First, the fund would have the same degree of flexibility to respond to
new developments and changing trends in the fixed income marketplace that other
comparable funds typically have. Pioneer believes that this added flexibility
will make your fund more competitive among its peer group of bond funds. Pioneer
recognizes that this added flexibility may also introduce added risks to an
investment in the fund. However, Pioneer believes that these changes may improve
the fund's risk-return balance by allowing for enhanced performance at a minimal
increase in risk for the fund's overall portfolio. Pioneer would carefully
evaluate all new investment opportunities which could become available to the
fund as a result of the increased flexibility to determine whether any would be
suitable for the fund given its investment objective, policies and risk profile.
In addition, Pioneer believes that these changes will not expose the fund's
shareholders to risks that are any greater than the risks normally associated
with investing in comparable bond funds.
Second, the proposed changes to the fund's investment restrictions are
designed to produce a clearer and more concise set of restrictions. These
revised restrictions parallel the investment restrictions of other funds managed
by the adviser, which will facilitate the adviser's compliance efforts. Also,
these revised restrictions should assist investors in understanding the
characteristics and risks associated with this fund and will allow for more
effective comparison to other mutual funds with similar investment objectives.
PROPOSED AMENDMENTS TO INVESTMENT POLICIES AND RESTRICTIONS
The table below sets forth the fund's current fundamental objective,
policies and restrictions in the left hand column and the proposed amended
policies or restrictions in the right hand column. The current restrictions are
presented in the same order as they are listed in the fund's statement of
additional information. The amended restrictions, if approved, will be reordered
in the fund's revised statement of additional information.
16
<PAGE>
<TABLE>
<CAPTION>
Proposal Current Fundamental Investment Objective Amended Fundamental Investment Objective
- --------- ------------------------------------------------ -----------------------------------------------
<S> <C> <C>
3(a) The fund seeks current income from a high Amended as follows. The fund seeks current
quality portfolio with due regard to income from an investment grade portfolio
preservation of capital and prudent with due regard to preservation of capital
investment risk. The fund has a secondary and prudent investment risk. The fund has a
objective of maintaining a relatively stable secondary objective of maintaining a
level of dividends; however, the level of relatively stable level of dividends; however,
dividends will be maintained only if the level of dividends will be maintained only
consistent with preserving the high quality of if consistent with preserving the investment
the fund's portfolio. grade quality of the fund's portfolio.
</TABLE>
<TABLE>
<CAPTION>
Proposal Current Fundamental Policy Amended Non-Fundamental Policy
- ---------- -------------------------------------------------- ------------------------------------------------
<S> <C> <C>
3(b) At least 85% of the fund's total assets must Amended as follows: At least 80% of the
be invested in (a) debt securities issued or fund's total assets must be invested in
guaranteed by the U.S. government or its (a) debt securities issued or guaranteed
agencies or instrumentalities, (b) investment- by the U.S. government or its agencies or
grade securities, that is, debt securities, instrumentalities, (b) investment-grade
including convertible securities, that are rated securities, that is, debt securities, including
"A" or higher by the major recognized bond convertible securities, that are rated "BBB" or
services, and comparably rated commercial higher by a nationally recognized statistical
paper and (c) cash and cash equivalents rating organization and comparably rated
(such as certificates of deposit, repurchase commercial paper and (c) cash and cash
agreements maturing in one week or less equivalents (such as certificates of deposit,
and bankers' acceptances). The fund may repurchase agreements maturing in one
also invest up to 15% of its total assets in week or less and bankers' acceptances).
debt securities, including convertible The fund may invest up to 20% of its
securities, which are rated in the fourth total assets in debt securities rated below
highest grade by the major recognized bond investment grade or in unrated securities that
services and commercial paper which is are determined to be of equivalent quality
comparable. None of the fund's portfolio may by Pioneer.
be invested in debt securities which are rated
below the fourth highest grade or are
unrated, except that the fund may hold debt
securities the ratings of which are reduced
subsequent to purchase.
</TABLE>
Explanation for proposal 3(a) and (b). The Trustees recommend that the
rating criteria for the fund's investments be made non-fundamental and revised
to permit the fund greater flexibility to invest in fixed income securities
rated BBB (the lowest investment grade category) and below. This policy change
will give the fund greater flexibility to select from a wider range of debt
securities. The fund's current policies do not allow the fund to invest in debt
securities rated below investment grade (or in unrated securities of equivalent
quality) and limit securities rated BBB to 15% of the fund's assets. Pioneer
believes that these sectors of the fixed income marketplace offers a number of
attractive investment opportunities for your fund. Pioneer believes that by
investing a greater portion of the fund in securities rated BBB and allocating a
small portion of the fund's assets to below investment grade securities, the
fund can enhance its performance without subjecting the fund to undue additional
risk. In addition, Pioneer believes that this added flexibility will allow the
fund to compete on a more equal footing with other comparable bond funds which
typically allocate up to 20% of their assets to below investment grade
securities and are not restricted in their allocation among investment grade
categories. In addition, by making this policy non-fundamental, the Trustees
will be able to authorize further changes in the fund's rating criteria in the
future. Consequently, the fund will be able to
17
<PAGE>
respond to the changing market environment without the delay and cost of a
shareholder vote. This change means that the Trustees, not the shareholders,
would approve any future changes in the specific composition of the fund's
primary investments; however, shareholders would still need to approve any
change in the fund's investment objective.
While Pioneer does not believe that allocating a portion of the fund's
assets to securities rated below investment grade would subject the fund to
undue additional risk, such investments would involve greater risks than
investments in investment grade securities only. Below investment grade
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
these securities tend to be very volatile, and they are less liquid than
investment grade debt securities. Adverse company specific events are more
likely to render the issuer of below investment grade securities unable to make
interest and/or principal payments. For these reasons, your investment in the
fund would be subject to increased price sensitivity to changing interest rates
and deteriorating economic environment and to greater risk of loss due to
default or declining credit quality if your fund is permitted to invest a
portion of its assets in below investment grade securities.
In light of these proposed changes to the fund's rating criteria, the
trustees are also recommending that the fund's investment objective be revised.
Pioneer believes that the fund's current investment objective may present some
confusion for investors to the extent that the fund is permitted to invest in
debt securities rated BBB as part of its 80% primary investment basket and up to
20% of its total assets in debt securities rated below BBB. When adopted in
1978, the fund's use of the phrase "high quality portfolio" was more clearly
understood to refer to securities of investment grade quality. Today, the term
"high quality" may also be used to refer to securities rated within the highest
two investment grade categories (AAA or AA). This common usage could imply to
some investors that the fund's portfolio is of a higher average quality than the
proposed policies contemplate. For this reason, the Trustees recommend that the
fund's investment objective be revised to refer to an "investment grade
portfolio" rather than a "high quality portfolio" to avoid any confusion on this
point. The revised investment objective would continue to be classified as
fundamental requiring shareholder approval before any further change could be
made.
It is important to note that the fund's primary investment focus will
remain investment grade debt securities. If the changes are approved, at least
80% of the fund's total assets will be invested in investment grade securities.
The remainder of the fund's assets, up to 20%, would be available for investment
in below investment grade securities. This does not mean that Pioneer will
always allocate the full 20% of the fund's total assets to such securities.
Pioneer will only advise the fund to purchase below investment grade securities
after conducting a thorough analysis of the issuer of the security and only if
Pioneer determines that the purchase would be consistent with the fund's
investment objective of providing current income with due regard for the
preservation of capital and prudent investment risk.
18
<PAGE>
<TABLE>
<CAPTION>
Proposal Current Fundamental Policy Amended Non-Fundamental Policy
- --------- ------------------------------------------------ --------------------------------------------
<S> <C> <C>
3(c) Not more than 15% of the fund's assets The fund may invest up to 15% of its total
may be invested in foreign securities and assets in securities of non-U.S. issuers,
not more than 5% of its total assets may including up to 5% of its total assets in
be invested in foreign securities that are not securities of emerging market issuers. This
listed on a recognized foreign or domestic limitation does not apply to securities of
exchange, provided that purchases of Canadian issuers.
Canadian securities are not subject to the
limitations of this paragraph.
</TABLE>
Explanation of Proposal 3(c). Other than redesignating this policy as non-
fundamental, the changes are to eliminate the 5% limit on bonds that are not
listed and to allow the fund to invest a portion of the assets which it
allocates to foreign securities to securities of issuers located in emerging
market countries. The 5% limit on bonds is no longer relevant and reflects a
time when most bonds were listed on an exchange. Currently, bonds generally
trade in the over-the-counter market. Eliminating this 5% limit would treat
domestic and foreign bonds equally. Emerging market countries are generally
considered to be those countries with less developed economies and securities
markets. Pioneer believes that this change will broaden the fund's investment
universe in a manner that will allow it to invest in potentially higher yielding
securities without adding undue risk to the fund's portfolio.
Investing in non-U.S. issuers may involve unique risks compared to
investing in the securities of U.S. issuers. These risks may include:
o Less information about non-U.S. issuers or markets may be available due
to less rigorous disclosure and accounting standards or regulatory
practices
o Many non-U.S. markets are smaller, less liquid and more volatile. In a
changing market, Pioneer may not be able to sell the fund's portfolio
securities in amounts and at prices it considers reasonable
o Adverse effect of currency exchange rates or controls on the value of
the fund's investments
o Political, economic and social developments that adversely affect the
securities markets
o Withholding and other foreign taxes may decrease the fund's return
19
<PAGE>
<TABLE>
<CAPTION>
Proposal Current Fundamental Restriction Amended Fundamental Restriction
- --------- ---------------------------------------------------- ---------------------------------------------------
<S> <C> <C>
The fund may not: The fund may not:
3(d) (1) Purchase any security (other than (1) Make any investment inconsistent with
securities issued or guaranteed by the the fund's status as a diversified investment
U.S. Government or its agencies or company under the 1940 Act.
instrumentalities) if, immediately after and as
a result of such investment, (a) more than (2) Invest 25% or more of its total assets in
5% of the value of the fund's total assets securities of one or more issuers (excluding
would be invested in securities of the issuer; the U.S. Government or its agencies or
(b) the fund would hold more than 10% of instrumentalities) conducting their principal
the voting securities of the issuer; or (c) business activities in the same industry. For
more than 25% of the value of the fund's purposes of this restriction the electric utility,
assets would be invested in a single industry natural gas utility, and telephone industries
(each of the electric utility, natural gas utility, shall be considered separate industries.
and telephone industries shall be considered
as a separate industry for this purpose);
</TABLE>
Explanation of Proposal 3(d). The current restriction combines two separate
concepts--diversification and industry concentration. The proposed change would
split those two concepts into two separate restrictions and update the language
of each to a more modern construction. The first amended restriction would
require the fund to comply with the definition of diversification under the 1940
Act, which is slightly more flexible than the definition in the fund's current
restriction which applies to 100% of the fund's assets.
Under the 1940 Act, a diversified fund is required to comply with the
following requirements: a diversified fund may not, with respect to 75% of its
total assets, purchase securities of an issuer (other than the U.S. Government,
its agencies, instrumentalities or authorities or repurchase agreements
collateralized by U.S. Government securities and other investment companies),
if: (a) such purchase would cause more than 5% of the fund's total assets taken
at market value to be invested in the securities of such issuer; or (b) such
purchase would at the time result in more than 10% of the outstanding voting
securities of such issuer being held by the fund. Unlike your fund's current
restriction, the 1940 Act only requires compliance with respect to 75% of a
fund's total assets. This amendment, therefore, will provide the fund with
additional flexibility to invest more significantly in certain issuers when the
adviser determines that an investment presents a special opportunity for the
fund. The fund would be permitted to invest up to 25% of its assets in the
securities of any one issuer while remaining diversified under the 1940 Act. To
the extent the fund would invest more than 5% of its total assets in a
particular issuer (which is maximum permitted by the current restriction), the
fund would become more susceptible to adverse events effecting that issuer. This
would increase the risks of investing in the fund because it could increase the
volatility of the fund's portfolio.
20
<PAGE>
<TABLE>
<CAPTION>
Proposal Current Fundamental Restriction Amended Fundamental Restriction
- --------- ------------------------------------------------ ------------------------------------------------
<S> <C> <C>
The fund may not: The fund may not:
3(e) (2) Buy or sell real estate in the ordinary (3) Invest in real estate, except that the fund
course of its business; provided, however, may invest in securities of issuers that invest
the fund may invest in readily marketable in real estate or interests therein, securities
debt securities secured by real estate or that are secured by real estate or interests
interests therein or issued by companies, therein, securities of real estate investment
including real estate investment trusts, trusts and mortgage-backed securities.
which invest in real estate or interests
therein;
</TABLE>
Explanation of Proposal 3(e). This restriction has been amended for
improved clarity and uniformity among Pioneer mutual funds but has not been
materially changed.
<TABLE>
<CAPTION>
Proposal Current Fundamental Restriction Amended Fundamental Restriction
- ---------- ------------------------------------------------ -------------------------------------------
<S> <C> <C>
The fund may not: The fund may not:
3(f) (3) Buy or sell commodities or commodity (4) Invest in commodities or commodity
contracts except interest rate futures contracts, except that the fund may invest
contracts, options on securities, securities in currency instruments and contracts and
indices, currency and other financial financial instruments and contracts that
instruments, futures contracts on securities, might be deemed to be commodities or
securities indices, currency and other commodity contracts.
financial instruments and options on such
futures contracts, forward foreign currency
exchange contracts, forward commitments,
securities index put or call warrants, interest
rate swaps, caps and floors and repurchase
agreements entered into in accordance with
the fund's investment policies;
</TABLE>
Explanation of Proposal 3(f). This restriction has been amended for
improved clarity and uniformity among Pioneer mutual funds but has not been
materially changed.
<TABLE>
<CAPTION>
Proposal Current Fundamental Restriction Amended Fundamental Restriction
- ---------- ----------------------------------------- ------------------------------------------------
<S> <C> <C>
The fund may not: The fund may not:
3(g) (4) Underwrite any issue of securities; (5) Act as an underwriter, except as it may be
deemed to be an underwriter in a sale of
restricted securities held in its portfolio.
</TABLE>
Explanation of Proposal 3(g). This restriction has been amended for
improved clarity and uniformity among Pioneer mutual funds but has not been
materially changed. The exception in the amended restriction with respect to
sales of restricted securities by the fund does not represent a change in the
scope of the current restriction. The fund is currently permitted to purchase
and sell restricted securities. Restricted securities are securities which are
subject to restrictions on resale imposed by the 1933 Act. When the fund sells a
restricted security, it must comply with any applicable restriction imposed by
the 1933 Act. In certain situations, the fund may be considered or "deemed" to
be an underwriter when selling a restricted security under certain provisions of
the 1933 Act. An exception covering this situation has been made explicit in the
amended restriction simply to clarify the fact that this situation is not
covered by the current restriction.
21
<PAGE>
<TABLE>
<CAPTION>
Proposal Current Fundamental Restriction Amended Fundamental Restriction
- --------- ---------------------------------------------- ----------------------------------------------
<S> <C> <C>
The fund may not: The fund may not:
3(h) (5) Make loans in an aggregate amount in (6) Make loans, except by the purchase of
excess of 10% of the value of the fund's debt obligations, by entering into repurchase
total assets, taken at the time any loan is agreements or through the lending of
made, provided that (I) the purchase of debt portfolio securities.
securities pursuant to the fund's investment
objectives shall not be deemed loans for the
purposes of this restriction, (ii) loans of
portfolio securities as described, from time
to time, under "Lending of Portfolio
Securities" shall be made only in accordance
with the terms and conditions therein set
forth and (iii) in seeking a return on
temporarily available cash, the fund may
engage in repurchase transactions maturing
in one week or less and involving obligations
of the U.S. Government, its agencies or
instrumentalities.
</TABLE>
Explanation of Proposal 3(h). This restriction has been amended for
improved clarity and uniformity among Pioneer mutual funds but has not been
materially changed.
<TABLE>
<CAPTION>
Proposal Current Fundamental Restriction Amended Non-Fundamental Restriction
- ---------- ------------------------------------------------- -------------------------------------------
<S> <C> <C>
The fund may not:
3(i) (6) Sell securities short, except to the extent Eliminate as fundamental and reclassify as
that the fund contemporaneously owns or has the a non-fundamental investment policy.
right to acquire at no additional cost
securities identical to those sold short.
</TABLE>
Explanation of Proposal 3(i). The 1940 Act does not require that this
restriction be fundamental. This restriction would continue to be a fund policy
but would be reclassified as non-fundamental.
<TABLE>
<CAPTION>
Proposal Current Fundamental Restriction Amended Non-Fundamental Restriction
- ---------- ------------------------------------------------- -------------------------------------------
<S> <C> <C>
The fund may not:
3(j) (7) Purchase securities on margin. Eliminate as fundamental and reclassify as
a non-fundamental investment policy.
</TABLE>
Explanation of Proposal 3(j). The 1940 Act does not require that this
restriction be fundamental. The fund would instead adopt a non-fundamental
investment policy that provides that the fund will only purchase securities on
margin to the extent permitted by the 1940 Act.
22
<PAGE>
<TABLE>
<CAPTION>
Proposal Current Fundamental Restriction Amended Fundamental Restriction
- --------- -------------------------------------------------- ----------------------------------------------
<S> <C> <C>
The fund may not: The fund may not:
3(k) (8) Borrow money, except that, as a (7) Borrow money, except the fund may: (a)
temporary measure for extraordinary or borrow from banks or through reverse
emergency purposes and not for investment repurchase agreements in an amount up to
purposes, the fund may borrow up to 5% of 33-1/3% of the fund's total assets (including
the value of its total assets at the time the amount borrowed); (b) to the extent
of the borrowing; 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.
</TABLE>
Explanation of Proposal 3(k). This restriction has been amended for
improved clarity and uniformity among Pioneer mutual funds. The percentage
limitation on borrowing has been revised upward from 5% to 33-1/3% of the fund's
total assets to conform to the percentage limitation included in the 1940 Act.
This change affords the fund additional flexibility to borrow money if Pioneer
determines that such borrowing is in the best interests of the fund and is
consistent with both the fund's investment objective and with the requirements
of the 1940 Act. However, because the fund does not engage in borrowing for
leverage purposes, the fund will adopt a non-fundamental policy that it will not
purchase additional securities while its total outstanding borrowing exceeds 5%
of its total assets.
<TABLE>
<CAPTION>
Proposal Current Fundamental Restriction Amended Restriction
- ---------- --------------------------------------------- ------------------------------------
<S> <C> <C>
The fund may not:
3(l) (9) Mortgage, pledge, or hypothecate any of Eliminate as a separate fundamental
its assets restriction.
</TABLE>
Explanation of Proposal 3(l). The 1940 Act does not require that this
restriction be fundamental.
BOARD EVALUATION AND RECOMMENDATION
The trustees believe that the proposed amendments to the fund's fundamental
policies and restrictions will more clearly reflect current regulatory practice
and will expand the investment opportunities available to the fund. Accordingly,
the trustees recommend that you approve the proposals as described above. If the
required approval of a change to a policy or restriction is not obtained, the
current investment policy or restriction will continue in effect.
THE TRUSTEES OF YOUR FUND RECOMMEND THAT THE SHAREHOLDERS OF YOUR FUND VOTE
FOR THE PROPOSAL TO AMEND THE FUND'S INVESTMENT RESTRICTIONS.
VOTING RIGHTS AND REQUIRED VOTE
Each share of your fund is entitled to one vote. Approval of each proposal
requires the affirmative vote of a majority of the shares of your fund
outstanding and entitled to
23
<PAGE>
vote. For this purpose, a majority of the outstanding shares of your fund means
with respect to each proposal the vote of the lesser of
(1) 67% or more of the shares present at the meeting, if the holders of more
than 50% of the shares of the fund are present or represented by proxy,
or
(2) more than 50% of the outstanding shares of the fund.
INFORMATION CONCERNING THE MEETING
Outstanding Shares and Quorum
As of February 26, 1999, 14,444,029.629 Class A shares, 5,230,495.642 Class
B and 1,249,691.967 Class C shares of beneficial interest of the fund were
outstanding. Only shareholders of record on March 5, 1999 are entitled to notice
of and to vote at the meeting. A majority of the outstanding shares of the fund
that are entitled to vote will be considered a quorum for the transaction of
business.
Ownership of shares of the fund
To the knowledge of the fund, as of February 26, 1999, the following
persons owned of record or beneficially 5% or more of the outstanding Class A,
Class B and Class C shares of your fund.
<TABLE>
<CAPTION>
Number of Shares Owned and Per-
centage of Total Shares Outstand-
Shareholder Class ing for the Class
- ----------- ----- -----------------
<S> <C> <C>
Merrill Lynch Pierce Fenner and Smith A 822,868.564
For the sole benefit of its customers 5.69%
Mutual Fund Administration 97JL1 B 692,985.545
48000 Deer Lake Drive East 13.24%
Jacksonville, FL 32246-6484 C 186,777.511
14.94%
</TABLE>
Shareholder proposals
Your fund is not required to hold annual meetings of shareholders and does
not currently intend to hold a meeting of shareholders in 2000. A shareholder
proposal intended to be presented at a future annual meeting must be received by
the fund a reasonable time before the fund prepares proxy materials relating to
that meeting.
Shares held in retirement plans
PGI, as trustee or custodian of certain retirement plans, is permitted to
vote any shares held in such plans and will do so if necessary to obtain a
quorum.
Proxies, quorum and voting at the meeting
Any shareholder who has given his or her proxy to someone has the power to
revoke that proxy at any time prior to its exercise by executing a superseding
proxy or by submitting a notice of revocation to the secretary of the fund. In
addition, although mere atten-
24
<PAGE>
dance at the meeting will not revoke a proxy, a shareholder present at the
meeting may withdraw his or her proxy and vote in person. All properly executed
and unrevoked proxies received in time for the meeting will be voted in
accordance with the instructions contained in the proxies. If no instruction is
given, the persons named as proxies will vote the shares represented thereby in
favor of the proposals described above and will use their best judgment in
connection with the transaction of such other business as may properly come
before the meeting or any adjournment thereof.
A majority of the shares entitled to vote -- present in person or
represented by proxy -- constitutes a quorum for the transaction of business
with respect to any proposal (unless otherwise noted in the proxy statement). In
the event that at the time any session of the meeting is called to order a
quorum is not present in person or by proxy, the persons named as proxies may
vote those proxies which have been received to adjourn the meeting to a later
date. In the event that a quorum is present but sufficient votes in favor of any
of the proposals, including the election of the nominees to the board of
trustees, have not been received, the persons named as proxies may propose one
or more adjournments of the meeting to permit further solicitation of proxies
with respect to such proposal. Any such adjournment will require the affirmative
vote of more than one half of the shares of the trust present in person or by
proxy at the session of the meeting to be adjourned. The persons named as
proxies will vote those proxies which they are entitled to vote in favor of any
such proposal in favor of such an adjournment and will vote those proxies
required to be voted against any such proposal against any such adjournment. A
shareholder vote may be taken on one or more of the proposals in the proxy
statement prior to such adjournment if sufficient votes for its approval have
been received and it is otherwise appropriate. Such vote will be considered
final regardless of whether the meeting is adjourned to permit additional
solicitation with respect to any other proposal.
Shares of your fund represented in person or by proxy, including shares
which abstain or do not vote with respect to a proposal, will be counted for
purposes of determining whether there is a quorum at the meeting. Accordingly,
an abstention from voting has the same effect as a vote against a proposal.
However, if a broker or nominee holding shares in "street name" indicates
on the proxy card that it does not have discretionary authority to vote on a
proposal, those shares will not be considered present and entitled to vote on
that proposal. Thus, a "broker non-vote" has no effect on the voting in
determining whether a proposal has been adopted in accordance with a vote that
may be approved by less than a majority of the outstanding shares of the fund,
if more than 50% of the outstanding shares (excluding the "broker non-votes")
are present or represented at the meeting. However, for purposes of determining
whether a proposal has been adopted in accordance with a vote that requires
approval by holders of at least a majority of the outstanding shares of the
fund, a "broker non-vote" has the same effect as a vote against that proposal
because shares represented by a "broker non-vote" are considered to be
outstanding shares.
Other business
While the meeting has been called to transact any business that may
properly come before it, the only matters that the trustees intend to present
are those matters stated in
25
<PAGE>
the attached Notice of Special Meeting of Shareholders. However, if any
additional matters properly come before the meeting, and on all matters
incidental to the conduct of the meeting, it is the intention of the persons
named in the enclosed proxy to vote the proxy in accordance with their judgment
on such matters unless instructed to the contrary.
Method of solicitation and expenses
The cost of preparing, assembling and mailing this proxy statement and the
attached Notice of Special Meeting of Shareholders and the accompanying proxy
card will be borne by Pioneer. In addition to soliciting proxies by mail,
Pioneer may, at Pioneer's expense, have one or more of the fund's officers,
representatives or compensated third-party agents, including Pioneer, PSC and
PFD, aid in the solicitation of proxies by personal interview or telephone and
telegraph and may request brokerage houses and other custodians, nominees and
fiduciaries to forward proxy soliciting material to the beneficial owners of the
shares held of record by such persons.
The fund may also arrange to have votes recorded by telephone. The
telephone voting procedure is designed to authenticate shareholders' identities,
to allow shareholders to authorize the voting of their shares in accordance with
their instructions and to confirm that their instructions have been properly
recorded. The fund has been advised by counsel that these procedures are
consistent with the requirements of applicable law. If these procedures were
subject to a successful legal challenge, such votes would not be counted at the
meeting. The fund is unaware of any such challenge at this time. Shareholders
would be called at the phone number PSC has in its records for their accounts,
and would be asked for their Social Security number or other identifying
information. The shareholders would then be given an opportunity to authorize
proxies to vote their shares at the meeting in accordance with their
instructions. To ensure that the shareholders' instructions have been recorded
correctly, they will also receive a confirmation of their instructions in the
mail. A special toll-free number will be available in case the information
contained in the confirmation is incorrect.
Persons holding shares as nominees will be reimbursed by Pioneer, upon
request, for the reasonable expenses of mailing soliciting materials to the
principals of the accounts.
March 9, 1999
26
<PAGE>
Exhibit A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION is made as of the 4th day of May,
1999, by and between Pioneer Bond Fund, a Massachusetts business trust (the
"Current Trust"), and Pioneer Bond Fund, a business trust duly formed under the
laws of the State of Delaware (the "Successor Trust").
This Agreement is intended to be and is adopted as a plan of reorganization
within the meaning of Section 368 (a)(1) of the U.S. Internal Revenue Code of
1986, as amended (the "Code"), and is intended to effect the conversion of the
Current Trust into a Delaware business trust.
In consideration of the premises and of the covenants and agreements
hereinafter set forth the parties hereto covenant and agree as follows.
1. TRANSFER OF ASSETS OF THE CURRENT TRUST IN EXCHANGE FOR ASSUMPTION OF
LIABILITIES AND ISSUANCE OF SHARES OF THE SUCCESSOR TRUST; DISSOLUTION OF
THE CURRENT TRUST
1.1 Subject to the terms and conditions set forth herein and on the basis
of the representations and warranties contained herein, the Current Trust agrees
to transfer all of its assets set forth in paragraph 1.2 and assign and transfer
all of its liabilities to the Successor Trust established solely for the purpose
of acquiring all of the assets and assuming all of the liabilities of the
Current Trust. As of the date of this Agreement, the Successor Trust has not
issued any shares of beneficial interest or commenced operations. The Successor
Trust agrees that in exchange for all of the assets of the Current Trust (1) the
Successor Trust shall assume all of the liabilities of the Current Trust,
whether contingent or otherwise, then existing and (2) the Successor Trust shall
deliver to the Current Trust the number of full and fractional shares of each
Class of the Successor Trust (the "Successor Trust Shares") equal to the number
of each class of Current Trust Shares then outstanding, the value of the
Successor Trust Shares collectively to be equal to the value of the assets of
the Current Trust transferred to, less the liabilities of Current Trust assumed
by, the Successor Trust (the "Net Assets"), as described in paragraph 3.1 on the
Closing Date provided for in paragraph 3.1. Such transactions shall take place
at the Closing provided for in paragraph 3.1.
1.2 The assets of the Current Trust to be acquired by the Successor Trust
shall include, without limitation, all cash, cash equivalents, securities,
receivables (including interest and dividends receivable), any claims or rights
of action or rights to register shares under applicable securities laws, any
books or records of the Current Trust and other property owned by the Current
Trust and any deferred or prepaid expenses shown as assets on the books of the
Current Trust on the Closing Date provided for in paragraph 3.1.
1.3 Immediately upon delivery to the Current Trust of Successor Trust
Shares of the Successor Trust, any duly authorized officer of the Current Trust
as the then sole shareholder of the Successor Trust shall (i) elect as Trustees
of the Successor Trust the persons
27
<PAGE>
who currently serve as Trustees of the Current Trust; (ii) ratify the selection
of the independent accountants; (iii) approve a management contract for the
Successor Trust with Pioneer Investments in the form most recently approved for
the Current Trust; and (iv) adopt the investment objectives, investment policies
and investment restrictions of the Current Trust.
1.4 As provided in paragraph 3.4, on the Closing Date, the Current Trust
will distribute in liquidation to its shareholders of record ("Current Trust
Shareholders"), determined as of the close of business on the Closing Date, the
Successor Trust Shares of each class received from the Successor Trust pro rata
in proportion to their respective shares of beneficial interest of such class in
the Current Trust ("Current Trust Shares"), in exchange for such Current Trust
Shares. Such distribution will be accomplished by the transfer of the Successor
Trust Shares then credited to the account of the Current Trust on the share
records of the Successor Trust to open accounts on those records in the names of
such Current Trust Shareholders and representing the respective pro rata number
of the Successor Trust Shares of each class received from the Successor Trust
due to the Current Trust Shareholders. The Successor Trust shall not issue
certificates representing Successor Trust Shares in connection with such
distributions and, if applicable, in exchange for the outstanding certificates
representing Acquired Fund Shares, as described in paragraph 1.8. Fractional
Successor Trust Shares shall be rounded to the third place after the decimal
point.
1.5 As soon as practicable after the distribution of the Successor Trust
Shares as set forth in Section 1.4, the Current Trust shall be terminated and
any such further actions shall be taken in connection therewith as are required
by applicable law.
1.6 Ownership of the Successor Trust Shares by each Successor Trust
Shareholder shall be maintained separately on the books of Pioneering Services
Corporation as the shareholder services and transfer agent for the Successor
Trust.
1.7 Any transfer taxes payable upon issuance of Successor Trust Shares in a
name other than the registered holder of the Current Trust Shares on the books
of the Current Trust as of that time shall be paid by the person to whom such
Successor Trust Shares are to be distributed as a condition of such transfer.
1.8 The Successor Trust shall record the net asset value of all outstanding
Current Trust certificated shares in its books and records as of the Closing
Date, in accordance with paragraph 2.2, and daily thereafter, in accordance with
the Successor Trust's procedures for determining net asset value per share. The
Successor Trust may honor certificates representing Current Trust shares at
their net asset value as determined only on the books and records of the
Successor Trust, and subject to the Successor Trust's normal requirements for
redeeming or transferring shares evidenced by certificates. The Current Trust
Shareholders need not surrender such certificates or deliver an affidavit with
respect to lost certificates, after the Closing. Any Current Trust certificate
which remains outstanding on the Closing Date shall be deemed to be cancelled,
shall no longer evidence ownership of shares of beneficial interest of the
Current Trust and shall not evidence ownership of the Successor Trust Shares.
28
<PAGE>
2. VALUATION
2.1 The value of the Net Assets of the Current Trust to be acquired
hereunder by the Successor Trust shall be the net asset value computed as of the
valuation time provided in the then current prospectus of the Current Trust on
the Closing Date using the valuation procedures set forth in the then current
prospectus or statement of additional information.
2.2 The value of full and fractional Successor Trust Shares of the
Successor Trust to be issued in exchange for the Net Assets of each of the
Current Trust shall be equal to the value of such Net Assets on the Closing
Date, and the number of such Successor Trust Shares of each class to be issued
by the Successor Trust shall equal the number of full and fractional Current
Trust Shares of each class of the Current Trust on the Closing Date.
2.3 All computations of value shall be made by Pioneering Services
Corporation.
3. CLOSING AND CLOSING DATE
3.1 The transfer of the assets of the Current Trust in exchange for the
assumption by the Successor Trust of the liabilities of the Current Trust and
the issuance of Successor Trust Shares to the Current Trust, as described above,
together with related acts necessary to consummate such acts (the "Closing"),
shall occur at the offices of Hale and Dorr LLP at 60 State Street, Boston,
Massachusetts 02109 on May 17, 1999 ("Closing Date"), or at such other place or
date on or prior to December 31, 1999 as the parties may agree in writing. All
acts taking place at the Closing shall be deemed to take place simultaneously as
of the last daily determination of the net asset value of the Current Trust or
at such other time and or place as the parties may agree.
3.2 In the event that on the Closing Date (a) the New York Stock Exchange
is closed to trading or trading thereon is restricted or (b) trading or
reporting of trading on said Exchange or in any market in which portfolio
securities of the Current Trust are traded is disrupted so that accurate
appraisal of the value of the Net Assets of the Current Trust is impracticable,
the Closing shall be postponed until the first business day upon which trading
shall have been fully resumed and reporting shall have been restored.
3.3 The Current Trust shall deliver at the Closing a certificate or
separate certificates of an authorized officer stating that it has notified the
Custodian, as custodian for the Current Trust and the Successor Trust, of the
conversion of the Current Trust to the Successor Trust.
3.4 Pioneering Services Corporation, as shareholder services and transfer
agent for the Current Trust, shall deliver at the Closing certificates as to the
conversion on its books and records of the accounts of the shareholders of the
Current Trust to accounts as holders of shares of the Successor Trust. The
Successor Trust shall issue and deliver to the Current Trust a confirmation
evidencing the shares of Successor Trust to be credited on the Closing Date or
provide evidence satisfactory to the Current Trust that such shares of the
Successor Trust have been credited to the account of the Current Trust on the
books of the Successor Trust. At the Closing each party shall deliver to the
other such bills of sale,
29
<PAGE>
checks, assignments, share certificates, receipts or other documents as such
other party or its counsel may reasonably request.
3.5 Portfolio securities that are not held in book-entry form in the name
of the Custodian as record holder for the Current Trust shall be presented by
the Current Trust to the Custodian for examination no later than five business
days preceding the Closing Date. Portfolio securities which are not held in
book-entry form shall be delivered by the Current Trust to the Custodian for the
account of the Successor Trust on the Closing Date, duly endorsed in proper form
for transfer, in such condition as to constitute good delivery thereof in
accordance with the custom of brokers, and shall be accompanied by all necessary
federal and state stock transfer stamps or a check for the appropriate purchase
price thereof. Portfolio securities held of record by the Custodian in
book-entry form on behalf of the Current Trust shall be delivered to the
Successor Trust by the Custodian by recording the transfer of beneficial
ownership thereof on its records. The cash of the Current Trust to be delivered
shall be in the form of currency or by the Custodian crediting the Successor
Trust's account maintained with the Custodian with immediately available funds.
4. REPRESENTATIONS AND WARRANTIES
4.1 The Current Trust represents and warrants as follows:
4.1.A. The Current Trust is a business trust duly authorized to exist under
the laws of The Commonwealth of Massachusetts and has the power to own all of
its properties and assets and, subject to approval by the shareholders of the
Current Trust, to perform its obligations under this Agreement. The Current
Trust is not required to qualify to do business in any jurisdiction in which it
is not so qualified or where failure to qualify would not subject it to any
material liability or disability. The Current Trust has all necessary federal,
state and local authorizations to own all of its properties and assets and to
carry on its business as now being conducted;
4.1.B. The Current Trust is a registered investment company classified as a
management company of the open-end diversified type and its registration with
the Securities and Exchange Commission (the "SEC") as an investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"), is in
full force and effect;
4.1.C. The Current Trust is not, and the execution, delivery and
performance of this Agreement will not result, in violation of any provision of
its Declaration of Trust or By-laws, or any agreement, indenture, instrument,
contract, lease or other undertaking to which the Current Trust is a party or by
which the Current Trust is bound;
4.1.D. The Current Trust has no material contracts or other commitments
(other than this Agreement or agreements for the purchase of securities entered
into in the ordinary course of business and consistent with its obligations
under this Agreement) that will not be terminated without liability to the
Current Trust on or prior to the Closing Date;
4.1.E. No material litigation or administrative proceeding or investigation
of or before any court or governmental body presently is pending or threatened
against the Current
30
<PAGE>
Trust or any of its properties or assets. The Current Trust knows of no facts
that might form the basis for the institution of such proceedings and the
Current Trust is not a party to, or subject to, the provisions of any order,
decree or judgment of any court or governmental body that materially and
adversely affects its business or its ability to consummate the transactions
herein contemplated;
4.1.F. At the date hereof and at the Closing Date, all federal, state and
other tax returns and reports, including information returns and payee
statements, of the Current Trust required by law to have been filed or furnished
by such dates shall have been filed or furnished and all federal, state and
other taxes, interest and penalties shall have been paid so far as due or
provision shall have been made for the payment thereof and no such return is
currently under audit and no assessment has been asserted with respect to any of
such returns or reports;
4.1.G. The Current Trust has elected that it be treated as a regulated
investment company under Subchapter M of the Code, has qualified as such for
each taxable year since its inception, and will qualify as such as of the
Closing Date;
4.1.H. The authorized capital of the Current Trust consists of an unlimited
number of shares of beneficial interest, no par value, divided into three
classes (Class A, Class B and Class C) of one series. All issued and outstanding
shares of beneficial interest of the Current Trust are, and at the Closing Date
will be, duly and validly issued and outstanding, fully paid and nonassessable.
The Current Trust does not have outstanding any options, warrants or other
rights to subscribe for or purchase any of its shares of beneficial interest,
nor is there outstanding any security convertible into any of its shares of
beneficial interest;
4.1.I. The information to be furnished by the Current Trust for use in
applications for orders, registration statements, proxy materials and other
documents which may be necessary in connection with the transactions
contemplated hereby shall be accurate and complete and shall comply in all
material respects with federal securities and other laws and regulations
thereunder applicable thereto;
4.1.J. All of the issued and outstanding Current Trust Shares will at the
time of the Closing be held by the persons and in the amounts as, on behalf of
the Current Trust, certified in accordance with the provisions of paragraph 3.4;
4.1.K. At the Closing Date, the Current Trust will have good and marketable
title to the assets to be transferred to the Successor Trust pursuant to
paragraph 1.1, and full right, power and authority to sell, assign, transfer and
deliver such assets hereunder, and upon delivery and in payment for such assets,
the Successor Trust will acquire good and marketable title thereto subject to no
restrictions on the full transfer thereof, including such restrictions as might
arise under the Securities Act of 1933, as amended (the "1933 Act), except as
otherwise disclosed in writing and accepted by the Successor Trust;
4.1.L. The execution, delivery and performance of this Agreement will have
been duly authorized prior to the Closing Date by all necessary action on the
part of the Current Trust and this Agreement constitutes a valid and binding
obligation of the Current Trust
31
<PAGE>
enforceable in accordance with its terms, subject to the approval of the
Current Trust's shareholders;
4.1.M. No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by the Current Trust of
the transactions contemplated herein, except such as shall have been obtained
prior to the Closing Date.
4.2 The Successor Trust represents and warrants as follows:
4.2.A. The Successor Trust is a business trust duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
the power to own all of its properties and assets and to perform its obligations
under this Agreement; the Successor Trust is not required to qualify to do
business in any jurisdiction in which it is not so qualified or where failure to
qualify would not subject it to any material liability or disability; the
Successor Trust has all necessary federal, state and local authorizations to own
all of its properties and assets and to carry on its business as now being
conducted; that as of the date hereof and as of the Closing Date, the Successor
Trust consists of one duly established and designated series;
4.2.B. The Successor Trust is not, and the execution, delivery and
performance of this Agreement will not result, in violation of any provision of
the Certificate of Trust, Agreement and Declaration of Trust or By-laws of the
Successor Trust or any agreement, indenture, instrument, contract, lease or
other undertaking to which the Successor Trust is a party or by which the
Successor Trust is bound;
4.2.C. No material litigation or administrative proceeding or investigation
of or before any court or governmental body is presently pending or threatened
against the Successor Trust or any of its properties or assets. The Successor
Trust knows of no facts that might form the basis for the institution of such
proceedings, and the Successor Trust is not a party to, or subject to, the
provisions of any order, decree or judgment of any court or governmental body
that materially and adversely affects its business or its ability to consummate
the transactions herein contemplated;
4.2.D. The Successor Trust will qualify as a regulated investment company
under Subchapter M of the Code for the taxable year in which the Closing occurs
and to continue to qualify as such for each taxable year;
4.2.E. Prior to the Closing Date, there shall be no issued and outstanding
Successor Trust Shares or any other securities of the Successor Trust; Successor
Trust Shares issued in connection with the transactions contemplated herein will
be duly and validly issued and outstanding and fully paid and non-assessable;
4.2.F. The execution, delivery and performance of this Agreement has been
duly authorized by all necessary action on the part of the Successor Trust, and
this Agreement constitutes a valid and binding obligation of the Successor Trust
enforceable against the Successor Trust in accordance with its terms;
4.2.G. The information to be furnished by the Successor Trust for use in
applications for orders, registration statements, proxy materials and other
documents which may be
32
<PAGE>
necessary in connection with the transactions contemplated hereby shall be
accurate and complete and shall comply in all material respects with Federal
securities and other laws and regulations applicable thereto;
4.2.H. No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by the Successor Trust
of the transactions contemplated herein, except such as shall have been obtained
prior to the Closing Date.
5. COVENANTS OF THE CURRENT TRUST AND THE SUCCESSOR TRUST
5.1 The Current Trust covenants that the Successor Trust Shares are not
being acquired for the purpose of making any distribution thereof, other than in
accordance with the terms of this Agreement.
5.2 The Current Trust covenants that it will assist the Successor Trust in
obtaining such information as the Successor Trust may reasonably request
concerning the beneficial ownership of Current Trust Shares.
5.3 The Current Trust will, from time to time, as and when requested by the
Successor Trust execute and deliver, or cause to be executed and delivered, all
such assignments and other instruments, and will take or cause to be taken such
further action, as the Successor Trust may deem necessary or desirable in order
to vest in, and confirm to, the Successor Trust, title to, and possession of,
all the assets of the Current Trust to be sold, assigned, transferred and
delivered to the Successor Trust hereunder and otherwise to carry out the intent
and purpose of this Agreement.
5.4 The Successor Trust will, from time to time, as and when requested by
the Current Trust, execute and deliver or cause to be executed and delivered all
such assignments and other instruments, and will take or cause to be taken such
further action, as the Current Trust may deem necessary or desirable in order to
vest in, and confirm to, the Current Trust, title to, and possession of, the
Successor Trust Shares issued, sold, assigned, transferred and delivered
hereunder and otherwise to carry out the intent and purpose of this Agreement.
5.5 The Successor Trust shall use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act and such
state securities laws as it may deem appropriate in order to operate after the
Closing Date.
5.6 Subject to the provisions of this Agreement, the Successor Trust and
the Current Trust each will take, or cause to be taken, all action and will do
or cause to be done all things reasonably necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement.
5.7 As promptly as practicable, but in any event within 60 days after the
Closing Date, the Current Trust shall furnish to the Successor Trust, in such
form as is reasonably satisfactory to Successor Trust, a statement of the
earnings and profits of the Current Trust for federal income tax purposes, and
of any capital loss carryovers and other items that
33
<PAGE>
will be carried over to the Successor Trust as a result of Section 381 of the
Code, and which statement will be certified by the President or Treasurer of
Current Trust.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE CURRENT TRUST
The obligations of the Current Trust to consummate the transactions
provided for herein shall be subject to the performance by the Successor Trust
of all the obligations to be performed by the Successor Trust hereunder on or
before the Closing Date and, in addition thereto, to the following further
conditions:
6.1 All representations and warranties of the Successor Trust contained in
this Agreement shall be true and correct in all material respects as of the date
hereof and except as they may be affected by the transactions contemplated by
this Agreement, as of the Closing Date, with the same force and effect as if
made on and as of the Closing Date, and
6.2 The Successor Trust shall have delivered on the Closing Date to the
Current Trust a certificate executed in Successor Trust's name by its President
or Executive Vice President, in form and substance satisfactory to the Current
Trust, dated as of the Closing Date, to the effect that the representations and
warranties of the Successor Trust made in this Agreement are true and correct at
and as of the Closing Date, except as they may be affected by the transactions
contemplated by this Agreement, and as to such other matters as the Current
Trust shall reasonably request.
Each of the foregoing conditions precedent may be waived by the Current
Trust.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SUCCESSOR TRUST
The obligations of the Successor Trust to consummate the transactions
provided for herein shall be subject to the performance by the Current Trust of
all the obligations to be performed hereunder on or before the Closing Date and,
in addition thereto, to the following further conditions:
7.1 All representations and warranties of the Current Trust contained in
this Agreement shall be true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated by
this Agreement, as of the Closing Date, with the same force and effect as if
made on and as of the Closing Date;
7.2 The Current Trust shall have delivered to the Successor Trust on the
Closing Date a statement of its assets and liabilities, prepared in accordance
with generally accepted accounting principles consistently applied, together
with a certificate of the Treasurer or Assistant Treasurer of the Current Trust
as to the portfolio securities of the Current Trust and the federal income tax
basis and holding period for each such portfolio security as of the Closing
Date; and
34
<PAGE>
7.3 The Current Trust shall have delivered to the Successor Trust on the
Closing Date a certificate executed in the name of the Current Trust by its
President or Executive Vice President, in form and substance satisfactory to the
Successor Trust, dated as of the Closing Date, to the effect that the
representations and warranties made in this Agreement are true and correct at
and as of the Closing Date, except as they may be affected by the transactions
contemplated by this Agreement, and as to such other matters as the Successor
Trust shall reasonably request.
Each of the foregoing conditions precedent may be waived by the Successor
Trust.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE CURRENT TRUST AND THE
SUCCESSOR TRUST
The obligations of the Current Trust and the Successor Trust are subject to
the further conditions that on or before the Closing Date:
8.1 This Agreement and the transactions contemplated herein shall have been
approved by the requisite vote of the shareholders of the Current Trust in
accordance with applicable law;
8.2 On the Closing Date, no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit or to obtain damages or other relief in connection with,
the transactions contemplated hereby;
8.3 All consents of other parties and all other consents, orders and
permits of federal, state and local regulatory authorities (including those of
the Commission and of state securities authorities) deemed necessary by the
Successor Trust or the Current Trust to permit consummation, in all material
respects, of the transactions contemplated hereby shall have been obtained,
except where failure to obtain any such consent, order or permit would not
involve a risk of a material adverse effect on the assets or properties of the
Successor Trust or the Current Trust, provided that either party hereto may for
itself waive any of such conditions;
8.4 The President or Executive Vice President of the Successor Trust shall
have delivered a certificate to the Current Trust on the Closing Date certifying
that the Successor Trust has taken all necessary action so that it shall be a
registered open-end investment company under the 1940 Act.
8.5 The Current Trust and the Successor Trust shall have received on or
before the Closing Date an opinion of Hale and Dorr LLP satisfactory to the
Current Trust and the Successor Trust, substantially to the effect that for
federal income tax purposes:
8.5.A. The acquisition of all of the assets of the Current Trust by the
Successor Trust solely in exchange for the issuance of Successor Trust Shares to
the Current Trust and the assumption by the Successor Trust of all of the
liabilities of the Current Trust, followed by the distribution in liquidation by
the Current Trust of Successor Trust Shares to the shareholders of the Current
Trust in exchange for their shares of the Current Trust and the termination of
the Current Trust, will constitute a "reorganization" within the meaning
35
<PAGE>
of Section 368(a)(1) of the Code, and the Current Trust and the Successor Trust
will each be "a party to a reorganization" within the meaning of Section 368(b)
of the Code;
8.5.B. No gain or loss will be recognized by the Current Trust upon (i) the
transfer of all of its assets to the Successor Trust solely in exchange for the
issuance of Successor Trust Shares to the Current Trust and the assumption by
the Successor Trust of the liabilities of the Current Trust and (ii) the
distribution by the Current Trust of such Successor Trust Shares to the
shareholders of the Current Trust;
8.5.C. No gain or loss will be recognized by the Successor Trust upon
receipt of all of the assets of the Current Trust solely in exchange for the
issuance of the Successor Trust Shares to the Current Trust and the assumption
by the Successor Trust of all of the liabilities of the Current Trust;
8.5.D. The tax basis of the assets acquired by the Successor Trust from the
Current Trust will be, in each instance, the same as the tax basis of those
assets in the hands of the Current Trust immediately before the transfer;
8.5.E. The tax holding period of the assets of the Current Trust in the
hands of the Successor Trust will, in each instance, include the tax holding
period of the Current Trust for those assets;
8.5.F. Current Trust Shareholders will not recognize gain or loss upon the
exchange of all of their shares of the Current Trust solely for Successor Trust
Shares as part of the transaction;
8.5.G. The tax basis of the Successor Trust Shares received by Current
Trust Shareholders in the transaction will be, for each shareholder, the same as
the tax basis of the shares of the Current Trust surrendered in exchange
therefor; and
8.5.H. The tax holding period of the Successor Trust Shares received by
Current Trust Shareholders will include, for each shareholder, the tax holding
period for the Current Trust Shares surrendered in exchange therefor, provided
that such Current Trust Shares were held as capital assets on the date of the
exchange.
The Current Trust and the Successor Trust each agree to make and provide
representations with respect to the Current Trust and the Successor Trust which
are reasonably necessary to enable Hale and Dorr LLP to deliver an opinion
substantially as set forth in this paragraph 8.5, which opinion may address such
other federal income tax consequences, if any, that Hale and Dorr LLP believes
to be material to the transaction.
Each of the foregoing conditions precedent to the obligations of a party,
except for the receipt of the opinion of Hale and Dorr LLP set forth in
paragraph 8.5, may be waived by that party.
9. BROKERAGE FEES AND EXPENSES
9.1 The Successor Trust and the Current Trust each represent and warrant to
the other that there are no broker's or finder's fees payable in connection with
the transactions contemplated hereby.
36
<PAGE>
9.2 The Current Trust and the Successor Trust shall each be liable for its
own expenses incurred in connection with entering into and carrying out the
provisions of this Agreement whether or not the transactions contemplated hereby
are consummated; if the transactions are consummated, such expenses of the
Current Trust will be assumed by the Successor Trust as part of the transaction.
10. ENTIRE AGREEMENT
The Successor Trust and the Current Trust agree that neither party has made
any representation, warranty or covenant not set forth herein and that this
Agreement constitutes the entire agreement between the parties. The
representations, warranties and covenants contained herein or in any document
delivered pursuant hereto or in connection herewith shall survive the
consummation of the transactions contemplated hereunder.
11. TERMINATION
11.1 This Agreement may be terminated by the mutual agreement of the
Successor Trust and the Current Trust. In addition, either the Successor Trust
or the Current Trust may at its option terminate this Agreement at or prior to
the Closing Date because:
11.1.A. There exists a material breach by the other party of any
representations, warranties or agreements contained herein to be performed at or
prior to the Closing Date; or
11.1.B. A condition herein expressed to be precedent to the obligations of
the terminating party has not been met and it reasonably appears that it will
not or cannot be met.
11.2 In the event of any such termination, there shall be no liability for
damages on the part of the Successor Trust or the Current Trust, or their
respective trustees or officers, to the other party or its trustees or officers.
12. AMENDMENT
This Agreement may be amended, modified or supplemented in such manner as
may be mutually agreed upon in writing by the parties; provided, however, that
following the approval of this Agreement by Current Trust Shareholders, no such
amendment may have the effect of changing the provisions for determining the
number of Successor Trust Shares to be paid to Current Trust Shareholders under
this Agreement to the detriment of Current Trust Shareholders without their
further approval.
13. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT
13.1 The article and paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
13.2 This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
37
<PAGE>
13.3 This Agreement shall be governed by and construed in accordance with
the laws of The Commonwealth of Massachusetts.
13.4 This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm or corporation other than the parties hereto and their respective
successors and assigns any rights or remedies under or by reason of this
Agreement.
13.5 All persons dealing with the Current Trust and the Successor Trust
must look solely to the property of the Current Trust and the Successor Trust
for the enforcement of any claims against such Trust as neither the Trustees,
officers, agents or shareholders of either Trust assume any personal liability
for obligations entered into on behalf of the Current Trust and the Successor
Trust.
13.6 A copy of the Agreement and Declaration of Trust of the Current Trust
is on file with the Secretary of State of The Commonwealth of Massachusetts, and
notice is hereby given that this instrument is executed on behalf of the
Trustees of the Current Trust as trustees and not individually and that the
obligations of this instrument are not binding upon any of the trustees,
officers, or shareholders of the current Trust individually, but are binding
only upon the assets and property of the Current Trust.
14. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by prepaid
telegraph, telecopy or certified mail addressed to the Current Trust or the
Successor Trust, each at 60 State Street, Boston, Massachusetts 02109,
Attention: Secretary.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by its duly authorized officer.
PIONEER BOND FUND,
a Massachusetts business trust
By:____________________________________________
Its:___________________________________________
PIONEER BOND FUND,
a Delaware business trust
By:____________________________________________
Its:___________________________________________
<PAGE>
FORM OF PROXY CARD [FRONT]
[landscape oriented on proxy card]
- ------------------------------------------------------------------------------
PROXY
PIONEER BOND FUND
PROXY TABULATOR
P.O BOX 9138
HINGHAM, MA 02043
The undersigned holder of shares of beneficial interest of Pioneer Bond
Fund hereby constitutes and appoints Joseph P. Barri, John F. Cogan, Jr., Robert
P. Nault and David D. Tripple, and each of them singly, proxies and attorneys of
the undersigned, with full power of substitution to each, for and in the name of
the undersigned, to vote and act upon all matters at the special meeting of
shareholders of the fund to be held on Tuesday, May 4, 1999 at the offices of
Hale and Dorr LLP, 60 State Street, Boston, Massachusetts, at 2:00 p.m., eastern
time, and at any and all adjournments thereof, relating to all shares of the
fund held by the undersigned which the undersigned would be entitled to vote or
act with all the powers the undersigned would possess if personally present. All
proxies previously given by the undersigned relating to the meeting are hereby
revoked.
THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THE PROXY
WILL BE VOTED IN FAVOR OF EACH ITEM. THE PERSONS NAMED AS PROXIES HAVE
DISCRETIONARY AUTHORITY WHICH THEY INTEND TO EXERCISE IN FAVOR OF THE PROPOSALS
REFERRED TO AND ACCORDING TO THEIR BEST JUDGMENT AS TO ANY OTHER MATTERS WHICH
PROPERLY COME BEFORE THE MEETING.
NOTE: Please complete, sign, date and return this
proxy in the enclosed envelope as soon as possible.
Please sign exactly as your name or names appear in
the box on the left. When signing as attorney,
executor, administrator, trustee or guardian, please
give your full title as such. If a corporation, please
sign in full corporate name by president or other
authorized officer. If a partnership, please sign in
partnership name by authorized person.
------------------------------------------------------
Signature
------------------------------------------------------
Signature(s) (and Title(s) if applicable)
------------------------------------------------, 1999
Date
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF YOUR FUND AND
SHOULD BE RTURNED AS SOON AS POSSIBLE IN THE ENVELOPE PROVIDED. THE BOARD OF
TRUSTEES RECOMMENDS A VOTE IN FAVOR OF THE FOLLOWING:
ITEM 1: To elect the nine (9) trustees to serve on the board of trustees until
their successors have been duly elected and qualified. The nominees are:
John F. Cogan, Jr., Mary K. Bush, Richard H. Egdahl, M.D., Margaret B.W.
Graham, John W. Kendrick, Marguerite A. Piret, David D. Tripple,
Stephen K. West and John Winthrop.
[ ] FOR ELECTING ALL OF THE NOMINEES [ ] WITHHOLD AUTHORITY TO VOTE FOR
(EXCEPT AS MARKED TO THE CONTRARY) ALL NOMINEES
To withhold authority to vote for one or more of the nominees, write the
nominee(s) name(s) on the line below:
- ---------------------------------------
ITEM 2: To approve an Agreement and Plan of Reorganization pursuant to which the
fund, which is currently organized as a Massachusetts business trust, would be
reorganized as a Delaware business trust.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
ITEMS 3(a-l): To amend the fund's fundamental investment objective, policies and
restrictions.
<TABLE>
<CAPTION>
[ ] FOR ALL [ ] AGAINST ALL [ ] FOR ALL EXCEPT
<S> <C>
(3a) To amend the fund's fundamental investment objective. (3b) To eliminate a. [ ]
the fund's fundamental policy with respect to rating criteria for debt b. [ ]
securities and amend and reclassify the policy as non-fundamental. (3c) To c. [ ]
eliminate the fund's fundamental policy with respect to investing [] AGAINST in d. [ ]
foreign securities and amend and reclassify the policy as non-fundamental. (3d) e. [ ]
To amend the fund's investment restriction on portfolio diversification and f. [ ]
concentration. (3e) To amend the fund's investment restriction on investing in g. [ ]
real estate. (3f) To amend the fund's investment restriction on investming in h. [ ]
commodities. (3g) To amend the fund's investment restriction on underwriting i. [ ]
securities. (3h) To amend the fund's investment restriction on making loans. j. [ ]
(3i) To eliminate the fund's fundamental investment restriction on selling k. [ ]
securities short and reclassify the restriction as non-fundamental. (3j) To l. [ ]
eliminate the fund's fundamental investment restriction on purchasing
securities on margin and reclassify the restriction as non-fundamental. (3k): To
amend the fund's investment restriction on borrowing. (3l) To eliminate the
fund's investment restriction on pledging assets.
</TABLE>
<PAGE>
[Pioneer Logo]
Pioneer Bond Fund
60 State Street
Boston, MA 02109
March 1999
Dear Fellow Shareowner,
I am writing to let you know that a special meeting will be held May 4, 1999 for
shareowners of Pioneer Bond Fund (the Fund) to vote on a number of important
proposals. As a shareowner in the Fund, you have the opportunity to voice your
opinion on these matters.
This package contains information about the proposals, along with a proxy card
for you to vote by mail. Please take a moment to read the enclosed materials and
cast your vote using the proxy card.
Your prompt vote will help save money. If a majority of shareowners have not
voted prior to the meeting, we must try to obtain their votes with additional
mailings or phone solicitation. Both of these are costly processes.
(callout in margin) Voting your shares by mail is quick and easy. Everything you
need is enclosed.
Each of the proposals have been reviewed by the Fund's Board of Trustees, whose
primary role is to protect your interests as a shareowner. In the Trustees'
opinion, the proposals are fair and reasonable. The Trustees recommend that you
vote FOR each proposal.
(callout in margin) The Board of Trustees recommends that you vote FOR each
proposal.
Here is what a FOR vote means for each of the proposals.
Proposal 1:
Elect nine Trustees to the Board. The Trustees supervise the Fund's activities
and review contractual arrangements with companies that provide services to the
Fund. All of the nominees currently serve as Trustees.
Proposal 2:
Allow the Fund to be reorganized as a Delaware business trust. Currently,
Pioneer Bond Fund is registered as a Massachusetts business trust. As a Delaware
business trust, the Fund and its shareowners could benefit from a decreased
possibility of shareowner and trustee liability and various potential operating
efficiencies described in the enclosed Proxy Statement.
Proposals 3(a) through 3(l):
Amend the investment objective and modernize certain investment policies and
restrictions to conform to current standards in the mutual fund industry. The
Trustees believe the proposed changes are appropriate and necessary to provide
future flexibility in the Fund's investment operations. For details on each of
the proposed changes, we encourage you to review the enclosed Proxy Statement.
Cast your vote by completing and signing the proxy card. Please mail your
completed and signed proxy card as quickly as possible, using the postage-paid
envelope provided.
(callout in margin) Please vote! Your vote is extremely important, no matter how
many shares you own.
Please feel free to call Pioneer at 1-800-225-6292 if you have any questions
about the proposals or the process for voting your shares. Thank you for your
prompt response.
Sincerely,
John F. Cogan, Jr.
Chairman and President
0399-6317
<PAGE>
[Pioneer Logo]
Pioneer Bond Fund
60 State Street
Boston, MA 02109
March 1999
Dear Fellow Shareowner,
I am writing to let you know that a special meeting will be held May 4, 1999 for
shareowners of Pioneer Bond Fund (the Fund) to vote on a number of important
proposals. As a shareowner in the Fund, you have the opportunity to voice your
opinion on these matters.
This package contains information about the proposals, along with a proxy card
for you to vote by mail. Please take a moment to read the enclosed materials and
cast your vote using the proxy card.
Your prompt vote will help save money. If a majority of shareowners have not
voted prior to the meeting, we must try to obtain their votes with additional
mailings or phone solicitation. Both of these are costly processes.
(callout in margin) Voting your shares by mail is quick and easy. Everything you
need is enclosed.
Each of the proposals has been reviewed by the Fund's Board of Trustees, whose
primary role is to protect your interests as a shareowner. In the Trustees'
opinion, the proposals are fair and reasonable. The Trustees recommend that you
vote FOR each proposal.
(callout in margin) The Board of Trustees recommends that you vote FOR each
proposal.
Here is what a FOR vote means for each of the proposals.
Proposal 1:
Elect nine Trustees to the Board. The Trustees supervise the Fund's activities
and review contractual arrangements with companies that provide services to the
Fund. All of the nominees currently serve as Trustees.
Proposal 2:
Allow the Fund to be reorganized as a Delaware business trust. Currently,
Pioneer Bond Fund is registered as a Massachusetts business trust. As a Delaware
business trust, the Fund and its shareowners could benefit from a decreased
possibility of shareowner and trustee liability and various potential operating
efficiencies described in the enclosed Proxy Statement.
Proposals 3(a) through 3(l):
Amend the investment objective and modernize certain investment policies and
restrictions to conform to current standards in the mutual fund industry. The
Trustees believe the proposed changes are appropriate and necessary to provide
future flexibility in the Fund's investment operations. For details on each of
the proposed changes, we encourage you to review the enclosed Proxy Statement.
(callout in margin) Please vote! Your vote is extremely important, no matter how
many shares you own.
Cast your vote by completing and signing the proxy card. Please mail your
completed and signed proxy card as quickly as possible, using the postage-paid
envelope provided. Thank you for your prompt response.
Sincerely,
John F. Cogan, Jr.
Chairman and President
0399-6320
<PAGE>
FOR INTERNAL USE ONLY
Pioneer Bond Fund Proxy Solicitation: Questions and Answers
Q: What do the proposals for Pioneer Bond Fund mean?
A: Pioneer Bond Fund periodically holds a shareowner meeting to vote on certain
issues. The upcoming meeting is scheduled for May 4, 1999. The Fund's Trustees,
whose primary function is to protect your interests as a shareowner, recommend
that you vote FOR each proposal.
Here is a what a FOR vote means for each of the proposals being considered.
Proposal 1:
Elect nine Trustees to the Board. The Trustees supervise the Fund's activities
and review contractual arrangements with companies that provide services to the
Fund. All of the nominees currently serve as Trustees.
Proposal 2:
Allow the Fund to be reorganized as a separate Delaware business trust.
Currently, Pioneer Bond Fund is registered as a Massachusetts business trust. As
a Delaware business trust, the Fund and its shareowners could benefit from a
decreased possibility of shareholder and trustee liability and various potential
operating efficiencies described in the enclosed Proxy Statement
Proposals 3(a) through 3(l):
Amend the investment objective and modernize certain investment policies and
restrictions to conform to current standards in the mutual fund industry. The
Trustees believe the proposed changes are appropriate and necessary to provide
future flexibility in the Fund's investment operations. For details on each of
the proposed changes, we encourage you to review the enclosed Proxy Statement.
PROPOSAL 1
Q: Who is being nominated for Trustee?
A: There are nine nominees. All currently serve as Trustees and their
biographical information is included in the Proxy Statement. The Trustees'
primary role is to protect your interests as a shareowner.
PROPOSAL 2
Q: Why reorganize the Fund as a Delaware business trust?
A: This proposal would allow the Fund to operate within the better-defined
regulations provided in Delaware, and also would allow the Fund more flexibility
to adapt to changes in the investment industry. The reorganization will have no
tax impact on shareowners. New classes of shares, if any are offered in the
future, also would have no effect on the value or operation of Fund shares
already in existence.
Reorganizing to a Delaware business trust will help save the Fund, and
shareowners, money because it will allow the Fund to adapt to new laws without
going to the expense of a special shareowner meeting. And, as a Delaware
business trust, it is clear that Fund shareowners have no responsibilities for
the Fund's liabilities, a point that is less certain as a Massachusetts business
trust.
PROPOSAL 3
Q: Why are there so many changes proposed to the Fund's operations structure and
investment policies?
A: Since the Fund's last shareowner meeting, the mutual fund industry has
evolved. The Fund's Trustees believe the proposed changes are appropriate and
necessary to update the Fund and modernize it to conform with current standards
in the mutual fund industry, along with other Pioneer funds.
GENERAL QUESTIONS
Q: Who makes the final decisions about these proposals?
A: You do. The Trustees you have elected - whose primary role, as mentioned, is
protecting your interests as a shareowner have unanimously approved the
proposals and encourage you to vote FOR each. However, you must make the final
decision, either by attending the meeting in person or by giving your proxy
vote.
Q: When and where will the meeting take place?
A: The meeting is scheduled for May 4, 1999, in Boston.
Q: What if I have questions about my investment?
A: The investment representative through whom you purchased Pioneer Bond Fund
can provide you with additional information as needed.
