File No. 2-28274
File No. 811-01604
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
Pioneer Growth Shares
(Name of Registrant as Specified in 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 GROWTH SHARES
60 State Street
Boston, Massachusetts 02109
1-800-225-6292
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
SCHEDULED FOR [SEPTEMBER 28], 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 Growth Shares:
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 02109, on
[September 28, 1999], at 2:00 p.m., Boston time, to consider the following:
1. To elect the nine 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 a new management contract between the fund and
Pioneer Investment Management, Inc., your fund's investment adviser
("Pioneer"), increasing the rate at which management fees are payable
to Pioneer and providing for a performance fee adjustment;
3(a)-(c). Proposals to approve amendments to your fund's fundamental investment
restrictions, as described in the attached proxy statement; and
4. Any other business that may properly come before the meeting.
Shareholders of record as of the close of business on [July 19, 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
[July 30, 1999]
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE AND RETURN THE
ENCLOSED PROXY CARD.
0799-6776
<PAGE>
PROXY STATEMENT
OF
PIONEER GROWTH SHARES
60 STATE STREET
BOSTON, MASSACHUSETTS 02109
1-800-225-6292
SPECIAL MEETING OF SHAREHOLDERS
This proxy statement contains the information you should have before
voting on the proposals as summarized below.
PIONEER GROWTH SHARES WILL FURNISH WITHOUT CHARGE A COPY OF ITS ANNUAL
REPORT OR SEMIANNUAL 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,] [September 28], 1999, and at any adjournments of the meeting to a
later date. The purpose of this meeting is to consider:
1. The election of nine 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 a new management contract between the
fund and Pioneer Investment Management, Inc., your fund's
investment adviser ("Pioneer"), increasing the rate at which
management fees are payable to Pioneer and providing for a
performance fee adjustment;
3(a)-(c). Proposals to approve the elimination or amendment of certain
of your fund's fundamental investment restrictions, as
described in this proxy statement; and
4. Any other business that may properly come before the meeting.
This proxy statement and proxy are being mailed to shareholders on or
about [July 30], 1999. The annual report for the fund for the fiscal period
ended December 31, 1998 was previously mailed to shareholders.
WHO IS ELIGIBLE TO VOTE?
Shareholders of record of the fund as of the close of business on [July
19], 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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<PAGE>
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 nominees named
below as trustees of the fund.
The following table sets forth each nominee's position(s) with the fund,
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 May 31, 1999.
<TABLE>
<CAPTION>
Name, age, position(s) with Principal occupation or employment First became Number of shares
the fund and trusteeships(1) a trustee owned and
and address percentage of
total shares
outstanding on
May 31, 1999
<S> <C> <C>
JOHN F. COGAN, JR.* (73) President, Chief Executive Officer and a 1993
CHAIRMAN OF THE BOARD, Director of The Pioneer Group, Inc. ("PGI");
PRESIDENT AND TRUSTEE Chairman and a Director of Pioneer Investment
60 State Street Management, Inc. ("Pioneer"), Pioneer Funds
Boston, MA 02109 Distributor, Inc. ("PFD"), Pioneer Goldfields
Limited, Teberebie Goldfields Limited, Closed
Joint-Stock Company "Amgun-Forest," Closed
Joint-Stock Company "Udinskoye" and Closed
Joint-Stock Company "Tas-Yurjah" Mining Company;
Director of Pioneer Real Estate Advisors, Inc.
("PREA"), Pioneer Forest, Inc., Pioneer
Explorer, Inc., Pioneer Management (Ireland)
Ltd. ("PMIL"), Pioneer First Investment Fund and
Closed Joint-Stock Company "Forest-Starma";
President and Director of Pioneer Metals and
Technology, Inc. ("PMT"), Pioneer International
Corp. ("PIntl"), Pioneer First Russia, Inc. and
Pioneer Omega, Inc. ("Pioneer Omega"); Chairman
of the Supervisory Board of Pioneer Fonds
Marketing, GmbH, Pioneer First Polish Investment
Fund Joint Stock Company, S.A. ("Pioneer First
Polish") and Pioneer Czech Investment Company,
A.S. ("Pioneer Czech"); Member of the
Supervisory Board of Pioneer Universal Pension
Fund Company; Chairman, President and Trustee of
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Name, age, position(s) with Principal occupation or employment First became Number of shares
the fund and trusteeships(1) a trustee owned and
and address percentage of
total shares
outstanding on
May 31, 1999
<S> <C> <C>
all of the Pioneer mutual funds;
Director of Pioneer Global Equity Fund Plc,
Pioneer Global Bond Fund Plc, Pioneer Euro
Reserve Fund Plc, Pioneer European Equity Fund
Plc, Pioneer Emerging Europe Fund Plc, Pioneer
US Real Estate Fund Plc and Pioneer U.S. Growth
Fund Plc (collectively, the "Irish Funds"); and
Partner, Hale and Dorr LLP (counsel to PGI and
the fund).
MARY K. BUSH President, Bush & Co. (international financial 1997
(51) advisory firm); Director and/or Trustee of
TRUSTEE Mortgage Guaranty Insurance Corporation, Novecon
4201 Cathedral Ave. NW Management Company, Hoover Institution, Folger
Apt. 1016E Shakespeare Library, March of Dimes, Project
Washington, DC 20016 2000, Inc. (not-for-profit educational
organization), Wilberforce University and Texaco,
Inc.; Advisory Board Member, Washington Mutual
Investors Fund (registered investment company);
and Trustee of all the Pioneer mutual funds,
except Pioneer Variable Contracts Trust.
RICHARD H. EGDAHL, M.D. Alexander Graham Bell Professor of Health Care 1993
(72) Entrepreneurship, Boston University; Professor
TRUSTEE of Management, Boston University School of
Boston University Health Management; Professor of Public Health, Boston
Policy Institute University School of Public Health; Professor of
53 Bay State Road Surgery, Boston University School of Medicine,
Boston, MA 02215 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.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Name, age, position(s) with Principal occupation or employment First became Number of shares
the fund and trusteeships(1) a trustee owned and
and address percentage of
total shares
outstanding on
May 31, 1999
<S> <C> <C>
MARGARET B.W. GRAHAM Founding Director, The Winthrop Group, Inc. 1993
(52) (consulting firm); Manager of Research
TRUSTEE Operations, Xerox Palo Alto Research Center,
The Keep from 1991 to 1994; Professor of Operations
P.O. Box 110 Management and Management of Technology and
Little Deer Isle, ME 04650 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 Washington 1993
(81) University; Director, American Productivity and
TRUSTEE Quality Center; Adjunct Scholar, American
636 Waterway Drive Enterprise Institute; Economic Consultant; and
Falls Church, VA 22044 Trustee of all of the Pioneer mutual funds,
except Pioneer Variable Contracts Trust
MARGUERITE A. PIRET President, Newbury, Piret & Company, Inc. 1993
(51) (merchant banking firm); Trustee of Boston
TRUSTEE Medical Center; Member of the Board of Governors
One Boston Place of the Investment Company Institute; Director,
26th Floor Organogenesis Inc. (tissue engineering company);
Boston, MA 02108 and Trustee of all of the Pioneer mutual funds.
DAVID D. TRIPPLE* Executive Vice President and a Director of PGI; 1993
(55) President and a Director of Pioneer and PFD;
EXECUTIVE VICE PRESIDENT AND Director of Pioneering Services Corporation
TRUSTEE ("PSC"), PIntl, PREA, Pioneer Omega, PMIL,
60 State Street Pioneer First Investment Fund and the Irish
Boston, MA 02109 Funds; Member of the Supervisory Board of
Pioneer First Polish and Pioneer Czech; and
Executive Vice President and Trustee of all of
the Pioneer mutual funds.
STEPHEN K. WEST Of Counsel, Sullivan & Cromwell (law firm); 1993
(70) Director, Kleinwort Benson Australian Income
TRUSTEE Fund, Inc., The Swiss Helvetia Fund, Inc.
125 Broad Street (investment companies), AMVESCAP PLC (investment
New York, NY 10004 managers) and American Insurance Holdings, Inc.;
Trustee, The Winthrop Focus Funds (mutual
funds); and Trustee of all of the Pioneer mutual
funds.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Name, age, position(s) with Principal occupation or employment First became Number of shares
the fund and trusteeships(1) a trustee owned and
and address percentage of
total shares
outstanding on
May 31, 1999
<S> <C> <C>
JOHN WINTHROP President, John Winthrop & Co., Inc. (private 1993
(63) investment firm); Director, of NUI Corp. (energy
TRUSTEE sales, services and distribution); and Trustee
One North Adgers Wharf of all of the Pioneer mutual funds; except
Charleston, SC 29401 Pioneer Variable Contracts Trust.
* 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 13 portfolios of the Pioneer Variable Contracts
Trust (except as noted). Each trustee was most recently elected by the
shareholders of the fund in 1998.
(2) As of May 31, 1999, the trustees and officers of the fund beneficially
owned, directly or indirectly, in the aggregate less than 1% of the
fund's outstanding shares.
</TABLE>
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.
During the fiscal year ended December 31, 1998, the board of trustees
held 12 meetings, the audit committee held 12 meetings and the nominating
committee held no meetings. 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 December 31,
1998.
As of May 31, 1999, Mr. Cogan and Mr. Tripple owned approximately 13.36%
and 1.19% of the outstanding common stock of PGI and none of the other nominees
owned PGI common stock.
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.
5
<PAGE>
<TABLE>
<CAPTION>
Name, age and position with the fund Principal occupation(s)
<S> <C>
ERIC W. RECKARD, (43), Treasurer Executive Vice President, Chief Financial Officer and
Treasurer of PGI since June 1999; Treasurer of
Pioneer, PFD, PSC, PIntl, PREA and Pioneer Omega since
June 1999; Vice President-Corporate Finance of PGI
from February 1999 to June 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 Treasurer of
all of the Pioneer mutual funds (Assistant Treasurer
prior to June 1999).
VINCENT NAVE (54), Assistant Treasurer Vice President-Fund Accounting, Administration and
Custody Services of Pioneer (Manager from September
1996 to February 1999); Senior Vice President of The
Boston Company's Investor Services Group prior to July
1994; and Assistant Treasurer of all of the Pioneer
mutual funds since June 1999.
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.
ROBERT P. NAULT, (35), Assistant Secretary Senior Vice President, General Counsel and Assistant
Secretary of PGI since 1995; Assistant Secretary of
Pioneer, certain other PGI subsidiaries and all of the
Pioneer mutual funds; Assistant Clerk of PFD and PSC;
and junior partner of Hale and Dorr LLP prior to 1995.
</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 of its officers.
6
<PAGE>
<TABLE>
<CAPTION>
Trustee Aggregate compensation Total compensation from the fund and
from the fund+ other funds in the Pioneer family of
mutual funds++
<S> <C> <C>
John F. Cogan, Jr. $ 750 $ 18,750
Mary K. Bush 3,629 77,125
Richard H. Egdahl, M.D. 3,628 79,125
Margaret B.W. Graham 3,940 81,750
John W. Kendrick 3,116 65,900
Marguerite A. Piret 4,683 98,750
David D. Tripple 750 18,750
Stephen K. West 4,004 85,050
John Winthrop 4,073 85,875
------- --------
Totals $28,573 $611,075
======= ========
+ For the fiscal year ended December 31, 1998.
++ For the calendar year ended December 31, 1998.
</TABLE>
INVESTMENT ADVISER
Pioneer and PFD, 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 nominees receiving
the greatest number of votes will be elected to the board.
PROPOSAL 2
APPROVAL OF A NEW MANAGEMENT CONTRACT
SUMMARY
Pioneer has served as the fund's investment adviser since December 1,
1993. Pioneer serves as the investment adviser for the Pioneer family of mutual
funds and for other institutional accounts. Pioneer, a registered investment
adviser under the Investment Advisers Act of 1940, as amended, is a wholly owned
subsidiary of The Pioneer Group, Inc. ("PGI"), a Delaware corporation with
publicly traded shares. Both Pioneer and PGI are located at 60 State Street,
Boston, Massachusetts 02109.
At a meeting of the board of trustees held on July 6, 1999, the
trustees, including [all of] the trustees who are not "interested persons" of
the fund or Pioneer, [unanimously] approved and voted to recommend that the
shareholders of the fund approve a proposal to terminate the fund's existing
management contract between Pioneer and the fund (the "existing contract") and
to adopt a new management contract (the "proposed contract"). The existing
contract and the proposed contract are also each referred to below as a
"contract." Under the proposed contract, there will be an increase in the basic
rate of management fees paid by the fund to Pioneer. As described more fully
below, depending on the fund's investment performance relative to a selected
securities index, this basic fee
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<PAGE>
will be increased or decreased. In all cases, the fee ultimately paid by
the fund will be higher than that paid under the existing contract.
A proposal for a new management contract and performance fee was
considered by fund shareholders in 1998. While such contract had the support of
a majority of the shares voted at that meeting, it did not obtain a sufficient
numbers of votes to be approved under the 1940 Act. The trustees are again
recommending a proposal for a new management contract. The asset levels ("break
points") at which the base fee is reduced are lower under the proposed contract
than under the contract proposed in 1998 and the comparative index is also
different. The lower break points potentially result in a lower overall fee than
that contained in the contract proposed in 1998. The trustees believe that the
conditions meriting approval of the proposed contract continue to exist and
there has also been a substantial increase in the fund's assets under
management.
Pioneer believes that the proposed fee increase is justified both
because of the fund's investment performance and in light of the fees being paid
by similar funds to other investment advisers. The fund has had above average
performance over the past several years. The following table compares the total
return of the fund's Class A shares at net asset value for the one-, three- and
five-year periods ended June 30, 1999 to the total return during the same
periods for the Standard & Poor 500 Index, the fund's benchmark, and investment
companies in the Lipper Growth Funds universe, which consists of funds that have
a growth orientation similar to the fund's. The universe consists of 1,065 funds
for the one-year period, 653 funds for the three-year period and 399 funds for
the five-year period ending June 30, 1999.
<TABLE>
<CAPTION>
Lipper Growth
Pioneer Growth Shares S&P 500 Funds Universe
<S> <C> <C> <C>
One year 19.17% 22.72% 18.87%
Three years 31.07% 29.05% 22.75%
Five years 33.08% 27.81% 22.64%
</TABLE>
The fund also pays Pioneer an advisory fee that is lower than the
majority of growth funds. During the 12 months ended December 31, 1998, the fund
paid Pioneer a management fee at an annual rate of 0.465% of average daily net
assets. Assuming an asset size of $1 billion, the median management fee for
investment companies in the Lipper Growth Fund universe is 0.750% of average
daily net assets. For the funds in the Lipper universe of approximately the same
size as the fund, the median management fee is 0.684%. If the proposed increase
in base fee is approved and without giving effect to any performance adjustment,
the fund would pay Pioneer a base fee of 0.675% assuming average daily net
assets of $1 billion. Consequently, Pioneer is currently paid at a rate that is
substantially below the median for its peer group and if the proposed contract
is approved, would be paid a base fee that is still below the median fee for the
fund's peer group.
TERMS OF EXISTING AND PROPOSED CONTRACTS
Except for the different fee rates, effective dates and renewal dates,
the terms of the existing and proposed contracts are substantially identical.
Pursuant to the terms of each contract, Pioneer serves as investment adviser to
the fund and is responsible for the overall management of the fund's business
affairs subject only to the authority of the board of trustees. Pioneer is
authorized to buy and sell securities for the account of the fund and to
designate brokers to carry out such transactions. Pioneer may not make any
purchase the cost of which exceeds funds currently available for the fund and
may not make any purchase which would violate any fundamental policy or
restriction in the fund's prospectus or statement of additional information as
in effect from time to time.
Under each contract, Pioneer pays all expenses, including executive
salaries and the rental of office space, related to its services for the fund
with the exception of the following which are paid by the fund: (i) charges and
expenses for fund accounting, pricing and appraisal services and related
overhead, including, to the extent such
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<PAGE>
services are performed by personnel of Pioneer or its affiliates, office
space and facilities and personnel compensation, training and benefits, (ii) the
charges and expenses of auditors, (iii) the charges and expenses of any
custodian, transfer agent, plan agent, dividend disbursing agent and registrar
appointed by the fund, (iv) issue and transfer taxes, chargeable to the fund in
connection with securities transactions to which the fund is a party, (v)
insurance premiums, interest charges, dues and fees for membership in trade
associations and all taxes and corporate fees payable by the fund to federal,
state or other governmental agencies, (vi) fees and expenses involved in
registering and maintaining registrations of the fund and of its shares with the
Securities and Exchange Commission, state securities agencies and foreign
jurisdictions, including the preparation of prospectuses and statements of
additional information for filing with such regulatory agencies, (vii) all
expenses of shareholders' and trustees' meetings and of preparing, printing and
distributing prospectuses, notices, proxy statements and all reports to
shareholders and to governmental agencies, (viii) charges and expenses of legal
counsel to the fund and the trustees, (ix) if applicable, distribution fees paid
by the fund pursuant to a plan of distribution in accordance with Rule 12b-1
promulgated by the Securities and Exchange Commission pursuant to the 1940 Act,
(x) compensation of those trustees of the fund who are not affiliated with or
interested persons of Pioneer, the fund (other than as trustees), PGI, or PFD,
the fund's principal underwriter, (xi) the cost of preparing and printing share
certificates, and (xii) interest on borrowed money, if any. The fund will pay
all brokers' and underwriting commissions chargeable to the fund in connection
with securities transactions to which the fund is a party.
EXISTING CONTRACT
The existing contract was approved by the shareholders of the fund on
November 23, 1993, in connection with the acquisition of Mutual of Omaha Fund
Management Company, the fund's prior investment adviser. The existing contract
was approved by your fund's board and its renewal was most recently approved by
the board at a meeting held on April 6, 1999. The existing contract is renewable
annually by the vote of a majority of the fund's board, including a majority of
the trustees who are not "interested persons" (as defined in the 1940 Act) of
the fund, Pioneer or PFD, cast in person at a meeting called for the purpose of
voting on such renewal. The existing contract terminates if assigned (as defined
in the 1940 Act) and may be terminated without penalty by either party by vote
of its board or a majority of the fund's outstanding voting securities and upon
60 days' written notice.
As compensation for its management services and certain expenses which
Pioneer incurs on behalf of the fund, the fund pays Pioneer an annual management
fee under the existing contract equal to 0.50% of the fund's average daily net
assets up to $250 million, 0.48% of the next $50 million and 0.45% of the excess
over $300 million. This fee is computed daily and paid monthly.
PROPOSED CONTRACT
The terms of the proposed contract differ materially from those of the
existing contract only in respect of the management fees payable to Pioneer.
BASIC FEE INCREASE
As compensation for its management services and certain expenses which
Pioneer incurs on behalf of the fund, the fund would pay Pioneer an annual
management fee under the proposed contract (the "basic fee") equal to
. The basic fee would be
computed daily and paid monthly. At June 30, 1999, the fund had net assets of
approximately $3,370,599,625.
The basic fee represents an increase in the management fee rate payable
to Pioneer over the rates under the existing contract. The board determined that
the basic fee with the application of the performance fee adjustment described
below is fair and reasonable. That adjustment provides for increases or
decreases in the basic fee, based upon the fund's performance. However, even
assuming a maximum downward adjustment due to performance, the proposed fee will
be higher than the current fee.
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<PAGE>
The effective date of the proposed contract is expected to be [October
1, 1999] (the "effective date"). Accordingly, the basic fee will take effect on
the effective date if the proposed contract is approved at the meeting.
PERFORMANCE FEE ADJUSTMENT
The board of trustees is proposing the implementation of a performance
adjustment to accompany the basic fee. The performance adjustment will either
increase or decrease the monthly basic fee paid by the fund to Pioneer based on
the performance of the fund as compared to the investment record (the "record")
over the same period of a securities index determined by the trustees to be
appropriate. The trustees initially have designated the
(the "Index") for this purpose. The Index is a recognized measure of
.
From time to time, the trustees may determine that another securities
index is a more appropriate benchmark than the Index for purposes of evaluating
the performance of the fund. In such event, a successor index may be substituted
for the Index in prospectively calculating the performance based adjustment to
the basic fee. However, the calculation of the performance adjustment for any
portion of the performance period prior to the adoption of the successor index
would still be based upon the fund's performance compared to the Index.
It is not possible to predict the effect of the performance adjustment
on the overall compensation to Pioneer in the future since it will depend on the
performance of the fund relative to the record of the Index.
The board determined that it would be appropriate to increase Pioneer's
compensation and that the amount of the increase should be greater when the
fund's performance exceeds that of an objective index and, conversely, lower
when the fund's performance is poorer than the record of that index. The Index
was deemed appropriate for this comparison because it is composed of
. The board
believes that a performance adjustment is appropriate for the fund and that
providing incentives to Pioneer based on its performance benefits shareholders.
The board is proposing that there be a performance adjustment which
would increase or decrease the basic fee based on the performance of the Class A
shares of the fund calculated at net asset value. The basic fee would be subject
to upward or downward adjustment depending on whether, and to what extent, the
investment performance of the Class A shares of the fund for the relevant
performance period exceeds, or is exceeded by, the record of the Index over the
same period. This performance comparison would be made at the end of each month.
Each percentage point of difference (up to a maximum difference of +/- 10
percentage points) would result in a performance rate adjustment of 0.01%. The
maximum rate adjustment is therefore +/- 0.10%. An appropriate percentage of
this rate (based upon the number of days in the current month) would then be
multiplied by the average daily net assets of the fund over the entire
performance period, giving the dollar amount which will be added to (or
subtracted from) the basic fee. The monthly performance adjustment will be
further adjusted to the extent necessary to insure that the total of such
adjustments to the basic fee does not exceed +/- 0.10% of average daily net
assets for that year.
IMPLEMENTATION OF PERFORMANCE ADJUSTMENT. The board is proposing that
the performance adjustment be implemented beginning on October 1, 2000. Until
October 1, 2000, the basic fee would remain unadjusted. During the period from
October 1, 2000 until September 30, 2002, fund performance would be measured
over an increasing period covering the current month and the prior months dating
back to the effective date (the "performance period"). Beginning October 1,
2002, the duration of the performance period would become fixed at 36 months.
Thereafter, fund performance would be measured over a rolling 36-month period
covering the current month and the prior 35 months. If the effective date is
delayed, the periods referred to above will be correspondingly adjusted.
10
<PAGE>
PERFORMANCE ADJUSTMENT EXAMPLE
The following hypothetical example illustrates the application of the
performance adjustment.
For proposes of the example, any dividends or capital gains
distributions paid by the fund are treated as if reinvested in shares of the
fund at net asset value, and any dividends paid on the stocks in the Index are
treated as if reinvested in the Index. The example assumes fund assets of up to
$500 million.
The example also makes these assumptions:
<TABLE>
<CAPTION>
Your fund's
For the Your fund's Index's performance relative
PERFORMANCE PERIOD INVESTMENT PERFORMANCE CUMULATIVE CHANGE TO THE INDEX
<S> <C> <C> <C> <C>
First day $10 100
Last day $13 123
Absolute change +$3 +$23
Actual change +30% +23% + 7 percentage points
</TABLE>
Based on these assumptions, the fund would calculate Pioneer's
management fee rate for the last month of the performance period as follows:
[square bullet] The portion of the annual basic fee rate of 0.70% applicable
to that month is multiplied by the fund's average daily net
assets for the month. This results in the dollar amount of
the basic fee.
[square bullet] The +7 percentage point difference between the performance
record of your fund's Class A shares and the performance
record of the Index is multiplied by the performance rate
adjustment of 0.01% producing a rate of 0.07%.
[square bullet] The 0.07% rate (adjusted for the number of days in the
month) is multiplied by the fund's average daily net assets
for the performance period. This results in the dollar
amount of the performance adjustment.
[square bullet] The dollar amount of the performance adjustment is added to
the dollar amount of the basic fee producing the adjusted
management fee.
If the Index's investment performance during the performance period exceeded the
fund's performance record, the dollar amount of the performance adjustment would
be deducted from the dollar amount of the basic fee.
Because the adjustment to the basic fee is based on the comparative
performance of the fund and the record of the Index, the controlling factor is
not whether fund performance is up or down, but whether it is up or down more or
less than the record of the Index. Moreover, the comparative investment
performance of the fund is based solely on the relevant performance period
without regard to the cumulative performance over a longer or shorter period of
time.
EFFECTIVE DATE OF PERFORMANCE ADJUSTMENT
The basic fee will take effect on the effective date if the proposed
contract is approved at the meeting. Accordingly, (1) from October 1, 1999
through September 30, 2000 the fund will pay management fees at a rate equal to
the basic fee (0.70% assuming assets up to $500 million); (2) from October 1,
2000 through September 30, 2001, the fund will pay management fees at a rate
equal to the basic fee plus or minus the amount of the performance adjustment
based upon the current month and the preceding months dating back to the
effective date; and (3) beginning on October 1, 2001, the fund will pay
management fees at a rate equal to the basic fee plus or minus the amount of the
performance adjustment based upon the current month and the preceding 35 months.
11
<PAGE>
Because the performance adjustment will be calculated no earlier than 12 months
after the effective date and because the performance adjustment will not reflect
the fund's performance prior to the effective date, the effect of the initial
performance adjustment (and all subsequent adjustments) is unknown and cannot
reasonably be estimated at the time of this proposal.
EFFECT OF THE NEW MANAGEMENT FEE STRUCTURE
Under the existing contract, the fund paid management fees at an
effective annual rate of 0.46% based on average daily net assets of
$1,414,076,701 for the fiscal year ended December 31, 1998. Under the proposed
contract, assuming asset levels during the fund's prior fiscal year and
implementation of the performance adjustment, the fund would pay a maximum
annual fee of 0.76% and a minimum annual fee of 0.56% based upon the fund's
performance relative to the Index as described above.
Set forth below is a table showing the dollar amount of actual
management fees paid during the fund's fiscal year ended December 31, 1998 under
the existing contract and the amount of fees that would have been paid under the
proposed contract at the maximum, basic and minimum fee rates. The table also
shows the percentage differences between the amounts that would have been paid
under the proposed contract and the amount actually paid under the existing
contract. Also set forth below is a comparative fee table showing the amount of
fees and expenses paid by the fund under the existing contract as a percentage
of average daily net assets and the amount of fees and expenses shareholders
would have paid if the maximum, basic and minimum fees under the proposed
contract had been in effect. The figures shown for the basic fee represent the
amounts that actually would have been paid during the 12 months under the
proposed contract when the performance adjustment would not be in effect. The
maximum and minimum fees, calculated at December 31, 1998 asset levels, would
apply only in the second or subsequent years under the proposed contract when
the performance adjustment would be in effect.
DOLLAR AMOUNT OF MANAGEMENT FEES PAID
(FISCAL YEAR ENDED DECEMBER 31, 1998)
<TABLE>
<CAPTION>
PROPOSED CONTRACT
Existing
CONTRACT MAXIMUM BASIC MINIMUM
<S> <C> <C> <C> <C>
Amount of Fees Paid or that Would Have
Been Paid $6,484,820 $ $ $
Percentage Difference from Amount Paid
under Existing Contract N/A +__.__% +__.__% +__.__%
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
COMPARATIVE FEE TABLES
(FISCAL YEAR ENDED DECEMBER 31, 1998)
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
CLASS A SHARES
PROPOSED CONTRACT
Existing
CONTRACT MAXIMUM BASIC MINIMUM
<S> <C> <C> <C> <C>
Management Fee 0.46
Distribution and Service (12b-1) Fee 0.25
Other Expenses 0.24
Total Annual Fund Operating Expenses 0.95
CLASS B SHARES
PROPOSED CONTRACT
Existing
CONTRACT MAXIMUM BASIC MINIMUM
Management Fee 0.46
Distribution and Service (12b-1) Fee 1.00
Other Expenses 0.28
Total Annual Fund Operating Expenses 1.74
CLASS C SHARES
PROPOSED CONTRACT
Existing
CONTRACT MAXIMUM BASIC MINIMUM
Management Fee 0.46
Distribution and Service (12b-1) Fee 1.00
Other Expenses 0.25
Total Annual Fund Operating Expenses 1.71
CLASS Y SHARES
PROPOSED CONTRACT
Existing
CONTRACT MAXIMUM BASIC MINIMUM
Management Fee 0.46
Distribution and Service (12b-1) Fee N/A
Other Expenses 0.05
Total Annual Fund Operating Expenses 0.51
</TABLE>
EXAMPLES
The following examples help you compare the costs of investing in the
fund with the cost of investing in other mutual funds. They assume that: a) you
invest $10,000 in the fund for the time periods shown, b) you reinvest all
dividends and distributions, c) your investment has a 5% return each year and d)
the fund's operating expenses remain the same.
13
<PAGE>
<TABLE>
<CAPTION>
IF YOU SELL YOUR SHARES IF YOU DO NOT SELL YOUR SHARES
-------------------------------------------------- ---------------------------------------------------
NUMBER OF YEARS YOU OWN YOUR SHARES
------------------------------------------------------------------------------------------------------
1 3 5 10 1 3 5 10
- -------------- ------------ ------------ ----------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
Basic $ $ $ $ $ $ $ $
Maximum
Minimum
- -------------- ------------ ------------ ----------- ------------ ------------ ------------ ------------ ------------
CLASS B
Basic
Maximum
Minimum
- -------------- ------------ ------------ ----------- ------------ ------------ ------------ ------------ ------------
CLASS C
Basic
Maximum
Minimum
- -------------- ------------ ------------ ----------- ------------ ------------ ------------ ------------ ------------
CLASS Y
Basic
Maximum
Minimum
- -------------- ------------ ------------ ----------- ------------ ------------ ------------ ------------ ------------
</TABLE>
OTHER PROVISIONS UNDER THE EXISTING AND PROPOSED CONTRACTS
STANDARD OF CARE. Under each contract, Pioneer "will not be liable for any
error of judgment or mistake of law or for any loss sustained by reason of the
adoption of any investment policy or the purchase, sale or retention of any
security on the recommendation of [Pioneer] . . . ." Pioneer, however, shall not
be protected against liability by reason of its ". . . willful misfeasance, bad
faith or gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under this agreement."
PIONEER'S AUTHORITY. Each contract provides that Pioneer shall have
full discretion to act for the fund in connection with purchase and sale
transactions subject only to the declaration of trust, bylaws, currently
effective registrations under the 1940 Act and the Securities Act of 1933, as
amended, investment objective, policies and restrictions of the fund in effect
from time to time, and specific policies and instructions established from time
to time by the trustees.
PORTFOLIO TRADING. Each contract expressly permits Pioneer to engage in
such activity. For a more detailed description of the fund's current portfolio
brokerage practices, see the appendix.
EXPENSE LIMITATION. Each contract provides that if the operating
expenses of the fund exceed the limits established by state "blue sky"
administrators, Pioneer's fee will be reduced (but not below $0) to the extent
required by such limits. No such limits are currently in force. Each contract
also provides that Pioneer may from time to time agree not to impose all or a
portion of its fee or otherwise take action to reduce expenses of the fund. Any
such fee limitation or expense reduction is voluntary and may be discontinued or
modified by Pioneer at any time.
OTHER PROVISIONS. Each contract includes provisions that provide that:
(i) the law of The Commonwealth of Massachusetts shall be the governing law of
the contract; (ii) Pioneer is an independent contractor and not an employee of
the fund; (iii) the contract is the entire agreement between the parties with
respect to the matters described therein; (iv) the contract may be executed
using counterpart signature pages; (v) invalid or unenforceable provisions of
the contract are severable and do not render the entire agreement invalid or
unenforceable; (vi) the fund may pay for charges and expenses of counsel to the
"non-interested" trustees as well as counsel to the fund;
14
<PAGE>
and (vii) subject to obtaining best execution, Pioneer may consider sales
of other Pioneer mutual funds when selecting brokers and dealers to execute the
fund's securities transactions.
MISCELLANEOUS
If approved, the proposed contract will become effective on [October
1,] 1999 (or if approved after that date, on the first day of the first month
following the approval date) and will continue in effect until [May 31,] [2000]
and thereafter will continue from year to year subject to annual approval by the
board of trustees in the same manner as the existing contract. The proposed
contract terminates if assigned (as defined in the 1940 Act) and may terminate
without penalty, upon 60 days' written notice, by either party, by vote of its
board or by a vote of a majority of the outstanding voting securities of the
fund.
ADDITIONAL INFORMATION PERTAINING TO PIONEER
For additional information concerning the management, ownership
structure, affiliations, brokerage policies and certain other matters pertaining
to Pioneer, see the appendix.
FACTORS CONSIDERED BY THE TRUSTEES
The trustees determined that the terms of the proposed contract are
fair and reasonable and that approval of the proposed contract on behalf of the
fund is in the best interests of the fund. The trustees considered a number of
factors in deciding to recommend an increase in the management fee and a
performance fee adjustment. In approving the performance aspect of the fee
proposed by management, the trustees considered its structure and the Index on
which it is based. They believe that it provides an appropriate range of
incentives for Pioneer and joins its interest with those of the shareholders for
good relative investment performance.
[At their July 6 meeting, the trustees who are not "interested" persons
of the fund or Pioneer were advised by fund counsel. When the trustees were
presented with the proposed fee arrangements, they requested and were furnished
with substantial information to assist in their evaluation.
After reviewing the information requested from and provided by Pioneer,
the trustees concluded that the present fee rate for services provided under the
existing contract, which had not changed since the inception of the fund in
1968, was out of date and inappropriately low under present conditions. The
trustees also concluded that the current fee does not reflect the existing
competitive situation within the comparable group of growth funds with which the
fund competes. As a result, and taking into consideration the information
reviewed above and requirements for excellence in investment management and
research and other talent and technology, it was concluded that the current fee
schedule over time would not provide appropriate resources to maintain and
attract investment management and research and other talent and provide
technology and other systems necessary to keep the fund operating at the level
of service and performance currently provided to shareholders or make it
possible to improve the service and investment performance for the benefit of
shareholders in the future. The trustees and Pioneer believe that the fee
increase would provide the necessary resources to accomplish these objectives.
The trustees also considered that the proposed fee is consistent with the
management fees paid by competing funds with investment objectives of capital
appreciation.
The trustees determined that the Index is appropriate based upon a
number of factors, including the fact that the Index is broad-based and is
composed of . It was
anticipated that any divergence between the fund's performance and that of the
Index could be attributed to Pioneer's skill in selecting securities within the
parameters established by the fund's objective and policies. Because of the
possible future development of an even more appropriate index for measuring the
fund's performance, the trustees believed it advisable to reserve the ability to
substitute a successor index for the Index; provided, in such event, the
calculation of the performance adjustment for any portion of the performance
period prior to the adoption of the successor index would still be based upon
the fund's performance compared to the Index. In addition, because
15
<PAGE>
of the possible future identification of a more appropriate class of fund
shares for comparison with the Index, the trustees believed it advisable to
reserve the ability to substitute the class of fund shares designated for the
performance comparison with the Index; provided, in such event, the calculation
of the performance adjustment for any portion of the performance period prior to
the designation of a successor class would still be based upon the performance
of the previously designated class of fund shares.
The time periods to be used in determining any performance adjustment
were also judged to be of appropriate length to ensure proper correlation and to
prevent fee adjustments from being based upon random or insignificant
differences between the fund and the Index. In this regard, the trustees
concluded that it would be appropriate for the basic fee rate to remain
unadjusted for 12 months before implementation of the performance adjustment,
and that once implemented, the performance adjustment should reflect only the
fund's performance subsequent to the effective date. Moreover, the trustees
believe that upon reaching the 36th month, the performance period would be fully
implemented, and that the performance adjustment should thereafter be based upon
a 36-month rolling performance period.
Based upon all of the above considerations, the trustees determined
that both the basic fee and the amount of any performance adjustments would be
equitable and fair to the shareholders of the fund and that their adoption will
make it more likely that the objectives of continued levels of good service and
investment performance currently and in the future will be achieved.]
TRUSTEES' RECOMMENDATION
Based on its evaluation of the materials presented and assisted by the
advice of independent counsel, the trustees who were present at the meeting on
July 6, 1999, including all of the trustees who are not "interested persons" of
the fund or Pioneer, unanimously concluded that the proposed contract was
sufficient to provide the resources necessary for the objectives described above
and was fair and reasonable and in the best interests of the fund's shareholders
and by a vote cast at the meeting, approved and voted to recommend to the
shareholders of the fund that they approve the proposal to terminate the
existing contract and to adopt the proposed contract.
REQUIRED VOTE
Adoption of Proposal 2 requires the approval of a majority of the
outstanding voting securities of the fund, which under the 1940 Act, is defined
to mean the affirmative vote of the lesser of (i) 67% or more of the shares of
the fund represented at the meeting, if at least 50% of all outstanding shares
of the fund are represented at the meeting, or (ii) 50% or more of the
outstanding shares of the fund entitled to vote at the meeting (a "1940 Act
majority vote").
If Proposal 2 is not approved by the shareholders of the fund, the
existing contract will continue in effect.
FOR THE REASONS SET FORTH ABOVE, THE TRUSTEES OF YOUR FUND RECOMMEND
THAT SHAREHOLDERS VOTE IN FAVOR OF THE PROPOSED CONTRACT.
PROPOSALS 3(A) THROUGH 3(C)
ELIMINATION OR AMENDMENT OF
VARIOUS INVESTMENT RESTRICTIONS
GENERAL
Pioneer and your board of trustees recommend that three changes be made
to modernize your fund's fundamental investment restrictions. We are asking you
to vote on these changes because the restrictions described below are
fundamental and may be changed only with shareholder approval.
16
<PAGE>
The 1940 Act requires mutual funds to adopt fundamental investment
restrictions covering certain types of investment practices. Your fund, however,
is also subject to a number of other fundamental restrictions that are not
required by the 1940 Act or any other current laws. Two of the investment
restrictions that the trustees propose to modify 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.
The fundamental restriction on borrowing would be liberalized to the extent
permitted under the 1940 Act.
Pioneer expects that you will benefit from these proposed changes to
the fund's investment restrictions in several ways. The fund would have the same
degree of flexibility to respond to new developments and changing trends in the
marketplace that other comparable funds typically have. Pioneer believes that
this added flexibility will make your fund more competitive among its peer group
of funds. The proposed changes to the fund's investment restrictions are also
designed to produce a clearer and more concise set of restrictions. These
revised restrictions parallel the investment restrictions of other funds managed
by Pioneer, which will facilitate Pioneer's compliance efforts.
PROPOSED AMENDMENTS TO INVESTMENT RESTRICTIONS
The table below sets forth the fund's current fundamental restrictions
in the left-hand column and the proposed amended 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 revised in the fund's amended statement of
additional information.
<TABLE>
<CAPTION>
PROPOSAL CURRENT RESTRICTION AMENDED RESTRICTION
<S> <C> <C>
3(a) Purchase securities on margin, but it may obtain such ELIMINATE AS FUNDAMENTAL, AMEND AND
short-term credits as may be necessary for the RECLASSIFY AS A NON-FUNDAMENTAL INVESTMENT
clearance of purchases and sales of securities. RESTRICTION.
EXPLANATION. The 1940 Act does not require that this restriction be fundamental. The restriction
would continue to be a fund policy but would be reclassified as non-fundamental.
PROPOSAL CURRENT RESTRICTION AMENDED RESTRICTION
3(b) Make short sales of securities unless at the time of ELIMINATE AS A FUNDAMENTAL INVESTMENT
such sale it owns or has the right to acquire as a RESTRICTION.
result of the ownership of convertible or exchangeable
securities, and without the payment of further
consideration, an equal amount of such securities
which it will retain so long as it is in a short
position. At no time will more than 10% of the value
of the funds assets be committed to short sales.
EXPLANATION. The 1940 Act does not require that this restriction be fundamental. The fund would
adopt a non-fundamental policy (that could be amended or eliminated in the future without
shareholder approval) to limit short sales to short sales "against-the-box". In a short sale
"against-the-box", the fund owns or has the right to acquire the security sold short.
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
PROPOSAL CURRENT RESTRICTION AMENDED RESTRICTION
<S> <C> <C>
3(c) Borrow money except from banks as a temporary measure Borrow money, except the fund may: (a) borrow
to facilitate the meeting of redemption requests or from banks or through reverse repurchase
for extraordinary or emergency purposes and except agreements in an amount up to 33 1/3% of the
pursuant to reverse repurchase agreements or dollar fund's total assets (including the amount
rolls, in all cases in amounts not exceeding 10% of borrowed); (b) to the extent permitted by
the fund's total assets (including the amount applicable law, borrow up to an additional 5%
borrowed) taken at market value. of the fund's assets for temporary purposes;
(c) obtain such short-term credits as are
necessary for the clearance of portfolio
transactions; and (d) purchase securities on
margin to the extent permitted by applicable
law.
EXPLANATION: This restriction has been amended for improved clarity and uniformity among Pioneer
mutual funds. The percentage limitation on borrowing has been revised upward from 10% 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.
</TABLE>
TRUSTEES' RECOMMENDATION
The trustees believe that the proposed amendments to the fund's
fundamental 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 to changes as described
above.
REQUIRED VOTE
Approval of each of Proposals 3(a) through (c) requires a 1940 Act
majority vote. If the required approvals to change the fund's restrictions are
not obtained, the current investment restrictions will continue in effect.
THE TRUSTEES OF YOUR FUND RECOMMEND THAT SHAREHOLDERS VOTE FOR EACH
PROPOSAL TO AMEND THE FUND'S INVESTMENT RESTRICTIONS.
INFORMATION CONCERNING THE MEETING
OUTSTANDING SHARES AND QUORUM
As of July __, 1999, ________ Class A shares, ________ Class B shares,
________ Class C shares and ________ Class Y shares of beneficial interest of
the fund were outstanding. Only shareholders of record on July 19, 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 June 30, 1999, the following
persons owned of record or beneficially 5% or more of the outstanding Class A,
Class B, Class C and Class Y shares of your fund.
18
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OWNED AND PERCENTAGE OF
TOTAL SHARES OUTSTANDING FOR THE CLASS
SHAREHOLDER CLASS
<S> <C> <C>
Merrill Lynch, Pierce, Fenner & Smith Incorporated A 12,752,004 (14.11%)
for the Sole Benefit of its Customers B 6,859,368 (14.40%)
4800 Deer Lake Drive East, 2nd Floor C 3,470,752 (25.79%)
Jacksonville, FL 32246-6484
U.S. Trust Company of the Pacific Y 150,391 (51.44%)
Northwest, Trustee
Pioneer Retirement Benefit Plan
4380 S.W. Macadam Avenue
Portland, OR 97201-6407
U.S. Trust Company of the Pacific Y 133,541 (42.82%)
Northwest, Trustee
Pioneer Savings and Investment Plan
4380 S.W. Macadam Avenue
Portland, OR 97201-6407
</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
superceding proxy or by submitting a notice of revocation to the secretary of
the fund. In addition, although mere attendance 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 name 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 of 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 or any of
the proposal 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 fund present in
person or by proxy at the session of the meeting to be adjourned.
19
<PAGE>
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 share 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 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, the
attached notice 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
internet or other electronic means. The voting procedures used in connection
with such voting methods are designed to authenticate a shareholder's identity,
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. 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. In the case of telephone voting, 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. In the case of
internet voting, shareholders would be required to provide their Social Security
number or other identifying information and will receive a confirmation of their
instructions. A special toll-free number will be available in case the
information contained in the confirmation is incorrect.
20
<PAGE>
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.
APPENDIX
ADDITIONAL INFORMATION PERTAINING TO PIONEER
OWNERSHIP OF PIONEER. Pioneer is a wholly owned subsidiary of PGI. As
of May 31, 1999, Mr. Cogan beneficially owned 3,558,044 shares (13.36%) of the
outstanding common stock of PGI. Mr. Cogan's beneficial holdings included
648,950 shares held in trusts with respect to which he may be deemed to be a
beneficial owner by reason of his interest as a beneficiary and/or position as a
trustee and shares which he has the right to acquire under outstanding options
within 60 days of May 31, 1999. At such date, David D. Tripple, Pioneer's other
director, owned beneficially 1.19% of the outstanding common stock of PGI. As of
May 31, 1999, executive officers and directors of Pioneer beneficially owned an
aggregate of 4,491,392 shares of common stock of PGI, approximately 16.62% of
the outstanding common stock of PGI.
SERVICES PROVIDED TO THE FUND BY AFFILIATES OF PIONEER. PSC serves as
the fund's transfer agent and shareholder servicing agent. Under the terms of
its contract with the fund, PSC's duties include: (i) processing sales,
redemptions and exchanges of shares of the fund; (ii) distributing dividends and
capital gains to shareholder accounts; and (iii) maintaining certain account
records and responding to routine shareholder inquires. For the fiscal year
ended December 31, 1998, the fund paid PSC approximately $2,863,153 in fees for
these services.
PFD, an indirect wholly owned subsidiary of PGI, serves as the fund's
principal underwriter. For the fiscal year ended December 31, 1998, the fund
paid PFD approximately $2,296,119 in distribution fees pursuant to the fund's
Class A distribution plan, $3,908,589 in distribution fees pursuant to the
fund's Class B distribution plan and $978,984 in distribution fees pursuant to
the fund's Class C distribution plan. Such fees were paid to PFD in
reimbursement of expenses related to servicing of shareholder accounts and
compensating broker/dealers and sales personnel. No distribution plan has been
adopted with respect to the fund's Class Y shares. For the same period, PFD
earned underwriting commissions in connection with its offering of shares of the
fund in the amount of approximately $13,974,000 of which approximately
$11,351,00 was reallowed to dealers.
FEES THE FUND PAID PIONEER. During the fiscal year ended December 31,
1998, the fund paid Pioneer $6,484,820 in management fees and approximately
$248,265 in administrative service fees.
SIMILAR FUNDS MANAGED BY PIONEER. Pioneer serves as the investment
manager to the following funds with investment objectives similar to your fund's
objective:
<TABLE>
<CAPTION>
Name of fund
ANNUAL MANAGEMENT FEE RATE (NET ASSETS AS OF 6/30/99)
<S> <C>
0.70% of the first $500 million of average daily net assets; Pioneer Capital Growth Fund
0.65% of the next $500 million; 0.625% of average daily net assets $1,800,905,486
exceeding $1 billion; adjusted by up to +/- 0.10% to reflect
Pioneer Capital Growth Fund's performance
0.625% of average daily net assets, adjusted by up to +/- 0.20% Pioneer Mid-Cap Fund
to reflect Pioneer Mid-Cap Fund's performance $829,578,644
0.75% of average daily net assets Pioneer Independence Fund
$6,963,029
0.85% of average daily net assets Pioneer Small Company Fund
$268,330,230
21
<PAGE>
1.10% of average daily net assets Pioneer Micro-Cap Fund
$91,069,240
0.65% of average daily net assets Pioneer Variable Contracts
Trust--Capital Growth Portfolio
$124,612,311
0.70% of average daily net assets Pioneer Variable Contract
Trust--Growth Shares Portfolio
$151,007,375
</TABLE>
PORTFOLIO TRANSACTIONS. All orders for the purchase or sale of
portfolio securities are placed on behalf of the fund by Pioneer pursuant to
authority contained in the existing and proposed contracts. In selecting brokers
or dealers, Pioneer considers factors relating to execution on the best overall
terms available, including, but not limited to, the size and type of the
transaction; the nature and character of the markets of the security to be
purchased or sold; the execution efficiency, settlement capability and financial
condition of the dealer; the dealer's execution services rendered on a
continuing basis; and the reasonableness of any dealer spreads.
Pioneer may select broker-dealers which provide brokerage and/or
research services to the fund and/or other investment companies or institutional
or other accounts managed by Pioneer. Such research services must be lawful and
must provide appropriate assistance to Pioneer in the performance of its
investment decision-making responsibilities and could include advice concerning
the value of securities; the advisability of investing in, purchasing or selling
securities; the availability of securities or the purchasers or sellers of
securities; providing stock quotation services, credit rating service
information and comparative fund statistics; furnishing analysis, electronic
information services, manuals and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategy and performance of
accounts and particular investment decisions; and effecting securities
transactions and performing functions incidental thereto (such as clearance and
settlement).
In circumstances where two or more broker-dealers offer comparable
prices and executions, preference may be given to a broker-dealer which has sold
shares of the fund as well as shares of other investment companies managed by
Pioneer. This policy does not imply a commitment to execute all portfolio
transactions through all broker-dealers that sell shares of the fund. In
addition, if Pioneer determines in good faith that the amount of commissions
charged by a broker-dealer is reasonable in relation to the value of the
brokerage and research services provided by such broker-dealer, the fund may pay
commissions to such broker-dealer in an amount greater than the amount another
firm may charge. This information might be useful to Pioneer in providing
services to the fund as well as to other investment companies or accounts
managed by Pioneer, although not all of such research may be useful to the fund.
Conversely, such information provided to Pioneer by brokers and dealers through
whom other clients of Pioneer effect securities transactions might be useful to
Pioneer in providing services to the fund. The receipt of such research is not
expected to reduce Pioneer's normal independent research activities; however, it
enables Pioneer to avoid the additional expense which might otherwise be
incurred if it were to attempt to develop comparable information through its own
staff.
22
<PAGE>
PROXY PROXY
PIONEER GROWTH SHARES
PROXY FOR THE MEETING OF SHAREHOLDERS
To be held September 28, 1999
I (we), having received notice of the meeting and management's proxy
statement therefor, and revoking all prior proxies, hereby appoint John F.
Cogan, Jr., David D. Tripple, Robert P. Nault and Joseph P. Barri, and each of
them, my (our) attorneys (with full power of substitution in them and each of
them) for and in my (our) name(s) to attend the Meeting of Shareholders of my
(our) fund to be held on Tuesday, September 28, 1999, at 2:00 p.m. (Boston time)
at the offices of Hale and Dorr LLP, counsel to the fund, 60 State Street, 26th
Floor, Boston, Massachusetts 02109, and any adjourned session or sessions
thereof, and there to vote and act upon the following matter (as more fully
described in the accompanying proxy statement) in respect of all shares of the
fund which I (we) will be entitled to vote or act upon, with all the powers I
(we) would possess if personally present.
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
UNDERSIGNED. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE
PROPOSAL.
In signing, please write name(s) exactly
as appearing hereon. When signing as
attorney, executor, administrator or other
fiduciary, please give your full title as
such. Joint owners should each sign
personally.
-------------------------------------------
-------------------------------------------
Signature(s)
Dated: ________________, 1999
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF YOUR FUND AND
SHOULD BE RETURNED AS SOON AS POSSIBLE IN THE ENVELOPE PROVIDED.
1. To elect Trustees:
The nominees for Trustees are: M.K. Bush, J.F. Cogan, Jr., Dr. R.H. Egdahl,
M.B.W. Graham, J.W. Kendrick, M.A. Piret, D.D. Tripple, S.K. West and
J. Winthrop.
___ FOR electing all the nominees (except as marked above)
To withhold authority to vote for one or more of the nominees, circle
The nominee name(s) above.
___WITHHOLD authority to vote for all nominees
2. To approve a new management contract FOR AGAINST ABSTAIN
between the fund and Pioneer Investment
Management, Inc. ("Pioneer"), the fund's ___ ___ ___
investment adviser, increasing the rate at
which management fees are payable to
Pioneer and providing for a performance fee
adjustment.
3.a. To approve the reclassification of the FOR AGAINST ABSTAIN
fund's investment restriction regarding
purchasing securities on margin. ___ ___ ___
3.b. To approve the elimination of the fund's FOR AGAINST ABSTAIN
investment restriction on short sales.
___ ___ ___
3.c. To approve an amendment to the fund's FOR AGAINST ABSTAIN
investment restriction regarding borrowing.
___ ___ ___
