SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-B
FOR REGISTRATION OF SECURITIES OF
CERTAIN SUCCESSOR ISSUERS
FILED PURSUANT TO SECTION 12(b) or
12(g) OF THE SECURITIES EXCHANGE
ACT OF 1934
Pioneer Interest Shares
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 470538563
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(State of Organization) (IRS Employer Identification No.)
60 State Street, Boston, Massachusetts 02109
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(Address of Principal Executive Offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on which
to be so Registered Each Class is to be Registered
------------------- ------------------------------
Common Shares of Beneficial New York Stock Exchange
Interest, No Par Value
<PAGE>
Item 1. General Information.
(a) Pioneer Interest Shares (the "Registrant") was organized as a
Delaware business trust on May 8, 1996.
(b) The Registrant's fiscal year ends on December 31 each year.
Item 2. Transaction of Succession.
(a) The Registrant will succeed to the assets and liabilities of
Pioneer Interest Shares, Inc., a Nebraska corporation and closed-end management
investment company (the "Predecessor"), which has securities registered pursuant
to Section 12(b) of the Securities Exchange Act of 1934 (the "1934 Act").
(b) In order to accomplish the reorganization (the "Reorganization") of
the Predecessor into the Registrant, the Registrant was formed as a Delaware
business trust pursuant to an Agreement and Declaration of Trust (the
"Declaration of Trust"). On the closing date of the Reorganization (the "Closing
Date"), the Predecessor will transfer all of its assets to the Registrant in
exchange for the assumption by the Registrant of all the liabilities of the
Predecessor and the issuance to the Predecessor of shares of beneficial interest
of the Registrant ("Successor Shares") equal to the value (as determined by
using the procedures set forth in the Predecessor's current prospectus) on the
date of the exchange of the Predecessor's net assets. The Predecessor, as a sole
shareholder of the Registrant, will then vote on certain matters. Immediately
thereafter, the Predecessor will liquidate and distribute Successor Shares to
each shareholder pro rata in proportion to such shareholder's beneficial
interest in the Predecessor in exchange for his or her shares of the
Predecessor. After this distribution of Successor Shares, the Predecessor will,
as soon as practicable thereafter, be dissolved in accordance with Nebraska law.
Certificates evidencing full or fractional Successor Shares will not be issued.
Upon completion of the Reorganization, each shareholder will be the owner of
full and fractional Successor Shares equal in number and aggregate net asset
value to his or her shares of the Predecessor as of the date of the exchange.
Item 3. Securities to be Registered.
(i) Number of common shares of beneficial interest, no par value,
of Registrant presently authorized: Indefinite
<PAGE>
(ii) Number of common shares of beneficial interest, no par value,
of Registrant to be issued on the Closing Date: 7,332,922
(iii) Number of common shares of beneficial interest, no par value,
of Registrant to be issued on the Closing Date which will be
held by or for the account of the Registrant: 0
Item 4. Description of Registrant's Securities to Be Registered.
The Registrant is hereby registering common shares of beneficial
interest, no par value.
(i) The Registrant's Declaration of Trust, filed herewith as Exhibit
3(b), describes the attributes of the shares of beneficial interest being
registered hereby with respect to distributions (Article VI), redemption
(Article II, ss. 2(v)), voting rights (Article VII), liquidation rights (Article
IX, ss. 4), liability to further calls and assessments by the Registrant
(Article V, ss. 6 and Article VIII) and restrictions on alienability of shares
(Article V, ss. 5 describes share transfer procedures). These provisions are
hereby incorporated by reference.
Presently there are no conversion rights, sinking fund provisions,
preemption rights or provisions discriminating against any existing or
prospective holder of securities as a result of such security holder owning a
substantial amount of securities. In addition, the Board of Trustees is not
presently classified and there is no cumulative voting with respect to election
of Trustees.
(ii) The voting rights of security holders are set forth in Article VII
and in Article X, ss. 9 of the Registrant's Declaration of Trust attached hereto
as Exhibit 3(b). These provisions are hereby incorporated by reference.
(iii) Preferred shares of beneficial interest are not hereby being
registered.
(iv) The Registrant may authorize preferred shares of beneficial
interest which, if issued, may qualify certain rights attributable to common
shares of beneficial interest. Presently, however, the Registrant has not
authorized preferred shares of beneficial interest.
(v) There are no provisions of the Registrant's Declaration of Trust
or by-laws that would have the effect of delaying, deferring or preventing a
change in control of the Registrant and that operate only with respect to any
extraordinary corporate transaction involving the Registrant.
<PAGE>
Item 5. Financial Statements and Exhibits.
(a) Financial Statements
Not required to be filed herewith.
(b) Exhibits
1. Not applicable
2. Form of Agreement and Plan of Reorganization
3(a). Certificate of Trust
3(b). Agreement and Declaration of Trust
3(c). By-Laws
4. Not Applicable
5. Not Applicable
6. Not Applicable
7. Not Applicable
8. Not Applicable
9. Not Applicable
10(a). Form of Investment Management Agreement
10(b). Form of Custodian Agreement
10(c). Form of Investment Company Service
Agreement
11. Statement Regarding Computation of Per Share
Earnings
12. Not Applicable
13. Not Applicable
14. None
15. Not Applicable
16. Not Applicable
17. Not Applicable
18. Not Applicable
19. Not Applicable
20. Not Applicable
21. None
22. Not Applicable
23. Not Applicable
24. Not Applicable
25. Not Applicable
26. Not Applicable
27. Not Applicable
28. Not Applicable
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
<PAGE>
PIONEER INTEREST SHARES
Date: June 28, 1996 By: /s/John F. Cogan, Jr.
----------------------
John F. Cogan, Jr.
President
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION is made as of the 15th day of
July, 1996, by and between Pioneer Interest Shares, Inc., a Nebraska corporation
(the "Current Fund"), and Pioneer Interest Shares, a business trust duly formed
under the laws of the State of Delaware (the "Successor Fund").
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
reorganization (a "reorganization") of the Current Fund as the Successor Fund.
The reorganization will involve the transfer of all of the assets of the Current
Fund to the Successor Fund solely in exchange for (1) assumption by the
Successor Fund of all liabilities of the Current Fund and (2) the issuance of
shares of beneficial interest (the "Successor Shares") by the Successor Fund to
the Current Fund, followed by the pro rata distribution on the Closing Date (as
defined below) of the Successor Shares to the holders of the Common Stock of the
Current Fund (the "Current Fund Shareholders") in exchange for their shares of
Common Stock of the Current Fund in liquidation and dissolution of the Current
Fund, all upon the terms and conditions hereinafter set forth in this Agreement.
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 FUND IN EXCHANGE FOR ASSUMPTION OF
LIABILITIES AND ISSUANCE OF SUCCESSOR SHARES OF THE SUCCESSOR FUND;
DISSOLUTION OF THE CURRENT FUND
1.1 Subject to the terms and conditions set forth herein and on the
basis of the representations and warranties contained herein, the Current Fund
agrees to transfer all of the assets of the Current Fund as set forth in
paragraph 1.2 and assign and transfer all of its liabilities to the Successor
Fund which has been organized solely for the purpose of acquiring all of the
assets and assuming all of the liabilities of the Current Fund. The Successor
Fund has not issued any Shares or commenced operations. The Successor Fund
agrees that in exchange for all of the assets of the Current Fund (1) the
Successor Fund shall assume all of the liabilities of the Current Fund, whether
contingent or otherwise, then existing, and further (2) the Successor Fund shall
deliver to the Current Fund the number of full and fractional Successor Shares
equal to the value of the assets of the Current Fund transferred to the
Successor Fund, minus the liabilities of the Current Fund assumed by the
Successor Fund (the "Net Assets"), as described in paragraph 3.1 on the Closing
Date provided for in
<PAGE>
paragraph 3.1. Such transactions shall take place at the Closing provided for in
paragraph 3.1.
1.2 The assets of the Current Fund to be acquired by the Successor Fund
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 Fund and other property owned by the Current
Fund and any deferred or prepaid expenses shown as assets on the books of the
Current Fund on the Closing Date provided for in paragraph 3.1.
1.3 Immediately upon delivery to the Current Fund of Successor Shares,
any duly authorized officer of the Current Fund shall cause the Current Fund, as
the then sole shareholder of the Successor Fund, to (i) elect as Trustees of the
Successor Fund the persons who currently serve as Directors of the Current Fund;
(ii) ratify the selection of the independent accountants; (iii) approve an
investment advisory agreement for the Successor Fund in the form currently
approved by the shareholders of the Current Fund; and (v) adopt, on behalf of
the Successor Fund, the investment objectives, investment policies and
investment restrictions of the Current Fund.
1.4 As provided in paragraph 3.4, on the Closing Date the Current Fund
will distribute in liquidation the Successor Shares pro rata in proportion to
the Current Fund's shares of Common Stock ("Current Fund Shares") to Current
Fund Shareholders of record determined as of the close of business on the
Closing Date, in exchange for the Current Fund Shares. Such distribution will be
accomplished by the transfer of the Successor Shares then credited to the
account of the Current Fund on the share records of the Successor Fund to open
accounts on those records in the names of the Current Fund Shareholders and
representing the respective pro rata number of the Successor Shares received
from the Successor Fund due the Current Fund Shareholders. The Successor Fund
shall not issue certificates representing Successor Shares in connection with
such distribution. Fractional Successor Shares shall be rounded to the third
place after the decimal point.
1.5 As soon as practicable after the distribution of the Successor
Shares as set forth in Section 1.4, the Current Fund shall be dissolved and any
such further actions shall be taken in connection therewith as are required by
applicable law.
1.6 Ownership of the Successor Shares of each Successor Fund
Shareholder shall be maintained separately on the books of Pioneering Services
Corporation as the Successor Fund's shareholder services and transfer agent.
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<PAGE>
1.7 Any transfer taxes payable upon issuance of Successor Shares in a
name other than the registered holder of the Current Fund Shares on the books of
the Current Fund as of that time shall be paid by the person to whom such
Successor Shares are to be distributed as a condition of such transfer.
2. VALUATION
2.1 The value of the Current Fund's Net Assets to be acquired by the
Successor Fund hereunder shall be the net asset value computed as of the
valuation time provided in the Current Fund's prospectus on the Closing Date
using the valuation procedures set forth in the Current Fund's current
prospectus or statement of additional information.
2.2 The value of full and fractional Successor Shares to be issued in
exchange for the Current Fund's Net Assets shall be equal to the value of the
Net Assets of the Current Fund on the Closing Date, and the number of such
Successor Shares shall equal the number of full and fractional Current Fund
Shares.
2.3 All computations of value shall be made by Pioneering Services
Corporation as the Current Fund's and the Successor Fund's shareholder services
and transfer agent.
3. CLOSING AND CLOSING DATE
3.1 The transfer of the Current Fund's assets in exchange for the
assumption by the Successor Fund of the Current Fund's liabilities and the
issuance of Successor Shares to the Current Fund, as described above, together
with related acts necessary to consummate such acts (the "Closing"), shall occur
at the offices of Hale and Dorr at 60 State Street, Boston, Massachusetts 02109
on August 1, 1996 ("Closing Date"), or at such other place or date on or prior
to September 1, 1996 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 any Current Fund 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 Fund are traded is disrupted so that accurate
appraisal of the value of the total net assets of the Current Fund 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.
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<PAGE>
3.3 The Current Fund 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 Fund, of the Current Fund's
reorganization as the Successor Fund.
3.4 Pioneering Services Corporation as shareholder services and
transfer agent for the Current Fund, shall deliver at the Closing a certificate
as to the conversion on its books and records of the Current Fund Shareholder
account to an account as a holder of Successor Shares. The Successor Fund shall
issue and deliver to the Current Fund a confirmation evidencing the Successor
Shares to be credited on the Closing Date or provide evidence satisfactory to
the Current Fund that such Successor Shares have been credited to the Current
Fund's account on the books of the Successor Fund. At the Closing, each party
shall deliver to the other such bills of sale, checks, assignments, stock
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 Fund shall be presented
by the Current Fund 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 Fund to the Custodian for the
account of the Successor Fund 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 Fund shall be delivered to the
Successor Fund by the Custodian by recording the transfer of beneficial
ownership thereof on its records. The cash delivered shall be in the form of
currency or by the Custodian crediting the Successor Fund's account maintained
with the Custodian with immediately available funds.
4. REPRESENTATIONS AND WARRANTIES
4.1 The Current Fund represents and warrants as follows:
4.1.A. The Current Fund is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nebraska
and has the power to own all of its properties and assets and, subject to
approval by the shareholders of the Current Fund, to perform its obligations
under this Agreement. The Current Fund 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 Fund
has all necessary
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<PAGE>
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 Fund is a registered investment company
classified as a management company of the closed-end type and its registration
with the Securities and Exchange Commission (the "Commission") 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 Fund 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 Fund is a party or by
which the Current Fund is bound;
4.1.D. The Current Fund 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 Fund 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 Fund or any of its properties or assets. The
Current Fund knows of no facts that might form the basis for the institution of
such proceedings and the Current Fund 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 Fund 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 Fund has elected to 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;
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<PAGE>
4.1.H. The authorized capital of the Current Fund consists of
Fifty Million (50,000,000) shares of common stock. All issued and outstanding
shares of common stock of the Current Fund are, and at the Closing Date will be,
duly and validly issued and outstanding, fully paid and nonassessable. The
Current Fund does not have outstanding any options, warrants or other rights to
subscribe for or purchase any of its shares of common stock, nor is there
outstanding any security convertible into any of its shares of common stock;
4.1.I. The information to be furnished by the Current Fund 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 Fund Shares
will at the time of the Closing be held by the persons and in the amounts as
certified in accordance with the provisions of paragraph 3.4;
4.1.K. At the Closing Date, the Current Fund will have good
and marketable title to the assets to be transferred to the Successor Fund
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 Fund 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;
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 Fund and this Agreement constitutes
a valid and binding obligation of the Current Fund enforceable in accordance
with its terms, subject to the approval of the Current Fund's Shareholders; and
4.1.M. No consent, approval, authorization or order of any
court or governmental authority is required for the consummation by the Current
Fund of the transactions contemplated herein, except such as shall have been
obtained prior to the Closing Date.
4.2 The Successor Fund represents and warrants as follows:
4.2.A. The Successor Fund 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 Fund is not required to qualify
to do
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<PAGE>
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; and the
Successor Fund 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.
4.2.B. The Successor Fund is not, and the execution, delivery
and performance of this Agreement will not result, in violation of any provision
of the Declaration of Trust or By-laws of the Successor Fund or any agreement,
indenture, instrument, contract, lease or other undertaking to which the
Successor Fund is a party or by which the Successor Fund 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 Fund or any of its properties or assets. The
Successor Fund knows of no facts that might form the basis for the institution
of such proceedings, and the Successor Fund 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 Fund will qualify as a regulated
investment company under subchapter M of the Code for the taxable year in which
the Closing occurs and intends 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 Shares or any other securities of the Successor Fund;
Successor Shares issued in connection with the transactions contemplated herein
will be duly and validly issued and outstanding and fully paid and
nonassessable;
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 Fund, and this Agreement constitutes a valid and binding obligation of
the Successor Fund enforceable against the Successor Fund in accordance with its
terms;
4.2.G. On the Closing Date, the Successor Fund shall have
obtained approval of the listing on the Successor Shares on the New York Stock
Exchange (the "Exchange") on substantially the same terms and conditions as the
listing of the Current Fund Shares, as well as well as approval for the
Successor Shares to commence trading on the Exchange immediately following the
Closing;
4.2.H. The information to be furnished by the Successor Fund
for use in applications for orders, registration statements,
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<PAGE>
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 applicable thereto; and
4.2.I. No consent, approval, authorization or order of any
court or governmental authority is required for the consummation by the
Successor Fund of the transactions contemplated herein, except such as shall
have been obtained prior to the Closing Date.
5. COVENANTS OF THE CURRENT FUND AND THE SUCCESSOR FUND
5.1 The Current Fund covenants that the Successor 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 Fund covenants that it will assist the Successor Fund
in obtaining such information as the Successor Fund reasonably requests
concerning the beneficial ownership of Current Fund Shares.
5.3 The Current Fund will, from time to time, as and when requested by
the Successor Fund 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 Fund may deem necessary or desirable in
order to vest in, and confirm to, the Successor Fund, title to, and possession
of, all the assets of the Current Fund to be sold, assigned, transferred and
delivered hereunder and otherwise to carry out the intent and purpose of this
Agreement.
5.4 The Successor Fund will, from time to time, as and when requested
by the Current Fund, 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 Fund may deem necessary or desirable in
order to vest in, and confirm to, the Current Fund title to, and possession of,
the Successor Shares issued, sold, assigned, transferred and delivered hereunder
and otherwise to carry out the intent and purpose of this Agreement.
5.5 The Successor Fund shall apply for listing of the Successor Shares
on the Exchange on substantially the same terms and conditions as the listing of
the Current Fund Shares and shall use all reasonable efforts to obtain such
listing by the Closing Date.
5.6 The Successor Fund shall use all reasonable efforts to obtain the
approvals and authorizations required by the Securities
-8-
<PAGE>
Act of 1933, the Securities Exchange Act of 1934, the 1940 Act, the rules and
regulations of the Exchange (or any successor securities exchange on which the
Successor Shares may in the future be listed) and such state securities laws as
it may deem appropriate in order to operate after the Closing Date.
5.7 Subject to the provisions of this Agreement, the Successor Fund and
the Current Fund 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.
5.8 As promptly as practicable, but in any event within 60 days after
the Closing Date, the Current Fund shall furnish to the Successor Fund, in such
form as is reasonably satisfactory to the Successor Fund, a statement of the
earnings and profits of the Current Fund for federal income tax purposes, and of
any capital loss carryovers and other items that will be carried over to the
Successor Fund as a result of Section 381 of the Code, and which statement will
be certified by the President or Treasurer of the Current Fund.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE CURRENT FUND
The obligations of the Current Fund to consummate the transactions
provided for herein shall be subject to the performance by the Successor Fund of
all the obligations to be performed by the Successor Fund 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 Fund contained
in this Agreement shall be true and correct in all material respects as of the
date hereof 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 Fund shall have delivered on the Closing Date to the
Current Fund a certificate executed in the Successor Fund's name by its
President or Vice President, in form and substance satisfactory to the Current
Fund, dated as of the Closing Date, to the effect that the representations and
warranties of the Successor Fund 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 Fund
shall reasonably request.
6.3 The Successor Fund shall have delivered on the Closing Date to the
Current Fund such evidence as the Current Fund deems necessary that the
Successor Shares have been approved for listing on the Exchange on substantially
the same terms and conditions as the listing of the Current Fund Shares.
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<PAGE>
Each of the foregoing conditions precedent may be waived by the Current Fund.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SUCCESSOR FUND
The obligations of the Successor Fund to consummate the transactions
provided for herein shall be subject to the performance by the Current Fund of
all the obligations to be performed by the Current Fund 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 Fund 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 Fund shall have delivered to the Successor Fund on the
Closing Date a statement of the Current Fund's 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 Fund as to its portfolio securities and the Current Fund's federal
income tax basis and holding period for each such portfolio security as of the
Closing Date; and
7.3 The Current Fund shall have delivered to the Successor Fund on the
Closing Date a certificate executed in the Current Fund's name by its President
or Vice President, in form and substance satisfactory to the Successor Fund,
dated as of the Closing Date, to the effect that the representations and
warranties of the Current Fund 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
Fund shall reasonably request.
Each of the foregoing conditions precedent may be waived by the
Successor Fund.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE CURRENT FUND AND THE
SUCCESSOR FUND
The obligations of the Current Fund and the Successor Fund are each
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 Current Fund's Shareholders in
accordance with applicable law;
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<PAGE>
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 Fund or the Current Fund 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 Fund or the Current Fund, provided that either party hereto may for
itself waive any of such conditions;
8.4 The President or a Vice President of the Successor Fund shall have
delivered a certificate to the Current Fund on the Closing Date certifying that
the Successor Fund has taken all necessary action so that it shall be a
registered closed-end investment company under the 1940 Act; and
8.5 The Current Fund and the Successor Fund shall have received on or
before the Closing Date an opinion of Hale and Dorr satisfactory to the Current
Fund and the Successor Fund, substantially to the effect that for federal income
tax purposes:
8.5.A. The acquisition of all of the assets of the Current
Fund by the Successor Fund solely in exchange for the issuance of
Successor Shares to the Current Fund and the assumption by the
Successor Fund of all of the liabilities of the Current Fund, followed
by the distribution in liquidation by the Current Fund of such
Successor Shares to the Current Fund Shareholders in exchange for their
Current Fund Shares and the dissolution of the Current Fund, will
constitute a reorganization within the meaning of Section 368(a)(1) of
the Code, and the Current Fund and the Successor Fund 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 Fund
upon (i) the transfer of all of its assets to the Successor Fund solely
in exchange for the issuance of Successor Shares to the Current Fund
and the assumption by the Successor Fund of the Current Fund's
liabilities and (ii) the distribution by the Current Fund of the
Successor Shares to the Current Fund Shareholders;
8.5.C. No gain or loss will be recognized by the Successor
Fund upon its receipt of all of the Current Fund's assets solely in
exchange for the issuance of the Successor
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Shares to the Current Fund and the assumption by the Successor Fund of all of
the liabilities of the Current Fund;
8.5.D. The tax basis of the assets acquired by the Successor
Fund from the Current Fund will be, in each instance, the same as the
tax basis of those assets in the Current Fund's hands immediately
before the transfer;
8.5.E. The tax holding period of the assets of the Current
Fund in the hands of the Successor Fund will include the Current Fund's
tax holding period for those assets;
8.5.F. The Current Fund's Shareholders will not recognize gain
or loss upon the exchange of all of their Current Fund Shares solely
for Successor Shares as part of the transaction;
8.5.G. The tax basis of the Successor Shares received by
Current Fund Shareholders in the transaction will be, for each
shareholder, the same as the tax basis of the Current Fund Shares
surrendered in exchange therefor; and
8.5.H. The tax holding period of the Successor Shares received
by Current Fund Shareholders will include, for each such Shareholder,
the tax holding period for the Current Fund Shares surrendered in
exchange therefor, provided that such Current Fund Shares were held as
capital assets on the date of the exchange.
The Current Fund and Successor Fund each agree to make and provide
representations with respect to the Current Fund and the Successor Fund which
are reasonably necessary to enable Hale and Dorr 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, as Hale and Dorr 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 set forth in
paragraph 8.5, may be waived by that party.
9. BROKERAGE FEES AND EXPENSES
9.1 The Successor Fund and the Current Fund 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.
9.2 The Current Fund and the Successor Fund 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
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transactions are consummated, such expenses of the Current Fund will be assumed
by the Successor Fund as part of the transactions.
10. ENTIRE AGREEMENT
The Successor Fund and the Current Fund 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 Fund and the Current Fund. In addition, either the Successor Fund or
the Current Fund 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 Fund or the Current Fund, or their
respective trustees, directors or officers, to the other party or its trustees,
directors 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 the Current Funds'
Shareholders, no such amendment may have the effect of changing the provisions
for determining the number of Successor Shares to be paid to the Current Fund
Shareholders under this Agreement to the detriment of the Current Fund
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.
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13.2 This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original.
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 Successor Fund must look solely to
the property of the Successor Fund for the enforcement of any claims against the
Successor Fund as neither the Trustees, officers, agents nor shareholders of the
Successor Fund assume any personal liability for obligations entered into on
behalf of the Successor Fund. No other series of the Successor Fund hereafter
established shall be responsible for any obligations assumed by the Successor
Fund on behalf of the Successor Fund under this Agreement.
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 Fund or the
Successor Fund, each at 60 State Street, Boston, Massachusetts 02109, Attention:
Secretary.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its duly authorized officer.
PIONEER INTEREST SHARES, INC.
By:_____________________________
John F. Cogan, Jr.
President
PIONEER INTEREST SHARES
By:_____________________________
David D. Tripple
Executive Vice President
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PIONEER INTEREST SHARES
AGREEMENT AND
DECLARATION OF TRUST
This AGREEMENT AND DECLARATION OF TRUST is made on April 30, 1996 by John F.
Cogan, Jr. (together with all other persons from time to time duly elected,
qualified and serving as Trustees in accordance with the provisions of Article
II hereof, the "Trustees");
NOW, THEREFORE, the Trustees declare that all money and property contributed to
the Trust shall be held and managed in trust pursuant to this Agreement and
Declaration of Trust.
ARTICLE I
NAME AND DEFINITIONS
Section 1. Name. The name of the Trust created by this Agreement and Declaration
of Trust is "Pioneer Interest Shares."
Section 2. Definitions. Unless otherwise provided or required by the context:
(a)"Administrator" means the party, other than the Trust, to the
contract described in Article III, Section 3 hereof.
(b)"By-laws" means the By-laws of the Trust adopted by the Trustees, as
amended from time to time, which By-laws are expressly herein incorporated by
reference as part of the "governing instrument" within the meaning of the
Delaware Act.
(c)"Class" refers to the division of Shares into two or more classes as
provided in Article V.
(d)"Commission," "Interested Person" and "Principal Underwriter" have
the meanings provided in the 1940 Act. Except as such term may be otherwise
defined by the Trustees in conjunction with the establishment of any Class or
Series of Shares, the term "vote of a majority of the Shares outstanding and
entitled to vote" shall have the same meaning as is assigned to the term "vote
of a majority of the outstanding voting securities" in the 1940 Act.
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(e)"Covered Person" means a person so defined in Article IV, Section 3.
(f)"Custodian" means any Person other than the Trust who has custody of
any Trust Property as required by Section 17(f) of the 1940 Act, but does not
include a system for the central handling of securities described in said
Section 17(f).
(g)"Declaration" shall mean this Agreement and Declaration of Trust, as
amended or restated from time to time. Reference in this Declaration of Trust to
"Declaration," "hereof," "herein," and "hereunder" shall be deemed to refer to
this Declaration rather than exclusively to the article or section in which such
words appear.
(h)"Delaware Act" means Chapter 38 of Title 12 of the Delaware Code
entitled "Treatment of Delaware Business Trusts," as amended from time to time.
(i)"His" shall include the feminine and neuter, as well as the
masculine, genders.
(j)"Investment Adviser" means the party, other than the Trust, to the
contract described in Article III, Section 2 hereof.
(k)"Net Asset Value" means the net asset value of each Share of the
Trust, determined as provided in Article VI, Section 2.
(l)"Person" means and includes individuals, corporations, partnerships,
trusts, associations, joint ventures, estates and other entities, and
governments and agencies and political subdivisions, thereof, whether domestic
or foreign.
(m)"Series" refers to the division of Shares representing any Class
into two or more Series as provided in Article V.
(n)"Shareholder" means a record owner of Outstanding Shares;
(o)"Shares" means the equal proportionate transferable units of
interest into which the beneficial interest of each Class or Series thereof is
divided from time to time (including whole Shares and fractions of Shares).
"Outstanding Shares" means Shares shown in the books of the Trust or its
transfer agent as then issued and outstanding, but does not include Shares which
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have been repurchased or redeemed by the Trust and which are held in the
treasury of the Trust.
(p)"Transfer Agent" means any Person other than the Trust who maintains
the Shareholder records of the Trust, such as the list of Shareholders, the
number of Shares credited to each account, and the like.
(q)"Trust" means Pioneer Interest Shares established hereby, and
reference to the Trust, when applicable to one or more Series, refers to that
Series.
(r)"Trustees" means the persons who have signed this Declaration of
Trust, so long as they shall continue in office in accordance with the terms
hereof, and all other persons who may from time to time be duly qualified and
serving as Trustees in accordance with Article II, in all cases in their
capacities as Trustees hereunder.
(s)"Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the Trust or the
Trustees on behalf of the Trust.
(t)"Underwriter" means the party, other than the Trust, to the contract
described in Article III, Section 1 hereof.
(u)The "1940 Act" means the Investment Company Act of 1940, as amended
from time to time.
ARTICLE II
THE TRUSTEES
Section 1. Management of the Trust. The business and affairs of the Trust shall
be managed by or under the direction of the Trustees, and they shall have all
powers necessary or desirable to carry out that responsibility. The Trustees may
execute all instruments and take all action they deem necessary or desirable to
promote the interests of the Trust. Any determination made by the Trustees in
good faith as to what is in the interests of the Trust shall be conclusive. In
construing the provisions of this Declaration, the presumption shall be in favor
of a grant of power to the Trustees.
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Section 2. Powers. The Trustees in all instances shall act as principals, free
of the control of the Shareholders. The Trustees shall have full power and
authority to take or refrain from taking any action and to execute any contracts
and instruments that they may consider necessary or desirable in the management
of the Trust. The Trustees shall not in any way be bound or limited by current
or future laws or customs applicable to trust investments, but shall have full
power and authority to make any investments which they, in their sole
discretion, deem proper to accomplish the purposes of the Trust. The Trustees
may exercise all of their powers without recourse to any court or other
authority. Subject to any applicable limitation herein or in the By- laws or
resolutions of the Trust, the Trustees shall have power and authority, without
limitation:
(a)To operate as and carry on the business of an investment company,
and exercise all the powers necessary and appropriate to the conduct of such
operations.
(b)To invest in, hold for investment, or reinvest in, cash; securities,
including common, preferred and preference stocks; warrants; subscription
rights; profit-sharing interests or participations and all other contracts for
or evidence of equity interests; bonds, debentures, bills, time notes and all
other evidences of indebtedness; negotiable or non-negotiable instruments;
government securities, including securities of any state, municipality or other
political subdivision thereof, or any governmental or quasi-governmental agency
or instrumentality; and money market instruments including bank certificates of
deposit, finance paper, commercial paper, bankers' acceptances and all kinds of
repurchase agreements, of any corporation, company, trust, association, firm or
other business organization however established, and of any country, state,
municipality or other political subdivision, or any governmental or
quasi-governmental agency or instrumentality; or any other security, property or
instrument in which the Trust shall be authorized to invest.
(c)To acquire (by purchase, subscription or otherwise), to hold, to
trade in and deal in, to acquire any rights or options to purchase or sell, to
sell or otherwise dispose of, to lend and to pledge any such securities, to
enter into repurchase agreements, reverse repurchase agreements, firm commitment
agreements and forward foreign currency exchange contracts, to purchase and sell
options on securities, securities indices, currency and other financial assets,
futures contracts and options on futures contracts of all descriptions and to
engage in all types of hedging and risk-management transactions.
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(d)To exercise all rights, powers and privileges of ownership or
interest in all securities and repurchase agreements included in the Trust
Property, including the right to vote thereon and otherwise act with respect
thereto and to do all acts for the preservation, protection, improvement and
enhancement in value of all such securities and repurchase agreements.
(e)To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, develop and dispose of (by sale or otherwise) any property, real or
personal, including cash or foreign currency, and any interest therein.
(f)To borrow money or other property in the name of the Trust
exclusively for Trust purposes and in this connection issue notes or other
evidence of indebtedness; to secure borrowings by mortgaging, pledging or
otherwise subjecting as security the Trust Property; and to endorse, guarantee,
or undertake the performance of any obligation or engagement of any other Person
and to lend Trust Property.
(g)To aid by further investment any corporation, company, trust,
association or firm, any obligation of or interest in which is included in the
Trust Property or in the affairs of which the Trustees have any direct or
indirect interest; to do all acts and things designed to protect, preserve,
improve or enhance the value of such obligation or interest; and to guarantee or
become surety on any or all of the contracts, stocks, bonds, notes, debentures
and other obligations of any such corporation, company, trust, association or
firm.
(h)To adopt By-laws not inconsistent with this Declaration providing
for the conduct of the business of the Trust and to amend and repeal them to the
extent such right is not reserved to the Shareholders.
(i)To elect and remove such officers and appoint and terminate such
agents as they deem appropriate.
(j)To employ as custodian of any assets of the Trust, subject to any
provisions herein or in the By-laws, one or more banks, trust companies or
companies that are members of a national securities exchange, or other entities
permitted by the Commission to serve as such.
(k)To retain one or more transfer agents and shareholder servicing
agents, or both.
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(l)To provide for the distribution of Shares either through a Principal
Underwriter as provided herein or by the Trust itself, or both, or pursuant to a
distribution plan of any kind.
(m)To set record dates in the manner provided for herein or in the By-
laws.
(n)To delegate such authority as they consider desirable to any
officers of the Trust and to any agent, independent contractor, manager,
investment adviser, custodian or underwriter.
(o)To hold any security or other property (i) in a form not indicating
any trust, whether in bearer, book entry, unregistered or other negotiable form,
or (ii) either in the Trust's or Trustees' own name or in the name of a
custodian or a nominee or nominees, subject to safeguards according to the usual
practice of business trusts or investment companies.
(p)To establish separate Classes having distinct preferences or special
or relative rights or privileges and to establish separate and distinct Series
of any such Classes, all in accordance with the provisions of Article V.
(q)To the full extent permitted by Section 3804 of the Delaware Act and
to the extent necessary or appropriate to give effect to the preferences,
special or relative rights and privileges of any Classes of Shares or Series
thereof, to allocate assets, liabilities and expenses of the Trust to a
particular Class or Series thereof or to apportion the same between or among two
or more Classes or Series, provided that any liabilities or expenses incurred by
a particular Class or Series shall be payable solely out of the assets
attributable to that Class or Series as provided for in Article V, Section 4.
(r)To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or concern whose securities are held
by the Trust; to consent to any contract, lease, mortgage, purchase, or sale of
property by such corporation or concern; and to pay calls or subscriptions with
respect to any security held in the Trust.
(s)To compromise, arbitrate, or otherwise adjust claims in favor of or
against the Trust or any matter in controversy including, but not limited to,
claims for taxes.
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(t)To make distributions of income, capital gains, returns of capital
(if any) and redemption proceeds to Shareholders in the manner hereinafter
provided for.
(u)To establish committees for such purposes, with such membership, and
with such responsibilities as the Trustees may consider proper, including a
committee consisting of fewer than all of the Trustees then in office, which may
act for and bind the Trustees and the Trust with respect to the institution,
prosecution, dismissal, settlement, review or investigation of any legal action,
suit or proceeding, pending or threatened.
(v)To issue, sell, repurchase, redeem, cancel, retire, acquire, hold,
resell, reissue, dispose of and otherwise deal in
Shares; to establish terms and conditions regarding the issuance, sale,
repurchase, redemption, cancellation, retirement, acquisition, holding, resale,
reissuance, disposition of or dealing in Shares; and, subject to Articles V and
VI, to apply to any such repurchase, redemption, retirement, cancellation or
acquisition of Shares any funds or property of the Trust, including, if
applicable, any funds or property specifically attributable to the affected
Class or Series.
(w)To invest part or all of the Trust Property or to dispose of part or
all of the Trust Property and invest the proceeds of such disposition, in
securities issued by one or more other investment companies registered under the
1940 Act all without any requirement of approval by Shareholders. Any such other
investment company may (but need not) be a trust (formed under the laws of the
State of New York or of any other state) which is classified as a partnership
for federal income tax purposes.
(x)To carry on any other business in connection with or incidental to
any of the foregoing powers, to do everything necessary or desirable to
accomplish any purpose or to further any of the foregoing powers, and to take
every other action incidental to the foregoing business or purposes, objects or
powers.
(y)To sell or exchange any or all of the assets of the Trust, subject
to Article IX, Section 4.
(z)To enter into joint ventures, partnerships and other combinations
and associations.
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(aa)To join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to deposit any
security with, or transfer any security to, any such committee, depositary or
trustee, and to delegate to them such power and authority with relation to any
security (whether or not so deposited or transferred) as the Trustees shall deem
proper, and to agree to pay, and to pay, such portion of the expenses and
compensation of such Committee, depositary or trustee as the Trustees shall deem
proper;
(bb)To purchase and pay for entirely out of Trust Property such
insurance as the Trustees may deem necessary or appropriate for the conduct of
the business, including, without limitation, insurance policies insuring the
assets of the Trust or payment of distributions and principal on its portfolio
investments, and, subject to applicable law and any restrictions set forth in
the By-laws, insurance policies insuring the Shareholders, Trustees, officers,
employees, agents, investment advisers, Principal Underwriters, or independent
contractors of the Trust, individually, against all claims and liabilities of
every nature arising by reason of holding Shares, holding, being or having held
any such office or position, or by reason of any action alleged to have been
taken or omitted by any such Person as Trustee, officer, employee, agent,
investment adviser, Principal underwriter, or independent contractor, including
any action taken or omitted that may be determined to constitute negligence,
whether or not the Trust would have the power to indemnify such Person against
liability;
(cc)To adopt, establish and carry out pension, profit-sharing, share
bonus, share purchase, savings, thrift and other retirement, incentive and
benefit plans and trusts, including the purchasing of life insurance and annuity
contracts as a means of providing such retirement and other benefits, for any or
all of the Trustees, officers, employees and agents of the Trust;
(dd) To enter into contracts of any kind and description;
(ee)To interpret the investment policies, practices or limitations of
the Trust; and
(ff)To guarantee indebtedness and contractual obligations of others.
The clauses above shall be construed as objects and powers, and the enumeration
of specific powers shall not limit in any way the general powers of the
Trustees. Any action by one or more of
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the Trustees in their capacity as such hereunder shall be deemed an action on
behalf of the Trust and not an action in an individual capacity. No one dealing
with the Trustees shall be under any obligation to make any inquiry concerning
the authority of the Trustees, or to see to the application of any payments made
or property transferred to the Trustees or upon their order. In construing this
Declaration, the presumption shall be in favor of a grant of power to the
Trustees.
Section 3. Certain Transactions. Except as prohibited by applicable law, the
Trustees may, on behalf of the Trust, buy any securities from or sell any
securities to, or lend any assets of the Trust to, any Trustee or officer of the
Trust or any firm of which any such Trustee or officer is a member acting as
principal, or have any such dealings with any investment adviser, administrator,
underwriter or transfer agent for the Trust or with any Interested Person of
such person. The Trust may employ any such person or entity in which such person
is an Interested Person, as broker, legal counsel, registrar, investment
adviser, administrator, underwriter, transfer agent, dividend disbursing agent,
custodian or in any other capacity upon customary terms.
Section 4. Initial Trustees; Election and Number of Trustees. The initial
Trustees shall be the persons initially signing this Declaration. The number of
Trustees (other than the initial Trustee) shall be fixed from time to time by a
majority of the Trustees; provided, that there shall be at least one (1) Trustee
and no more than fifteen (15). The Shareholders shall elect the Trustees (other
than the initial Trustees) on such dates as the Trustees may fix from time to
time.
Section 5. Term of Office of Trustees. Each Trustee shall hold office for life
or until his successor is elected or the Trust terminates; except that (a) any
Trustee may resign by delivering to the other Trustees or to any Trust officer a
written resignation effective upon such delivery or a later date specified
therein; (b) any Trustee may be removed with or without cause at any time by a
written instrument signed by at least a majority of the then Trustees,
specifying the effective date of removal; (c) any Trustee who requests to be
retired, or who is declared bankrupt or has become physically or mentally
incapacitated or is otherwise unable to serve, may be retired by a written
instrument signed by a majority of the other Trustees, specifying the effective
date of retirement; and (d) any Trustee may be removed at any meeting of the
Shareholders by a vote of at least two-thirds of the Outstanding Shares.
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Section 6. Vacancies; Appointment of Trustees. Whenever a vacancy shall exist in
the Board of Trustees, regardless of the reason for such vacancy, the remaining
Trustees shall appoint any person as they determine in their sole discretion to
fill that vacancy, consistent with the limitations under the 1940 Act. Such
appointment shall be made by a written instrument signed by a majority of the
Trustees or by a resolution of the Trustees, duly adopted and recorded in the
records of the Trust, specifying the effective date of the appointment. The
Trustees may appoint a new Trustee as provided above in anticipation of a
vacancy expected to occur because of the retirement, resignation or removal of a
Trustee, or an increase in number of Trustees, provided that such appointment
shall become effective only at or after the expected vacancy occurs. As soon as
any such Trustee has accepted his appointment in writing, the trust estate shall
vest in the new Trustee, together with the continuing Trustees, without any
further act or conveyance, and he shall be deemed a Trustee hereunder. The
Trustees' power of appointment is subject to Section 16(a) of the 1940 Act.
Whenever a vacancy in the number of Trustees shall occur, until such vacancy is
filled as provided in this Article II, the Trustees in office, regardless of
their number, shall have all the powers granted to the Trustees and shall
discharge all the duties imposed upon the Trustees by the Declaration. The
death, declination to serve, resignation, retirement, removal or incapacity of
one or more Trustees, or all of them, shall not operate to annul the Trust or to
revoke any existing agency created pursuant to the terms of this Declaration of
Trust.
Section 7. Temporary Vacancy or Absence. Whenever a vacancy in the Board of
Trustees shall occur, until such vacancy is filled, or while any Trustee is
absent from his domicile (unless that Trustee has made arrangements to be
informed about, and to participate in, the affairs of the Trust during such
absence), or is physically or mentally incapacitated, the remaining Trustees
shall have all the powers hereunder and their certificate as to such vacancy,
absence, or incapacity shall be conclusive. Any Trustee may, by power of
attorney, delegate his powers as Trustee for a period not exceeding six (6)
months at any one time to any other Trustee or Trustees.
Section 8. Chairman. The Trustees shall appoint one of their number to be
Chairman of the Board of Trustees. The Chairman shall preside at all meetings of
the Trustees, shall be responsible for the execution of policies established by
the Trustees and the administration of the Trust, and may be the chief
executive, financial and/or accounting officer of the Trust.
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Section 9. Action by the Trustees. The Trustees shall act by majority vote at a
meeting duly called at which a quorum is present, including a meeting held by
conference telephone, teleconference or other electronic media or communication
equipment by means of which all persons participating in the meeting can
communicate with each other; or by written consent of a majority of Trustees (or
such greater number as may be required by applicable law) without a meeting. A
majority of the Trustees shall constitute a quorum at any meeting. Meetings of
the Trustees may be called orally or in writing by the President or by any one
of the Trustees. Notice of the time, date and place of all Trustees' meetings
shall be given to each Trustee as set forth in the By-laws; provided, however,
that no notice is required if the Trustees provide for regular or stated
meetings. Notice need not be given to any Trustee who attends the meeting
without objecting to the lack of notice or who signs a waiver of notice either
before or after the meeting. The Trustees by majority vote may delegate to any
Trustee or Trustees or committee authority to approve particular matters or take
particular actions on behalf of the Trust. Any written consent or waiver may be
provided and delivered to the Trust by facsimile or other similar electronic
mechanism.
Section 10. Ownership of Trust Property. The Trust Property of the Trust shall
be held separate and apart from any assets now or hereafter held in any capacity
other than as Trustee hereunder by the Trustees or any successor Trustees. Legal
title in and beneficial ownership of all of the assets of the Trust shall at all
times be considered as vested in the Trust, except that the Trustees may cause
legal title in and beneficial ownership of any Trust Property to be held by, or
in the name of one or more of the Trustees acting for and on behalf of the
Trust, or in the name of any person as nominee acting for and on behalf of the
Trust. No Shareholder shall be deemed to have a severable ownership in any
individual asset of the Trust or any right of partition or possession thereof,
but each Shareholder shall have, as provided in Article V, a proportionate
undivided beneficial interest in the Trust (or, if applicable, a particular
Class or Series thereof) represented by Shares. The Shares shall be personal
property giving only the rights specifically set forth in this Trust Instrument.
The Trust, or at the determination of the Trustees one or more of the Trustees
or a nominee acting for and on behalf of the Trust, shall be deemed to hold
legal title and beneficial ownership of any income earned on securities of the
Trust issued by any business entities formed, organized, or existing under the
laws of any jurisdiction, including the laws of any foreign country. Upon the
resignation or removal of a Trustee, or his
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otherwise ceasing to be a Trustee, he shall execute and deliver such documents
as the remaining Trustees shall require for the purpose of conveying to the
Trust or the remaining Trustees any Trust Property held in the name of the
resigning or removed Trustee. Upon the incapacity or death of any Trustee, his
legal representative shall execute and deliver on his behalf such documents as
the remaining Trustees shall require as provided in the preceding sentence.
Section 11. Effect of Trustees Not Serving. The death, resignation, retirement,
removal, incapacity or inability or refusal to serve of the Trustees, or any one
of them, shall not operate to annul the Trust or to revoke any existing agency
created pursuant to the terms of this Declaration.
Section 12. Trustees, etc. as Shareholders. Subject to any restrictions in the
By-laws, any Trustee, officer, agent or independent contractor of the Trust may
acquire, own and dispose of Shares to the same extent as any other Shareholder;
the Trustees may issue and sell Shares to and buy Shares from any such person or
any firm or company in which such person is interested, subject only to any
general limitations herein.
ARTICLE III
CONTRACTS WITH SERVICE PROVIDERS
Section 1. Underwriting Contract. The Trustees may in their discretion from time
to time enter into an exclusive or non-exclusive underwriting contract or
contracts providing for the sale of the Shares whereby the Trustees may either
agree to sell the Shares to the other party or parties to the contract or
appoint such other party or parties as their sales agent(s) for the Shares, and
in either case on such terms and conditions, if any, as may be prescribed in the
By-laws, and such further terms and conditions as the Trustees may in their
discretion determine not inconsistent with the provisions of this Article III or
of the By-laws; and such contract may also provide for the repurchase of the
Shares by such other party as agent of the Trustees.
Section 2. Advisory or Management Contract. The Trustees may in their discretion
from time to time enter into one or more investment advisory or management
contracts whereby the other party or parties to any such contracts shall
undertake to furnish the Trust management, investment advisory, administration,
accounting, legal, statistical and research facilities and services, promotional
or marketing activities, and such other
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facilities and services, if any, as the Trustees shall from time to time
consider desirable and all upon such terms and conditions as the Trustees may in
their discretion determine. Notwithstanding any provisions of the Declaration,
the Trustees may authorize the Investment Advisers or persons to whom the
Investment Adviser delegates certain or all of their duties, or any of them,
under any such contracts (subject to such general or specific instructions as
the Trustees may from time to time adopt) to effect purchases, sales, loans or
exchanges of portfolio securities and other investments of the Trust on behalf
of the Trustees or may authorize any officer, employee or Trustee to effect such
purchases, sales, loans or exchanges pursuant to recommendations of such
Investment Advisers, or any of them (and all without further action by the
Trustees). Any such purchases, sales, loans and exchanges shall be deemed to
have been authorized by all of the Trustees.
Section 3. Administration Agreement. The Trustees may in their discretion from
time to time enter into an administration agreement whereby the other party to
such agreement shall undertake to manage the business affairs of the Trust and
furnish the Trust with office facilities, and shall be responsible for the
ordinary clerical, bookkeeping and recordkeeping services at such office
facilities, and other facilities and services, if any, and all upon such terms
and conditions as the Trustees may in their discretion determine.
Section 4. Service Agreement. The Trustees may in their discretion from time to
time enter into service agreements whereby the other parties to such Service
Agreements will provide administration and/or support services pursuant to
administration plans and service plans, and all upon such terms and conditions
as the Trustees in their discretion may determine.
Section 5. Transfer Agent. The Trustees may in their discretion from time to
time enter into a transfer agency and shareholder service contract whereby the
other party to such contract shall undertake to furnish transfer agency and
shareholder services to the Trust. The contract shall have such terms and
conditions as the Trustees may in their discretion determine not inconsistent
with the Declaration. Such services may be provided by one or more Persons.
Section 6. Custodian. The Trustees may appoint or otherwise engage one or more
banks or trust companies, each having aggregate capital, surplus and undivided
profits (as shown in its last published report) of at least two million dollars
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($2,000,000), or any other entity satisfying the requirements of the 1940 Act,
to serve as Custodian with authority as its agent, but subject to such
restrictions, limitations and other requirements, if any, as may be contained in
the By-laws of the Trust. The Trustees may also authorize the Custodian to
employ one or more sub-custodians, including such foreign banks and securities
depositories as meet the requirements of applicable provisions of the 1940 Act,
and upon such terms and conditions as may be agreed upon between the Custodian
and such sub-custodian, to hold securities and other assets of the Trust and to
perform the acts and services of the Custodian, subject to applicable provisions
of law and resolutions adopted by the Trustees.
Section 7. Dividend and Distribution Reinvestment Plan Agency Agreement. The
Trustees may in their discretion from time to time enter into a dividend and
distribution plan agency agreement or any similar agreement whereby the other
party to such agreement (which may, but need not, also serve as the Trust's
transfer agent) will administer any dividend and distribution reinvestment plan
or similar plan adopted by the Trust, all on such terms and conditions as the
Trustees may in their discretion determine.
Section 8. Other Contracts. To the extent permitted by applicable law, the
By-laws and any other contractual arrangements under which the Trust is
obligated, the Trustees may in their discretion enter into one or more contracts
whereby the other parties provide services relating to the Trust's operations
not otherwise described in this Article III. Such contracts, if any, shall have
such terms and conditions as the Trustees may determine. Any such services may
be provided by one or more persons who may also be parties to other contracts
described in this Article III.
Section 9. Affiliations of Trustees or Officers, Etc. The fact that:
(i) any of the Shareholders, Trustees or officers of the
Trust is a shareholder, director, officer, partner, trustee, employee,
manager, adviser or underwriter of or for any partnership, corporation,
trust, association or other organization or of or for any parent or
affiliate of any organization, with which a contract of the character
described in this Article III or for services as Custodian,
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Transfer Agent or disbursing agent or for related services may have
been or may hereafter be made, or that any such organization, or any
parent or affiliate thereof, is a Shareholder of or has an interest in
the Trust, or that
(ii) any partnership, corporation, trust, association or other
organization with which a contract of the character described in
Sections 1, 2, 3 or 4 of this Article III or for services as Custodian,
Transfer Agent or disbursing agent or for related services may have
been or may hereafter be made also has any one or more of such
contracts with one or more other partnerships, corporations, trusts,
associations or other organizations, or has other business or
interests,
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same or create any liability or accountability to the Trust or its Shareholders.
ARTICLE IV
COMPENSATION, LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 1. Compensation. The Trustees as such shall be entitled to
reasonable compensation from the Trust, and they may fix the amount of such
compensation. Nothing herein shall in any way prevent the employment of any
Trustee for advisory, management, legal, accounting, investment banking or other
services and payment for the same by the Trust.
Section 2. Limitation of Liability. All persons contracting with or
having any claim against the Trust shall look only to the assets of the Trust
for payment under such contract or claim; and neither the Trustees nor, when
acting in such capacity, any of the Trust's officers, employees or agents,
whether past, present or future, shall be personally liable therefor. Every
written instrument or obligation on behalf of the Trust shall contain a
statement to the foregoing effect, but the absence of such statement shall not
operate to make any Trustee or officer of the Trust liable thereunder. Provided
they have exercised reasonable care and have acted under the reasonable belief
that their actions are in the best interest of the Trust, the Trustees and
officers of the Trust shall not be responsible or liable for any act or omission
or for neglect or wrongdoing of them or any officer, agent, employee, investment
adviser or independent contractor of the Trust, but nothing contained in this
Declaration or in the Delaware Act shall protect any Trustee or officer of the
Trust
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against liability to the Trust or to Shareholders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office.
Section 3. Indemnification. (a) Subject to the exceptions and
limitations contained in subsection (b) below:
(i)every person who is, or has been, a Trustee or an officer,
employee or agent of the Trust (including any individual who
serves at its request as director, officer, partner, trustee
or the like of another organization in which it has any
interest as a shareholder, creditor or otherwise) ("Covered
Person") shall be indemnified by the Trust to the fullest
extent permitted by law against liability and against all
expenses reasonably incurred or paid by him in connection with
any claim, action, suit or proceeding in which he becomes
involved as a party or otherwise by virtue of his being or
having been a Covered Person and against amounts paid or
incurred by him in the settlement thereof; and
(ii) as used herein, the words "claim," "action," "suit," or
"proceeding" shall apply to all claims, actions, suits or
proceedings (civil, criminal or other, including appeals),
actual or threatened, and the words "liability" and "expenses"
shall include, without limitation, attorneys' fees, costs,
judgments, amounts paid in settlement, fines, penalties and
other liabilities.
(b) No indemnification shall be provided hereunder to a Covered Person:
(i)who shall have been adjudicated by a court or body before
which the proceeding was brought (A) to be liable to the Trust
or its Shareholders by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office, or (B) not to have
acted in good faith in the reasonable belief that his action
was in the best interest of the Trust; or
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(ii) in the event of a settlement, unless there has been a
determination that such Covered Person did not engage in
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office;
(A) by the court or other body approving the settlement; (B)
by at least a majority of those Trustees who are neither
Interested Persons of the Trust nor are parties to the matter
based upon a review of readily available facts (as opposed to
a full trial-type inquiry); (C) by written opinion of
independent legal counsel based upon a review of readily
available facts (as opposed to a full trial-type inquiry) or
(D) by a vote of a majority of the Outstanding Shares entitled
to vote (excluding any Outstanding Shares owned of record or
beneficially by such individual).
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall not be
exclusive of or affect any other rights to which any Covered Person may now or
hereafter be entitled, and shall inure to the benefit of the heirs, executors
and administrators of a Covered Person.
(d) To the maximum extent permitted by applicable law, expenses in
connection with the preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in subsection (a) of this
Section may be paid by the Trust from time to time prior to final disposition
thereof upon receipt of an undertaking by or on behalf of such Covered Person
that such amount will be paid over by him to the Trust if it is ultimately
determined that he is not entitled to indemnification under this Section;
provided, however, that either (i) such Covered Person shall have provided
appropriate security for such undertaking, (ii) the Trust is insured against
losses arising out of any such advance payments or (iii) either a majority of
the Trustees who are neither Interested Persons of the Trust nor parties to the
matter, or independent legal counsel in a written opinion, shall have
determined, based upon a review of readily available facts (as opposed to a full
trial-type inquiry) that there is reason to believe that such Covered Person
will not be disqualified from indemnification under this Section.
(e) Any repeal or modification of this Article IV by the Shareholders,
or adoption or modification of any other provision of the Declaration or By-
laws inconsistent with this Article, shall be prospective only, to the extent
that such repeal, or
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modification would, if applied retrospectively, adversely affect any limitation
on the liability of any Covered Person or indemnification available to any
Covered Person with respect to any act or omission which occurred prior to such
repeal, modification or adoption.
Section 3. Indemnification of Shareholders. If any Shareholder or
former Shareholder of the Trust shall be held personally liable solely by reason
of his being or having been a Shareholder and not because of his acts or
omissions or for some other reason, the Shareholder or former Shareholder (or
his heirs, executors, administrators or other legal representatives or in the
case of any entity, its general successor) shall be entitled out of the assets
belonging to the Trust to be held harmless from and indemnified against all loss
and expense arising from such liability. The Trust shall, upon request by such
Shareholder, assume the defense of any claim made against such Shareholder for
any act or obligation of the Trust and satisfy any judgment thereon from the
assets of the Trust.
Section 4. No Bond Required of Trustees. No Trustee shall be obligated
to give any bond or other security for the performance of any of his duties
hereunder.
Section 5. No Duty of Investigation; Notice in Trust Instruments, Etc.
No purchaser, lender, transfer agent or other Person dealing with the Trustees
or any officer, employee or agent of the Trust shall be bound to make any
inquiry concerning the validity of any transaction purporting to be made by the
Trustees or by said officer, employee or agent or be liable for the application
of money or property paid, loaned, or delivered to or on the order of the
Trustees or of said officer, employee or agent. Every obligation, contract,
instrument, certificate, Share, other security of the Trust or undertaking, and
every other act or thing whatsoever executed in connection with the Trust shall
be conclusively presumed to have been executed or done by the executors thereof
only in their capacity as Trustees under this Declaration or in their capacity
as officers, employees or agents of the Trust. Every written obligation,
contract, instrument, certificate, Share, other security of the Trust or
undertaking made or issued by the Trustees may recite that the same is executed
or made by them not individually, but as Trustees under the Declaration, and
that the obligations of the Trust under any such instrument are not binding upon
any of the Trustees or Shareholders individually, but bind only the Trust
Property, and may contain any further recital which they may deem appropriate,
but the omission of such recital shall not operate to bind the
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Trustees individually. The Trustees shall at all times maintain insurance for
the protection of the Trust Property, its Shareholders, Trustees, officers,
employees and agents in such amount as the Trustees shall deem adequate to cover
possible tort liability, and such other insurance as the Trustees in their sole
judgment shall deem advisable.
Section 6. Reliance on Experts, Etc. Each Trustee, officer or employee
of the Trust shall, in the performance of his duties, powers and discretions
hereunder be fully and completely justified and protected with regard to any act
or any failure to act resulting from reliance in good faith upon the books of
account or other records of the Trust, upon an opinion of counsel, or upon
reports made to the Trust by any of its officers or employees or by the
Investment Adviser, the Administrator, the Underwriter, Transfer Agent, selected
dealers, accountants, appraisers or other experts or consultants selected with
reasonable care by the Trustees, officers or employees of the Trust, regardless
of whether such counsel or expert may also be a Trustee.
ARTICLE V
SERIES; CLASSES; SHARES
Section 1. Authorization of Classes or Series. The Trustees may,
without shareholder approval, authorize one or more Classes of Shares, which
Classes may be divided into one or more Series of Shares. Shares of each such
Class or Series will have such preferences, voting powers and special or
relative rights or privileges, including conversion rights, if any, as the
Trustees may determine and as shall be set forth in the By-Laws. The number of
Shares of each Class or Series authorized shall be unlimited except as the
By-Laws may otherwise provide. The Shares of each Class and Series shall have no
par value. The Trustees may, from time to time, divide or combine the Shares of
any Class or Series into a greater or lesser number without thereby changing the
proportionate beneficial interest in the Class or Series.
Section 2. Shares. Shareholders shall have no preemptive or other right
to subscribe to any additional Shares or other securities issued by the Trust.
The Trustees shall have full power and authority, in their sole discretion and
without obtaining Shareholder approval, to issue original or additional Shares
at such times and on such terms and conditions as they deem appropriate; to
issue fractional Shares and Shares held in the treasury; to establish and to
change in any manner Shares of any Classes or Series thereof with such
preferences, terms of
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conversion, voting powers, rights and privileges as the Trustees may determine
(but the Trustees may not change Outstanding Shares in a manner materially
adverse to the Shareholders of such Shares); to divide or combine the Shares of
any Classes or Series thereof into a greater or lesser number; to classify or
reclassify any unissued Shares of any Classes or Series thereof into one or more
Classes or Series of Shares; to abolish any one or more Classes or Series of
Shares; to issue Shares to acquire other assets (including assets subject to,
and in connection with, the assumption of liabilities) and businesses; and to
take such other action with respect to the Shares as the Trustees may deem
desirable. Shares held in the treasury shall not confer any voting rights on the
Trustees and shall not be entitled to any dividends or other distributions
declared with respect to the Shares.
Section 3. Investment in the Trust. The Trustees shall accept
investments in any Class or any Series thereof from such persons and on such
terms as they may from time to time authorize. At the Trustees' discretion, such
investments, subject to applicable law, may be in the form of cash or securities
in which the Trust is authorized to invest, valued as provided in Article VI,
Section 2. Investments shall be credited to each Shareholder's account in the
form of full Shares or fractional shares at any price determined in such
offering, including any applicable sales charge, permitted by the 1940 Act or
any rule, order or interpretation of the Commission thereunder. The Trustees
shall have the right to refuse to accept investments at any time without any
cause or reason therefor whatsoever.
Section 4. Assets and Liabilities of a Class or Series. The Trustees
may, in their discretion and without shareholder approval, allocate any assets,
income, earnings, profits, proceeds, liabilities, expenses, costs, charges or
revenues to any Class or Series thereof to the extent allowed by applicable law.
Such allocations to any Class or Series shall be held and accounted for
separately from allocations to any other Class or Series.
Section 5. Ownership and Transfer of Shares. The Trust or a transfer or
similar agent for the Trust shall maintain a register containing the names and
addresses of the Shareholders of each Class and Series thereof, the number of
Shares of each Class and Series held by such Shareholders, and a record of all
Share transfers. The register shall be conclusive as to the identity of
Shareholders of record and the number of Shares held by them from time to time.
The Trustees may authorize the issuance of
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certificates representing Shares and adopt rules governing their use. The
Trustees may make rules governing the issuance of Share certificates, the
transfer of Shares, whether or not represented by certificates, and similar
matters. Except as otherwise provided by the Trustees, Shares shall be
transferable on the books of the Trust only by the record holder thereof or by
his duly authorized agent upon delivery to the Trustees or the Trust's transfer
agent of a duly executed instrument of transfer, together with a Share
certificate if one is outstanding, and such evidence or the genuineness of each
such execution and authorization and of such other matters as may be required by
the Trustees. Upon such delivery, and subject to any further requirements
specified by the Trustees or contained in the By-laws, the transfer shall be
recorded on the books of the Trust. Until a transfer is so recorded, the
Shareholder of record of Shares shall be deemed to be the holder of such Shares
for all purposes hereunder and neither the Trustees nor the Trust, nor any
transfer agent or registrar or any officer, employee or agent of the Trust,
shall be affected by any notice of a proposed transfer.
Section 6. Status of Shares; Limitation of Shareholder Liability.
Shares shall be deemed to be personal property giving Shareholders only the
rights provided in this Declaration. Every Shareholder, by virtue of having
acquired a Share, shall be held expressly to have assented to and agreed to be
bound by the terms of this Declaration and to have become a party hereto. No
Shareholder shall be personally liable for the debts, liabilities, obligations
and expenses incurred by, contracted for, or otherwise existing with respect to,
the Trust. The death, incapacity, dissolution, termination or bankruptcy of a
Shareholder during the existence of the Trust shall not operate to terminate the
Trust, nor entitle the representative of any such Shareholder to an accounting
or to take any action in court or elsewhere against the Trust or the Trustees,
but entitles such representative only to the rights of such Shareholder under
this Trust. Ownership of Shares shall not entitle the Shareholder to any title
in or to the whole or any part of the Trust Property or right to call for a
partition or division of the same or for an accounting, nor shall the ownership
of Shares constitute the Shareholders as partners. Neither the Trust nor the
Trustees, nor any officer, employee or agent of the Trust shall have any power
to bind any Shareholder personally or to call upon a Shareholder for the payment
of any assessment or demand payment from any Shareholder for anything, other
than as agreed by the Shareholder. Shareholders shall have the same limitation
of personal liability as is extended to shareholders of a private corporation
for profit incorporated in the State of Delaware. Every written obligation of
the Trust
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shall contain a statement to the effect that such obligation may only be
enforced against the assets of the Trust; however, the omission of such
statement shall not operate to bind or create personal liability for any
Shareholder or Trustee.
ARTICLE VI
DISTRIBUTIONS
Section 1. Distributions. The Trustees or a committee of one or more
Trustees and one or more officers may declare and pay dividends and other
distributions to the Shareholders of each Class or any Series thereof in such
amounts as the Trustees, the committee of Trustees or the declaring officer may
determine subject to the preferences, special or relative rights and privileges
of the various Classes or Series of Shares. The Trustees shall have full
discretion to determine which items shall be treated as income and which items
as capital; and each such determination and allocation shall be conclusive and
binding upon the Shareholders. The amount and payment of dividends or
distributions and their form, whether they are in cash, Shares or other Trust
Property, shall be determined by the Trustees. Dividends and other distributions
may be paid pursuant to a standing resolution adopted once or more often as the
Trustees determine. All dividends and other distributions on Shares of a
particular Class or Series shall be distributed pro rata to the Shareholders of
that Class or Series in proportion to the number of Shares of that Class or
Series they held on the record date established for such payment. The Trustees
may adopt and offer to Shareholders such dividend reinvestment plans, cash
dividend payout plans or similar plans as the Trustees deem appropriate.
Section 2. Determination of Net Asset Value. The Trustees shall cause
the Net Asset Value of Shares of each Class and any Series thereof to be
determined from time to time in a manner consistent with applicable laws and
regulations. The Trustees may delegate the power and duty to determine Net Asset
Value per Share to one or more Trustees or officers of the Trust or to a
custodian, depository or other agent appointed for such purpose. The Net Asset
Value of Shares shall be determined separately for each Class and Series at such
times as may be prescribed by the Trustees or, in the absence of action by the
Trustees, as of the close of regular trading on the New York Stock Exchange on
each day for all or part of which such Exchange is open for unrestricted
trading.
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ARTICLE VII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 1. Voting Powers. The Shareholders shall have power to vote
only with respect to (a) the election of Trustees as provided in Section 2 of
this Article; (b) the removal of Trustees as provided in Article II, Section 5;
(c) any investment advisory or management contract; (d) any termination of the
Trust as provided in Article IX, Section 4; (e) conversion of the Trust from a
"closed-end company" to an "open-end company" as provided in Article IX, Section
6; (f) the amendment of this Declaration to the extent and as provided in
Article X, Section 9; and (g) such additional matters relating to the Trust as
may be required or authorized by law, this Declaration, the By-laws, any
agreement with any national securities exchange on which Shares are listed or
any registration of the Trust with the Commission or any State, or as the
Trustees may consider desirable.
On any matter submitted to a vote of the Shareholders, all Shares shall
be voted by individual Classes or Series thereof, except (a) when required by
the 1940 Act, Shares shall be voted in the aggregate and not by individual
Classes or Series thereof, and (b) when the Trustees have determined that the
matter affects the interests of more than one Class or Series, then the
Shareholders of all such Classes or Series shall be entitled to vote thereon. As
determined by the Trustees without the vote or consent of shareholders, on any
matter submitted to a vote of Shareholders either (i) each whole Share shall be
entitled to one vote as to any matter on which it is entitled to vote and each
fractional Share shall be entitled to a proportionate fractional vote or (ii)
each dollar of net asset value (number of Shares owned times net asset value per
share of such Class or Series, as applicable) shall be entitled to one vote on
any matter on which such Shares are entitled to vote and each fractional dollar
amount shall be entitled to a proportionate fractional vote. Without limiting
the power of the Trustees in any way to designate otherwise in accordance with
the preceding sentence, the Trustees hereby establish that each whole Share
shall be entitled to one vote as to any matter on which it is entitled to vote
and each fractional Share shall be entitled to a proportionate fractional vote.
There shall be no cumulative voting in the election of Trustees. Shares may be
voted in person or by proxy or in any manner provided for in the By-laws. The
By-laws may provide that proxies may be given by any electronic or
telecommunications device or in any other manner, but if a proposal by anyone
other than the officers or Trustees is submitted to a vote of the Shareholders
of any Class
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or Series, or if there is a proxy contest or proxy solicitation or proposal in
opposition to any proposal by the officers or Trustees, Shares may be voted only
in person or by written proxy. Until Shares of a Class or any Series thereof are
issued, as to that Class or Series the Trustees may exercise all rights of
Shareholders and may take any action required or permitted to be taken by
Shareholders by law, this Declaration or the By-laws. Meetings of Shareholders
shall be called and notice thereof and record dates therefor shall be given and
set as provided in the By-laws.
Section 2. Quorum; Required Vote. One-third of the Outstanding Shares
of each Class or Series, or one-third of the Outstanding Shares of the Trust,
entitled to vote in person or by proxy shall be a quorum for the transaction of
business at a Shareholders' meeting with respect to such Class or Series, or
with respect to the entire Trust, respectively. Any lesser number shall be
sufficient for adjournments. Any adjourned session of a Shareholders' meeting
may be held within a reasonable time without further notice. Except when a
larger vote is required by law, this Declaration, the By-laws or any agreement
with any national securities exchange on which Shares are listed, a majority of
the Shares voting at a Shareholders' meeting in person or by proxy shall decide
any matters to be voted upon with respect to the entire Trust and a plurality of
such Shares shall elect a Trustee; provided, that if this Declaration,
applicable law, the By-laws or any agreement with any national securities
exchange on which Shares are listed permits or requires that Shares be voted on
any matter by individual Classes or Series, then a majority of the Shares of
that Class or Series (or, if required by law, a majority of the Shares
outstanding and entitled to vote of that Class or Series) voting at a
Shareholders' meeting in person or by proxy on the matter shall decide that
matter insofar as that Class or Series is concerned. Shareholders may act as to
the Trust or any Class or Series by the written consent of a majority (or such
other amount as may be required by applicable law, the By-laws or any agreement
with any national securities exchange on which Shares are listed ) of the
Outstanding Shares of the Trust or of such Class or Series, as the case may be.
Section 3. Record Dates. For the purpose of determining the
Shareholders of any Class or Series who are entitled to receive payment of any
dividend or of any other distribution, the Trustees may from time to time fix a
date, which shall be before the date for the payment of such dividend or such
other payment, as the record date for determining the Shareholders of such Class
or Series having the right to receive such dividend or distribution.
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Without fixing a record date, the Trustees may for distribution purposes close
the register or transfer books for one or more Classes or Series any time prior
to the payment of a distribution. Nothing in this Section shall be construed as
precluding the Trustees from setting different record dates for different
Classes or Series.
Section 4. Additional Provisions. The By-laws may include further
provisions for Shareholders' votes and meetings and related matters.
ARTICLE VIII
EXPENSES OF THE TRUST AND SERIES
Section 1. Payment of Expenses by the Trust. Subject to Article V,
Section 4, the Trust (or a particular Class or Series to the extent required or
permitted by applicable law, the By-laws or any agreement with any national
securities exchange on which Shares are listed) shall pay, or shall reimburse
the Trustees from the assets belonging to the Trust (or the particular Class or
Series to the extent required or permitted by applicable law, the By-laws or any
agreement with any national securities exchange on which Shares are listed), for
their expenses and disbursements, including, but not limited to, interest
charges, taxes, brokerage fees and commissions; expenses of issue, repurchase
and redemption of Shares; certain insurance premiums; applicable fees, interest
charges and expenses of third parties, including the Trust's investment
advisers, managers, administrators, underwriters, custodians, transfer agents
and fund accountants; fees of pricing, interest, dividend, credit and other
reporting services; costs of membership in trade associations;
telecommunications expenses; funds transmission expenses; auditing, legal and
compliance expenses; costs of forming the Trust and its Classes and Series and
maintaining its existence; costs of preparing and printing the prospectuses of
the Trust, statements of additional information and Shareholder reports and
delivering them to Shareholders; expenses of meetings of Shareholders and proxy
solicitations therefor; costs of maintaining books and accounts; costs of
reproduction, stationery and supplies; fees and expenses of the Trustees;
compensation of the Trust's officers and employees and costs of other personnel
performing services for the Trust or any Class or Series; costs of Trustee
meetings; Commission registration fees and related expenses; state or foreign
securities laws registration fees and related expenses; securities exchange
listing fees and related expenses; and for such non-recurring items as may
arise, including litigation to which the Trust (or a
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Trustee or officer of the Trust acting as such) is a party, and for all losses
and liabilities by them incurred in administering the Trust. The Trustees shall
have a lien on the assets belonging to the appropriate Class or Series, or in
the case of an expense allocable to more than one Class or Series, on the assets
of each such Class or Series, prior to any rights or interests of the
Shareholders thereto, for the reimbursement to them of such expenses,
disbursements, losses and liabilities.
Section 2. Payment of Expenses by Shareholders. The Trustees shall have
the power, as frequently as they may determine, to cause each Shareholder to pay
directly, in advance or arrears, for charges of the Trust's custodian or
transfer, shareholder servicing or similar agent, an amount fixed from time to
time by the Trustees, by setting off such charges due from such Shareholder from
declared but unpaid dividends owed such Shareholder and/or by reducing the
number of Shares in the account of such Shareholder by that number of full
and/or fractional Shares which represents the outstanding amount of such charges
due from such Shareholder.
ARTICLE IX
MISCELLANEOUS
Section 1. Trust Not a Partnership. This Declaration creates a trust
and not a partnership. No Trustee shall have any power to bind personally either
the Trust's officers or any Shareholder.
Section 2. Trustee Action. The exercise by the Trustees of their powers
and discretion hereunder in good faith and with reasonable care under the
circumstances then prevailing shall be binding upon everyone interested. Subject
to the provisions of Article IV, the Trustees shall not be liable for errors of
judgment or mistakes of fact or law.
Section 3. Record Dates. The Trustees may fix in advance a date up to
ninety (90) days before the date of any Shareholders' meeting, or the date for
the payment of any dividends or other distributions, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
Shares shall go into effect as a record date for the determination of the
Shareholders entitled to notice of, and to vote at, any such
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meeting, or entitled to receive payment of such dividend or other distribution,
or to receive any such allotment of rights, or to exercise such rights in
respect of any such change, conversion or exchange of Shares.
Section 4. Termination of the Trust. (a) This Trust shall have
perpetual existence. Subject to the vote of a majority of the Shares outstanding
and entitled to vote of the Trust, the Trustees may
(i)sell and convey all or substantially all of the assets of
the Trust to another entity which is an investment company as
defined in the 1940 Act, or is a series thereof, for adequate
consideration, which may include the assumption of all
outstanding obligations, taxes and other liabilities, accrued
or contingent, of the Trust, and which may include shares of
or interests in the Trust, such entity, or series thereof; or
(ii) at any time sell and convert into money all or
substantially all of the assets of the Trust.
Upon making reasonable provision for the payment of all known liabilities of the
Trust in either (i) or (ii), by such assumption or otherwise, the Trustees shall
distribute the remaining proceeds or assets (as the case may be) ratably among
the Shareholders of all Classes and Series, except to the extent otherwise
required or permitted by the preferences and special or relative rights and
privileges of any Class or Series of Shares. The payment to any particular Class
or Series thereof may be reduced by any fees, expenses or charges allocated to
that Class or Series.
(b) Unless shareholder approval is required by applicable law, the
Trust's By-laws or any agreement with any national securities exchange on which
Shares are listed, the Trustees may take any of the actions specified in
subsection (a) (i) and (ii) above without obtaining the vote of a majority of
the Shares Outstanding and entitled to vote of the Trust if a majority of the
Trustees determines that the continuation of the Trust is not in the best
interests of the Trust or its Shareholders as a result of factors or events
adversely affecting the ability of the Trust to conduct its business and
operations in an economically viable manner. Such factors and events may include
the inability of the Trust to maintain its assets at an appropriate size,
changes in
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laws or regulations governing the Trust or affecting assets of the type in which
the Trust invests, or economic developments or trends having a significant
adverse impact on the business or operations of the Trust.
(c) Upon completion of the distribution of the remaining proceeds or
assets pursuant to subsection (a), the Trust shall terminate and the Trustees
and the Trust shall be discharged of any and all further liabilities and duties
hereunder with respect thereto and the right, title and interest of all parties
therein shall be canceled and discharged. Upon termination of the Trust,
following completion of winding up of its business, the Trustees shall cause a
certificate of cancellation of the Trust's certificate of trust to be filed in
accordance with the Delaware Act, which certificate of cancellation may be
signed by any one Trustee.
Section 5. Reorganization. (a) Notwithstanding anything else herein, to
change the Trust's form or place of organization the Trustees may, without
Shareholder approval, unless such approval is required by applicable law, the
Trust's By-Laws or any agreement with any national securities exchange on which
Shares of the Trust are listed, (i) cause the Trust to merge or consolidate with
or into one or more entities, if the surviving or resulting entity is the Trust
or another investment company under the 1940 Act, or a series thereof, that will
succeed to or assume the Trust's registration under the 1940 Act, (ii) cause the
Shares to be exchanged under or pursuant to any state or federal statute to the
extent permitted by law, or (iii) cause the Trust to incorporate under the laws
of Delaware or any other U.S. jurisdiction. Any agreement of merger or
consolidation or certificate of merger may be signed by a majority of Trustees
and facsimile signatures conveyed by electronic or telecommunication means shall
be valid.
(b) Pursuant to and in accordance with the provisions of Section
3815(f) of the Delaware Act, an agreement of merger or consolidation approved by
the Trustees in accordance with this Section 5 may effect any amendment to the
Declaration or effect the adoption of a new trust instrument of the Trust if it
is the surviving or resulting trust in the merger or consolidation.
(c) The Trustees may create one or more business trusts to which all or
any part of the assets, liabilities, profits or losses of the Trust or any
Classes or Series thereof may be transferred and may provide for the conversion
of Shares in the Trust or any Classes or Series thereof into beneficial
interests
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in any such newly created trust or trusts or any classes or series thereof.
Section 6. Conversion. The Trust may be converted at any time from a
"closed-end company" to an "open-end company" as those terms are defined in
Section 5(a)(2) and 5(a)(1) of the 1940 Act, respectively, upon the approval of
such a conversion, together with any necessary amendments to the Declaration to
permit such a conversion, by a majority of the Trustees and by the holders of a
majority of the Outstanding Shares of the Trust entitled to vote thereon. Upon
the adoption of such convertibility and related amendments by the Trustees and,
to the extent required by law, the Trust's By-laws or any agreement between the
Trust and any national securities exchange on which Shares of the Trust are
listed, the Trust's Shareholders, the Trust shall, upon complying with any
requirements of the 1940 Act and state law, become an "open-end" investment
company.
Section 7. Declaration of Trust. The original or a copy of this
Declaration of Trust and of each amendment hereto or Declaration of Trust
supplemental shall be kept at the office of the Trust where it may be inspected
by any Shareholder. Anyone dealing with the Trust may rely on a certificate by a
Trustee or an officer of the Trust as to the authenticity of the Declaration of
Trust or any such amendments or supplements and as to any matters in connection
with the Trust. The masculine gender herein shall include the feminine and
neuter genders. Headings herein are for convenience only and shall not affect
the construction of this Declaration of Trust. This Declaration of Trust may be
executed in any number of counterparts, each of which shall be deemed an
original.
Section 8. Applicable Law. This Declaration and the Trust created
hereunder are governed by and construed and administered according to the
Delaware Act and the applicable laws of the State of Delaware; provided,
however, that there shall not be applicable to the Trust, the Trustees or this
Declaration of Trust (a) the provisions of Section 3540 of Title 12 of the
Delaware Code, or (b) any provisions of the laws (statutory or common) of the
State of Delaware (other than the Delaware Act) pertaining to trusts which
relate to or regulate (i) the filing with any court or governmental body or
agency of trustee accounts or schedules of trustee fees and charges, (ii)
affirmative requirements to post bonds for trustees, officers, agents or
employees of a trust, (iii) the necessity for obtaining court or other
governmental approval concerning the acquisition, holding or disposition of real
or personal property, (iv) fees or other sums payable to
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trustees, officers, agents or employees of a trust, (v) the allocation of
receipts and expenditures to income or principal, (vi) restrictions or
limitations on the permissible nature, amount or concentration of trust
investments or requirements relating to the titling, storage or other manner of
holding of trust assets, or (vii) the establishment of fiduciary or other
standards of responsibilities or limitations on the acts or powers of trustees,
which are inconsistent with the limitations or liabilities or authorities and
powers of the Trustees set forth or referenced in this Declaration. The Trust
shall be of the type commonly called a Delaware business trust, and, without
limiting the provisions hereof, the Trust may exercise all powers which are
ordinarily exercised by such a trust under Delaware law. The Trust specifically
reserves the right to exercise any of the powers or privileges afforded to
trusts or actions that may be engaged in by trusts under the Delaware Act, and
the absence of a specific reference herein to any such power, privilege or
action shall not imply that the Trust may not exercise such power or privilege
or take such actions.
Section 9. Amendments. The Trustees may, without any Shareholder vote,
amend or otherwise supplement this Declaration by making an amendment, a
Declaration of Trust supplemental hereto or an amended and restated trust
instrument; provided, that Shareholders shall have the right to vote on any
amendment (a) which would affect the voting rights of Shareholders granted in
Article VII, Section 1, and in Article IX, Section 6 or in the Trust's By-laws,
(b) to this Section 9, (c) in connection with the conversion of the Trust as
described in Article IX, Section 6, (d) required to be approved by Shareholders
by law or by the Trust's registration statement(s) filed with the Commission or
by the terms of any agreement with any national securities exchange on which
Shares of the Trust are listed, and (e) submitted to them by the Trustees in
their discretion. Any amendment submitted to Shareholders which the Trustees
determine would affect the Shareholders of any Class or Series shall be
authorized by vote of the Shareholders of such Class or Series and no vote shall
be required of Shareholders of a Class or Series not affected. Notwithstanding
anything else herein, any amendment (i) to Article IV which would have the
effect of reducing the indemnification and other rights provided thereby to
Trustees, officers, employees, and agents of the Trust or to Shareholders or
former Shareholders, and (ii) which would have the effect of reducing the
shareholder voting requirement set forth in Article IX, Section 6, and (iii) any
repeal or amendment of this sentence shall each require the affirmative vote of
the holders of two-thirds of the Outstanding Shares of the Trust entitled to
vote thereon.
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Section 10. Derivative Actions. In addition to the requirements set
forth in Section 3816 of the Delaware Act, a Shareholder may bring a derivative
action on behalf of the Trust only if the following conditions are met:
(a) Shareholders eligible to bring such derivative action under the
Delaware Act who hold at least 10% of the Outstanding Shares of the Trust, or
10% of the Outstanding Shares of the Class or Series to which such action
relates, shall join in the request for the Trustees to commence such action; and
(b) the Trustees must be afforded a reasonable amount of time to
consider such shareholder request and to investigate the basis of such claim.
The Trustees shall be entitled to retain counsel or other advisers in
considering the merits of the request and shall require an undertaking by the
Shareholders making such request to reimburse the Trust for the expense of any
such advisers in the event that the Trustees determine not to bring such action.
Section 11. Fiscal Year. The fiscal year of the Trust shall end on a
specified date as set forth in the By-laws. The Trustees may change the fiscal
year of the Trust without Shareholder approval.
Section 12. Severability. The provisions of this Declaration are
severable. If the Trustees determine, with the advice of counsel, that any
provision hereof conflicts with the 1940 Act, the regulated investment company
provisions of the Internal Revenue Code or with other applicable laws and
regulations, the conflicting provision shall be deemed never to have constituted
a part of this Declaration; provided, however, that such determination shall not
affect any of the remaining provisions of this Declaration or render invalid or
improper any action taken or omitted prior to such determination. If any
provision hereof shall be held invalid or unenforceable in any jurisdiction,
such invalidity or unenforceability shall attach only to such provision only in
such jurisdiction and shall not affect any other provision of this Declaration.
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IN WITNESS WHEREOF, the undersigned have executed this instrument as of
the date first written above.
/s/ John F. Cogan, Jr. /s/ Marguerite A. Piret
John F. Cogan, Jr.* Marguerite A. Piret*
/s/ Richard H. Egdahl, M.D. /s/ David D. Tripple
Richard H. Egdahl, M.D.* David D. Tripple*
/s/ Margaret B.W. Graham /s/ Stephen K. West
Margaret B.W. Graham* Stephen K. West*
/s/ John W. Kendrick /s/ John Winthrop
John W. Kendrick* John Winthrop*
* Each of the above-signed persons has
executed this instrument as Trustee and
not individually.
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BY-LAWS
OF
PIONEER INTEREST SHARES
ARTICLE I
DEFINITIONS
All capitalized terms have the respective meanings given them in the Agreement
and Declaration of Trust of Pioneer Interest Shares dated April 30, 1996, as
amended or restated from time to time.
ARTICLE II
OFFICES
Section 1. Principal Office. Until changed by the Trustees, the principal office
of the Trust shall be in Boston, Massachusetts.
Section 2. Other Offices. The Trust may have offices in such other places
without as well as within the State of Delaware as the Trustees may from time to
time determine.
Section 3. Registered Office and Registered Agent. The Board of Trustees shall
establish a registered office in the State of Delaware and shall appoint as the
Trust's registered agent for service of process in the State of Delaware an
individual resident of the State of Delaware or a Delaware corporation or a
corporation authorized to transact business in the State of Delaware; in each
case the business office of such registered agent for service of process shall
be identical with the registered Delaware office of the Trust.
ARTICLE III
SHAREHOLDERS
Section 1. Meetings. Meetings of the Shareholders of the Trust or a Class or
Series thereof shall be held whenever called by the Trustees, provided for in
the Declaration of Trust, required by the Investment Company Act of 1940, as
amended (the "1940 Act") or required by any agreement with any national
<PAGE>
securities exchange on which the Shares of the Trust are listed. Such meetings
will be held at such place within or without the State of Delaware as the
Trustees shall designate. The holders of one-third of the Outstanding Shares of
the Trust or a Class or Series thereof present in person or by proxy and
entitled to vote shall constitute a quorum at any meeting of the Shareholders of
the Trust or a Class or Series thereof.
Section 2. Notice of Meetings. Notice of all meetings of the Shareholders,
stating the time, place and purposes of the meeting, shall be given by the
Trustees by mail or telegraphic or electronic means to each Shareholder at his
address as recorded on the register of the Trust mailed at least (10) days and
not more than ninety (90) days before the meeting, provided, however, that
notice of a meeting need not be given to a Shareholder to whom such notice need
not be given under the proxy rules of the Securities and Exchange Commission
(the "Commission") under the 1940 Act and the Securities Exchange Act of 1934,
as amended. Only the business stated in the notice of the meeting shall be
considered at such meeting. Any adjourned meeting may be held as adjourned
without further notice. No notice need be given to any Shareholder who shall
have failed to inform the Trust of his current address or if a written waiver of
notice, executed before or after the meeting by the Shareholder or his attorney
thereunto authorized, is filed with the records of the meeting.
Section 3. Record Date for Meetings and Other Purposes. For the purpose of
determining the Shareholders who are entitled to notice of and to vote at any
meeting, or to participate in any distribution, or for the purpose of any other
action, the Trustees may from time to time close the transfer books for such
period, not exceeding thirty (30) days, as the Trustees may determine; or
without closing the transfer books the Trustees may fix a date not more than
ninety (90) days prior to the date of any meeting of Shareholders or
distribution or other action as a record date for the determination of the
persons to be treated as Shareholders of record for such purposes, except for
dividend payments which shall be governed by the Declaration of Trust.
Section 4. Proxies. At any meeting of Shareholders, any holder of Shares
entitled to vote thereat may vote by proxy, provided that no proxy shall be
voted at any meeting unless it shall have been placed on file with the
Secretary, or with such other officer or agent of the Trust as the Secretary may
direct, for verification prior to the time at which such vote shall be taken. A
proxy shall be deemed signed if the shareholder's name is placed on the proxy
(whether by manual signature, typewriting, telegraphic transmission, facsimile,
other electronic means or
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otherwise) by the Shareholder or the Shareholder's attorney-in-fact. Proxies may
be given by any electronic or telecommunication device except as otherwise
provided in the Declaration of Trust. Proxies may be solicited in the name of
one or more Trustees or one or more of the officers of the Trust. Only
Shareholders of record shall be entitled to vote. As determined by the Trustees
without the vote or consent of Shareholders, on any matter submitted to a vote
of Shareholders, either (i) each whole Share shall be entitled to one vote as to
any matter on which it is entitled to vote and each fractional Share shall be
entitled to a proportionate fractional vote or (ii) each dollar of net asset
value (number of Shares owned times net asset value per Share of such Class or
any Series thereof, as applicable) shall be entitled to one vote on any matter
on which such Shares are entitled to vote and each fractional dollar amount
shall be entitled to a proportionate fractional vote. Without limiting their
power to designate otherwise in accordance with the preceding sentence, the
Trustees have established in the Declaration of Trust that each whole share
shall be entitled to one vote as to any matter on which it is entitled by the
Declaration of Trust to vote and fractional shares shall be entitled to a
proportionate fractional vote. When any Share is held jointly by several
persons, any one of them may vote at any meeting in person or by proxy in
respect of such Share, but if more than one of them shall be present at such
meeting in person or by proxy, and such joint owners or their proxies so present
disagree as to any vote to be cast, such vote shall not be received in respect
of such Share. A proxy purporting to be executed by or on behalf of a
Shareholder shall be deemed valid unless challenged at or prior to its exercise,
and the burden of proving invalidity shall rest on the challenger. If the holder
of any such share is a minor or a person of unsound mind, and subject to
guardianship or the legal control of any other person as regards the charge or
management of such Share, he may vote by his guardian or such other person
appointed or having such control, and such vote may be given in person or by
proxy.
Section 5. Abstentions and Broker Non-Votes. Outstanding Shares represented in
person or by proxy (including Shares which abstain or do not vote with respect
to one or more of any proposals presented for Shareholder approval) will be
counted for purposes of determining whether a quorum is present at a meeting.
Abstentions will be treated as Shares that are present and entitled to vote for
purposes of determining the number of Shares that are present and entitled to
vote with respect to any particular proposal, but will not be counted as a vote
in favor of such proposal. If a broker or nominee holding Shares in "street
name" indicates on the proxy that it does not have discretionary authority to
vote as to a particular proposal, those Shares will
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not be considered as present and entitled to vote with respect to such proposal.
Section 6. Inspection of Records. The records of the Trust shall be open to
inspection by Shareholders to the same extent as is permitted shareholders of a
Delaware business corporation.
Section 7. Action without Meeting. Any action which may be taken by Shareholders
may be taken without a meeting if a majority of Outstanding Shares entitled to
vote on the matter (or such larger proportion thereof as shall be required by
law) consent to the action in writing and the written consents are filed with
the records of the meetings of Shareholders. Such consents shall be treated for
all purposes as a vote taken at a meeting of Shareholders.
ARTICLE IV
TRUSTEES
Section 1. Meetings of the Trustees. The Trustees may in their discretion
provide for regular or stated meetings of the Trustees. Notice of regular or
stated meetings need not be given. Meetings of the Trustees other than regular
or stated meetings shall be held whenever called by the President, the Chairman
or by any one of the Trustees, at the time being in office. Notice of the time
and place of each meeting other than regular or stated meetings shall be given
by the Secretary or an Assistant Secretary or by the officer or Trustee calling
the meeting and shall be mailed to each Trustee at least two days before the
meeting, or shall be given by telephone, cable, wireless, facsimile or other
electronic mechanism to each Trustee at his business address, or personally
delivered to him at least one day before the meeting. Such notice may, however,
be waived by any Trustee. Notice of a meeting need not be given to any Trustee
if a written waiver of notice, executed by him before or after the meeting, is
filed with the records of the meeting, or to any Trustee who attends the meeting
without protesting prior thereto or at its commencement the lack of notice to
him. A notice or waiver of notice need not specify the purpose of any meeting.
The Trustees may meet by means of a telephone conference circuit or similar
communications equipment by means of which all persons participating in the
meeting can hear each other at the same time and participation by such means
shall be deemed to have been held at a place designated by the Trustees at the
meeting. Participation in a telephone conference meeting shall constitute
presence in person at such meeting. Any action required or permitted to be taken
at any meeting of the Trustees may be taken by the Trustees without a
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meeting if a majority of the Trustees consent to the action in writing and the
written consents are filed with the records of the Trustees' meetings. Such
consents shall be treated as a vote for all purposes.
Section 2. Quorum and Manner of Acting. A majority of the Trustees shall be
present in person at any regular or special meeting of the Trustees in order to
constitute a quorum for the transaction of business at such meeting and (except
as otherwise required by law, the Declaration of Trust or these By-laws) the act
of a majority of the Trustees present at any such meeting, at which a quorum is
present, shall be the act of the Trustees. In the absence of a quorum, a
majority of the Trustees present may adjourn the meeting from time to time until
a quorum shall be present. Notice of an adjourned meeting need not be given.
ARTICLE V
COMMITTEES
Section 1. Executive and Other Committees. The Trustees by vote of a majority of
all the Trustees may elect from their own number an Executive Committee to
consist of not less than three (3) members to hold office at the pleasure of the
Trustees, which shall have the power to conduct the current and ordinary
business of the Trust while the Trustees are not in session, including the
purchase and sale of securities and the designation of securities to be
delivered upon redemption of Shares of the Trust, and such other powers of the
Trustees as the Trustees may delegate to them, from time to time, except those
powers which by law, the Declaration of Trust or these By-laws they are
prohibited from delegating. The Trustees may also elect from their own number
other Committees from time to time; the number composing such Committees, the
powers conferred upon the same (subject to the same limitations as with respect
to the Executive Committee) and the term of membership on such Committees to be
determined by the Trustees. The Trustees may designate a chairman of any such
Committee. In the absence of such designation the Committee may elect its own
Chairman.
Section 2. Meetings, Quorum and Manner of Acting. The Trustees may (1) provide
for stated meetings of any Committee, (2) specify the manner of calling and
notice required for special meetings of any Committee, (3) specify the number of
members of a Committee required to constitute a quorum and the number of members
of a Committee required to exercise specified powers delegated to such
Committee, (4) authorize the making of decisions to exercise specified powers by
written assent of the requisite
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number of members of a Committee without a meeting, and (5) authorize the
members of a Committee to meet by means of a telephone conference circuit.
The Executive Committee shall keep regular minutes of its meetings and records
of decisions taken without a meeting and cause them to be recorded in a book
designated for that purpose and kept in the office of the Trust.
ARTICLE VI
OFFICERS
Section 1. General Provisions. The officers of the Trust shall be a President, a
Treasurer and a Secretary, who shall be elected by the Trustees. The Trustees
may elect or appoint such other officers or agents as the business of the Trust
may require, including one or more Vice Presidents, one or more Assistant
Secretaries, and one or more Assistant Treasurers. The Trustees may delegate to
any officer or committee the power to appoint any subordinate officers or
agents.
Section 2. Term of Office and Qualifications. Except as otherwise provided by
law, the Declaration of Trust or these By-laws, the President, the Treasurer,
the Secretary and any other officer shall each hold office at the pleasure of
the Board of Trustees or until his successor shall have been duly elected and
qualified. The Secretary and the Treasurer may be the same person. A Vice
President and the Treasurer or a Vice President and the Secretary may be the
same person, but the offices of Vice President, Secretary and Treasurer shall
not be held by the same person. The President shall hold no other office,
however, the President may also serve as Chairman. Except as above provided, any
two offices may be held by the same person. Any officer may be but none need be
a Trustee or Shareholder.
Section 3. Removal. The Trustees, at any regular or special meeting of the
Trustees, may remove any officer with or without cause, by a vote of a majority
of the Trustees then in office. Any officer or agent appointed by an officer or
committee may be removed with or without cause by such appointing officer or
committee.
Section 4. Powers and Duties of the Chairman. The Trustees may, but need not,
appoint from among their number a Chairman. When present he shall preside at the
meetings of the Shareholders and of the Trustees. He may call meetings of the
Trustees and of any committee thereof whenever he deems it necessary. He shall
be
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an executive officer of the Trust and shall have, with the President, general
supervision over the business and policies of the Trust, subject to the
limitations imposed upon the President, as provided in Section 5 of this Article
VI.
Section 5. Powers and Duties of the President. The President may call meetings
of the Trustees and of any Committee thereof when he deems it necessary and
shall preside at all meetings of the Shareholders. Subject to the control of the
Trustees and to the control of any Committees of the Trustees, within their
respective spheres, as provided by the Trustees, he shall at all times exercise
a general supervision and direction over the affairs of the Trust. He shall have
the power to employ attorneys and counsel for the Trust and to employ such
subordinate officers, agents, clerks and employees as he may find necessary to
transact the business of the Trust. He shall also have the power to grant,
issue, execute or sign such powers of attorney, proxies or other documents as
may be deemed advisable or necessary in furtherance of the interests of the
Trust. The President shall have such other powers and duties, as from time to
time may be conferred upon or assigned to him by the Trustees.
Section 6. Powers and Duties of Vice Presidents. In the absence or disability of
the President, the Vice President or, if there be more than one Vice President,
any Vice President designated by the Trustees, shall perform all the duties and
may exercise any of the powers of the President, subject to the control of the
Trustees. Each Vice President shall perform such other duties as may be assigned
to him from time to time by the Trustees and the President.
Section 7. Powers and Duties of the Treasurer. The Treasurer shall be the
principal financial and accounting officer of the Trust. He shall deliver all
funds of the Trust which may come into his hands to such Custodian as the
Trustees may employ. He shall render a statement of condition of the finances of
the Trust to the Trustees as often as they shall require the same and he shall
in general perform all the duties incident to the office of a Treasurer and such
other duties as from time to time may be assigned to him by the Trustees. The
Treasurer shall give a bond for the faithful discharge of his duties, if
required so to do by the Trustees, in such sum and with such surety or sureties
as the Trustees shall require.
Section 8. Powers and Duties of the Secretary. The Secretary shall keep the
minutes of all meetings of the Trustees and of the Shareholders in proper books
provided for that purpose; he shall have custody of the seal of the Trust; he
shall have charge of the Share transfer books, lists and records unless the
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same are in the charge of a transfer agent. He shall attend to the giving and
serving of all notices by the Trust in accordance with the provisions of these
By-laws and as required by law; and subject to these By-laws, he shall in
general perform all duties incident to the office of Secretary and such other
duties as from time to time may be assigned to him by the Trustees.
Section 9. Powers and Duties of Assistant Officers. In the absence or disability
of the Treasurer, any officer designated by the Trustees shall perform all the
duties, and may exercise any of the powers, of the Treasurer. Each officer shall
perform such other duties as from time to time may be assigned to him by the
Trustees. Each officer performing the duties and exercising the powers of the
Treasurer, if any, and any Assistant Treasurer, shall give a bond for the
faithful discharge of his duties, if required so to do by the Trustees, in such
sum and with such surety or sureties as the Trustees shall require.
Section 10. Powers and Duties of Assistant Secretaries. In the absence or
disability of the Secretary, any Assistant Secretary designated by the Trustees
shall perform all the duties, and may exercise any of the powers, of the
Secretary. Each Assistant Secretary shall perform such other duties as from time
to time may be assigned to him by the Trustees.
Section 11. Compensation of Officers and Trustees and Members of the Advisory
Board. Subject to any applicable provisions of the Declaration of Trust, the
compensation of the officers and Trustees and members of an advisory board shall
be fixed from time to time by the Trustees or, in the case of officers, by any
Committee or officer upon whom such power may be conferred by the Trustees. No
officer shall be prevented from receiving such compensation as such officer by
reason of the fact that he is also a Trustee.
ARTICLE VII
SHARE CERTIFICATES
Section 1. Share Certificates. In lieu of issuing certificates for Shares, the
Trustees or the transfer agent may either issue receipts therefor or may keep
accounts upon the books of the Trust for the record holders of such Shares, who
shall in either case be deemed, for all purposes hereunder, to be the holders of
certificates for such Shares as if they had accepted such certificates and shall
be held to have expressly assented and agreed to the terms hereof.
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<PAGE>
The Trustees may at any time authorize the issuance of Share certificates. In
that event, each Shareholder shall be entitled to a certificate stating the
number of Shares owned by him or her, in such form as shall be prescribed from
time to time by the Trustees. Such certificate shall be signed by the President
or a Vice President and by the Treasurer or an Assistant Treasurer. Such
signatures may be facsimile if the certificate is signed by a transfer agent or
by a registrar. In case any officer who has signed or whose facsimile signature
has been placed on such certificate shall cease to be such officer before such
certificate is issued, it may be issued by the Trust with the same effect as if
he or she were such officer at the time of its issue.
Section 2. Loss of Certificates. The transfer agent of the Trust, with the
approval of any two officers of the Trust, is authorized to issue and
countersign replacement certificates for the Shares of the Trust which have been
lost, stolen or destroyed upon (i) receipt of an affidavit or affidavits of loss
or non-receipt and of an indemnity agreement executed by the registered holder
or his or her legal representative and supported by an open penalty surety bond,
said agreement and said bond in all cases to be in form and content satisfactory
to and approved by the President or the Treasurer, or (ii) receipt of such other
documents as may be approved by the Trustees.
Section 3. Issuance of New Certificate to Pledgee. A pledgee of Shares
transferred as collateral security shall be entitled to a new certificate if the
instrument of transfer substantially describes the debt or duty that is intended
to be secured thereby. Such new certificate shall express on its face that it is
held as collateral security, and the name of the pledgor shall be stated
thereon, who alone shall be liable as a Shareholder and entitled to vote
thereon.
Section 4. Discontinuance of Issuance of Certificates. The Trustees may at any
time discontinue the issuance of Share certificates and may, by written notice
to each Shareholder, require the surrender of Share certificates to the Trust
for cancellation. Such surrender and cancellation shall not affect the ownership
of Shares in the Trust.
ARTICLE VIII
FISCAL YEAR
The fiscal year of the Trust shall begin on the first day of January in each
year and shall end on the last day of December in each year, provided, however,
that the Trustees may from time to
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time change the fiscal year. The taxable year of each Series of the Trust shall
be as determined by the Trustees from time to time.
ARTICLE IX
SEAL
The Trustees may adopt a seal which shall be in such form and shall have such
inscription thereon as the Trustees may from time to time prescribe.
ARTICLE X
SUFFICIENCY AND WAIVERS OF NOTICE
Whenever any notice whatever is required to be given by law, the Declaration of
Trust or these By-laws, a waiver thereof in writing, signed by the person or
persons entitled to said notice, whether before or after the time stated
therein, shall be deemed equivalent thereto. A notice shall be deemed to have
been sent by mail, telegraph, cable, wireless, facsimile or other electronic
means for the purposes of these By-laws when it has been delivered to a
representative of any company holding itself out as capable of sending notice by
such means with instructions that it be so sent.
ARTICLE XI
AMENDMENTS
These By-laws, or any of them, may be altered, amended or repealed, or new
By-laws may be adopted by (a) vote of a majority of the Outstanding Shares
voting in person or by proxy at a meeting of Shareholders and entitled to vote
or (b) by the Trustees, provided, however, that no By-law may be amended,
adopted or repealed by the Trustees if such amendment, adoption or repeal
requires, pursuant to law, the Declaration of Trust or these By-laws, a vote of
the Shareholders.
END OF BY-LAWS
MANAGEMENT CONTRACT
THIS AGREEMENT dated this 1st day of August, 1996 between Pioneer
Interest Shares, a Delaware business trust (the "Trust"), and Pioneering
Management Corporation, a Delaware corporation (the "Manager").
W I T N E S S E T H
WHEREAS, the Trust is registered as a closed-end, diversified,
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and has filed with the Securities and Exchange
Commission (the "Commission") a registration statement (the "Registration
Statement") for the purpose of registering its shares for public offering under
the Securities Act of 1933, as amended (the "1933 Act"),
WHEREAS, the parties hereto deem it mutually advantageous that the
Manager should be engaged, subject to the supervision of the Trust's Board of
Trustees and officers, to manage the Trust.
NOW, THEREFORE, in consideration of the mutual covenants and benefits
set forth herein, the Trust and the Manager do hereby agree as follows:
1. (a) The Manager will regularly provide the Trust with investment
research, advice and supervision and will furnish continuously an investment
program for the Trust, consistent with the investment objectives and policies of
the Trust. The Manager will determine from time to time what securities shall be
purchased for the Trust, what securities shall be held or sold by the Trust and
what portion of the Trust's assets shall be held uninvested as cash, subject
always to the provisions of the Trust's Certificate of Trust, Agreement and
Declaration of Trust, By- Laws and its registration statements under the 1940
Act and under the 1933 Act covering the Trust's shares, as filed with the
Securities and Exchange Commission, and to the investment objectives, policies
and restrictions of the Trust, as each of the same shall be from time to time in
effect, and subject, further, to such policies and instructions as the Board of
Trustees of the Trust may from time to time establish. To carry out such
determinations, the Manager will exercise full discretion and act for the Trust
in the same manner and with the same force and effect as the Trust itself might
or could do with respect to purchases, sales or other transactions, as well as
with respect to all other things necessary or incidental to the furtherance or
conduct of such purchases, sales or other transactions.
(b) The Manager will, to the extent reasonably required in the
conduct of the business of the Trust and upon the Trust's request, furnish to
the Trust research, statistical and advisory reports upon the industries,
businesses,
<PAGE>
corporations or securities as to which such requests shall be made, whether or
not the Trust shall at the time have any investment in such industries,
businesses, corporations or securities. The Manager will use its best efforts in
the preparation of such reports and will endeavor to consult the persons and
sources believed by it to have information available with respect to such
industries, businesses, corporations or entities.
(c) The Manager will maintain all books and records with respect to
the Trust's securities transactions required by sub-paragraphs (b)(5), (6), (9)
and (10) and paragraph (f) of Rule 31a-1 under the 1940 Act (other than those
records being maintained by the custodian or transfer agent appointed by the
Trust) and preserve such records for the periods prescribed therefor by Rule
31a-2 under the 1940 Act. The Manager will also provide to the Board of Trustees
such periodic and special reports as the Board may reasonably request.
2. (a) Except as otherwise provided herein, the Manager, at its own
expense, shall furnish to the Trust office space in the offices of the Manager
or in such other place as may be agreed upon from time to time, and all
necessary office facilities, equipment and personnel for managing the Trust's
affairs and investments, and shall arrange, if desired by the Trust, for members
of the Manager's organization to serve as officers or agents of the Trust.
(b) The Manager shall pay directly or reimburse the Trust for: (i)
the compensation (if any) of the Trustees who are affiliated with, or
"interested persons" (as defined in the 1940 Act) of, the Manager and all
officers of the Trust as such; and (ii) all expenses not hereinafter
specifically assumed by the Trust where such expenses are incurred by the
Manager or by the Trust in connection with the management of the affairs of, and
the investment and reinvestment of the assets of, the Trust.
(c) The Trust shall assume and shall pay: (i) charges and expenses
for fund accounting, pricing and appraisal services and related overhead,
including, to the extent such services are performed by personnel of the
Manager, or its affiliates, office space and facilities and personnel
compensation, training and benefits; (ii) the charges and expenses of auditors;
(iii) the charges and expenses of any custodian, transfer agent, plan agent,
dividend disbursing agent and registrar appointed by the Trust with respect to
the Trust; (iv) issue and transfer taxes chargeable to the Trust in connection
with securities transactions to which the Trust is a party; (v) insurance
premiums, interest charges, dues and fees for membership in trade associations
and all taxes and corporate fees payable by the Trust to federal, state or other
governmental agencies; (vi) fees and expenses involved in registering and
maintaining registrations of the Trust and/or its shares with the Commission,
state or blue sky securities agencies and foreign countries, including the
preparation of Prospectuses and Statements of Additional Information for filing
with the Commission; (vii) all expenses of shareholders' and Trustees' meetings
and of preparing, printing and distributing prospectuses, notices, proxy
statements and all
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reports to shareholders and to governmental agencies; (viii) charges and
expenses of legal counsel to the Trust and the Trustees; (ix) distribution
expenses; (x) compensation of those Trustees of the Trust who are not affiliated
with or interested persons of the Manager, the Trust (other than as Trustees),
The Pioneer Group, Inc. or Pioneer Funds Distributor, Inc.; (xi) the cost of
preparing and printing share certificates; (xii) interest on borrowed money, if
any; and (xiii) the fees and other expenses of listing the Trust's shares on the
New York Stock Exchange or any other national stock exchange.
(d) In addition to the expenses described in Section 2(c) above, the
Trust shall pay all brokers' and underwriting commissions chargeable to the
Trust in connection with securities transactions to which the Trust is a party.
3. (a) The Trust shall pay to the Manager, as compensation for the
Manager's services and expenses assumed hereunder, a fee at the rates per annum
of the Trust's average daily net assets set forth in Schedule A hereto.
Management fees payable hereunder shall be computed daily and paid monthly in
arrears. In the event of termination of this Agreement, the fee provided in this
Section shall be computed on the basis of the period ending on the last business
day on which this Agreement is in effect subject to a pro rata adjustment based
on the number of days elapsed in the current month as a percentage of the total
number of days in such month.
(b) If the operating expenses of the Trust in any year exceed the
limits set by state securities laws or regulations in states in which shares of
the Trust are sold, the amount payable to the Manager under subsection (a) above
will be reduced (but not below $0), and the Manager shall make other
arrangements concerning expenses but, in each instance, only as and to the
extent required by such laws or regulations. If amounts have already been
advanced to the Manager under this Agreement, the Manager will return such
amounts to the Trust to the extent required by the preceding sentence.
(c) In addition to the foregoing, the Manager may from time to time
agree not to impose all or a portion of its fee otherwise payable hereunder (in
advance of the time such fee or a portion thereof would otherwise accrue) and/or
undertake to pay or reimburse the Trust for all or a portion of its expenses not
otherwise required to be borne or reimbursed by the Manager. Any such fee
reduction or undertaking may be discontinued or modified by the Manager at any
time.
4. The Manager will not be liable for any error of judgment or mistake
of law or for any loss sustained by reason of the adoption of any investment
policy or the purchase, sale, or retention of any security on the recommendation
of the Manager, whether or not such recommendation shall have been based upon
its own
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investigation and research or upon investigation and research made by any other
individual, firm or corporation, but nothing contained herein will be construed
to protect the Manager against any liability to the Trust or its shareholders by
reason of willful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of its reckless disregard of its obligations and
duties under this Agreement.
5. (a) Nothing in this Agreement will in any way limit or restrict the
Manager or any of its officers, Trustees, or employees from buying, selling or
trading in any securities for its or their own accounts or other accounts. The
Manager may act as an investment advisor to any other person, firm or
corporation, and may perform management and any other services for any other
person, association, corporation, firm or other entity pursuant to any contract
or otherwise, and take any action or do any thing in connection therewith or
related thereto; and no such performance of management or other services or
taking of any such action or doing of any such thing shall be in any manner
restricted or otherwise affected by any aspect of any relationship of the
Manager to or with the Trust or deemed to violate or give rise to any duty or
obligation of the Manager to the Trust except as otherwise imposed by law. The
Trust recognizes that the Manager, in effecting transactions for its various
accounts, may not always be able to take or liquidate investment positions in
the same security at the same time and at the same price.
(b) In connection with purchases or sales of securities for the
account of the Trust, neither the Manager nor any of its Directors, officers or
employees will act as a principal or agent or receive any commission except as
permitted by the 1940 Act. The Manager shall arrange for the placing of all
orders for the purchase and sale of securities for the Trust's account with
brokers or dealers selected by the Manager. In the selection of such brokers or
dealers and the placing of such orders, the Manager is directed at all times to
seek for the Trust the most favorable execution and net price available except
as described herein. It is also understood that it is desirable for the Trust
that the Manager have access to supplemental investment and market research and
security and economic analyses provided by brokers who may execute brokerage
transactions at a higher cost to the Trust than may result when allocating
brokerage to other brokers on the basis of seeking the most favorable price and
efficient execution. Therefore, the Manager is authorized to place orders for
the purchase and sale of securities for the Trust with such brokers, subject to
review by the Trust's Trustees from time to time with respect to the extent and
continuation of this practice. It is understood that the services provided by
such brokers may be useful to the Manager in connection with its or its
affiliates' services to other clients.
(c) On occasions when the Manager deems the purchase or sale of a
security to be in the best interest of the Trust as well as other clients, the
Manager, to the extent permitted by applicable laws and regulations, may
aggregate the securities to be sold or purchased in order to obtain the best
execution and lower brokerage commissions, if any. In such event, allocation of
the securities so purchased or sold,
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as well as the expenses incurred in the transaction, will be made by the Manager
in the manner it considers to be the most equitable and consistent with its
fiduciary obligations to the Trust and to such clients.
6. This Agreement shall become effective on the date hereof and shall
remain in force until ________________, 1998 and from year to year thereafter,
but only so long as its continuance is approved annually by a vote of the
Trustees of the Trust voting in person, including a majority of its Trustees who
are not parties to this Agreement or "interested persons" (as defined in the
1940 Act) of any such parties, at a meeting of Trustees called for the purpose
of voting on such approval or by a vote of a "majority of the outstanding voting
securities" (as defined in the 1940 Act) of the Trust, subject to the right of
the Trust and the Manager to terminate this contract as provided in Section 7
hereof.
7. Either party hereto may, without penalty, terminate this Agreement
by vote of its Board of Trustees or Directors, as the case may be, or by vote of
a "majority of its outstanding voting securities" (as defined in the 1940 Act)
of the Trust and the giving of 60 days' written notice to the other party.
8. This Agreement shall automatically terminate in the event of its
assignment. For purposes of this Agreement, the term "assignment" shall have the
meaning given it by Section 2(a)(4) of the 1940 Act.
9. The Trust agrees that in the event that neither the Manager nor any
of its affiliates acts as an investment adviser to the Trust, the name of the
Trust will be changed to one that does not contain the name "Pioneer" or
otherwise suggest an affiliation with the Manager.
10. The Manager is an independent contractor and not an employee of the
Trust for any purpose. If any occasion should arise in which the Manager gives
any advice to its clients concerning the shares of the Trust, the Manager will
act solely as investment counsel for such clients and not in any way on behalf
of the Trust.
11. This Agreement states the entire agreement of the parties hereto,
and is intended to be the complete and exclusive statement of the terms hereof.
It may not be added to or changed orally, and may not be modified or rescinded
except by a writing signed by the parties hereto and in accordance with the 1940
Act, when applicable.
12. This Agreement and all performance hereunder shall be governed by
the laws of The Commonwealth of Massachusetts, which apply to contracts made and
to be performed in The Commonwealth of Massachusetts.
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13. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms or provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction.
14. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers and their seal to be hereto affixed
as of the day and year first above written.
ATTEST: PIONEER INTEREST SHARES
_________________________________ By: _____________________________
Joseph P. Barri John F. Cogan, Jr.
Secretary Chairman and President
ATTEST: PIONEERING MANAGEMENT CORPORATION
_________________________________ By: _____________________________
Joseph P. Barri David D. Tripple
Secretary President
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<PAGE>
Schedule A
Net Assets Annual Fee
Up to $50,000,000 0.625%
Over $50,000,000 0.50%
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AGREEMENT BETWEEN
BROWN BROTHERS HARRIMAN & CO.
AND
PIONEER INTEREST SHARES
<PAGE>
TABLE OF CONTENTS
1. Employment of Custodian
1
2. Powers and Duties of the Custodian with respect to
Property of the Fund held by the Custodian
1
A. Safekeeping 2
B. Manner of Holding Securities 2
C. Registered Name; Nominee 2
D. Purchases 2
E. Exchanges 3
F. Sales of Securities 4
G. Depositary Receipts 5
H. Exercise of Rights; Tender Offers 5
I. Stock Dividends, Rights, Etc. 6
J. Options 6
K. Borrowings 6
L. Demand Deposit Bank Accounts 6
M. Interest Bearing Call or Time Deposits 7
N. Foreign Exchange Transactions and Futures Contracts 8
O. Stock Loans 9
P. Collections 9
Q. Dividends, Distributions and Redemptions 10
R. Proxies, Notices, Etc. 11
S. Nondiscretionary Details 11
T. Bills 12
U. Deposit of Fund Assets in Securities Systems 12
V. Other Transfers 14
W. Investment Limitations 14
X. Restricted Securities 15
Y. Proper Instructions 16
Z. Segregated Account 17
3.Powers and Duties of the Custodian with
Respect to the Appointment of Subcustodians 18
i
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4.Assistance by the Custodian as to Certain Matters
to its Role as Financial Agent 21
5.Powers and Duties of the Custodian with Respect 21
A. Records 21
B. Accounts 22
C. Access to Records 22
D. Disbursements 22
6.Standard of Care and Related Matters 23
A. Liability of the Custodian with Respect to Proper Instructions;
Evidence of Authority; Etc. 23
B. Liability of the Custodian with Respect to Use of Securities
System 24
C. Liability of the Custodian with Respect to Subcustodians 24
D. Standard of Care; Liability; Indemnification 25
E. Reimbursement of Advances 26
F. Security for Obligations to Custodian 26
G. Appointment of Agents 27
H. Powers of Attorney 27
7.Compensation of the Custodian 28
8.Termination; Successor Custodian 28
9.Amendment 28
10.Governing Law 28
11.Notices 28
12.Binding Effect 29
13.Counterparts 29
ii
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CUSTODIAN AGREEMENT
AGREEMENT made this 1st day of August, 1996 between PIONEER INTEREST
SHARES (the "Fund") and Brown Brothers Harriman & Co. (the "Custodian");
WITNESSETH: That in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
1. Employment of Custodian: The Fund hereby employs and appoints the
Custodian as a custodian for the term and subject to the provisions of this
Agreement. The Custodian shall not be under any duty or obligation to require
the Fund to deliver to it any securities or funds owned by the Fund and shall
have no responsibility or liability for or on account of securities or funds not
so delivered. The Fund will deposit with the Custodian copies of the Declaration
of Trust or Certificate of Incorporation and By-Laws (or comparable documents)
of the Fund and all amendments thereto, and copies of such votes and other
proceedings of the Fund as may be necessary for or convenient to the Custodian
in the performance of its duties.
2. Powers and Duties of the Custodian with respect to Property of the
Fund held by the Custodian: Except for securities and funds held by any
Subcustodians or held by the Custodian through a non-U.S. securities depository
appointed pursuant to the provisions of Section 3 hereof, the Custodian shall
have and perform the following powers and duties:
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A. Safekeeping - To keep safely the securities and other assets of the
Fund that have been delivered to the Custodian and, on behalf of the Fund, from
time to time to receive delivery of securities for safekeeping.
B. Manner of Holding Securities - To hold securities of the Fund (1) by
physical possession of the share certificates or other instruments representing
such securities in registered or bearer form, or (2) in book-entry form by a
Securities System (as said term is defined in Section 2U).
C. Registered Name; Nominee - To hold registered securities of the Fund
(1) in the name or any nominee name of the Custodian or the Fund, or in the name
or any nominee name of any Agent appointed pursuant to Section 6F, or (2) in
street certificate form, so-called, and in any case with or without any
indication of fiduciary capacity, provided that securities are held in an
account of the Custodian containing only assets of the Fund or only assets held
as fiduciary or custodian for customers.
D. Purchases - Upon receipt of Proper Instructions, as defined in
Section Y on Page 16, insofar as funds are available for the purpose, to pay for
and receive securities purchased for the account of the Fund, payment being made
only upon receipt of the securities (1) by the Custodian, or (2) by a clearing
corporation of a national securities exchange of which the Custodian is a
member, or (3) by a Securities System. However, (i) in the case of repurchase
agreements entered into by the Fund, the Custodian (as well as an Agent) may
release funds to a Securities System or to a Subcustodian prior to the receipt
of advice from the Securities System or Subcustodian that the securities
underlying such repurchase agreement have been
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transferred by book entry into the Account (as defined in Section 2U) of the
Custodian (or such Agent) maintained with such Securities System or
Subcustodian, so long as such payment instructions to the Securities System or
Subcustodian include a requirement that delivery is only against payment for
securities, (ii) in the case of foreign exchange contracts, options, time
deposits, call account deposits, currency deposits, and other deposits,
contracts or options pursuant to Sections 2J, 2L, 2M and 2N, the Custodian may
make payment therefor without receiving an instrument evidencing said deposit,
contract or option so long as such payment instructions detail specific
securities to be acquired, and (iii) in the case of securities in which payment
for the security and receipt of the instrument evidencing the security are under
generally accepted trade practice or the terms of the instrument representing
the security expected to take place in different locations or through separate
parties, such as commercial paper which is indexed to foreign currency exchange
rates, derivatives and similar securities, the Custodian may make payment for
such securities prior to delivery thereof in accordance with such generally
accepted trade practice or the terms of the instrument representing such
security.
E. Exchanges - Upon receipt of proper instructions, to exchange
securities held by it for the account of the Fund for other securities in
connection with any reorganization, recapitalization, split-up of shares, change
of par value, conversion or other event relating to the securities or the issuer
of such securities and to deposit any such securities in accordance with the
terms of any reorganization or protective plan. Without proper instructions, the
Custodian may surrender securities in
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temporary form for definitive securities, may surrender securities for transfer
into a name or nominee name as permitted in Section 2C, and may surrender
securities for a different number of certificates or instruments representing
the same number of shares or same principal amount of indebtedness, provided the
securities to be issued are to be delivered to the Custodian.
F. Sales of Securities - Upon receipt of proper instructions, to make
delivery of securities which have been sold for the account of the Fund, but
only against payment therefor (1) in cash, by a certified check, bank cashier's
check, bank credit, or bank wire transfer, or (2) by credit to the account of
the Custodian with a clearing corporation of a national securities exchange of
which the Custodian is a member, or (3) by credit to the account of the
Custodian or an Agent of the Custodian with a Securities System; provided,
however, that (i) in the case of delivery of physical certificates or
instruments representing securities, the Custodian may make delivery to the
broker buying the securities, against receipt therefor, for examination in
accordance with "street delivery" custom, provided that the payment therefor is
to be made to the Custodian (which payment may be made by a broker's check) or
that such securities are to be returned to the Custodian, and (ii) in the case
of securities referred to in clause (iii) of the last sentence of Section 2D,
the Custodian may make settlement, including with respect to the form of
payment, in accordance with generally accepted trade practice relating to such
securities or the terms of the instrument representing said security.
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G. Depositary Receipts - Upon receipt of proper instructions, to
instruct a Subcustodian or an Agent to surrender securities to the depositary
used by an issuer of American Depositary Receipts or International Depositary
Receipts (hereinafter collectively referred to as "ADRs") for such securities
against a written receipt therefor adequately describing such securities and
written evidence satisfactory to the Subcustodian or Agent that the depositary
has acknowledged receipt of instructions to issue with respect to such
securities ADRs in the name of the Custodian, or a nominee of the Custodian, for
delivery to the Custodian in Boston, Massachusetts, or at such other place as
the Custodian may from time to time designate.
Upon receipt of proper instructions, to surrender ADRs to the issuer
thereof against a written receipt therefor adequately describing the ADRs
surrendered and written evidence satisfactory to the Custodian that the issuer
of the ADRs has acknowledged receipt of instructions to cause its depositary to
deliver the securities underlying such ADRs to a Subcustodian or an Agent.
H. Exercise of Rights; Tender Offers - Upon timely receipt of proper
instructions, to deliver to the issuer or trustee thereof, or to the agent of
either, warrants, puts, calls, rights or similar securities for the purpose of
being exercised or sold, provided that the new securities and cash, if any,
acquired by such action are to be delivered to the Custodian, and, upon receipt
of proper instructions, to deposit securities upon invitations for tenders of
securities, provided that the consideration is to be paid or delivered or the
tendered securities are to be returned to the Custodian.
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<PAGE>
I. Stock Dividends, Rights, Etc. - To receive and collect all stock
dividends, rights and other items of like nature; and to deal with the same
pursuant to proper instructions relative thereto.
J. Options - Upon receipt of proper instructions, to receive and retain
confirmations or other documents evidencing the purchase of writing of an option
on a security or securities index by the Fund; to deposit and maintain in a
segregated account, either physically or by book-entry in a Securities System,
securities subject to a covered call option written by the Fund; and to release
and/or transfer such securities or other assets only in accordance with the
provisions of any agreement among the Fund, the Custodian and a broker-dealer
relating to such securities or other assets a notice or other communication
evidencing the expiration, termination or exercise of such covered option
furnished by The Options Clearing Corporation, the securities or options
exchange on which such covered option is traded or such other organization as
may be responsible for handling such options transactions.
K. Borrowings - Upon receipt of proper instructions, to deliver
securities of the Fund to lenders or their agents as collateral for borrowings
effected by the Fund, provided that such borrowed money is payable to or upon
the Custodian's order as Custodian for the Fund.
L. Demand Deposit Bank Accounts - To open and operate an account or
accounts in the name of the Fund on the Custodian's books subject only to draft
or order by the Custodian. All funds received by the Custodian from or for the
account of the Fund shall be deposited in said account(s). The responsibilities
of the
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Custodian to the Fund for deposits accepted on the Custodian's books shall be
that of a U. S. bank for a similar deposit.
If and when authorized by proper instructions, the Custodian may open
and operate an additional account(s) in such other banks or trust companies as
may be designated by the Fund in such instructions (any such bank or trust
company so designated by the Fund being referred to hereafter as a "Banking
Institution"), provided that such account(s) (hereinafter collectively referred
to as "demand deposit bank accounts") shall be in the name of the Custodian for
account of the Fund and subject only to the Custodian's draft or order. Such
demand deposit accounts may be opened with Banking Institutions in the United
States and in other countries and may be denominated in either U. S. Dollars or
other currencies as the Fund may determine. All such deposits shall be deemed to
be portfolio securities of the Fund and accordingly the responsibility of the
Custodian therefore shall be the same as and no greater than the Custodian's
responsibility in respect of other portfolio securities of the Fund.
M. Interest Bearing Call or Time Deposits - To place interest bearing
fixed term and call deposits with such banks and in such amounts as the Fund may
authorize pursuant to proper instructions. Such deposits may be placed with the
Custodian or with Subcustodians or other Banking Institutions as the Fund may
determine. Deposits may be denominated in U. S. Dollars or other currencies and
need not be evidenced by the issuance or delivery of a certificate to the
Custodian, provided that the Custodian shall include in its records with respect
to the assets of
-7-
<PAGE>
the Fund appropriate notation as to the amount and currency of each such
deposit, the accepting Banking Institution and other appropriate details, and
shall retain such forms of advice or receipt evidencing the deposit, if any, as
may be forwarded to the Custodian by the Banking Institution. Such deposits,
other than those placed with the Custodian, shall be deemed portfolio securities
of the Fund and the responsibilities of the Custodian therefor shall be the same
as those for demand deposit bank accounts placed with other banks, as described
in Section K of this Agreement. The responsibility of the Custodian for such
deposits accepted on the Custodian's books shall be that of a U. S. bank for a
similar deposit.
N. Foreign Exchange Transactions and Futures Contracts - Pursuant to
proper instructions, to enter into foreign exchange contracts or options to
purchase and sell foreign currencies for spot and future delivery on behalf and
for the account of the Fund. Such transactions may be undertaken by the
Custodian with such Banking Institutions, including the Custodian and
Subcustodian(s) as principals, as approved and authorized by the Fund. Foreign
exchange contracts and options other than those executed with the Custodian,
shall be deemed to be portfolio securities of the Fund and the responsibilities
of the Custodian therefor shall be the same as those for demand deposit bank
accounts placed with other banks as described in Section 2L of this agreement.
Upon receipt of proper instructions, to receive and retain confirmations
evidencing the purchase or sale of a futures contract or an option on a futures
contract by the Fund; to deposit and maintain in a segregated account, for the
benefit of any futures commission merchant or to pay to such futures commission
-8-
<PAGE>
merchant, assets designated by the Fund as initial, maintenance or variation
"margin" deposits intended to secure the Fund's performance of its obligations
under any futures contracts purchased or sold or any options on futures
contracts written by the Fund, in accordance with the provisions of any
agreement or agreements among any of the Fund, the Custodian and such futures
commission merchant, designated to comply with the rules of the Commodity
Futures Trading Commission and/or any contract market, or any similar
organization or organizations, regarding such margin deposits; and to release
and/or transfer assets in such margin accounts only in accordance with any such
agreements or rules.
O. Stock Loans - Upon receipt of proper instructions, to deliver
securities of the Fund, in connection with loans of securities by the Fund, to
the borrower thereof prior to receipt of the collateral, if any, for such
borrowing, provided that for stock loans secured by cash collateral the
Custodian's instructions to the Securities System require that the Securities
System may deliver the securities to the borrower thereof only upon receipt of
the collateral for such borrowing.
P. Collections - To collect, receive and deposit in said account or
accounts all income, payments of principal and other payments with respect to
the securities held hereunder, and in connection therewith to deliver the
certificates or other instruments representing the securities to the issuer
thereof or its agent when securities are called, redeemed, retired or otherwise
become payable; provided, that the payment is to be made in such form and manner
and at such time, which may be after delivery by the Custodian of the instrument
representing the security, as is in
-9-
<PAGE>
accordance with the terms of the instrument representing the security, or such
proper instructions as the Custodian may receive, or governmental regulations,
the rules of Securities Systems or other U.S. securities depositories and
clearing agencies or, with respect to securities referred to in clause (iii) of
the last sentence of Section 2D, in accordance with generally accepted trade
practice; (ii) to execute ownership and other certificates and affidavits for
all federal and state tax purposes in connection with receipt of income or other
payments with respect to securities of the Fund or in connection with transfer
of securities, and (iii) pursuant to proper instructions to take such other
actions with respect to collection or receipt of funds or transfer of securities
which involve an investment decision.
Q. Dividends, Distributions and Redemptions - Upon receipt of proper
instructions from the Fund, or upon receipt of instructions from the Fund's
shareholder servicing agent or agent with comparable duties (the "Shareholder
Servicing Agent") (given by such person or persons and in such manner on behalf
of the Shareholder Servicing Agent as the Fund shall have authorized), the
Custodian shall release funds or securities to the Shareholder Servicing Agent
or otherwise apply funds or securities, insofar as available, for the payment of
dividends or other distributions to Fund shareholders. Upon receipt of proper
instructions from the Fund, or upon receipt of instructions from the Shareholder
Servicing Agent (given by such person or persons and in such manner on behalf of
the Shareholder Servicing Agent as the Fund shall have authorized), the
Custodian shall release funds or securities, insofar as available, to the
Shareholder Servicing Agent or as such Agent
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<PAGE>
shall otherwise instruct for payment to Fund shareholders who have delivered to
such Agent a request for repurchase or redemption of their shares of capital
stock of the Fund.
R. Proxies, Notices, Etc. - Promptly to deliver or mail to the Fund all
forms of proxies and all notices of meetings and any other notices or
announcements affecting or relating to securities owned by the Fund that are
received by the Custodian, and upon receipt of proper instructions, to execute
and deliver or cause its nominee to execute and deliver such proxies or other
authorizations as may be required. Neither the Custodian nor its nominee shall
vote upon any of such securities or execute any proxy to vote thereon or give
any consent or take any other action with respect thereto (except as otherwise
herein provided) unless ordered to do so by proper instructions.
S. Nondiscretionary Details - Without the necessity of express
authorization from the Fund, (1) to attend to all nondiscretionary details in
connection with the sale, exchange, substitution, purchase, transfer or other
dealings with securities, funds or other property of the Portfolio held by the
Custodian except as otherwise directed from time to time by the Directors or
Trustees of the Fund, and (2) to make payments to itself or others for minor
expenses of handling securities or other similar items relating to the
Custodian's duties under this Agreement, provided that all such payments shall
be accounted for to the Fund.
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<PAGE>
T. Bills - Upon receipt of proper instructions, to pay or cause to be
paid, insofar as funds are available for the purpose, bills, statements, or
other obligations of the Fund.
U. Deposit of Fund Assets in Securities Systems - The Custodian may
deposit and/or maintain securities owned by the Fund in (i) The Depository Trust
Company, (ii) any book-entry system as provided in Subpart 0 of Treasury
Circular No. 300, 31 CFR 306, Subpart B of 31 CFR Part 350, or the book-entry
regulations of federal agencies substantially in the form of Subpart 0, or (iii)
any other domestic clearing agency registered with the Securities and Exchange
Commission under Section 17A of the Securities Exchange Act of 1934 which acts
as a securities depository and whose use the Fund has previously approved in
writing (each of the foregoing being referred to in this Agreement as a
"Securities System"). Utilization of a Securities System shall be in accordance
with applicable Federal Reserve Board and Securities and Exchange Commission
rules and regulations, if any, and subject to the following provisions:
1) The Custodian may deposit and/or maintain Fund securities, either
directly or through one or more Agents appointed by the Custodian (provided that
any such agent shall be qualified to act as a custodian of the Fund pursuant to
the Investment Company Act of 1940 and the rules and regulations thereunder), in
a Securities System provided that such securities are represented in an account
("Account") of the Custodian or such Agent in the Securities System which shall
not
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<PAGE>
include any assets of the Custodian or Agent other than assets held as a
fiduciary, custodian, or otherwise for customers;
2) The records of the Custodian with respect to securities of the Fund
which are maintained in a Securities System shall identify by book-entry those
securities belonging to the Fund;
3) The Custodian shall pay for securities purchased for the account of
the Fund upon (i) receipt of advice from the Securities System that such
securities have been transferred to the Account, and (ii) the making of an entry
on the records of the Custodian to reflect such payment and transfer for the
account of the Fund. The Custodian shall transfer securities sold for the
account of the Fund upon (i) receipt of advice from the Securities System that
payment for such securities has been transferred to the Account, and (ii) the
making of an entry on the records of the Custodian to reflect such transfer and
payment for the account of the Fund. Copies of all advices from the Securities
System of transfers of securities for the account of the Fund shall identify the
Fund, be maintained for the Fund by the Custodian or an Agent as referred to
above, and be provided to the Fund at its request. The Custodian shall furnish
the Fund confirmation of each transfer to or from the account of the Fund in the
form of a written advice or notice and shall furnish to the Fund copies of daily
transaction sheets reflecting each day's transactions in the Securities System
for the account of the Fund on the next business day;
4) The Custodian shall provide the Fund with any report obtained by the
Custodian or any Agent as referred to above on the Securities System's
accounting
-13-
<PAGE>
system, internal accounting control and procedures for safeguarding securities
deposited in the Securities System; and the Custodian and such Agents shall send
to the Fund such reports on their own systems of internal accounting control as
the Fund may reasonably request from time to time.
5) At the written request of the Fund, the Custodian will terminate the
use of any such Securities System on behalf of the Fund as promptly as
practicable.
V. Other Transfers - Upon receipt of proper instructions, to deliver
securities, funds and other property of the Fund to a Subcustodian or another
custodian of the Fund; and, upon receipt of proper instructions, to make such
other disposition of securities, funds or other property of the Fund in a manner
other than or for purposes other than as enumerated elsewhere in this Agreement,
provided that the instructions relating to such disposition shall include a
statement of the purpose for which the delivery is to be made, the amount of
securities to be delivered and the name of the person or persons to whom
delivery is to be made.
W. Investment Limitations - In performing its duties generally, and
more particularly in connection with the purchase, sale and exchange of
securities made by or for the Fund, the Custodian may assume unless and until
notified in writing to the contrary that proper instructions received by it are
not in conflict with or in any way contrary to any provisions of the Fund's
Declaration of Trust or Certificate of Incorporation or By-Laws (or comparable
documents) or votes or proceedings of the shareholders or Directors of the Fund.
The Custodian shall in no event be liable to the Fund and shall be indemnified
by the Fund for any violation which occurs in the
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<PAGE>
course of carrying out instructions given by the Fund of any investment
limitations to which the Fund is subject or other limitations with respect to
the Fund's powers to make expenditures, encumber securities, borrow or take
similar actions affecting the Fund.
X. Restricted Securities. Notwithstanding any other provision of this
Agreement, the Custodian shall not be liable for failure to take any action in
respect of a "restricted security" (as hereafter defined) if the Custodian has
not received Proper Instructions to take such action (including but not limited
to the failure to exercise in a timely manner any right in respect of any
restricted security) unless the Custodian's responsibility to take such action
is set forth in a writing, agreed upon by the Custodian and the Fund or the
investment adviser of the Fund, which specifies particular actions the Custodian
is to take without Proper Instructions in respect of specified rights and
obligations pertaining to a particular restricted security. Further, the
Custodian shall not be responsible for transmitting to the Fund information
concerning a restricted security, such as with respect to exercise periods and
expiration dates for rights relating to the restricted security, except such
information which the Custodian actually receives or which is published in a
source which is publicly distributed and generally recognized as a major source
of information with respect to corporate actions of securities similar to the
particular restricted security. As used herein, the term "restricted securities"
shall mean securities which are subject to restrictions on transfer, whether by
reason of contractual restrictions or federal, state or foreign securities or
similar laws, or securities which have special rights or
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<PAGE>
contractual features which do not apply to publicly-traded shares of, or
comparable interests representing, such security.
Y. Proper Instructions - Proper instructions shall mean a tested telex
from the Fund or a written request, direction, instruction or certification
signed or initialled on behalf of the Fund by one or more person or persons as
the Board of Directors or Trustees of the Fund shall have from time to time
authorized, provided, however, that no such instructions directing the delivery
of securities or the payment of funds to an authorized signatory of the Fund
shall be signed by such person. Those persons authorized to give proper
instructions may be identified by the Board of Directors or Trustees by name,
title or position and will include at least one officer empowered by the Board
to name other individuals who are authorized to give proper instructions on
behalf of the Fund. Telephonic or other oral instructions given by any one of
the above persons will be considered proper instructions if the Custodian
reasonably believes them to have been given by a person authorized to give such
instructions with respect to the transaction involved. Oral instructions will be
confirmed by tested telex or in writing in the manner set forth above but the
lack of such confirmation shall in no way affect any action taken by the
Custodian in reliance upon such oral instructions. The Fund authorizes the
Custodian to tape record any and all telephonic or other oral instructions given
to the Custodian by or on behalf of the Fund (including any of its officers,
Directors, Trustees, employees or agents) and will deliver to the Custodian a
similar authorization from any investment manager or adviser or person or entity
with similar responsibilities which is
-16-
<PAGE>
authorized to give proper instructions on behalf of the Fund to the Custodian.
Proper instructions may relate to specific transactions or to types or classes
of transactions, and may be in the form of standing instructions.
Proper instructions may include communications effected directly
between electro-mechanical or electronic devices or systems, in addition to
tested telex, provided that the Fund and the Custodian agree to the use of such
device or system.
Z. Segregated Account - The Custodian shall upon receipt of proper
instructions establish and maintain on its books a segregated account or
accounts for and on behalf of the Fund, into which account or accounts may be
transferred cash and/or securities of the Fund, including securities maintained
by the Custodian pursuant to Section 2U hereof, (i) in accordance with the
provisions of any agreement among the Fund, the Custodian and a broker-dealer
registered under the Securities Exchange Act of 1934 and a member of the
National Association of Securities Dealers, Inc. (or any futures commission
merchant registered under the Commodity Exchange Act) relating to compliance
with the rules of the Options Clearing Corporation and of any registered
national securities exchange (or the Commodity Futures Trading Commission or any
registered contract market), or any similar organization or organizations,
regarding escrow or other arrangements in connection with transactions by the
Fund, (ii) for purposes of segregating cash or securities in connection with
options purchased, sold or written by the Fund or commodity futures contracts or
options thereon purchased or sold by the Fund, (iii) for the purposes of
compliance by the Fund with the procedures required by Investment
-17-
<PAGE>
Company Act Release No. 10666, or any subsequent release or releases of the
Securities and Exchange Commission relating to the maintenance of segregated
accounts by registered investment companies, and (iv) as mutually agreed from
time to time between the Fund and the Custodian.
3. Powers and Duties of the Custodian with Respect to the Appointment
of Subcustodians: The Fund hereby authorizes and instructs the Custodian to hold
securities, funds and other property of the Fund which are maintained outside
the United States at subcustodians appointed pursuant to the provisions of this
Section 3 (a "Subcustodian"). The Fund shall approve in writing (1) the
appointment of each Subcustodian and the subcustodian agreement to be entered
into between such Subcustodian and the Custodian, and (2) if the Subcustodian is
organized under the laws of a country other than the United States, the country
or countries in which the Subcustodian is authorized to hold securities, cash
and other property of the Fund. The Fund hereby further authorizes and instructs
the Custodian and any Subcustodian to utilize such securities depositories
located outside the United States which are approved in writing by the Fund to
hold securities, cash and other property of the Fund. Upon such approval by the
Fund, the Custodian is authorized on behalf of the Fund to notify each
Subcustodian of its appointment as such. The Custodian may, at any time in its
discretion, remove any Subcustodian that has been appointed as such but will
promptly notify the Fund of any such action.
Those Subcustodians, and the countries where and the securities
depositories through which they or the Custodian may hold securities, cash and
other property of
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the Fund which the Fund has approved to date are set forth on Appendix A hereto.
Such Appendix shall be amended from time to time as Subcustodians, and/or
countries and/or securities depositories are changed, added or deleted. The Fund
shall be responsible for informing the Custodian sufficiently in advance of a
proposed investment which is to be held in a country not listed on Appendix A,
in order that there shall be sufficient time for the Fund to give the approval
required by the preceding paragraph and for the Custodian to put the appropriate
arrangements in place with such Subcustodian, including negotiation of a
subcustodian agreement and submission of such subcustodian agreement to the Fund
for approval.
If the Fund shall have invested in a security to be held in a country
before the foregoing procedures have been completed, such security shall be held
by such agent as the Custodian may appoint. In any event, the Custodian shall be
liable to the Fund for the actions of such agent if and only to the extent the
Custodian shall have recovered from such agent for any damages caused the Fund
by such agent. At the request of the Fund, Custodian agrees to remove any
securities held on behalf of the Fund by such agent, if practical, to an
approved Subcustodian. Under such circumstances Custodian will collect income
and respond to corporate actions on a best efforts basis.
With respect to securities and funds held by a Subcustodian, either
directly or indirectly (including by a securities depository or clearing
agency), notwithstanding any provision of this Agreement to the contrary,
payment for securities purchased and delivery of securities sold may be made
prior to receipt of the securities or
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<PAGE>
payment, respectively, and securities or payment may be received in a form, in
accordance with governmental regulations, rules of securities depositories and
clearing agencies, or generally accepted trade practice in the applicable local
market.
In the event that any Subcustodian appointed pursuant to the provisions
of this Section 3 fails to perform any of its obligations under the terms and
conditions of the applicable subcustodian agreement, the Custodian shall use its
best efforts to cause such Subcustodian to perform such obligations. In the
event that the Custodian is unable to cause such Subcustodian to perform fully
its obligations thereunder, the Custodian shall forthwith upon the Fund's
request terminate such Subcustodian in accordance with the termination
provisions under the applicable subcustodian agreement and, if necessary or
desirable, appoint another subcustodian in accordance with the provisions of
this Section 3. At the election of the Fund, it shall have the right to enforce,
to the extent permitted by the subcustodian agreement and applicable law, the
Custodian's rights against any such Subcustodian for loss or damage caused the
Fund by such Subcustodian.
The Custodian will not amend any subcustodian agreement or agree to
change or permit any changes thereunder except upon the prior written approval
of the Fund.
The Custodian may, at any time in its discretion upon notification to
the Fund, terminate any Subcustodian of the Fund in accordance with the
termination provisions under the applicable Subcustodian Agreement, and at the
written request
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<PAGE>
of the Fund, the Custodian will terminate any Subcustodian in accordance with
the termination provisions under the applicable Subcustodian Agreement.
If necessary or desirable, the Custodian may appoint another
subcustodian to replace a Subcustodian terminated pursuant to the foregoing
provisions of this Section 3, such appointment to be made upon approval of the
successor subcustodian by the Fund's Board of Directors or Trustees in
accordance with the provisions of this Section 3.
In the event the Custodian receives a claim from a Subcustodian under
the indemnification provisions of any subcustodian agreement, the Custodian
shall promptly give written notice to the Fund of such claim. No more than
thirty days after written notice to the Fund of the Custodian's intention to
make such payment, the Fund will reimburse the Custodian the amount of such
payment except in respect of any negligence or misconduct of the Custodian.
4. Assistance by the Custodian as to Certain Matters: The Custodian may
assist generally in the preparation of reports to Fund shareholders and others,
audits of accounts, and other ministerial matters of like nature.
5. Powers and Duties of the Custodian with Respect to its Role as
Financial Agent: The Fund hereby also appoints the Custodian as the Funds
financial agent. With respect to the appointment as financial agent, the
Custodian shall have and perform the following powers and duties:
A. Records - To create, maintain and retain such records relating to
its activities and obligations under this Agreement as are required under the
Investment
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<PAGE>
Company Act of 1940 and the rules and regulations thereunder (including Section
31 thereof and Rules 31a-1 and 31a-2 thereunder) and under applicable Federal
and State tax laws. All such records will be the property of the Fund and in the
event of termination of this Agreement shall be delivered to the successor
custodian.
B. Accounts - To keep books of account and render statements, including
interim monthly and complete quarterly financial statements, or copies thereof,
from time to time as reasonably requested by proper instructions.
C. Access to Records - The books and records maintained by the
Custodian pursuant to Sections 5A and 5B shall at all times during the
Custodian's regular business hours be open to inspection and audit by officers
of, attorneys for and auditors employed by the Fund and by employees and agents
of the Securities and Exchange Commission, provided that all such individuals
shall observe all security requirements of the Custodian applicable to its own
employees having access to similar records within the Custodian and such
regulations as may be reasonably imposed by the Custodian.
D. Disbursements - Upon receipt of proper instructions, to pay or cause
to be paid, insofar as funds are available for the purpose, bills, statements
and other obligations of the Fund (including but not limited to interest
charges, taxes, management fees, compensation to Fund officers and employees,
and other operating expenses of the Fund).
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6. Standard of Care and Related Matters:
A. Liability of the Custodian with Respect to Proper Instructions;
Evidence of Authority, Etc. The Custodian shall not be liable for any action
taken or omitted in reliance upon proper instructions believed by it to be
genuine or upon any other written notice, request, direction, instruction,
certificate or other instrument believed by it to be genuine and signed by the
proper party or parties.
The Secretary or Assistant Secretary of the Fund shall certify to the
Custodian the names, signatures and scope of authority of all persons authorized
to give proper instructions or any other such notice, request, direction,
instruction, certificate or instrument on behalf of the Fund, the names and
signatures of the officers of the Fund, the name and address of the Shareholder
Servicing Agent, and any resolutions, votes, instructions or directions of the
Fund's Board of Directors or Trustees or shareholders. Such certificate may be
accepted and relied upon by the Custodian as conclusive evidence of the facts
set forth therein and may be considered in full force and effect until receipt
of a similar certificate to the contrary.
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Agreement.
The Custodian shall be entitled, at the expense of the Fund, to receive
and act upon advice of (i) counsel regularly retained by the Custodian in
respect of custodian matters, (ii) counsel for the Fund, or (iii) such other
counsel as the Fund and the
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Custodian may agree upon, with respect to all matters, and the Custodian shall
be without liability for any action reasonably taken or omitted pursuant to such
advice.
B. Liability of the Custodian with Respect to Use of Securities System
- - With respect to the portfolio securities, cash and other property of the Fund
held by a Securities System, the Custodian shall be liable to the Fund only for
any loss or damage to the Fund resulting from use of the Securities System if
caused by any negligence, misfeasance or misconduct of the Custodian or any of
its agents or of any of its or their employees or from any failure of the
Custodian or any such agent to enforce effectively such rights as it may have
against the Securities System. At the election of the Fund, it shall be entitled
to be subrogated to the rights of the Custodian with respect to any claim
against the Securities System or any other person which the Custodian may have
as a consequence of any such loss or damage to the Fund if and to the extent
that the Fund has not been made whole for any such loss or damage.
C. Liability of the Custodian with Respect to Subcustodians - The
Custodian shall be liable to the Fund for any loss or damage to the Fund caused
by or resulting from the acts or omissions of any Subcustodian to the extent
that under the terms set forth in the subcustodian agreement between the
Custodian and the Subcustodian (or in the subcustodian agreement between a
Subcustodian and any secondary Subcustodian), the Subcustodian (or secondary
Subcustodian) has failed to perform in accordance with the standard of conduct
imposed under such subcustodian agreement as determined in accordance with the
law which is
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adjudicated to govern such agreement and in accordance with any determination of
any court as to the duties of said Subcustodian pursuant to said agreement. The
Custodian shall also be liable to the Fund for its own negligence in
transmitting any instructions received by it from the Fund and for its own
negligence in connection with the delivery of any securities or funds held by it
to any Subcustodian.
D. Standard of Care; Liability; Indemnification - The Custodian shall
be held only to the exercise of reasonable care and diligence in carrying out
the provisions of this Agreement, provided that the Custodian shall not thereby
be required to take any action which is in contravention of any applicable law.
The Fund agrees to indemnify and hold harmless the Custodian and its nominees
from all claims and liabilities (including counsel fees) incurred or assessed
against it or its nominees in connection with the performance of this Agreement,
except such as may arise from its or its nominee's breach of the relevant
standard of conduct set forth in this Agreement. Without limiting the foregoing
indemnification obligation of the Fund, the Fund agrees to indemnify the
Custodian and any nominee in whose name portfolio securities or other property
of the Fund is registered against any liability the Custodian or such nominee
may incur by reason of taxes assessed to the Custodian or such nominee or other
costs, liability or expense incurred by the Custodian or such nominee resulting
directly or indirectly from the fact that portfolio securities or other property
of the Fund is registered in the name of the Custodian or such nominee.
It is also understood that the Custodian shall not be liable for any
loss involving any securities, currencies, deposits or other property of the
Fund, whether
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maintained by it, a Subcustodian, a securities depository, an agent of the
Custodian or a Subcustodian, a Securities System, or a Banking Institution, or
for any loss arising from a foreign currency transaction or contract, where the
loss results from a Sovereign Risk or where the entity maintaining such
securities, currencies, deposits or other property of the Fund, whether the
Custodian, a Subcustodian, a securities depository, an agent of the Custodian or
a Subcustodian, a Securities System or a Banking Institution, has exercised
reasonable care maintaining such property or in connection with the transaction
involving such property. A "Sovereign Risk" shall mean nationalization,
expropriation, devaluation, revaluation, confiscation, seizure, cancellation,
destruction or similar action by any governmental authority, de facto or de
jure; or enactment, promulgation, imposition or enforcement by any such
governmental authority of currency restrictions, exchange controls, taxes,
levies or other charges affecting the Fund's property; or acts of war,
terrorism, insurrection or revolution; or any other act or event beyond the
Custodian's control.
E. Reimbursement of Advances - The Custodian shall be entitled to
receive reimbursement from the Fund on demand, in the manner provided in Section
7, for its cash disbursements, expenses and charges (including the fees and
expenses of any Subcustodian or any Agent) in connection with this Agreement,
but excluding salaries and usual overhead expenses.
F. Security for Obligations to Custodian - If the Fund shall require
the Custodian to advance cash or securities for any purpose for the benefit of
the Fund, including in connection with foreign exchange contracts or options
(collectively, an
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"Advance"), or if the Custodian or any nominee thereof shall incur or be
assessed any taxes, charges, expenses, assessments, claims or liabilities in
connection with the performance of this Agreement (collectively a "Liability"),
except such as may arise from its or such nominee's breach of the relevant
standard of conduct set forth in this Agreement, then in such event any property
at any time held for the account of the Fund by the Custodian or a Subcustodian
shall be security for such Advance or Liability and if the Fund shall fail to
repay or indemnify the Custodian promptly, the Custodian shall be entitled to
utilize available cash and to dispose of the Fund's property, including
securities, to the extent necessary to obtain reimbursement or indemnification.
G. Appointment of Agents - The Custodian may at any time or times in
its discretion appoint (and may at any time remove) any other bank or trust
company as its agent (an "Agent") to carry out such of the provisions of this
Agreement as the Custodian may from time to time direct, provided, however, that
the appointment of such Agent (other than an Agent appointed pursuant to the
third paragraph of Section 3) shall not relieve the Custodian of any of its
responsibilities under this agreement.
H. Powers of Attorney - Upon request, the Fund shall deliver to the
Custodian such proxies, powers of attorney or other instruments as may be
reasonable and necessary or desirable in connection with the performance by the
Custodian or any Subcustodian of their respective obligations under this
Agreement or any applicable subcustodian agreement.
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<PAGE>
7. Compensation of the Custodian: The Fund shall pay the Custodian a
custody fee based on such fee schedule as may from time to time be agreed upon
in writing by the Custodian and the Fund. Such fee, together with all amounts
for which the Custodian is to be reimbursed in accordance with Section 6D, shall
be billed to the Fund in such a manner as to permit payment by a direct cash
payment to the Custodian.
8. Termination; Successor Custodian: This Agreement shall continue in
full force and effect until terminated by either party by an instrument in
writing delivered or mailed, postage prepaid, to the other party, such
termination to take effect not sooner than seventy five (75) days after the date
of such delivery or mailing. In the event of termination the Custodian shall be
entitled to receive prior to delivery of the securities, funds and other
property held by it all accrued fees and unreimbursed expenses the payment of
which is contemplated by Sections 6D and 7, upon receipt by the Fund of a
statement setting forth such fees and expenses.
In the event of the appointment of a successor custodian, it is agreed
that the funds and securities owned by the Fund and held by the Custodian or any
Subcustodian shall be delivered to the successor custodian, and the Custodian
agrees to cooperate with the Fund in execution of documents and performance of
other actions necessary or desirable in order to substitute the successor
custodian for the Custodian under this Agreement.
9. Amendment: This Agreement constitutes the entire understanding and
agreement of the parties hereto with respect to the subject matter hereof. No
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<PAGE>
provision of this Agreement may be amended or terminated except by a statement
in writing signed by the party against which enforcement of the amendment or
termination is sought.
In connection with the operation of this Agreement, the Custodian and
the Fund may agree in writing from time to time on such provisions
interpretative of or in addition to the provisions of this Agreement as may in
their joint opinion be consistent with the general tenor of this Agreement. No
interpretative or additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this Agreement.
The section headings in this Agreement are for the convenience of the
parties and in no way alter, amend, limit or restrict the contractual
obligations of the parties set forth in this Agreement.
10. Governing Law: This instrument is executed and delivered in The
Commonwealth of Massachusetts and shall be governed by and construed according
to the laws of said Commonwealth.
11. Notices: Notices and other writings delivered or mailed postage
prepaid to the Fund addressed to the Fund at 60 State Street, Boston,
Massachusetts 02109 or to such other address as the Fund may have designated to
the Custodian in writing, or to the Custodian at 40 Water Street, Boston,
Massachusetts 02109, Attention: Manager, Securities Department, or to such other
address as the Custodian may have designated to the Fund in writing, shall be
deemed to have been properly delivered or given hereunder to the respective
addressee.
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<PAGE>
12. Binding Effect: This Agreement shall be binding on and shall inure
to the benefit of the Fund and the Custodian and their respective successors and
assigns, provided that neither party hereto may assign this Agreement or any of
its rights or obligations hereunder without the prior written consent of the
other party.
13. Counterparts: This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original. This Agreement shall
become effective when one or more counterparts have been signed and delivered by
each of the parties.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed in its name and behalf on the day and year first above written. PIONEER
INTEREST SHARES BROWN BROTHERS HARRIMAN & CO.
By:___________________________ per pro:_____________________
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CERTIFICATE OF TRUST
THIS Certificate of Trust of Pioneer Interest Shares (the "Trust"),
dated April 30, 1996, is being duly executed and filed by the undersigned, as
trustees, to form a business trust under the Delaware Business Trust Act (12
Del. C. ss. 3801, et seq.).
1. Name. The name of the business trust formed hereby is Pioneer
Interest Shares.
2. Registered Agent. The business address of the registered office of
the Trust in the State of Delaware is 1201 North Market Street in the City of
Wilmington, County of New Castle, 19801. The name of the Trust's registered
agent at such address is Delaware Corporation Organizers, Inc.
3. Effective Date. This Certificate of Trust shall be effective upon
the date and time of filing.
4. Series Trust. Notice is hereby given that pursuant to Section 3804
of the Delaware Business Trust Act, the debts, liabilities, obligations and
expenses incurred, contracted for or otherwise existing with respect to a
particular series of the Trust shall be enforceable against the assets of such
series only and not against the assets of the Trust generally. The Trust is a
registered investment company under the Investment Company Act of 1940, as
amended.
<PAGE>
IN WITNESS WHEREOF, the undersigned, being the Trustees of the Trust,
have executed this Certificate of Trust as of the date first above-written.
/s/ John F. Cogan, Jr. /s/ Marguerite A. Piret
John F. Cogan, Jr.* Marguerite A. Piret*
/s/ Richard H. Egdahl, M.D. /s/ David D. Tripple
Richard H. Egdahl, M.D.* David D. Tripple*
/s/ Margaret B.W. Graham /s/ Stephen K. West
Margaret B.W. Graham* Stephen K. West*
/s/ John W. Kendrick /s/ John Winthrop
John W. Kendrick* John Winthrop*
* Each of the above-signed persons has
executed this instrument as Trustee and
not individually.
INVESTMENT COMPANY SERVICE AGREEMENT
August 1, 1996
Pioneer Interest Shares, a Delaware business trust with its principal
place of business at 60 State Street, Boston,
Massachusetts 02109 ("Customer") and Pioneering Services Corporation, a
Massachusetts corporation ("PSC"), hereby agree as follows:
1.SERVICES TO BE PROVIDED BY PSC. During the term of this Agreement,
PSC will provide to Customer the services described in Exhibits A, B, C and D
(collectively, the "Exhibits") that are attached hereto and incorporated herein
by reference. It is understood that PSC may subcontract any of such services to
one or more firms designated by PSC, provided that PSC (i) shall be solely
responsible for all compensation payable to any such firm and (ii) shall be
liable to Customer for the acts or omissions of any such firm to the same extent
as PSC would be liable to Customer with respect to any such act or omission
hereunder.
2.EFFECTIVE DATE. This Agreement shall become effective on the date
hereof (the "Effective Date") and shall continue in effect until it is
terminated in accordance with Section 11 below.
3.DELIVERY, VERIFICATION AND RECEIPT FOR DATA AND ASSETS. Prior to the
Effective Date, Customer agrees to deliver to PSC all such documentation, data
and materials as PSC may reasonably prescribe to enable it to perform the
services contemplated by this Agreement. If PSC so requests, Customer agrees to
confirm the accuracy of any starting records of Customer's assets and accounts
produced from PSC's computer or held in other recording systems. In the event
Customer does not, prior to the Effective Date, comply fully with any of the
foregoing provisions of this Section 3, the date for commencement of PSC's
services hereunder may be postponed by PSC until such compliance has taken
place.
Customer shall, from time to time, while this Agreement is in effect
deliver all such materials and data as may be necessary or desirable to enable
PSC to perform its services hereunder, including without limitation, those
described in Section 12 hereof.
4.REPORTS AND MAINTENANCE OF RECORDS BY PSC. PSC will furnish to
Customer and to properly authorized auditors, examiners, distributors, dealers,
underwriters, salesmen, insurance companies, investors, and others designated by
Customer in writing, such books, any and all records and reports at such times
as are prescribed for each service in the Exhibits attached
<PAGE>
hereto. Customer agrees to examine or to ask any other authorized recipient to
examine each such report or copy promptly and will report or cause to be
reported any errors or discrepancies therein of which Customer then has any
knowledge. PSC may at its option at any time, and shall forthwith upon
Customer's demand, turn over to Customer and cease to retain in PSC's files, any
and all records and documents created and maintained by PSC pursuant to this
Agreement which are no longer needed by PSC in the performance of its services
or for its protection.
If not so turned over to Customer, such documents and reports will be
retained by PSC for six years from the year of
creation, during the first two of which the same will be in readily accessible
form. At the end of six years, such records and documents will be turned over to
Customer by PSC unless Customer authorizes their destruction.
5.PSC'S DUTY OF CARE. PSC shall at all time use reasonable care and act
in good faith in performing its duties hereunder. PSC shall incur no liability
to Customer in connection with its performance of services hereunder except to
the extent that it does not comply with the foregoing standards.
PSC shall at all times adhere to various procedures and systems
consistent with industry standards in order to safeguard Customer's checks,
records and other data from loss or damage attributable to fire or theft. PSC
shall maintain insurance adequate to protect against the costs of reconstructing
checks, records and other data in the event of such loss and shall notify
Customer in the event of a material adverse change in such insurance coverage.
In the event of damage or loss occurring to Customer's records or data such that
PSC is unable to meet the terms of this Agreement, PSC shall transfer all
records and data to a transfer agent of Customer's choosing upon Customer's
written authorization to do so.
Without limiting the generality of the foregoing, PSC shall not be
liable or responsible for delays or errors occurring by reason of circumstances
beyond its control including acts of civil, military or banking authority,
national emergencies, labor difficulties, fire, flood or other catastrophes,
acts of God, insurrection, war, riots, failure of transportation, communication
or power supply.
6.CONFIDENTIALITY. PSC will keep confidential all records and
information provided by Customer or by its shareholders to PSC, except to the
extent disclosures are required by this Agreement, are required by the
Customer's Prospectus and Statement
-2-
<PAGE>
of Additional Information, or are required by a valid subpoena or warrant issued
by a court of competent jurisdiction or by a state or federal agency or
governmental authority.
7.CUSTOMER INSPECTION. Upon reasonable notice, in writing signed by
Customer, PSC shall make available, during regular business hours, all records
and other data created and maintained pursuant to this Agreement for reasonable
audit and inspection by Customer or Customer's agents, including reasonable
visitation by Customer or Customer's agents, including inspecting PSC's
operation facilities. PSC shall not be liable for injury to or responsible in
any way for the safety of any individual visiting PSC's facilities under the
authority of this section. Customer will keep confidential and will cause to
keep confidential all confidential information obtained by its employees or
agents or any other individual representing Customer while on PSC's premises.
Confidential information shall include (1) any information of whatever nature
regarding PSC's operations, security procedures, and data processing
capabilities, (2) financial information regarding PSC, its affiliates, or
subsidiaries, and (3) any information of whatever kind or description regarding
any customer of PSC, its affiliates or subsidiaries.
8.RELIANCE BY PSC ON INSTRUCTIONS AND ADVICE; INDEMNITY. PSC shall be
entitled to seek advice of Customer's legal counsel with respect to PSC's
responsibilities and duties hereunder and shall in no event be liable to
Customer for any action taken pursuant to such advice, except to the extent that
Customer's legal counsel determines in its sole discretion that the rendering of
advice to PSC would result in a conflict of interest.
Whenever PSC is authorized to take action hereunder pursuant to proper
instructions from Customer, PSC shall be entitled to rely upon any certificate,
letter or other instrument or telephone call reasonably believed by PSC to be
genuine and to have been properly made or signed by an officer or other
authorized agent of Customer, and shall be entitled to receive as conclusive
proof of any fact or matter required to be ascertained by it hereunder a
certificate signed by an officer of Customer or any other person authorized by
Customer's Board of Trustees.
Subject to the provisions of Section 13 of this Agreement, Customer
agrees to indemnify and hold PSC, its employees, agents and nominees harmless
from any and all claims, demands, actions and suits, whether groundless or
otherwise, and from and against any and all judgments, liabilities, losses,
damages, costs, charges, counsel fees and other expenses of every nature
-3-
<PAGE>
and character arising out of or in any way relating to PSC's action or
non-action upon information, instructions or requests given or made to PSC by
Customer.
Notwithstanding the above, whenever Customer may be asked to indemnify
or hold PSC harmless, Customer shall be advised of all pertinent facts arising
from the situation in question. Additionally, PSC will use reasonable care to
identify and notify Customer promptly concerning any situation which presents,
actually or potentially, a claim for indemnification against Customer. Customer
shall have the option to defend PSC against any claim for which PSC is entitled
to indemnification from Customer under the terms hereof, and in the event
Customer so elects, it will notify PSC and, thereupon, Customer shall take over
complete defense of the claim and PSC shall sustain no further legal or other
expenses in such a situation for which indemnification shall be sought or
entitled. PSC may in no event confess any claim or make any compromise in any
case in which Customer will be asked to indemnify PSC except with Customer's
prior written consent.
9.MAINTENANCE OF DEPOSIT ACCOUNTS. PSC shall maintain on behalf of
Customer such deposit accounts as are necessary or desirable from time to time
to enable PSC to carry out the provisions of this Agreement.
10.COMPENSATION AND REIMBURSEMENT TO PSC. For the services rendered by
PSC under this Agreement, Customer agrees to pay an annual fee of $[______] per
account to PSC, such fee to be payable in equal monthly installments. In
addition, Customer shall reimburse PSC monthly for out-of-pocket expenses such
as postage, forms, envelopes, checks, "outside" mailings, telephone line and
other charges, mailgrams, mail insurance on certificates and data processing
file recovery insurance.
11.TERMINATION. Either PSC or Customer may at any time terminate this
Agreement by giving 90 days' prior written notice ----------- to the other.
After the date of termination, for so long as PSC in fact continues to
perform any one or more of the services contemplated by this Agreement or any
exhibit hereto, the provisions of this Agreement, including without limitation
the provisions of Section 8 dealing with indemnification, shall where applicable
continue in full force and effect.
12.REQUIRED DOCUMENTS. Customer agrees to furnish to PSC prior to the
Effective Date the following (to the extent not previously provided):
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<PAGE>
A.Two (2) copies of the Agreement and Declaration of Trust of Customer,
and of any amendments thereto, certified by an officer of the Customer.
B.Two (2) copies of the following documents, currently certified by the
Secretary of Customer:
a. Customer's By-laws and any amendment thereto.
b. Certified copies of resolutions of Customer's Board of Trustees
covering the following matters.
(1) Approval of this Agreement.
(2) Authorization of specified officers of Customer to instruct PSC
hereunder (if different from other officers of Customer
previously specified by Customer as to other Customer accounts
being serviced by PSC).
C.List of all officers of Customer together with specimen signatures of
those officers who are authorized to sign share certificates and to instruct PSC
in all other matters.
D. Two (2) copies of the following:
a. Prospectus
b. Statement of Additional Information
c. Management Agreement
d. Registration Statement
E.Opinion of counsel for Customer as to the due authorization by and
binding effect of this Agreement on Customer, the applicability of the
Securities Act of 1933, as amended, and the Investment Company Act of 1940, as
amended, and the approval by such public authorities as may be prerequisite to
lawful sale and delivery in the various states.
F.Amendments to, and changes in, any of the foregoing forthwith upon
such amendments and changes being available, but in no case later than the
effective date.
13.INDEMNIFICATION. The parties to this Agreement acknowledge and agree
that all liabilities arising, directly or indirectly, under this Agreement, of
any and every nature whatsoever, including without limitation, liabilities
arising in connection with any agreement of Customer or its Trustees set
-5-
<PAGE>
forth herein to indemnify any party to this Agreement or any other person, shall
be satisfied out of the assets of the Customer and that no Trustee, officer or
holder of shares of beneficial interest of Customer shall be personally liable
for any of the foregoing liabilities. Customer's Agreement and Declaration of
Trust, dated April 30, 1996, describes in detail the respective responsibilities
and limitations on liability of the Trustees, officers, and holders of shares of
beneficial interest of Customer.
14.LIMITATIONS ON EXCHANGES. PSC acknowledges that shareholders of
other Pioneer mutual funds may not open new accounts with Customer or purchase
shares of Customer by exchanging shares from other Pioneer mutual funds.
Shareholders of Customer may exchange their shares of Customer for shares of
other Pioneer mutual funds. Such shares, however, may not be exchanged back into
Customer. The foregoing exchange restriction shall be in effect until December
31, 1996, unless Customer notifies PSC otherwise.
15.MISCELLANEOUS. In connection with the operation of this Agreement,
PSC and Customer may agree from time to time on such provisions interpretive of
or in addition to the provisions of this Agreement as may in their joint opinion
be consistent with the general tenor of this Agreement. Any such interpretive or
additional provisions are to be signed by both parties and annexed hereto, but
no such provision shall contravene any applicable Federal and state law or
regulation, and no such provision shall be deemed to be an amendment of this
Agreement.
This Agreement shall be construed in accordance with the laws of The
Commonwealth of Massachusetts.
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<PAGE>
IN WITNESS WHEREOF, Customer and PSC have caused this Agreement to be
executed in their respective names by their respective
officers thereunto duly authorized as of the date first written above.
ATTEST:
PIONEERING SERVICES CORPORATION
- -------------------------- -----------------------------
Joseph P. Barri, Clerk
William H. Smith, Jr.
President
PIONEER INTEREST SHARES
- -------------------------- -----------------------------
Joseph P. Barri, Secretary John F. Cogan, Jr.
President
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<PAGE>
EXHIBIT A - TO INVESTMENT COMPANY SERVICE AGREEMENT
Shareholder Account Service:
As Servicing Agent for fund accounts and in accordance with the provisions of
the standard fund application and Customer's prospectus, PSC will:
1. Open, maintain and close accounts.
2. Purchase shares for the shareholder.
3. Out of the money received in payment for sales of Customer's shares
pay to the Customer's custodian the net asset value per share and pay
to the underwriter and to the dealer their commission, if any, on a
bimonthly basis.
4. Redeem shares by systematic withdrawal orders. (See Exhibit B)
5. Issue share certificates, upon instruction, resulting from withdrawals
from share accounts (It is the policy of PSC to issue share
certificates only upon request of the shareholder). Maintain records
showing name, address, certificate numbers and number of shares.
6. Deposit certificates to shareholder accounts when furnished with such
documents as PSC deems necessary to authorize the deposit.
7. Reinvest or disburse dividends and other distributions upon direction
of shareholder.
8. Establish the proper registration of ownership of shares.
9. Pass upon the adequacy of documents submitted by a shareholder or his
legal representative to substantiate the transfer of ownership of
shares from the registered owner to transferees.
10. Make transfers from time to time upon the books of the Customer in
accordance with properly executed transfer instructions furnished to
PSC.
11. Upon receiving appropriate detailed instructions and written materials
prepared by Customer and, where
<PAGE>
applicable, proxy proofs checked by Customer, mail shareholder
reports, proxies and related materials of suitable design for
automatic enclosing, receive and tabulate executed proxies, and
furnish an annual meeting list of shareholders when required.
12. Respond to shareholder inquiries in a timely manner.
13. Maintain dealer and salesperson records.
14. Maintain and furnish to Customer such shareholder information as
Customer may reasonably request for the purpose of compliance by
Customer with the applicable tax and securities law of various
jurisdictions.
15. Mail confirmations of transactions to shareholders in a timely fashion
(confirmations of Automatic Investment Plan transactions will be
mailed quarterly).
16. Provide Customer with such information regarding correspondence as
well as enable Customer to comply with related N-SAR requirements.
17. Maintain continuous proof of the outstanding shares of Customer.
18. Solicit taxpayer identification numbers.
19. Provide data to enable Customer to file abandoned property reports for
those accounts that have been indicated by the Post Office to be not
at the address of record with no forwarding address.
20. Maintain bank accounts and reconcile same on a monthly basis.
21. Provide management information reports on a quarterly basis to
Customer's Board of Trustees/Directors outlining the level of service
provided.
22. Provide sale/statistical reporting for purposes of providing fund
management with information to maximizing the return to shareholders.
<PAGE>
EXHIBIT B - TO INVESTMENT COMPANY SERVICE AGREEMENT
Redemption Service:
In accordance with the provisions of the Customer's Prospectus, as servicing
agent for the redemptions, PSC will:
1. Where applicable, establish accounts payable based on information
furnished to PSC on behalf of Customer (i.e., copies of trade
confirmations and other documents deemed necessary or desirable by PSC
on the first business day following the trade date).
2. Receive for redemption either:
a. Share certificates, supported by appropriate documentation; or
b. Written or telephone authorization (where no share certificates
are issued).
3. Verify there are sufficient available shares in an account to cover
redemption requests.
4. Transfer the redeemed or repurchased shares to Customer's treasury
share account or, if applicable, cancel such shares for retirement.
5. Pay the applicable redemption or repurchase price to the shareholder
in accordance with Customer's Prospectus and Declaration of Trust on
or before the seventh calendar day succeeding any receipt of
certificates or requests for redemption or repurchase in "good order"
as defined in the Prospectus.
6. Notify Customer and the underwriter on behalf of Customer of the total
number of shares presented and covered by such requests within a
reasonable period of time following receipt.
7. Promptly notify the shareholder if any such certificate or request for
redemption or repurchase is not in "good order" together with notice
of the documents required to comply with the good order standards.
Upon receipt of the necessary documents PSC shall effect such
redemption at the net asset value applicable at the date and time of
receipt of such documents.
8. Produce periodic reports of unsettled items, if any.
9. Adjust unsettled items, if any, relative to dividends and
distributions.
10. Report to Customer any late redemptions which must be included in
Customer's N-SAR.
<PAGE>
EXHIBIT C - TO INVESTMENT COMPANY SERVICE AGREEMENT
Exchange Service:
1. Receive and process exchanges in accordance with a duly
executed exchange authorization. PSC will redeem existing
shares and use the proceeds to purchase new shares. Shares of
Customer purchased directly or acquired through reinvestment
of dividends on such shares may be exchanged for shares of
other Pioneer funds (which funds have sales charges) only by
payment of the applicable sales charge, if any, as described
in Customer's Prospectus. Shares of Customer acquired by
exchange and through reinvestment of dividends on such shares
may be re-exchanged to another Pioneer fund at their
respective net asset values.
2. Make authorized deductions of fees, if any.
3. Register new shares identically with the shares surrendered
for exchange. Mail new shares certificates, if requested, or
an account statement confirming the exchange by first class
mail to the address of record.
4. Maintain a record of unprocessed exchanges and produce a
periodic report.
<PAGE>
EXHIBIT D - TO INVESTMENT COMPANY SERVICE AGREEMENT
Income Accrual and Disbursing Service:
1. Distribute income dividends and/or capital gain distributions,
either through reinvestment or in cash, in accordance with
shareholder instructions.
2. On the mailing date, Customer shall make available to PSC
collected funds to make such distribution.
3. Adjust unsettled items relative to dividends and distribution.
4. Reconcile dividends and/or distributions with Customer.
5. Prepare and file annual Federal and State information returns
of distributions and, in the case of Federal returns, mail
information copies to shareholders and report and pay Federal
income taxes withheld from distributions made to non-resident
aliens.
EXHIBIT 11
COMPUTATION OF PER SHARE EARNINGS
Earnings = Earnings per Outstanding Share
--------
Number of Shares Outstanding
