File Nos. 2-79140
811-3564
As Filed with The Securities and Exchange Commission February 1, 1996
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
-----
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /_X__/
Pre-Effective Amendment No. ___ /____/
Post-Effective Amendment No. 21 /_X__/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT
OF 1940 / X /
Amendment No. 21 /_X _/
(Check appropriate box or boxes)
PIONEER MID-CAP FUND
(FORMERLY, PIONEER THREE)
(Exact name of registrant as specified in charter)
60 State Street, Boston, Massachusetts 02109
(Address of principal executive office) Zip Code
Registrant's Telephone Number, including Area Code: (617) 742-7825
Joseph P. Barri, Hale and Dorr, 60 State Street, Boston, MA 02109
(Name and address of agent for service)
It is proposed that this filing will become effective:
_X_ immediately upon filing pursuant to paragraph (b) of Rule 485
Registrant has registered an indefinite amount of securities under the
Securities Act of 1933 pursuant to Section 24(f) of the Investment Company Act
of 1940. Registrant filed a Rule 24f-2 Notice for its fiscal year ending
September 30, 1995 on November 29, 1995.
CALCULATION OF REGISTRATION FEE
Title of Amount of Proposed Proposed Amount of
Securities Shares Maximum Maximum Registration
Being Being Offering Aggregate Fee
Registered Registered Fee Per Unit Offering Price
Shares 694,726.00 $20.05 $13,929,256 $100.00
<PAGE>
This calculation has been made pursuant to Rule 24e-2 under the Investment
Company Act of 1940. During its fiscal year ended September 30, 1995, the
Registrant redeemed or repurchased 8,669,269 shares of beneficial interest of
which 7,989,006 shares of beneficial interest were utilized by the Registrant on
its Rule 24f-2 Notice filed on November 29, 1995, and 680,263 are being used
herein for purposes of reducing the filing fee payable herewith under Rule
24e-2. An additional 14,463 shares being registered hereby are valued at the
public offering price of $20.05 as of January 24, 1996.
This Post-Effective Amendment No. 21 to the Registration Statement of Pioneer
Three, a Massachusetts business trust (the "Massachusetts Trust"), is being
filed by Pioneer Mid-Cap Fund, a Delaware business trust (the "Delaware Trust"),
pursuant to Rule 414(d) and Rule 485(b) under the Securities Act of 1933 as
amended, for the purpose of the Delaware trust adopting the Massachusetts
Trust's Registration Statement on Form N-1A. This Post-Effective Amendment will
become effective at the start of business on February 1, 1996, which is the
first business date that the Massachusetts Trust is reorganized as the Delaware
Trust. The reorganization was approved by the shareholders of the Massachusetts
Trust at a meeting held on January 23, 1996.
------------------------
ADOPTION OF REGISTRATION STATEMENT
The Delaware Trust hereby affirmatively adopts the Registration Statement (File
Nos. 2-79140 and 811-3564) of the Massachusetts Trust.
<PAGE>
PIONEER MID-CAP FUND
Cross-Reference Sheet Showing Location in Prospectus and Statemen
of Additional Information of Information Required by Items
of the Registration Form
Location in
Prospectus or
Statement of
Additional
Form N-1A Item Number and Caption Information
1. Cover Page.......................................Prospectus - Cover Page
2. Synopsis.........................................Prospectus - Expense
Information
3. Condensed Financial Information..................Not Applicable
4. General Description of Registrant................Prospectus - Investment
Objective and Policies;
Management of the Fund;
Fund Share Alternatives;
Share Price; How to Buy
Fund Shares; How to Sell
Fund Shares; How to
Exchange Fund Shares; The
Fund
5. Management of the Fund...........................Prospectus - Management
of the Fund
6. Capital Stock and Other Securities...............Prospectus - Investment
Objective and Policies;
Management of the Fund;
Fund Share Alternatives;
Share Price; How to Buy
Fund Shares; How to Sell
Fund Shares; How to
Exchange Fund Shares;
Dividends, Distributions
and Taxation; The Fund
<PAGE>
7. Purchase of Securities Being
Offered........................................Prospectus - Fund Share
Alternatives; Share
Price; How to Buy Fund
Shares; How to Sell Fund
Shares; How to Exchange
Fund Shares; Distribution
Plans; Shareholder
Services; The Fund
8. Redemption or Repurchase.........................Prospectus - Fund Share
Alternatives; Share
Price; How to Buy Fund
Shares; How to Sell Fund
Shares; How to Exchange
Fund Shares; Shareholder
Services; The Fund
9. Pending Legal Proceedings........................Not Applicable
10. Cover Page.......................................Statement of Additional
Information - Cover Page
11. Table of Contents................................Statement of Additional
Information - Cover Page
12. General Information and History..................Statement of Additional
Information - Description
of Shares
13. Investment Objectives and Policies...............Statement of Additional
Information - Investment
Policies and Restrictions
14. Management of the Fund...........................Statement of Additional
Information - Management
of the Fund; Investment
Adviser
-2-
<PAGE>
15. Control Persons and Principle Holders
of Securities...............................Statement of Additional
Information - Management
of the Fund
16. Investment Advisory and Other
Services....................................Statement of Additional
Information - Management
of the Fund; Investment
Adviser; Underwriting
Agreement and
Distribution Plans;
Shareholder
Servicing/Transfer Agent;
Custodian; Principal
Underwriter; Independent
Public Accountants
17. Brokerage Allocation and Other
Practices...................................Statement of Additional
Information - Portfolio
Transactions
18. Capital Stock and Other Securities...............Statement of Additional
Information - Description
of Shares
19. Purchase, Redemption and Pricing of
Securities Being Offered....................Statement of Additional
Information - Letter of
Intention; Systematic
Withdrawal Plan;
Determination of Net
Asset Value
20. Tax Status.......................................Statement of Additional
Information - Tax Status
and Dividends
-3-
<PAGE>
21. Underwriters.....................................Statement of Additional
Information -
Underwriting Agreement
and Distribution Plans;
Principal Underwriter
22. Calculation of Performance Data..................Statement of Additional
Information - Investment
Results
23. Financial Statements.............................Financial Statements
-4-
<PAGE>
PIONEER LOGO
Pioneer Mid-Cap Fund
Class A, Class B and Class C Shares
Prospectus
February 1, 1996
Pioneer Mid-Cap Fund (the "Fund") seeks capital growth by investing in a
diversified portfolio of securities consisting primarily of common stocks.
Any current income generated from these securities is incidental to the
investment objective of the Fund.
In order to achieve its investment objective, the Fund will invest at least
65% of its total assets in common stocks and common stock equivalents (such
as convertible bonds and preferred stock) of companies with a market
capitalization between $100 million and $5 billion ("Mid-Cap Companies"). The
Fund may invest a portion of its assets in foreign securities. See
"Investment Objective and Policies" in this Prospectus. There is, of course,
no assurance that the Fund will achieve its investment objective.
Fund returns and share prices fluctuate and the value of your account upon
redemption may be more or less than your purchase price. Shares in the Fund
are not deposits or obligations of, or guaranteed or endorsed by, any bank or
other depository institution, and the shares are not federally insured by the
Federal Deposit Insurance Corporation, the Federal Reserve Board or any other
government agency. Investments in the securities of mid-cap companies may
offer greater capital appreciation potential than investments in
large-capitalization company securities, but may be subject to greater
short-term price fluctuations. The Fund is intended for investors who can
accept the risks associated with its investments and may not be suitable for
all investors. See "Investment Objective and Policies and Associated Risks"
for a discussion of these risks.
This Prospectus (Part A of the Registration Statement) provides information
about the Fund that you should know before investing. Please read and retain
it for your future reference. More information about the Fund is included in
Part B, the Statement of Additional Information, also dated February 1, 1996,
which is incorporated into this Prospectus by reference. A copy of the
Statement of Additional Information may be obtained free of charge by calling
Shareowner Services at 1-800-225-6292 or by written request to the Fund at 60
State Street, Boston, Massachusetts 02109. Additional information about the
Fund has been filed with the Securities and Exchange Commission (the "SEC")
and is available upon request and without charge.
<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
- --------- -------------------------------------------------- --------
<S> <C> <C>
I. EXPENSE INFORMATION 2
II. FINANCIAL HIGHLIGHTS 3
III. INVESTMENT OBJECTIVE AND POLICIES AND ASSOCIATED
RISKS 3
IV. MANAGEMENT OF THE FUND 4
V. FUND SHARE ALTERNATIVES 6
VI. SHARE PRICE 6
VII. HOW TO BUY FUND SHARES 6
Class A Shares 7
Class B Shares 8
Class C Shares 8
VIII. HOW TO SELL FUND SHARES 10
IX. HOW TO EXCHANGE FUND SHARES 11
X. DISTRIBUTION PLANS 11
XI. DIVIDENDS, DISTRIBUTIONS AND TAXATION 12
XII. SHAREOWNER SERVICES 13
Account and Confirmation Statements 13
Additional Investments 13
Automatic Investment Plans 13
Financial Reports and Tax Information 13
Distribution Options 13
Directed Dividends 13
Direct Deposit 13
Voluntary Tax Withholding 13
Telephone Transactions and Related Liabilities 13
FactFone(SM) 14
Retirement Plans 14
Telecommunications Device for the Deaf (TDD) 14
Systematic Withdrawal Plans 14
Reinstatement Privilege (Class A Only) 14
XIII. THE FUND 15
XIV. INVESTMENT RESULTS 15
</TABLE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
I. EXPENSE INFORMATION
The table is designed to help you understand the charges and expenses that
you, as a shareholder, will bear directly or indirectly when you invest in
the Fund. The information in the table is an estimate based on actual
expenses for Class A shares for the year ended September 30, 1995. No Class B
or C shares were outstanding during such period. Management fees for Class A
shares have been restated to reflect (and management fees for Class B and
Class C shares reflect) the maximum, basic and minimum fees payable to
Pioneering Management Corporation ("PMC") under the most recently approved
management contract. See "Management of the Fund." Actual management fees and
total operating expenses with respect to Class A shares for the fiscal year
ended September 30, 1995 were 0.46% and 0.85%, respectively, under a
management contract previously in effect.
<TABLE>
<CAPTION>
Shareowner Transaction Expenses: Class A Class B(+) Class C(+)
<S> <C> <C> <C>
Maximum Initial Sales Charge on Purchases
(as a percentage of offering price) 5.75%(1) None None
Maximum Sales Charge on Reinvestment
of Dividends None None None
Maximum Deferred Sales Charge None(1) 4.00% 1.00%
(as a percentage of original purchase price
or redemption proceeds, as applicable)
Redemption Fee(2) None None None
Exchange Fee None None None
Annual Fund Operating Expenses (As a Percentage
of Average Net Assets):
Management Fee(3)
-----------------------------------
Class A Basic Maximum Minimum
Management Fee .625 .825 .425
12b-1 Fees .18 .18 .18
Other Expenses (including accounting and
transfer agent fees, custodian fees and
printing expenses) .21 .21 .21
--------- ---------- ----------
Total Operating Expenses 1.02 1.22 .82
========= ========== ==========
Class B
Management Fee .625 .825 .425
12b-1 Fees 1.00 1.00 1.00
Other Expenses (including accounting and
transfer agent fees, custodian fees and
printing expenses) .21 .21 .21
--------- ---------- ----------
Total Operating Expenses 1.84 2.04 1.64
========= ========== ==========
Class C
Management Fee .625 .825 .425
12b-1 Fees 1.00 1.00 1.00
Other Expenses (including accounting and
transfer agent fees, custodian fees and
printing expenses) .21 .21 .21
--------- ---------- ----------
Total Operating Expenses 1.84 2.04 1.64
========= ========== ==========
</TABLE>
(+) Class B and Class C shares will first be offered on February 1, 1996.
(1) Purchases of $1,000,000 or more and purchases by participants in certain
group plans are not subject to an initial sales charge but may be subject
to a contingent deferred sales charge as further described under "How to
Sell Fund Shares."
(2) Separate fees (currently $10 and $20, respectively) apply to domestic and
international wire transfers of redemption proceeds.
(3) The management fee paid to Pioneering Management Corporation ("PMC")
consists of a basic fee of 0.625 of average net assets and a performance
adjustment. The actual rate paid to PMC may be higher or lower than the
basic fee. See "Management of the Fund" for additional information about
the fee calculation.
Example:
You would pay the following fees and expenses on a $1,000 investment,
assuming a 5% annual return and redemption at the end of each time period:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------- -------- -------- ----------
<S> <C> <C> <C> <C>
Class A Shares
Management Fee
Basic $10 $30 $ 52 $116
Maximum $11 $35 $ 61 $135
Minimum $ 8 $24 $ 42 $ 94
Class B Shares*
- --Assuming complete
redemption at end of
period Management Fee
Basic $59 $88 $119 $215
Maximum $61 $94 $130 $237
Minimum $57 $82 $109 $193
- --Assuming no redemption
Management Fee
Basic $19 $58 $ 99 $215
Maximum $21 $64 $110 $237
Minimum $17 $52 $ 89 $193
Class C Shares
- --Assuming complete
redemption at end of
period Management Fee
Basic $29 $58 $ 99 $215
Maximum $31 $64 $110 $237
Minimum $27 $52 $ 89 $193
- --Assuming no redemption
Management Fee
Basic $19 $58 $ 99 $215
Maximum $21 $64 $110 $237
Minimum $17 $52 $ 89 $193
</TABLE>
* Class B shares convert to Class A shares eight years after purchase.
The example above assumes the reinvestment of all dividends and
distributions and that the percentage amounts listed under "Annual Operating
Expenses" remain the same each year.
The example is designed for information purposes only, and should not be
considered a representation of future expenses or return. Actual Fund
expenses and return will vary from year to year and may be higher or lower
than those shown.
For further information regarding management fees, 12b-1 fees and other
expenses of the Fund, including information regarding the basis upon which
management fees and 12b-1 fees are paid, see "Management of the Fund,"
"Distribution Plans" and "How To Buy Fund Shares" in this Prospectus and
"Management of the Fund" and "Underwriting Agreement and Distribution Plans"
in the Statement of Additional Information. The Fund's imposition of a Rule
12b-1 fee may result in long-term shareholders paying more than the economic
equivalent of the maximum sales charge permitted under Rules of Fair Practice
of the National Association of Securities Dealers, Inc. ("NASD").
The maximum initial sales charge is reduced on purchases of specified
larger amounts of Class A shares and the value of shares owned in other
Pioneer mutual funds is taken into account in determining the applicable
initial sales charge. See "How to Buy Fund Shares." No sales charge is
applied to exchanges of shares of the Fund for shares of other publicly
available Pioneer mutual funds. See "How to Exchange Shares."
<PAGE>
II. FINANCIAL HIGHLIGHTS
The following information has been derived from financial statements which
have been audited by Arthur Andersen LLP, independent public accounts, in
connection with their examination of the Fund's financial statements. Arthur
Andersen LLP's report on the Fund's financial statements as of September 30,
1995 appears in the Fund's Annual Report which is incorporated by reference
in the Statement of Additional Information. Class B and Class C shares are
new classes of shares; no financial highlights exist for either Class B or
Class C shares. The Annual Report includes more information about the Fund's
performance and is available free of charge by calling Shareholder Services
at 1-800-225-6292.
PIONEER MID-CAP FUND
For a Class A share outstanding throughout each period:
<TABLE>
<CAPTION>
For the Year Ended September 30,
-----------------------------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
--------- --------- --------- ------- ------- ------- ------- ------- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $19.92 $21.12 $18.03 $16.16 $12.96 $17.80 $15.09 $18.52 $16.01 $13.98
Income from investment
operations--
Net investment income $0.24 $0.24 $0.28 $0.33 $0.41 $0.41 $0.42 $0.30 $0.28 $0.34
Net realized and
unrealized gain
(loss) on investments 2.70 0.32 3.72 2.04 3.94 (3.56) 3.33 (1.91) 3.76 2.41
Total income (loss)
from investment
operations $2.94 $0.56 $4.00 $2.37 $ 4.35 $3.15 $3.75 $(1.61) $4.04 $2.75
Distribution to
shareholders from--
Net investment income (0.23) (0.25) (0.29) (0.35) (0.41) (0.46) (0.36) (0.41) (0.36) (0.36)
Net realized capital
gains 1.15 (1.51) (0.62) (0.15) (0.74) (1.23) (0.68) (1.41) (1.17) (0.36)
Net increase
(decrease) in net
asset value $ 1.56 $(1.20) $ 3.09 $ 1.87 $ 3.20 $ (4.84) $2.71 $(3.43) $2.51 $2.03
Net asset value, end
of period $21.48 $19.92 $21.12 $18.03 $16.16 $ 12.96 $17.80 $15.09 $18.52 $16.01
Total return* 16.24% 2.62% 22.82% 15.05% 35.80% (19.39%) 26.32% (6.00%) 27.50% 20.40%
Ratio of net operating
expenses to average
net assets 0.85** 0.86% 0.84% 0.85% 0.74% 0.71% 0.72% 0.76% 0.68% 0.71%
Ratio of net
investment income to
average net assets 1.18** 1.19% 1.43% 1.85% 2.72% 2.58% 2.56% 2.15% 1.74% 2.41%
Portfolio turnover
rate 19% 15% 18% 12% 5% 14% 16% 12% 23% 24%
Net assets end
of period
(in thousands $1,082,154 $1,017,233 $1,019,059 $779,631 $692,344 $562,343 $752,135 $616,953 $734,300 $543,173
</TABLE>
*Assumes initial investment at net asset value at the beginning of each
year, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each year and no sales charges.
Total return would be reduced if sales charges were taken into account.
** Ratios include expenses paid through certain expense offset arrangements.
Exclusion of such offset arrangements had no impact on these ratios.
III. INVESTMENT OBJECTIVE AND POLICIES
AND ASSOCIATED RISKS
The investment objective of the Fund is to seek capital growth by
investing in a diversified portfolio of securities consisting primarily of
common stocks.
The Fund is managed in accordance with the value philosophy of PMC. This
approach consists of developing a diversified portfolio of securities
consistent with the Fund's investment objective and selected primarily on the
basis of PMC's judgment that the securities have an underlying value, or
potential value, which exceeds their current prices. The analysis and
quantification of the economic worth, or basic value, of individual companies
reflects PMC's assessment of a company's assets and the company's prospects
for earnings growth over the next 1-1/2- to-3 years. PMC relies primarily on
the knowledge, experience and judgment of its own research staff, but also
receives and uses information from a variety of outside sources, including
brokerage firms, electronic data bases, specialized research firms and
technical journals.
Under normal circumstances, at least 65% of the Fund's total assets are
invested in common stocks of companies with a market capitalization of
between $100 million and $5 billion determined at the time the security is
purchased. The Fund's investments in common stock include common stock
equivalents, that is, securities with common stock characteristics such as
convertible bonds and preferred stocks. While Mid-Cap Company securities may
offer a greater capital appreciation potential than investments in large-cap
company securities, they may also present greater risks. Mid-Cap Company
securities tend to be more sensitive to changes in earnings expectations and
have lower trading volumes than large-cap company securities and, as a
result, they may experience more abrupt and erratic price movements.
A convertible security is a long-term debt obligation of the issuer
convertible at a stated exchange rate into common stock of the issuer.
Convertible securities rank senior to common stocks in an issuer's capital
structure and are consequently of higher quality and entail less risk than
the issuer's common stock. As with all debt securities, the market values of
convertible securities tend to increase when interest rates decline and,
conversely, tend to decline when interest rates increase. The Fund may invest
in investment grade debt securities, that is, securities rated "BBB" or
higher by Standard & Poor's Ratings Group or the equivalent rating of other
ranking agencies. If the rating of a security falls below investment grade,
management will consider whatever action is appropriate consistent with the
Fund's investment objectives and policies. See the Statement of Additional
Information for a discussion of rating categories.
While there is no requirement to do so, the Fund intends to limit
investments in foreign securities to no more than 10% of
<PAGE>
its assets and to limit investments in readily tradable securities of real
estate investment trusts ("REITS") to no more than 5% of assets. REITs are
pooled investment vehicles which invest primarily in income producing real
estate or real estate related loans or interests. Investing in REITs involves
risks similar to those associated with investing in mid-cap companies. Any
current income produced by a security is not a significant factor in the
selection of investments. The Fund's portfolio may include a number of
securities which are owned by other equity mutual funds managed by PMC. See
"Portfolio Transactions" in the Statement of Additional Information for more
information.
The Fund's fundamental investment objective and the fundamental investment
restrictions set forth in the Statement of Additional Information may not be
changed without shareowner approval. Certain other investment policies,
strategies and restrictions on investment are noted throughout the Prospectus
and are set forth in the Statement of Additional Information. These
non-fundamental investment policies, strategies and restrictions may be
changed at any time by a vote of the Board of Trustees.
It is the policy of the Fund not to engage in trading for short-term
profits. Nevertheless, changes in the portfolio will be made promptly when
determined to be advisable by reason of developments not foreseen at the time
of the initial investment decision, and usually without reference to the
length of time a security has been held. Accordingly, portfolio turnover rate
is not considered a limiting factor in the execution of investment decisions.
The Fund intends to be substantially fully invested at all times. If
suitable investments are not immediately available, the Fund may hold a
portion of its investments in cash and cash-equivalents. For temporary
defensive purposes, however, the Fund may invest up to 100% of its assets in
short- term investments. The Fund will assume a defensive posture only when
political and economic factors affect common stock markets to such an extent
that PMC believes there to be extraordinary risks in being substantially
invested in common stocks. A short-term investment is considered to be an
investment with a maturity of one year or less from the date of issuance.
Short-term investments will not normally represent more than 10% of the
Fund's assets.
The Fund may enter into repurchase agreements, not to exceed seven days,
with broker-dealers and any member bank of the Federal Reserve System. The
Board of Trustees of the Fund will review and monitor the creditworthiness of
any institution which enters into a repurchase agreement with the Fund. Such
repurchase agreements will be fully collateralized with United States
("U.S.") Treasury and/or agency obligations with a market value of not less
than 100% of the obligations, valued daily. Collateral will be held by the
Fund's custodian in a segregated, safekeeping account for the benefit of the
Fund. Repurchase agreements afford the Fund an opportunity to earn income on
temporarily available cash at low risk. In the event that a repurchase
agreement is not fulfilled, the Fund could suffer a loss to the extent that
the value of the collateral falls below the repurchase price.
The Fund may invest in securities issued by companies located in foreign
countries. Investing in securities of foreign companies involves certain
considerations and risks which are not typically associated with investing in
securities of domestic companies. Foreign companies are not subject to
uniform accounting, auditing and financial standards and requirements
comparable to those applicable to U.S. companies. There may also be less
publicly available information about foreign companies compared to reports
and ratings published about U.S. companies. In addition, foreign securities
markets have substantially less volume than domestic markets and securities
of some foreign companies are less liquid and more volatile than securities
of comparable U.S. companies. There may also be less government supervision
and regulation of foreign securities exchanges, brokers and listed companies
than exists in the United States. Dividends or interest paid by foreign
issuers may be subject to withholding and other foreign taxes which will
decrease the net return on such investments as compared to dividends or
interest paid to the Fund by domestic companies. Finally, there may be the
possibility of expropriations, confiscatory taxation, political, economic or
social instability or diplomatic developments which could adversely affect
assets of the Fund held in foreign countries.
The value of foreign securities may also be adversely affected by
fluctuations in the relative rates of exchange between the currencies of
different nations and by exchange control regulations. For example, the value
of a foreign security held by the Fund as measured in U.S. dollars will
decrease if the foreign currency in which the security is denominated
declines in value against the U.S. dollar. In such event, this will cause an
overall decline in the Fund's net asset value and may also reduce net
investment income and capital gains, if any, to be distributed in U.S.
dollars to shareholders of the Fund.
IV. MANAGEMENT OF THE FUND
The Board of Trustees of the Fund has overall responsibility for
management and supervision of the Fund. There are currently eight Trustees,
six of whom are not "interested persons" of the Fund as defined in the
Investment Company Act of 1940, as amended (the "1940 Act"). The Board meets
at least quarterly. By virtue of the functions performed by Pioneering
Management Corporation as investment adviser, the Fund requires no employees
other than its executive officers, all of whom receive their compensation
from PMC or other sources. The Statement of Additional Information contains
the names and general business and professional background of each Trustee
and executive officer of the Fund.
Investment advisory services are provided to the Fund by PMC pursuant to a
management contract between PMC and the Fund. PMC serves as investment
adviser to the Fund and is responsible for the overall management of the
Fund's business affairs, subject only to the authority of the Board of
Trustees. PMC is a wholly-owned subsidiary of The Pioneer Group, Inc.
("PGI"), a publicly-traded Delaware corporation. Pioneer Funds Distributor,
Inc. ("PFD"), an indirect wholly- owned subsidiary of PGI, is the principal
underwriter of the Fund.
<PAGE>
John F. Cogan, Jr., Chairman and President of the Fund, Chairman of PFD,
President and a Director of PGI and Chairman and a Director of PMC, owned
approximately 15% of the outstanding capital stock of PGI as of the date of
this Prospectus.
Each domestic equity portfolio managed by PMC, including this Fund, is
overseen by an Equity Committee, which consists of PMC's most senior equity
professionals, and a Portfolio Management Committee, which consists of PMC's
domestic equity portfolio managers. Both committees are chaired by Mr. David
Tripple, PMC's President and Chief Investment Officer and Executive Vice
President of each Pioneer mutual fund. Mr. Tripple joined PMC in 1974 and has
had general responsibility for PMC's investment operations and specific
portfolio assignments for over five years. Day-to-day management of the
Fund's investments has been the responsibility of Robert W. Benson since
December 1986. Mr. Benson is Vice President of the Fund and Senior Vice
President of PMC. Mr. Benson joined PMC in 1974.
In addition to the Fund, PMC also manages and serves as the investment
adviser for other mutual funds and is an investment adviser to certain other
institutional accounts. PMC's and PFD's executive offices are located at 60
State Street, Boston, Massachusetts 02109.
Under the terms of its contract with the Fund, PMC serves as the Fund's
manager and investment adviser subject to the supervision of the Fund's
Trustees. PMC pays all the ordinary operating expenses, including executive
salaries and the rental of office space relating to its services for the Fund
with the exception of the following which are to be paid by the Fund: (a)
taxes and other governmental charges, if any; (b) interest on borrowed money,
if any; (c) legal fees and expenses; (d) auditing fees; (e) insurance
premiums; (f) dues and fees for membership in trade associations; (g) fees
and expenses of registering and maintaining registrations by the Fund of its
shares with the SEC, individual states, territories and foreign jurisdictions
and of preparing reports to government agencies; (h) fees and expenses of
Trustees not affiliated with or interested persons of PMC; (i) fees and
expenses of the custodian, dividend disbursing agent, transfer agent and
registrar; (j) issue and transfer taxes chargeable to the Fund in connection
with securities transactions to which the Fund is a party; (k) costs of
reports to shareholders, shareholders' meetings and Trustees' meetings; (l)
the cost of certificates representing shares of the fund; (m) fund
accounting, pricing and appraisal charges and related overhead; and (n)
distribution fees in accordance with Rule 12b-1. The Fund also pays all
brokerage commissions and any taxes or other charges in connection with its
portfolio transactions.
Orders for the Fund's portfolio securities transactions are placed by PMC,
which strives to obtain the best price and execution for each transaction. In
circumstances in which two or more broker-dealers are in a position to offer
comparable prices and execution, consideration may be given to whether the
broker-dealer provides investment research or brokerage services or sells
shares of the Fund or other Pioneer mutual funds. See the Statement of
Additional Information for a further description of PMC's brokerage
allocation practices.
Management Fee
As compensation for its management services and certain expenses which PMC
incurs on behalf of the Fund, the Fund pays PMC a management fee that is
comprised of two components. The first component is a basic fee equal to
0.625% per annum of the Fund's average daily net assets (the "Basic Fee").
The second component is a performance fee adjustment.
Computing the Performance Fee Adjustment. The Basic Fee is subject to an
upward or downward adjustment, depending on whether, and to what extent, the
investment performance of the Fund for the performance period exceeds, or is
exceeded by, the record of the Standard and Poors Mid-Cap 400 Index of
mid-capitalization stocks (the "Index") over the same period. The performance
period consists of the current month and the prior 35 months ("performance
period"). Each percentage point of difference (up to a maximum of |m;10) is
multiplied by a performance adjustment rate of 0.02%. Thus, the maximum
annualized adjustment rate is |m;0.20%. This performance comparison is made at
the end of each month. One twelfth (1/12) of this rate is then applied to the
Fund's average net assets for the entire performance period, giving a dollar
amount that will be added to (or subtracted from) the Basic Fee.
The Fund's performance is calculated based on its net asset value per
share. For purposes of calculating the performance adjustment, any dividends
or capital gains distributions paid by the Fund are treated as if reinvested
in Fund shares at the net asset value per share as of the record date for
payment. The record for the Index is based on change in value and is adjusted
for any cash distributions from the companies whose securities comprise the
Index.
Because the adjustment to the Basic Fee is based on the comparative
performance of the Fund and the record of the Index, the controlling factor
is not whether Fund performance is up or down, but whether it is up or down
more or less than the record of the Index. Moreover, the comparative
investment record of the Fund is based solely on the relevant performance
period without regard to the cumulative performance over a longer or shorter
period of time.
Phase-In Of Performance Fee Arrangements. The Fund's current management
contract with PMC became effective February 1, 1996. Under the terms of the
contract, for the period beginning February 1 and ending June 30, 1996, the
Fund would pay PMC fees at the following annual rates, which are the same as
those under the contract previously in effect: 0.50% on average net assets up
to $250 million, 0.48% on the next $50 million in net assets and 0.45% on net
assets exceeding $300 million. For the period beginning July 1 and ending
December 31, 1996, the Basic Fee will take effect but a performance
adjustment will only be made if this will result in a lowering of the basic
fee. For periods after January 1, 1997, the performance adjustment will be
made as described above.
The performance period initially used for calculating any performance
adjustment to the Basic Fee will begin on February 1, 1996 and will increase
by each succeeding month until a total of 36 months has been reached.
<PAGE>
Thereafter, the performance period will consist of the current month and the
prior 35 months as described above.
The Basic Fee is computed daily, the performance fee adjustment is
calculated once per month and the entire management fee is normally paid
monthly.
V. FUND SHARE ALTERNATIVES
The Fund continuously offers three Classes of shares designated as Class
A, Class B and Class C shares, as described more fully in "How to Buy Fund
Shares." If you do not specify in your instructions to the Fund which Class
of shares you wish to purchase, exchange or redeem, the Fund will assume that
your instructions apply to Class A shares.
Class A Shares. If you invest less than $1 million in Class A shares, you
will pay an initial sales charge. Certain purchases may qualify for reduced
initial sales charges. If you invest $1 million or more in Class A shares, no
sales charge will be imposed at the time of purchase, however, shares
redeemed within 12 months of purchase may be subject to a contingent deferred
sales charge ("CDSC"). Class A shares are subject to distribution and service
fees at a combined annual rate of up to 0.25% of the Fund's average daily net
assets attributable to Class A shares.
Class B Shares. If you plan to invest up to $250,000, Class B shares are
available to you. Class B shares are sold without an initial sales charge,
but are subject to a CDSC of up to 4% if redeemed within six years. Class B
shares are subject to distribution and service fees at a combined annual rate
of 1.00% of the Fund's average daily net assets attributable to Class B
shares. Your entire investment in Class B shares is available to work for you
from the time you make your investment, but the higher distribution fee paid
by Class B shares will cause your Class B shares (until conversion) to have a
higher expense ratio and to pay lower dividends, to the extent dividends are
paid, than Class A shares. Class B shares will automatically convert to Class
A shares, based on relative net asset value, eight years after the initial
purchase.
Class C Shares. Class C shares are sold without an initial sales charge,
but are subject to a 1% CDSC if they are redeemed within the first year after
purchase. Class C shares are subject to distribution and service fees at a
combined annual rate of up to 1.00% of the Fund's average daily net assets
attributable to Class C shares. Your entire investment in Class C shares is
available to work for you from the time you make your investment, but the
higher distribution fee paid by Class C shares will cause your Class C shares
to have a higher expense ratio and to pay lower dividends, to the extent
dividends are paid, than Class A shares. Class C shares have no conversion
feature.
Selecting a Class of Shares. The decision as to which Class to purchase
depends on the amount you invest, the intended length of the investment and
your personal situation. If you are making an investment that qualifies for
reduced sales charges, you might consider Class A shares. If you prefer not
to pay an initial sales charge on an investment of $250,000 or less and you
plan to hold the investment for at least six years, you might consider Class
B shares. If you prefer not to pay an initial sales charge and you plan to
hold your investment for one to eight years, you may prefer Class C shares.
Investment dealers or their representatives may receive different
compensation depending on which Class of shares they sell. Shares may be
exchanged only for shares of the same Class of another Pioneer mutual fund
and shares acquired in the exchange will continue to be subject to any CDSC
applicable to the shares of the Fund originally purchased. Shares sold
outside the U.S. to persons who are not U.S. citizens may be subject to
different sales charges, CDSC's and dealer compensation arrangements in
accordance with local laws and business practices.
VI. SHARE PRICE
Shares of the Fund are sold at the public offering price, which is the net
asset value per share, plus the applicable sales charge. Net asset value per
share of a Class of the Fund is determined by dividing the value of its
assets, less liabilities attributable to that Class, by the number of shares
of that Class outstanding. The net asset value is computed once daily, on
each day the Exchange is open, as of the close of regular trading on the
Exchange.
Securities are valued at the last sale price on the principal exchange or
market where they are traded. Securities which have not traded on the date of
valuation or securities for which sales prices are not generally reported are
valued at the mean between the current bid and asked prices. Securities
quoted in foreign currencies are converted to U.S. dollars utilizing foreign
exchange rates employed by the Fund's independent pricing services.
Generally, trading in foreign securities is substantially completed each day
at various times prior to the close of the Exchange. The values of such
securities used in computing the net asset value of the Fund's shares are
determined as of such times. Foreign currency exchange rates are also
generally determined prior to the close of the Exchange. Occasionally, events
which affect the values of such securities and such exchange rates may occur
between the times at which they are determined and the close of the Exchange
and will therefore not be reflected in the computation of the Fund's net
asset value. If events materially affecting the value of such securities
occur during such period, then these securities are valued at their fair
value as determined in good faith by the Trustees. All assets of the Fund for
which there is no other readily available valuation method are valued at
their fair value as determined in good faith by the Trustees.
VII. HOW TO BUY FUND SHARES
You may buy Fund shares from any securities broker-dealer which has a
sales agreement with PFD. If you do not have a securities broker-dealer,
please call 1-800-225-6292. Shares will be purchased at the public offering
price, that is, the net asset value per share plus any applicable sales
charge, next computed after receipt of a purchase order, except as set forth
below.
The minimum initial investment is $1,000 for Class A, B and C shares,
except as specified below. The minimum initial investment is $50 for Class A
accounts being established to utilize monthly bank drafts, government
allotments, payroll
<PAGE>
deduction and other similar automatic investment plans. Separate minimum
investment requirements apply to retirement plans and to telephone and wire
orders placed by broker-dealers; and no sales charge or minimum investment
requirements apply to the reinvestment of dividends or capital gains
distributions. The minimum subsequent investment is $50 for Class A shares
and $500 for Class B and C shares except that the subsequent minimum
investment amount for Class B and C share accounts may be as little as $50 if
an automatic investment plan (see "Automatic Investment Plans") is
established.
Telephone Purchases. Your account is automatically authorized to have the
telephone purchase privilege unless you indicated otherwise on your Account
Application or by writing to Pioneering Services Corporation ("PSC"). The
telephone purchase option may be used to purchase additional shares for an
existing fund account; it may not be used to establish a new account. Proper
account identification will be required for each telephone purchase. A
maximum of $25,000 per account may be purchased by telephone each day. The
telephone purchase privilege is available to IRA accounts but may not be
available to other types of retirement plan accounts. Call PSC for more
information.
You are strongly urged to consult with your financial representative prior
to requesting a telephone purchase. To purchase shares by telephone, you must
establish your bank account of record by completing the appropriate section
of your Account Application or an Account Options Form. PSC will
electronically debit the amount of each purchase from this predesignated bank
account. Telephone purchases may not be made for 30 days after the
establishment of your bank of record or any change to your bank information.
Telephone purchases will be priced at the net asset value plus any
applicable sales charge next determined after PSC's receipt of a telephone
purchase instruction and receipt of good funds (usually three days after the
purchase instruction). You may always elect to deliver purchases to PSC by
mail. See "Telephone Transactions and Related Liabilities" for additional
information.
Class A Shares
You may buy Class A shares at the public offering price, as follows:
<TABLE>
<CAPTION>
Sales Charge as a % of Dealer
--------------------------- Allowance
Net as a % of
Offering Amount Offering
Amount of Purchase Price Invested Price
---------------------------------- ------------ ------------- -------------
<S> <C> <C> <C>
Less than $50,000 5.75% 6.10% 5.00%
$50,000 but less than $100,000 4.50 4.71 4.00
$100,000 but less than $250,000 3.50 3.63 3.00
$250,000 but less than $500,000 2.50 2.56 2.00
$500,000 but less than $1,000,000 2.00 2.04 1.75
$1,000,000 or more -0- -0- see below
</TABLE>
No sales charge is payable at the time of purchase on investments of $1
million or more, or for investments by certain group plans ("Group Plans"),
but for such investments a contingent deferred sales charge ("CDSC") of 1.00%
is imposed in the event of a redemption of Class A shares within 12 months of
purchase. See "Redemptions and Repurchases" below. PFD may, in its
discretion, pay a commission to broker-dealers who initiate and are
responsible for such purchases as follows: 1.00% on the first $5 million
invested; 0.50% on the next $45 million invested; and 0.25% on the excess
over $50 million invested. These commissions shall not be payable if the
purchaser is affiliated with the broker-dealer or if the purchase represents
the reinvestment of a redemption made during the previous 12 calendar months.
Broker-dealers who receive a commission in connection with Class A share
purchases at net asset value by 401(a) or 401(k) retirement plans with 1,000
or more eligible participants or with at least $10 million in plan assets
will be required to return any commissions paid or a pro rata portion thereof
if the retirement plan redeems its shares within 12 months of purchase. See
also "How to Sell Fund Shares." In connection with PGI's acquisition of
Mutual of Omaha Fund Management Company and contingent upon the achievement
of certain sales objectives, PFD may pay to Mutual of Omaha Investor
Services, Inc. 50% of PFD's retention of any sales commission on sales of the
Fund's shares through such dealer.
The schedule of sales charges above is applicable to purchases of Class A
shares of the Fund by (i) an individual, (ii) an individual and his or her
spouse and children under the age of 21 and (iii) a trustee or other
fiduciary of a trust estate or fiduciary account or related trusts or
accounts including pension, profit-sharing and other employee benefit trusts
qualified under Section 401 or 408 of the Internal Revenue Code of 1986, as
amended (the "Code"), although more than one beneficiary is involved. The
sales charges applicable to a current purchase of Class A shares of the Fund
by a person listed above is determined by adding the value of shares to be
purchased to the aggregate value (at the then current offering price) of
shares of any of the other Pioneer mutual funds previously purchased and then
owned, provided PFD is notified by such person or his or her broker-dealer
each time a purchase is made which would qualify. Pioneer mutual funds
include all mutual funds for which PFD serves as principal underwriter. See
the "Letter of Intention" section of the Account Application.
Qualifying for a Reduced Sales Charge. Class A shares of the Fund may be
sold at a reduced or eliminated sales charge to certain group plans with 100
or more participants or at least $500,000 in plan assets ("Group Plans")
under which a sponsoring organization makes recommendations to, permits group
solicitation of, or otherwise facilitates purchases by, its employees,
members or participants. Class A shares of the Fund may be sold at net asset
value per share without a sales charge to state-sponsored Optional Retirement
Program participants if (i) the employer has authorized a limited number of
investment company providers for the Program, (ii) all authorized investment
company providers offer their shares to Program participants at net asset
value, (iii) the employer has agreed in writing to actively promote the
authorized investment providers to Program participants and (iv) the Program
provides for a matching contribution for each partici-
<PAGE>
pant contribution. Information about such arrangements is available from PFD.
Class A shares of the Fund may also be sold at net asset value per share
without a sales charge to: (a) current or former Trustees and officers of the
Fund and partners and employees of its legal counsel; (b) current or former
directors, officers, employees or sales representatives of PGI, its
subsidiaries; (c) current or former directors, officers, employees or sales
representatives of any subadviser or predecessor investment adviser to any
investment company for which PMC serves as an investment adviser, and the
subsidiaries or affiliates of such persons; (d) current or former officers,
partners, employees or registered representatives of broker- dealers which
have entered into sales agreements with PFD; (e) members of the immediate
families of any of the persons above; (f) any trust, custodian, pension,
profit-sharing or other benefit plan of the foregoing persons; (g) insurance
company separate accounts; (h) certain "wrap accounts" for the benefit of
clients of financial planners adhering to standards established by PFD; (i)
other funds and accounts for which PMC or any of its affiliates serves as
investment adviser or manager; and (j) certain unit investment trusts. Shares
so purchased are purchased for investment purposes and may not be resold
except through redemption or repurchase by or on behalf of the Fund. The
availability of this privilege is conditioned on the receipt by PFD of
written notification of eligibility. Class A shares of the Fund may also be
sold at net asset value without a sales charge in connection with certain
reorganization, liquidation or acquisition transactions involving other
investment companies or personal holding companies.
Reduced sales charges for Class A shares are available through an
agreement to purchase a specified quantity of Fund shares over a designated
thirteen-month period by completing the "Letter of Intention" section of the
Account Application. Information about the "Letter of Intention" procedure,
including its terms, is contained on the back of the Account Application as
well as in the Statement of Additional Information. Investors who are clients
of a broker-dealer with a current sales agreement with PFD may purchase Class
A shares of the Fund at net asset value, without a sales charge, to the
extent that the purchase price is paid out of proceeds from one or more
redemptions by the investor of shares of certain other mutual funds. In order
for a purchase to qualify for this privilege, the investor must document to
the broker-dealer that the redemption occurred within 60 days immediately
preceding the purchase of Class A shares; that the client paid a sales charge
on the original purchase of the shares redeemed; and that the mutual fund
whose shares were redeemed also offers net asset value purchases to redeeming
shareholders of any of the Pioneer mutual funds. Further details may be
obtained from PFD.
Class B Shares
You may buy Class B shares at net asset value without the imposition of an
initial sales charge; however, Class B shares redeemed within six years of
purchase will be subject to a CDSC at the rates shown in the table below. The
charge will be assessed on the amount equal to the lesser of the current
market value or the original purchase cost of the shares being redeemed. No
CDSC will be imposed on increases in account value above the initial purchase
price, including shares derived from the reinvestment of dividends or capital
gains distributions.
The amount of the CDSC, if any, will vary depending on the number of years
from the time of purchase until the time of redemption of Class B shares. For
the purpose of determining the number of years from the time of any purchase,
all payments during a quarter will be aggregated and deemed to have been made
on the first day of that quarter. In processing redemptions of Class B
shares, the Fund will first redeem shares not subject to any CDSC, and then
shares held longest during the six-year period. As a result, you will pay the
lowest possible CDSC.
<TABLE>
<CAPTION>
Year Since CDSC as a Percentage of Dollar
Purchase Amount Subject to CDSC
- --------------------------- ---------------------------------
<S> <C>
First 4.0%
Second 4.0%
Third 3.0%
Fourth 3.0%
Fifth 2.0%
Sixth 1.0%
Seventh and thereafter none
</TABLE>
Proceeds from the CDSC are paid to PFD and are used in whole or in part to
defray PFD's expenses related to providing distribution-related services to
the Fund in connection with the sale of Class B shares, including the payment
of compensation to broker-dealers.
Class B shares will automatically convert into Class A shares at the end
of the calendar quarter that is eight years after the purchase date, except
as noted below. Class B shares acquired by exchange from Class B shares of
another Pioneer fund will convert into Class A shares based on the date of
the initial purchase and the applicable CDSC. Class B shares acquired through
reinvestment of distributions will convert into Class A shares based on the
date of the initial purchase to which such shares relate. For this purpose,
Class B shares acquired through reinvestment of distributions will be
attributed to particular purchases of Class B shares in accordance with such
procedures as the Trustees may determine from time to time. The conversion of
Class B shares to Class A shares is subject to the continuing availability of
a ruling from the Internal Revenue Service ("IRS") that such conversions will
not constitute taxable events for federal tax purposes. The conversion of
Class B shares to Class A shares will not occur if such ruling is not
available and, therefore, Class B shares would continue to be subject to
higher expenses than Class A shares for an indeterminate period.
Class C Shares
You may buy Class C shares at net asset value without the imposition of an
initial sales charge; however, Class C shares redeemed within one year of
purchase will be subject to a CDSC of 1.00%. The charge will be assessed on
the amount equal to the lesser of the current market value or the original
purchase cost of the shares being redeemed. No CDSC will be imposed on
increases in account value above the initial
<PAGE>
purchase price, including shares derived from the reinvestment of dividends
or capital gains distributions. Class C shares do not convert to any other
Class of Fund shares.
For the purpose of determining the time of any purchase, all payments
during a quarter will be aggregated and deemed to have been made on the first
day of that quarter. In processing redemptions of Class C shares, the Fund
will first redeem shares not subject to any CDSC, and then shares held for
the shortest period of time during the one-year period. As a result, you will
pay the lowest possible CDSC.
Proceeds from the CDSC are paid to PFD and are used in whole or in part to
defray PFD's expenses related to providing distribution-related services to
the Fund in connection with the sale of Class C shares, including the payment
of compensation to broker-dealers.
Waiver or Reduction of Contingent Deferred Sales Charge. The CDSC on Class B
shares may be waived or reduced for non-retirement accounts if: (a) the
redemption results from the death of all registered owners of an account (in
the case of UGMAs, UTMAs and trust accounts, waiver applies upon the death of
all beneficial owners) or a total and permanent disability (as defined in
Section 72 of the Code) of all registered owners occurring after the purchase
of the shares being redeemed or (b) the redemption is made in connection with
limited automatic redemptions as set forth in "Systematic Withdrawal Plans"
(limited in any year to 10% of the value of the account in the Fund at the
time the withdrawal plan is established).
The CDSC on Class B shares may be waived or reduced for retirement plan
accounts if: (a) the redemption results from the death or a total and
permanent disability (as defined in Section 72 of the Code) occurring after
the purchase of the shares being redeemed of a shareowner or participant in
an employer-sponsored retirement plan; (b) the distribution is to a
participant in an Individual Retirement Account ("IRA"), 403(b) or
employer-sponsored retirement plan, is part of a series of substantially
equal payments made over the life expectancy of the participant or the joint
life expectancy of the participant and his or her beneficiary or as scheduled
periodic payments to a participant (limited in any year to 10% of the value
of the participant's account at the time the distribution amount is
established; a required minimum distribution due to the participant's
attainment of age 70-1/2 may exceed the 10% limit only if the distribution
amount is based on plan assets held by Pioneer); (c) the distribution is from
a 401(a) or 401(k) retirement plan and is a return of excess employee
deferrals or employee contributions or a qualifying hardship distribution as
defined by the Code or results from a termination of employment (limited with
respect to a termination to 10% per year of the value of the plan's assets in
the Fund as of the later of the prior December 31 or the date the account was
established unless the plan's assets are being rolled over to or reinvested
in the same class of shares of a Pioneer mutual fund subject to the CDSC of
the shares originally held); (d) the distribution is from an IRA, 403(b) or
employer-sponsored retirement plan and is to be rolled over to or reinvested
in the same class of shares in a Pioneer mutual fund and which will be
subject to the applicable CDSC upon redemption; (e) the distribution is in
the form of a loan to a participant in a plan which permits loans (each
repayment of the loan will constitute a new sale which will be subject to the
applicable CDSC upon redemption); or (f) the distribution is from a qualified
defined contribution plan and represents a participant's directed transfer
(provided that this privilege has been pre-authorized through a prior
agreement with PFD regarding participant directed transfers).
The CDSC on Class C shares and on any Class A shares subject to a CDSC may
be waived or reduced as follows: (a) for automatic redemptions as described
in "Systematic Withdrawal Plans" (limited to 10% of the value of the account
subject to the CDSC); (b) if the redemption results from the death or a total
and permanent disability (as defined in Section 72 of the Code) occurring
after the purchase of the shares being redeemed of a shareowner or
participant in an employer- sponsored retirement plan; (c) if the
distribution is part of a series of substantially equal payments made over
the life expectancy of the participant or the joint life expectancy of the
participant and his or her beneficiary; or (d) if the distribution is to a
participant in an employer-sponsored retirement plan and is (i) a return of
excess employee deferrals or contributions, (ii) a qualifying hardship
distribution as defined by the Code, (iii) from a termination of employment,
(iv) in the form of a loan to a participant in a plan which permits loans, or
(v) from a qualified defined contribution plan and represents a participant's
directed transfer (provided that this privilege has been pre-authorized
through a prior agreement with PFD regarding participant directed transfers).
The CDSC on Class B and Class C shares and on any Class A shares subject
to a CDSC may be waived or reduced for either non-retirement or retirement
plan accounts if: (a) the redemption is made by any state, county, or city,
or any instrumentality, department, authority, or agency thereof, which is
prohibited by applicable laws from paying a CDSC in connection with the
acquisition of shares of any registered investment management company; or (b)
the redemption is made pursuant to the Fund's right to liquidate or
involuntarily redeem shares in a shareowner's account.
Broker-Dealers. An order for any Class of Fund shares received by PFD from a
broker-dealer prior to the close of regular trading on the Exchange is
confirmed at the price appropriate for that Class as determined at the close
of regular trading on the Exchange on the day the order is received, provided
the order is received prior to PFD's close of business (usually, 5:30 p.m.
Eastern Time). It is the responsibility of broker-dealers to transmit orders
so that they will be received by PFD prior to its close of business.
General. The Fund reserves the right in its sole discretion to withdraw all
or any part of the offering of shares when, in the judgment of the Fund's
management, such withdrawal is in the best interest of the Fund. An order to
purchase shares is not binding on, and may be rejected by, PFD until it has
been confirmed in writing by PFD and payment has been received.
<PAGE>
VIII. HOW TO SELL FUND SHARES
You can arrange to sell (redeem) Fund shares on any day the Exchange is
open by selling either some or all of your shares to the Fund.
You may sell your shares either through your broker-dealer or directly to
the Fund. Please note the following:
(bullet) If you are selling shares from a retirement account, you must
make your request in writing (except for exchanges to other Pioneer
mutual funds which can be requested by phone or in writing).
Call 1-800-622-0176 for more information.
(bullet) If you are selling shares from a non-retirement account, you may
use any of the methods described below.
Your shares will be sold at the share price next calculated after your
order is received in good order less any applicable CDSC. Sale proceeds
generally will be sent to you in cash, normally within seven days after your
order is received in good order. The Fund reserves the right to withhold
payment of the sale proceeds until checks received by the Fund in payment for
the shares being sold have cleared, which may take up to 15 calendar days
from the purchase date.
In Writing. You may sell your shares by delivering a written request,
signed by all registered owners, in good order to PSC, however, you must use
a written request, including a signature guarantee, to sell your shares if
any of the following situations applies:
(bullet) you wish to sell over $50,000 worth of shares,
(bullet) your account registration or address has changed within the last
30 days
(bullet) the check is not being mailed to the address on your account
(address of record),
(bullet) the check is not being made out to the account owners, or
(bullet) the sale proceeds are being transferred to a Pioneer account with
a different registration.
Your request should include your name, the Fund's name, your Fund account
number, the Class of shares to be redeemed, the dollar amount or number of
shares to be redeemed, and any other applicable requirements as described
below. Unless instructed otherwise, Pioneer will send the proceeds of the
sale to the address of record. Fiduciaries or corporations are required to
submit additional documents. For more information, contact PSC at
1-800-225-6292.
Written requests will not be processed until they are received in good
order and accepted by PSC. Good order means that there are no outstanding
claims or requests to hold redemptions on the account, certificates are
endorsed by the record owner(s) exactly as the shares are registered and, if
required, the signature(s) are guaranteed by an eligible guarantor. You
should be able to obtain a signature guarantee from a bank, broker, dealer,
credit union (if authorized under state law), securities exchange or
association, clearing agency or savings association. A notary public cannot
provide a signature guarantee. Signature guarantees are not accepted by
facsimile ("fax"). For additional information about the necessary
documentation for redemption by mail, please contact PSC at 1-800-225-6292.
By Telephone or by Fax. Your account is automatically authorized to have
the telephone redemption privilege unless you indicated otherwise on your
Account Application or by writing to PSC. Proper account identification will
be required for each telephone redemption. The telephone redemption option is
not available to retirement plan accounts. A maximum of $50,000 may be
redeemed by telephone or fax and the proceeds may be received by check or by
bank wire or electronic funds transfer. To receive the proceeds by check: the
check must be made payable exactly as the account is registered and the check
must be sent to the address of record which must not have changed in the last
30 days. To receive the proceeds by bank wire or by electronic funds
transfer: the proceeds must be sent to the bank wire address of record which
must have been properly pre-designated either on your Account Application or
on an Account Options Form and which must not have changed in the last 30
days. To redeem by fax, send your redemption request to 1-800- 225-4240. You
may always elect to deliver redemption instructions to PSC by mail. See
"Telephone Transactions and Related Liabilities" below. Telephone and fax
redemptions will be priced as described above. You are strongly urged to
consult with your financial representative prior to requesting a telephone
redemption.
Selling Shares Through Your Broker-Dealer. The Fund has authorized PFD to
act as its agent in the repurchase of shares of the Fund from qualified
broker-dealers and reserves the right to terminate this procedure at any
time. Your broker-dealer must receive your request before the close of
business on the Exchange and transmit it to PFD before PFD's close of
business to receive that day's redemption price. Your broker-dealer is
responsible for providing all necessary documentation to PFD and may charge
you for its services.
Small Accounts. The minimum account value is $500. If you hold shares of
the Fund in an account with a net asset value of less than the minimum
required amount due to redemptions or exchanges, the Fund may redeem the
shares held in this account at net asset value if you have not increased the
net asset value of the account to at least the minimum required amount within
six months of notice by the Fund to you of the Fund's intention to redeem the
shares.
CDSC on Class A Shares. Purchases of Class A shares of $1,000,000 or more,
or by participants in a Group Plan which were not subject to an initial sales
charge, may be subject to a CDSC upon redemption. A CDSC is payable to PFD on
these investments in the event of a share redemption within 12 months
following the share purchase, at the rate of 1% of the lesser of the value of
the shares redeemed (exclusive of reinvested dividend and capital gain
distributions) or the total cost of such shares. Shares subject to the CDSC
which are exchanged into another Pioneer fund will continue to be subject to
the CDSC until the original 12-month period expires. However, no CDSC is
payable with respect to purchases of Class A shares by 401(a) or 401(k)
retirement plans with 1,000 or more eligible participants or with at least
$10 million in plan assets.
<PAGE>
General. Redemptions may be suspended or payment postponed during any
period in which any of the following conditions exist: the Exchange is closed
or trading on the Exchange is restricted; an emergency exists as a result of
which disposal by the Fund of securities owned by it is not reasonably
practicable or it is not reasonably practicable for the Fund to fairly
determine the value of the net assets of its portfolio; or the SEC, by order,
so permits.
Redemptions and repurchases are taxable transactions to shareholders. The
net asset value per share received upon redemption or repurchase may be more
or less than the cost of shares to an investor, depending on the market value
of the portfolio at the time of redemption or repurchase.
IX. HOW TO EXCHANGE FUND SHARES
Written Exchanges. You may exchange your shares by sending a letter of
instruction to PSC. Your letter should include your name, the name of the
Fund out of which you wish to exchange and the name of the Pioneer mutual
fund into which you wish to exchange, your fund account number(s), the Class
of shares to be exchanged and the dollar amount or number of shares to be
exchanged. Written exchange requests must be signed by all record owner(s)
exactly as the shares are registered.
Telephone Exchanges. Your account is automatically authorized to have the
telephone exchange privilege unless you indicated otherwise on your Account
Application or by writing to PSC. Proper account identification will be
required for each telephone exchange. Telephone exchanges may not exceed
$500,000 per account per day. Each voice-requested or FactFone(SM) telephone
exchange request will be recorded.
You are strongly urged to consult with your financial representative prior to
requesting a telephone exchange. See "Telephone Transactions and Related
Liabilities" below.
Automatic Exchanges. You may automatically exchange shares from one
Pioneer account for shares of the same Class in another Pioneer account on a
monthly or quarterly basis. The accounts must have identical registrations
and the originating account must have a minimum balance of $5,000. The
exchange will be effective on the 18th day of the month.
General. Exchanges must be at least $1,000. You may exchange your
investment from one Class of Fund shares at net asset value, without a sales
charge, for shares of the same Class of any other Pioneer mutual fund. Not
all Pioneer mutual funds offer more than one Class of shares. A new Pioneer
account opened through an exchange must have a registration identical to that
on the original account.
Class A or Class B shares which would normally be subject to a CDSC upon
redemption will not be charged the applicable CDSC at the time of an
exchange. Shares acquired in an exchange will be subject to the CDSC of the
shares originally held. For purposes of determining the amount of any
applicable CDSC, the length of time you have owned Class B shares acquired by
exchange will be measured from the date you acquired the original shares and
will not be affected by any subsequent exchange.
Exchange requests received by PSC before 4:00 p.m. Eastern Time will be
effective on that day if the requirements above have been met, otherwise,
they will be effective on the next business day. PSC will process exchanges
only after receiving an exchange request in good order. There are currently
no fees or sales charges imposed at the time of an exchange. An exchange of
shares may be made only in states where legally permitted. For federal and
(generally) state income tax purposes, an exchange is considered to be a sale
of the shares of the Fund exchanged and a purchase of shares in another
Pioneer mutual fund. Therefore, an exchange could result in a gain or loss on
the shares sold, depending on the tax basis of these shares and the timing of
the transaction, and special tax rules may apply.
You should consider the differences in objectives and policies of the
Pioneer mutual funds, as described in each fund's current prospectus, before
making any exchange. For the protection of the Fund's performance and
shareholders, the Fund and PFD reserve the right to refuse any exchange
request or restrict, at any time without notice, the number and/or frequency
of exchanges to prevent abuses of the exchange privilege. Such abuses may
arise from frequent trading in response to short-term market fluctuations, a
pattern of trading by an individual or group that appears to be an attempt to
"time the market," or any other exchange request which, in the view of
management, will have a detrimental effect on the Fund's portfolio management
strategy or its operations. In addition, the Fund and PFD reserve the right
to charge a fee for exchanges or to modify, limit, suspend or discontinue the
exchange privilege with notice to shareholders as required by law.
X. DISTRIBUTION PLANS
The Fund has adopted a Plan of Distribution for each Class of shares (the
"Class A Plan," "Class B Plan," and "Class C Plan") in accordance with Rule
12b-1 under the 1940 Act pursuant to which certain distribution fees are paid
to PFD.
Pursuant to the Class A Plan, the Fund reimburses PFD for its actual
expenditures to finance any activity primarily intended to result in the sale
of Class A shares or to provide services to holders of Class A shares,
provided the categories of expenses for which reimbursement is made are
approved by the Fund's Board of Trustees. As of the date of this Prospectus,
the Board of Trustees has approved the following categories of expenses for
Class A shares of the Fund: (i) a service fee to be paid to qualified
broker-dealers in an amount not to exceed 0.25% per annum of the Fund's daily
net assets attributable to Class A shares; (ii) reimbursement to PFD for its
expenditures for broker- dealer commissions and employee compensation on
certain sales of the Fund's Class A shares with no initial sales charge (See
"How to Buy Fund Shares"); and (iii) reimbursement to PFD for expenses
incurred in providing services to Class A shareholders and supporting
broker-dealers and other organizations (such as banks and trust companies) in
their efforts to provide such services. Banks are currently prohibited under
the Glass- Steagall Act from providing certain underwriting or distribution
services. If a bank was prohibited from acting in any capacity or providing
any of the described services, management would consider what action, if any,
would be appropriate.
Expenditures of the Fund pursuant to the Class A Plan are accrued daily
and may not exceed 0.25% of the Fund's aver-
<PAGE>
age daily net assets attributable to Class A shares. Distribution expenses of
PFD are expected to substantially exceed the distribution fees paid by the
Fund in a given year. The Class A Plan may not be amended to increase
materially the annual percentage limitation of average net assets which may
be spent for the services described therein without approval of the
shareholders of the Fund.
Both the Class B Plan and the Class C Plan provide that the Fund will
compensate PFD by paying a distribution fee at the annual rate of 0.75% of
the Fund's average daily net assets attributable to the applicable Class of
shares and a service fee at the annual rate of 0.25% of the Fund's average
daily net assets attributable to that Class of shares. The distribution fee
is intended to compensate PFD for its Class B and Class C distribution
services to the Fund. The service fee is intended to be additional
compensation for personal services and/or account maintenance services with
respect to Class B or Class C shares. PFD also receives the proceeds of any
CDSC imposed on the redemption of Class B or Class C shares.
Commissions of 4% of the amount invested in Class B shares, equal to 3.75%
of the amount invested and a first year's service fee equal to 0.25% of the
amount invested, are paid to broker-dealers who have selling agreements with
PFD. PFD may advance to dealers the first year service fee at a rate up to
0.25% of the purchase price of such shares and, as compensation therefore,
PFD may retain the service fee paid by the Fund with respect to such shares
for the first year after purchase. Commencing in the 13th month following the
purchase of Class B shares, dealers will become eligible for additional
annual service fees of up to 0.25% of the purchase price with respect to such
shares.
Commissions of up to 1% of the amount invested in Class C shares,
consisting of 0.75% of the amount invested and a first year's service fee of
0.25% of the amount invested, are paid to broker-dealers who have selling
agreements with PFD. PFD may advance to dealers the first year service fee at
a rate up to 0.25% of the purchase price of such shares and, as compensation
therefore, PFD may retain the service fee paid by the Fund with respect to
such shares for the first year after purchase. Commencing in the 13th month
following the purchase of Class C shares, dealers will become eligible for
additional annual distribution fees and services fees of up to 0.75% and
0.25%, respectively, of the purchase price with respect to such shares.
Dealers may from time to time be required to meet certain criteria in
order to receive service fees. PFD or its affiliates are entitled to retain
all service fees payable under the Class B Plan or the Class C Plan for which
there is no dealer of record or for which qualification standards have not
been met as partial consideration for personal services and/or account
maintenance services performed by PFD or its affiliates for shareowner
accounts.
XI. DIVIDENDS, DISTRIBUTIONS AND TAXATION
The Fund has elected to be treated, has qualified and intends to qualify
each year as a "regulated investment company" under Subchapter M of the Code,
so that it will not pay federal income taxes on income and capital gains
distributed to shareholders at least annually. Under the Code, the Fund will
be subject to a nondeductible 4% federal excise tax on a portion of its
undistributed income and capital gains if it fails to meet certain
distribution requirements with respect to each calendar year. The Fund
intends to make distributions in a timely manner and accordingly does not
expect to be subject to the excise tax.
The Fund's policy is to pay to shareholders dividends from net investment
income, if any, twice each year during the months of June and December and to
make distributions from net long-term capital gains, if any, in December.
Distributions from net short-term capital gains, if any, may be paid with
such dividends; distributions from income and/or capital gains may also be
made at such times as may be necessary to avoid federal income or excise tax.
Dividends from the Fund's net investment income, net short-term capital
gains, and certain net foreign exchange gains are taxable as ordinary income,
and dividends from the Fund's net long-term capital gains are taxable as
long-term capital gains.
Unless shareholders specify otherwise, all distributions will be
automatically reinvested in additional full and fractional shares of the
Fund. For federal income tax purposes, all dividends are taxable as described
above whether a shareowner takes them in cash or reinvests them in additional
shares of the Fund. Information as to the federal tax status of dividends and
distributions will be provided annually. For further information on the
distribution options available to shareholders, see "Distribution Options"
and "Directed Dividends" below.
Distributions by the Fund of the dividend income it receives from U.S.
domestic corporations, if any, may qualify for the corporate
dividends-received deduction for corporate shareholders, subject to minimum
holding-period requirements and debt-financing restrictions under the Code.
The Fund anticipates that it will be subject to foreign withholding taxes
or other foreign taxes on income (possibly including capital gains) on
certain foreign investments, which will reduce the yield on those
investments. The Fund does not expect to qualify to pass such taxes and any
associated tax deductions or credits through to its shareholders.
Dividends and other distributions and the proceeds of redemptions,
exchanges or repurchases of Fund shares paid to individuals and other
non-exempt payees will be subject to a 31% backup withholding of federal
income tax if the Fund is not provided with the shareowner's correct taxpayer
identification number and certification that the number is correct and the
shareowner is not subject to backup withholding or if the Fund receives
notice from the IRS or a broker that such withholding applies. Please refer
to the Account Application for additional information.
The description above relates only to U.S. federal income tax consequences
for shareholders who are U.S. persons, i.e., U.S. citizens or residents or
U.S. corporations, partnerships, trusts or estates and who are subject to
U.S. federal income tax. Non-U.S. shareholders and tax-exempt shareholders
are subject to different tax treatment that is not
<PAGE>
described above. Shareholders should consult their own tax advisers regarding
state, local and other applicable tax laws.
XII. SHAREOWNER SERVICES
PSC is the shareowner services and transfer agent for shares of the Fund.
PSC, a Massachusetts corporation, is a wholly- owned subsidiary of PGI. PSC's
offices are located at 60 State Street, Boston, Massachusetts 02109, and
inquiries to PSC should be mailed to Pioneering Services Corporation, P.O.
Box 9014, Boston, Massachusetts 02205-9014. Brown Brothers Harriman & Co.
(the "Custodian") serves as custodian of the Fund's portfolio securities and
other assets. The principal business address of the mutual fund division of
the Custodian is 40 Water Street, Boston, Massachusetts 02109.
Account and Confirmation Statements
PSC maintains an account for each shareowner and all transactions of the
shareowner are recorded in this account. Confirmation statements showing
details of transactions are sent to shareholders as transactions occur,
except Automatic Investment Plan transactions which are confirmed quarterly.
The Combined Account Statement, mailed quarterly, is available to
shareholders who have more than one Pioneer account.
Shareholders whose shares are held in the name of an investment
broker-dealer or other party will not normally have an account with the Fund
and might not be able to utilize some of the services available to
shareholders of record. Examples of services which might not be available are
investment or redemption of shares by mail, automatic reinvestment of
dividends and capital gains distributions, withdrawal plans, Letters of
Intention, Rights of Accumulation, telephone exchanges and redemptions, and
newsletters.
Additional Investments
You may add to your account by sending a check (minimum of $50 for Class A
shares and $500 for Class B and C shares) to PSC (account number and Class of
shares should be clearly indicated). The bottom portion of a confirmation
statement may be used as a remittance slip to make additional investments.
Additions to your account, whether by check or through a Pioneer
Investomatic Plan, are invested in full and fractional shares of the Fund at
the applicable offering price in effect as of the close of the Exchange on
the day of receipt.
Automatic Investment Plans
You may arrange for regular automatic investments of $50 or more through
government/military allotments, payroll deduction or through a Pioneer
Investomatic Plan. A Pioneer Investomatic Plan provides for a monthly or
quarterly investment by means of a pre-authorized draft drawn on a checking
account. Pioneer Investomatic Plan investments are voluntary, and you may
discontinue the Plan at any time without penalty upon 30 days' written notice
to PSC. PSC acts as agent for the purchaser, the broker-dealer and PFD in
maintaining these plans.
Financial Reports and Tax Information
As a shareowner, you will receive financial reports at least semiannually.
In January of each year, the Fund will mail you information about the tax
status of dividends and distributions.
Distribution Options
Dividends and capital gains distributions, if any, will automatically be
invested in additional shares of the Fund, at the applicable net asset value
per share, unless you indicate another option on the Account Application.
Two other options available are (a) dividends in cash and capital gains
distributions in additional shares; and (b) all dividends and capital gains
distributions in cash. These two options are not available, however, for
retirement plans or for an account with a net asset value of less than $500.
Changes in your distribution options may be made by written request to PSC.
Directed Dividends
You may elect (in writing) to have the dividends paid by one Pioneer fund
account invested in a second Pioneer fund account. The value of this second
account must be at least $1,000 ($500 for Pioneer Fund or Pioneer II).
Invested dividends may be in any amount, and there are no fees or charges for
this service. Retirement plan shareholders may only direct dividends to
accounts with identical registrations, i.e., PGI IRA Cust for John Smith may
only go into another account registered PGI IRA Cust for John Smith.
Direct Deposit
If you have elected to take distributions, whether dividends or dividends
and capital gains, in cash, or have established a Systematic Withdrawal Plan,
you may choose to have those cash payments deposited directly into your
savings, checking or NOW bank account. You may establish this service by
completing the appropriate section on the Account Application when opening a
new account or the Account Options Form for an existing account.
Voluntary Tax Withholding
You may request (in writing) that PSC withhold 28% of the dividends and
capital gains distributions paid from your account (before any reinvestment)
and forward the amount withheld to the IRS as a credit against your federal
income taxes. This option is not available for retirement plan accounts or
for accounts subject to backup withholding.
Telephone Transactions and Related Liabilities
Your account is automatically authorized to have telephone transaction
privileges unless you indicate otherwise on your Account Application or by
writing to PSC. You may purchase, sell or exchange Fund shares by telephone.
For personal assistance, call 1-800-225-6292 between 8:00 a.m. and 8:00 p.m.
Eastern time on weekdays. Computer-assisted transactions are available to
shareholders who have pre- recorded certain bank information (see
"FactFone(SM)"). You are strongly urged to consult with your financial
representative prior to requesting any telephone transaction. See "Share
Price" for more information. To confirm that each transaction instruction
received by telephone is genuine, the Fund will record each telephone
transaction, require the caller to provide the personal identification number
(PIN) for the account and send you a written confirmation of each telephone
transaction. Different procedures may apply to accounts that are registered
to non-U.S. citizens or that are
<PAGE>
held in the name of an institution or in the name of an investment
broker-dealer or other third-party. If reasonable procedures, such as those
described above, are not followed, the Fund may be liable for any loss due to
unauthorized or fraudulent instructions. The Fund may implement other
procedures from time to time. In all other cases, neither the Fund, PSC or
PFD will be responsible for the authenticity of instructions received by
telephone; therefore, you bear the risk of loss for unauthorized or
fraudulent telephone transactions.
During times of economic turmoil or market volatility or as a result of
severe weather or a natural disaster, it may be difficult to contact the Fund
by telephone to institute a redemption or exchange. You should communicate
with the Fund in writing if you are unable to reach the Fund by telephone.
FactFone(SM)
FactFone(SM) is an automated inquiry and telephone transaction system
available to Pioneer shareholders by dialing 1-800-225-4321. FactFone(SM)
allows you to obtain current information on your Pioneer accounts and to
inquire about the prices and yields of all publicly available Pioneer mutual
funds. In addition, you may use FactFone(SM) to make computer-assisted
telephone purchases, exchanges and redemptions from your Pioneer accounts if
you have activated your personal identification number ("PIN"). Telephone
purchases and redemptions require the establishment of a bank account of
record.
You are strongly urged to consult with your financial representative prior to
requesting any telephone transaction. Shareholders whose accounts are
registered in the name of a broker-dealer or other third party may not be
able to use FactFone(SM). See "How to Buy Fund Shares," "How to Exchange Fund
Shares," "How to Sell Fund Shares" and "Telephone Transactions and Related
Liabilities." Call PSC for assistance.
Retirement Plans
You should contact the Retirement Plans Department of PSC at
1-800-622-0176 for information relating to retirement plans for businesses,
age-weighted profit sharing plans, Simplified Employee Pension Plans, IRAs,
and Section 403(b) retirement plans for employees of certain non-profit
organizations and public school systems, all of which are available in
conjunction with investments in the Fund. The Account Application
accompanying this Prospectus should not be used to establish any of these
plans. Separate applications are required.
Telecommunications Device for the Deaf (TDD)
If you have a hearing disability and you own TDD keyboard equipment, you
can call our TDD number toll-free at 1-800- 225-1997, weekdays from 8:30 a.m.
to 5:30 p.m. Eastern Time, to contact our telephone representatives with
questions about your account.
Systematic Withdrawal Plans
If your account has a total value of at least $10,000 you may establish a
Systematic Withdrawal Plan ("SWP") providing for fixed payments at regular
intervals. Withdrawals will be limited to 10% of the value of the account if
a CDSC is applicable. See "Waiver or Reduction of Contingent Deferred Sales
Charge" for more information. Periodic checks of $50 or more will be sent to
you, or any person designated by you, monthly or quarterly, and your periodic
redemptions of shares may be taxable to you. Payments can be made either by
check or electronic transfer to a bank account designated by you. If you
direct that withdrawal checks be paid to another person after you have opened
your account, a signature guarantee must accompany your instructions.
Purchases of Class A shares of the Fund at a time when you have a SWP in
effect may result in the payment of unnecessary sales charges and may
therefore be disadvantageous.
You may obtain additional information by calling PSC at 1-800-225-6292 or
by referring to the Statement of Additional Information.
Reinstatement Privilege (Class A Shares Only)
If you redeem all or part of your Class A shares of the Fund, you may
reinvest all or part of the redemption proceeds without a sales charge in
Class A shares of the Fund if you send a written request to PSC not more than
90 days after your shares were redeemed. Your redemption proceeds will be
reinvested at the next determined net asset value of the Class A shares of
the Fund in effect immediately after receipt of the written request for
reinstatement. You may realize a gain or loss for federal income tax purposes
as a result of the redemption, and special tax rules may apply if a
reinvestment occurs. Subject to the provisions outlined under "How to
Exchange Fund Shares" above, you may also reinvest in Class A shares of other
Pioneer mutual funds; in this case you must meet the minimum investment
requirements for each fund you enter.
The 90-day reinstatement period may be extended by PFD for periods of up
to one year for shareholders living in areas that have experienced a natural
disaster, such as a flood, hurricane, tornado, or earthquake.
---------------------------
The options and services available to shareholders, including the terms of
the Exchange Privilege and the Pioneer Investomatic Plan, may be revised,
suspended or terminated at any time by PFD or by the Fund. You may establish
the services described in this section when you open your account. You may
also establish or revise many of them on an existing account by completing an
Account Options Form, which you may request by calling 1-800-225-6292.
<PAGE>
XIII. THE FUND
The Fund is a diversified open-end management investment company (commonly
referred to as a mutual fund) organized as a Delaware business trust on
January 31, 1996. Prior to that time the Fund operated as a Massachusetts
business trust, initially reorganized as such on January 31, 1985. The Fund
has authorized an unlimited number of shares of beneficial interest. As an
open-end management investment company, the Fund continuously offers its
shares to the public and under normal conditions must redeem its shares upon
the demand of any shareowner at the then current net asset value per share.
See "How to Sell Fund Shares." The Fund is not required, and does not intend,
to hold annual shareowner meetings although special meetings may be called
for the purpose of electing or removing Trustees, changing fundamental
investment restrictions or approving a management contract.
The Fund reserves the right to create and issue additional series of
shares. The Trustees have the authority, without further shareowner approval,
to classify and reclassify the shares of the Fund, or any additional series
of the Fund, into one or more classes. As of the date of this Prospectus, the
Trustees have authorized the issuance of three classes of shares, designated
Class A, Class B and Class C. The shares of each class represent an interest
in the same portfolio of investments of the Fund. Each class has equal rights
as to voting, redemption, dividends and liquidation, except that each class
bears different distribution and transfer agent fees and may bear other
expenses properly attributable to the particular class. Class A, Class B and
Class C shareholders have exclusive voting rights with respect to the Rule
12b-1 distribution plans adopted by holders of those shares in connection
with the distribution of shares.
In addition to the requirements under Delaware law, the Declaration of
Trust provides that a shareowner of the Fund may bring a derivative action on
behalf of the Fund only if the following conditions are met: (a) shareholders
eligible to bring such derivative action under Delaware law who hold at least
10% of the outstanding shares of the Fund, or 10% of the outstanding shares
of the series or class to which such action relates, shall join in the
request for the Trustees to commence such action; and (b) the Trustees must
be afforded a reasonable amount of time to consider such shareowner request
and investigate the basis of such claim. The Trustees shall be entitled to
retain counsel or other advisers in considering the merits of the request and
shall require an undertaking by the shareholders making such request to
reimburse the Fund for the expense of any such advisers in the event that the
Trustees determine not to bring such action.
When issued and paid for in accordance with the terms of the Prospectus
and Statement of Additional Information, shares of the Fund are fully-paid
and non-assessable. Shares will remain on deposit with the Fund's transfer
agent and certificates will not normally be issued. The Fund reserves the
right to charge a fee for the issuance of certificates.
XIV. INVESTMENT RESULTS
The average annual total return (for a designated period of time) on an
investment in the Fund may be included in advertisements, and furnished to
existing or prospective shareholders. The average annual total return for
each Class is computed in accordance with the SEC's standardized formula. The
calculation for all Classes assumes the reinvestment of all dividends and
distributions at net asset value and does not reflect the impact of federal
or state income taxes. In addition, for Class A shares the calculation
assumes the deduction of the maximum sales charge of 5.75%; for Class B and
Class C shares the calculation reflects the deduction of any applicable CDSC.
The periods illustrated would normally include one, five and ten years (or
since the commencement of the public offering of the shares of a Class, if
shorter) through the most recent calendar quarter.
One or more additional measures and assumptions, including but not limited
to historical total returns; distribution returns; results of actual or
hypothetical investments; changes in dividends, distributions or share
values; or any graphic illustration of such data may also be used. These data
may cover any period of the Fund's existence and may or may not include the
impact of sales charges, taxes or other factors.
Other investments or savings vehicles and/or unmanaged market indexes,
indicators of economic activity or averages of mutual fund results may be
cited or compared with the investment results of the Fund. Rankings or
listings by magazines, newspapers or independent statistical or rating
services, such as Lipper Analytical Services, Inc., may also be referenced.
The Fund's investment results will vary from time to time depending on
market conditions, the composition of the Fund's portfolio and operating
expenses of the Fund. All quoted investment results are historical and should
not be considered representative of what an investment in the Fund may earn
in any future period. For further information about the calculation methods
and uses of the Fund's investment results, see the Statement of Additional
Information.
<PAGE>
PIONEER LOGO
Pioneer Mid-Cap Fund
60 State Street
Boston, Massachusetts 02109
OFFICERS
JOHN F. COGAN, JR., Chairman and President
DAVID D. TRIPPLE, Executive Vice President
ROBERT W. BENSON, Vice President
WILLIAM H. KEOUGH, Treasurer
JOSEPH P. BARRI, Secretary
INVESTMENT ADVISER
PIONEERING MANAGEMENT CORPORATION
CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.
INDEPENDENT PUBLIC ACCOUNTANTS
ARTHUR ANDERSEN LLP
LEGAL COUNSEL
HALE AND DORR
PRINCIPAL UNDERWRITER
PIONEER FUNDS DISTRIBUTOR, INC.
SHAREHOLDER SERVICES AND TRANSFER AGENT
PIONEERING SERVICES CORPORATION
60 State Street
Boston, Massachusetts 02109
Telephone: 1-800-225-6292
SERVICE INFORMATION
If you would like information on the following, please call:
Existing and new accounts, prospectuses,
applications, service forms
and telephone transactions .................................. 1-800-225-6292
FactFone(SM)
Automated fund yields and prices,
account information and computer transactions................ 1-800-225-4321
Retirement plans ............................................. 1-800-622-0176
Toll-free fax ................................................ 1-800-225-4240
Telecommunications Device for the Deaf (TDD) ................. 1-800-225-1997
0196-3006
(C)Pioneer Funds Distributor, Inc.
<PAGE>
PIONEER MID-CAP FUND
60 State Street
Boston, Massachusetts 02109
STATEMENT OF ADDITIONAL INFORMATION
Class A, Class B and Class C Shares
February 1, 1996
This Statement of Additional Information (Part B of the Registration Statement)
is not a Prospectus, but should be read in conjunction with the Prospectus,
dated February 1, 1996. A copy of the Prospectus can be obtained free of charge
by calling Shareholder Services at 1- 800-225-6292 or by written request to
Pioneer Mid-Cap Fund (the "Fund") at 60 State Street, Boston, Massachusetts
02109.
TABLE OF CONTENTS
Page
1. Investment Policies and Restrictions............................ 2
2. Management of the Fund.......................................... 11
3. Investment Adviser.............................................. 15
4. Underwriting Agreement and Distribution Plans................... 16
5. Shareholder Servicing/Transfer Agent............................ 18
6. Custodian....................................................... 18
7. Principal Underwriter........................................... 19
8. Independent Public Accountants.................................. 19
9. Portfolio Transactions.......................................... 19
10. Tax Status and Dividends........................................ 21
11. Description of Shares........................................... 24
12. Certain Liabilities............................................. 25
13. Letter of Intention............................................. 26
14. Systematic Withdrawal Plan...................................... 26
15. Determination of Net Asset Value................................ 27
16. Investment Results.............................................. 28
17. Financial Statements............................................ 30
Appendix A...................................................... A-31
Appendix B...................................................... B-42
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A
PROSPECTUS AND IS AUTHORIZED FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS ONLY IF PRECEDED OR
ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
<PAGE>
1. INVESTMENT POLICIES AND RESTRICTIONS
The Fund's current prospectus (the "Prospectus") presents the investment
objective and the principal investment policies of the Fund. Additional
investment policies and a further description of some of the policies described
in the Prospectus appear below.
The following policies and restrictions supplement those discussed in the
Prospectus. Whenever an investment policy or restriction states a maximum
percentage of the Fund's assets that may be invested in any security or presents
a policy regarding quality standards, this standard or other restrictions shall
be determined immediately after and as a result of the Fund's investment.
Accordingly, any later increase or decrease resulting from a change in values,
net assets or other circumstances will not be considered in determining whether
the investment complies with the Fund's investment objectives and policies.
Lending of Portfolio Securities
The Fund may lend portfolio securities to member firms of the New York Stock
Exchange, under agreements which would require that the loans be secured
continuously by collateral in cash, cash equivalents or United States ("U.S.")
Treasury Bills maintained on a current basis at an amount at least equal to the
market value of the securities loaned. The Fund would continue to receive the
equivalent of the interest or dividends paid by the issuer on the securities
loaned as well as the benefit of an increase in the market value of the
securities loaned and would also receive compensation based on investment of the
collateral. The Fund would not, however, have the right to vote any securities
having voting rights during the existence of the loan, but would call the loan
in anticipation of an important vote to be taken among holders of the securities
or of the giving or withholding of consent on a material matter affecting the
investment.
As with other extensions of credit there are risks of delay in recovery or even
loss of rights in the collateral should the borrower of the securities fail
financially. The Fund will lend portfolio securities only to firms which have
been approved in advance by the Board of Trustees, which will monitor the
creditworthiness of any such firms. At no time would the value of the securities
loaned exceed 5% of the value of the Fund's total assets.
Forward Foreign Currency Transactions
The Fund may engage in foreign currency transactions. These transactions may be
conducted on a spot, i.e., cash basis, at the spot rate for purchasing or
selling currency prevailing in the foreign exchange market. The Fund also has
authority to deal in forward foreign currency exchange contracts involving
currencies of the different countries in which the Fund will invest as a hedge
against possible variations in the foreign exchange rate between these
currencies and the U.S. dollar. This is accomplished through contractual
agreements to purchase or sell a specified currency at a specified future date
and price set at the time of the contract. The Fund's dealings in forward
foreign currency contracts will be limited to hedging either specific
transactions or portfolio positions. Transaction hedging is the purchase or sale
of forward foreign currency
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contracts with respect to specific receivables or
payables of the Fund, accrued in connection with the purchase and sale of their
portfolio securities denominated in foreign currencies. Portfolio hedging is the
use of forward foreign currency contracts to offset portfolio security positions
denominated or quoted in such foreign currencies. There is no guarantee that the
Fund will be engaged in hedging activities when adverse exchange rate movements
occur. The Fund will not attempt to hedge all of its foreign portfolio
positions, and the Fund will enter into such transactions only to the extent, if
any, deemed appropriate by the investment adviser. The Fund will not enter into
speculative forward foreign currency contracts.
If the Fund enters into a forward contract to purchase foreign currency, the
custodian bank will segregate cash or high grade liquid debt securities in a
separate account in an amount equal to the value of the total assets committed
to the consummation of such forward contract. Those assets will be valued at
market daily and if the value of the assets in the separate account declines,
additional cash or securities will be placed in the accounts so that the value
of the account will equal the amount of the Fund's commitment with respect to
such contracts.
Hedging against a decline in the value of a currency does not eliminate
fluctuations in the prices of portfolio securities or prevent losses if the
prices of such securities decline. Such transactions also limit the opportunity
for gain if the value of the hedged currency should rise. Moreover, it may not
be possible for the Fund to hedge against a devaluation that is so generally
anticipated that the Fund is not able to contract to sell the currency at a
price above the devaluation level they anticipate. The cost to the Fund of
engaging in foreign currency transactions varies with such factors as the
currency involved, the size of the contract, the length of the contract period
and the market conditions then prevailing. Since transactions in foreign
currency and forward contracts are usually conducted on a principal basis, no
fees or commissions are involved. The Fund may close out a forward position in a
currency by selling the forward contract or by entering into an offsetting
forward contract.
Real Estate Investment Trusts and Associated Risk Factors
The Fund may invest up to 5% of its assets in shares of REITs. REITs are pooled
investment vehicles which invest primarily in income producing real estate or
real estate related loans or interests. REITs are generally classified as equity
REITs, mortgage REITs or a combination of equity and mortgage REITs. Equity
REITs invest the majority of their assets directly in real property and derive
income primarily from the collection of rents. Equity REITs can also realize
capital gains by selling properties that have appreciated in value. Mortgage
REITs invest the majority of their assets in real estate mortgages and derive
income from the collection of interest payments. Like investment companies such
as the Fund, REITs are not taxed on income distributed to shareholders provided
they comply with several requirements of the Internal Revenue Code of 1986, as
amended (the "Code"). The Fund will indirectly bear its proportionate share of
any expenses paid by REITs in which it invests in addition to the expenses paid
by the Fund.
Investing in REITs involves certain unique risks in addition to those risks
associated with investing in the real estate industry in general. Equity REITs
may be affected by changes
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in the value of the underlying property owned by the REITs, while mortgage REITs
may be affected by the quality of any credit extended. REITs are dependent upon
management skills, are not diversified, and are subject to the risks of
financing projects. REITs are subject to heavy cash flow dependency, default by
borrowers, self-liquidation, and the possibilities of failing to qualify for the
exemption from tax for distributed income under the Code and failing to maintain
their exemptions from the Investment Company Act of 1940, as amended (the "1940
Act"). REITs whose underlying assets include long-term health care properties,
such as nursing, retirement and assisted living homes, may be impacted by
federal regulations concerning the health care industry.
REITs (especially mortgage REITs) are also subject to interest rate risks. When
interest rates decline, the value of a REIT's investment in fixed rate
obligations can be expected to rise. Conversely, when interest rates rise, the
value of a REIT's investment in fixed rate obligations can be expected to
decline. In contrast, as interest rates on adjustable rate mortgage loans are
reset periodically, yields on a REIT's investments in such loans will gradually
align themselves to reflect changes in market interest rates, causing the value
of such investments to fluctuate less dramatically in response to interest rate
fluctuations than would investments in fixed rate obligations.
Investing in REITs involves risks similar to those associated with investing in
mid capitalization companies. REITs may have limited financial resources, may
trade less frequently and in a limited volume and may be subject to more abrupt
or erratic price movements than larger company securities. Historically, mid
capitalization stocks, such as REITs, have been more volatile in price than the
larger capitalization stocks included in the Standard & Poor's Index of 500
Common Stocks.
Other Policies and Risks
It is the policy of the Fund not to concentrate its investments in securities of
companies in any particular industry. In the opinion of the staff of the
Securities and Exchange Commission (the "Commission"), investments are deemed to
be concentrated in a particular industry if such investments constitute 25% or
more of the Fund's total assets. The 1940 Act provides that the policy of the
Fund with respect to concentration is a fundamental policy.
Investment Restrictions
Fundamental Investment Restrictions. The Fund has adopted certain additional
investment restrictions which may not be changed without the affirmative vote of
the holders of a "majority" (as defined in the 1940 Act) of the Fund's
outstanding voting securities. The Fund may not:
(1)......Issue senior securities, except as permitted by the Fund's
borrowing, lending and commodity restrictions, and for purposes of this
restriction, the issuance of shares of beneficial interest in multiple classes
or series, the purchase or sale of options, futures contracts and options on
futures contracts, forward commitments, forward foreign exchange contracts,
repurchase agreements, reverse repurchase agreements, dollar rolls, swaps and
any other financial
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transaction entered into pursuant to the Fund's investment policies as described
in the Prospectus and this Statement of Additional Information and in accordance
with applicable SEC pronouncements, as well as the pledge, mortgage or
hypothecation of the Fund's assets within the meaning of the Fund's fundamental
investment restriction regarding pledging, are not deemed to be senior
securities.
(2)......Borrow money, except from banks as a temporary measure to
facilitate the meeting of redemption requests or for extraordinary or emergency
purposes and except pursuant to reverse repurchase agreements or dollar rolls,
in all cases in amounts not exceeding 33 1/3% of the Fund's total assets
(including the amount borrowed) taken at market value. The Fund will not use
leverage to attempt to increase income. The Fund will not purchase securities
while outstanding borrowings (including reverse repurchase agreements and dollar
rolls) exceed 10% of the Fund's total assets.
(3)......Guarantee the securities of any other company, or , mortgage,
pledge, hypothecate or assign or otherwise encumber as security for indebtedness
its securities or receivables in an amount exceeding the amount of the borrowing
secured thereby.
(4)......Purchase securities of a company if the purchase would result
in the Fund's having more than 5% of the value of its total assets invested in
securities of such company.
(5)......Purchase securities of a company if the purchase would result
in the Fund's owning more than 10% of the outstanding voting securities of such
company.
(6)......Act as an underwriter, except as it may deemed to be on
underwriter in a sale of restricted securities held in its portfolio.
(7)......Make loans, except by purchase of debt obligations in which
the Fund may invest consistent with its investment policies, by entering into
repurchase agreements or through the lending of portfolio securities, in each
case only to the extent permitted by the Prospectus and this Statement of
Additional Information.
(8)......Invest in real estate, commodities or commodity contracts,
except that the Fund may invest in real estate investment trusts and in
financial futures contracts and related options and in any other financial
instruments which may be deemed to be commodities or commodity contracts in
which the Fund is not prohibited from investing by the Commodity Exchange Act
and the rules and regulations thereunder
(9)......Purchase securities on "margin" or effect " short sales" of
securities.
The Fund does not intend to enter into any reverse repurchase agreement, lend
portfolio securities or invest in securities index put and call warrants, as
described in fundamental investment restrictions (2), (6) and (7) above, during
the coming year.
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<PAGE>
Non-fundamental Investment Restrictions.
It is the policy of the Fund not to concentrate its investments in securities of
companies in any particular industry. In the opinion of the Commission,
investments are concentrated in a particular industry if such investments
aggregate 25% or more of the Fund's total assets. The Fund's policy does not
apply to investments in U.S. Government securities. The Fund has agreed to abide
by the foregoing non-fundamental policy which it will not change without the
affirmative vote of a majority of the Fund's outstanding shares of beneficial
interest.
The following restrictions have been designated as non-fundamental and may be
changed by a vote of the Fund's Board of Trustees without approval of
shareholders.
The Fund may not:
(1) purchase or retain the securities of any company if officers of the
Fund or Trustees of the Fund, or officers and directors of its adviser or
principal underwriter, individually own more than one-half of 1% of the
securities of such company or collectively own more than 5% of the securities of
such company; or
(2) invest in securities of other registered investment companies,
except by purchases in the open market including only customary brokers'
commissions, and except as they may be acquired as part of a merger, a
consolidation or an acquisition of assets; or
(3) purchase (a) securities which at the time of investment are not
readily marketable, (b) securities the disposition of which is restricted under
federal securities laws (excluding restricted securities that have been
determined by the Trustees of the Fund (or the person designated by them to make
such determinations) to be readily marketable) and (c) repurchase agreements
maturing in more than seven days, if, as a result, more than 15% of the Fund's
net assets would be invested in securities described in (a), (b), and (c) above.
In addition, in connection with the offering of its shares in various states,
the Fund has agreed not to: (1) invest in puts, calls, straddles, spreads or any
combination thereof, or in oil, gas or other mineral exploration or development
leases or programs; (2) invest more than 5% of its assets in equity securities
of any issuer which are not readily marketable, i.e., securities for which a
bona fide market does not exist at the time of purchase or subsequent valuation;
(3) pledge its portfolio securities, unless its net assets less pledged
securities continues to amount to at least 90% of the offering price; (4) invest
more than 5% of its total assets in warrants, valued at the lower of cost or
market, or more than 2% of its total assets in warrants, so valued, which are
not listed on the New York or American Stock Exchanges; and (5) invest in real
estate limited partnerships.
2. MANAGEMENT OF THE FUND
The Fund's Board of Trustees provides broad supervision over the
affairs of the Fund. The officers of the Fund are responsible for the Fund's
operations. The Trustees and executive officers of the Fund are listed below,
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together with their principal occupations during the past five years. An
asterisk indicates those Trustees who are interested persons of the Fund within
the meaning of the Investment Company Act of 1940, as amended (the "1940 Act").
JOHN F. COGAN, JR.*, Chairman of the Board, President and Trustee, DOB: June
1926
President, Chief Executive Officer and a Director of The Pioneer Group,
Inc. ("PGI"); Chairman and a Director of Pioneering Management Corporation
("PMC") and Pioneer Funds Distributor, Inc. ("PFD"); Director of Pioneering
Services Corporation ("PSC"), Pioneer Capital Corporation ("PCC") and
Forest-Starma (a Russian corporation); President and Director of Pioneer Plans
Corporation ("PPC"), Pioneer Investment Corp. ("PIC"), Pioneer Metals and
Technology, Inc. ("PMT"), Pioneer International Corp. ("PIntl"), Pioneer First
Russia, Inc. ("First Russia") and Pioneer Omega, Inc. ("Omega"); Chairman of the
Board and Director of Pioneer Goldfields Limited ("PGL") and Teberebie
Goldfields Limited; Chairman of the Supervisory Board of Pioneer Fonds
Marketing, GmbH ("Pioneer GmbH"); Member of the Supervisory Board of Pioneer
First Polish Trust Fund Joint Stock Company ("PFPT"); Chairman, President and
Trustee of all of the Pioneer mutual funds and Partner, Hale and Dorr (counsel
to the Fund).
RICHARD H. EGDAHL, M.D., Trustee, DOB: December 1926
Boston University Health Policy Institute, 53 Bay State Rd., Boston, MA 02115
Professor of Management, Boston University School of Management;
Professor of Public Health, Boston University School of Public Health; Professor
of Surgery, Boston University School of Medicine; Director, Boston University
Health Policy Institute and Boston University Medical Center; Executive Vice
President and Vice Chairman of the Board, University Hospital; Academic Vice
President for Health Affairs, Boston University; Director, Essex Investment
Management Company, Inc. (investment adviser), Health Payment Review, Inc.
(health care containment software firm), Mediplex Group, Inc. (nursing care
facilities firm), Peer Review Analysis, Inc. (health care facilities firm) and
Springer-Verlag New York, Inc. (publisher); Honorary Trustee, Franciscan
Children's Hospital and Trustee of all of the Pioneer mutual funds.
MARGARET B.W. GRAHAM, Trustee, DOB: May 1947
The Keep, P.O. Box 110. Little Deer Isle, ME 04650
Founding Director, Winthrop Group, Inc (consulting firm) since 1982;
Manager of Research Operations, Xerox Palo Alto Research Center, from 1991 to
1994; Professor of Operations Management and Management of Technology, Boston
University School of Management ("BUSM"), from 1989 to 1993 and Trustee of all
of the Pioneer mutual funds, except Pioneer Variable Contracts Trust.
JOHN W. KENDRICK, Trustee, DOB: July 1917
6363 Waterway Drive, Falls Church, VA 22044
Professor Emeritus and Adjunct Scholar, George Washington University;
Economic Consultant and Director, American Productivity and Quality Center;
American Enterprise Institute and Trustee of all of the Pioneer mutual funds,
except Pioneer Variable Contracts Trust.
MARGUERITE A. PIRET, Trustee, DOB: May 1948
One Boston Place, Suite 2635, Boston, MA 02108
President, Newbury, Piret & Company, Inc. (merchant banking firm) and
Trustee of all of the Pioneer mutual funds.
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DAVID D. TRIPPLE*, Trustee and Executive Vice President, DOB: February 1944
Executive Vice President and a Director of PGI; President, Chief
Investment Officer and a Director of PMC; Director of PFD, PCC, PIC, PIntl ,
First Russia, Omega and Pioneer SBIC Corporation, Executive Vice President and
Trustee of all of the Pioneer mutual funds.
STEPHEN K. WEST, Trustee, DOB: September 1928
125 Broad Street, New York, NY 10004
Partner, Sullivan & Cromwell (law firm); Trustee, The Winthrop Focus
Funds (mutual funds) and Trustee of all of the Pioneer mutual funds.
JOHN WINTHROP, Trustee, DOB: June 1936
One North Adgers Wharf, Charleston, SC 29401
President, John Winthrop & Co., Inc. (private investment firm);
Director of NUI Corp.; Trustee of Alliance Capital Reserves, Alliance Government
Reserves and Alliance Tax Exempt Reserves and Trustee of all of the Pioneer
mutual funds, except Pioneer Variable Contracts Trust.
WILLIAM H. KEOUGH, Treasurer, DOB: April 1937
Senior Vice President, Chief Financial Officer and Treasurer of PGI;
Treasurer of PFD, PMC, PSC, PCC, PIC, PIntl, PMT, PGL, First Russia, Omega and
Pioneer SBIC Corporation; Treasurer and Director of PPC and Treasurer of all of
the Pioneer mutual funds.
JOSEPH P. BARRI, Secretary, DOB: August 1946
Secretary of PGI, PMC, PPC, PIC, PIntl, PMT, First Russia, Omega and PCC;
Clerk of PFD and PSC; Partner, Hale and Dorr (counsel to the Fund) and Secretary
of all of the Pioneer mutual funds.
ERIC W. RECKARD, Assistant Treasurer, DOB: June 1956
Manager of Fund Accounting of PMC since May 1994, Manager of Auditing,
Compliance and Business Analysis for PGI prior to May 1994 and Assistant
Treasurer of all of the Pioneer mutual funds.
ROBERT P. NAULT, Assistant Secretary, DOB: March 1964
General Counsel and Assistant Secretary of PGI since 1995; Assistant
Secretary of PMC, PIntl, PGL, First Russia, Omega and all of the Pioneer mutual
funds; Assistant Clerk of PFD and PSC: and .formerly of Hale and Dorr (counsel
to the Fund) where he most recently served as junior partner.
ROBERT W. BENSON, Vice President, DOB: April 1947
Senior Vice President of PMC
Each of the above (except Mr. Benson) is also an officer and/or Trustee
or Director of the Pioneer mutual funds listed below. The Fund's Amended and
Restated Declaration of Trust (the "Declaration of Trust") provides that the
holders of two-thirds of its outstanding shares may vote to remove a Trustee of
the Fund at any meeting of shareholders. See "Description of Shares" below. The
business address of all officers is 60 State Street, Boston, Massachusetts
02109.
All of the outstanding capital stock of PFD, PMC and PSC is owned,
directly or indirectly, by PGI, a publicly-owned Delaware corporation. PMC, the
Fund's investment adviser, serves as the investment adviser for the Pioneer
mutual funds listed below and manages the investments of certain institutional
accounts.
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The table below lists all the Pioneer mutual funds currently offered to
the public and the investment adviser and principal underwriter for each fund.
Investment Principal
Fund Name Adviser Underwriter
Pioneer International Growth Fund PMC PFD
Pioneer Europe Fund PMC PFD
Pioneer Emerging Markets Fund PMC PFD
Pioneer India Fund PMC PFD
Pioneer Capital Growth Fund PMC PFD
Pioneer Mid-Cap Fund PMC PFD
Pioneer Growth Shares PMC PFD
Pioneer Small Company Fund PMC PFD
Pioneer Gold Shares PMC PFD
Pioneer Equity-Income Fund PMC PFD
Pioneer Fund PMC PFD
Pioneer II PMC PFD
Pioneer Real Estate Shares PMC PFD
Pioneer Short-Term Income Trust PMC PFD
Pioneer America Income Trust PMC PFD
Pioneer Bond Fund PMC PFD
Pioneer Income Fund PMC PFD
Pioneer Intermediate Tax-Free Fund PMC PFD
Pioneer Tax-Free Income Fund PMC PFD
Pioneer New York Triple Tax-Free Fund PMC PFD
Pioneer Massachusetts Double Tax-Free Fund PMC PFD
Pioneer California Double Tax-Free Fund PMC PFD
Pioneer U.S. Government Money Fund PMC PFD
Pioneer Cash Reserves Fund PMC PFD
Pioneer Interest Shares, Inc. PMC Note 1
Pioneer Variable Contracts Trust PMC Note 2
Note 1 This fund is a closed-end fund.
Note 2 This is a series of eight separate portfolios designed to provide
investment vehicles for the variable annuity and variable life
insurance contracts of various insurance companies or for certain
qualified pension plans.
To the knowledge of the Fund, no officer or trustee of the Fund owned 5% or more
of the issued and outstanding shares of PGI on the date of this Statement of
Additional Information, except Mr. Cogan who then owned approximately 15% of
such shares.
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Compensation of Officers and Trustees
The Fund pays no salaries or compensation to any of its officers. Commencing on
October 1, 1996, each series of the Fund will pay an annual trustee's fee to
each Trustee who is not affiliated with PMC, PFD or PSC consisting of two
components: (a) a base fee of $500 and (b) a variable fee, calculated on the
basis of the average net assets of the Fund, estimated to be approximately
$4,444 for 1996. In addition, the Fund will pay a per meeting fee of $120 to
each Trustee who is not affiliated with PMC, PFD or PSC. The Fund also will pay
an annual committee participation fee to trustees who serve as members of
committees established to act on behalf of one or more of the Pioneer mutual
funds. Committee fees will be allocated to the Fund on the basis of the Fund's
average net assets. Each Trustee who is a member of the Audit Committee for the
Pioneer mutual funds will receive an annual fee equal to 10% of the aggregate
annual trustee's fee, except the Committee Chair who will receive an annual
trustee's fee equal to 20% of the aggregate annual trustee's fee. The Audit
Committee fees for each member and the audit Committee Chair for 1996 are
expected to be approximately $6,000 and $12,000, respectively. Members of the
Pricing Committee for the Pioneer mutual funds, as well as any other committee
which renders material functional services to the Board of Trustees for the
Pioneer mutual funds, will receive an annual fee equal to 5% of the annual
trustee's fee, except the Committee Chair who will receive an annual trustee's
fee equal to 10% of the annual trustee's fee. The Pricing Committee fees for
each member and the Pricing Committee Chair for 1996 are expected to be
approximately $3,000 and $6,000, respectively. Any such fees paid to affiliates
or interested persons of PMC, PFD or PSC are reimbursed to the Fund under its
Management Contract. In 1995, the Fund paid an annual trustee's fee of $6,000,
and a payment of $500 plus expenses per meeting attended, to each Trustee who
was not affiliated with PMC, PFD or PSC and paid an annual trustee's fee of $500
plus expenses to each Trustee affiliated with PMC, PFD or PSC. Any such fees and
expenses paid to affiliates or interested persons of PMC, PFD or PSC were
reimbursed to the Fund under its management contract. As of the date of this
Statement of Additional Information, the Trustees and officers of the Fund
owned, in the aggregate, less than 1% of the outstanding securities of the Fund.
As of such date, to the knowledge of the Fund, no person owned more than 5% of
the outstanding shares of the Fund.
The following table sets forth certain information with respect to the
compensation of each Trustee of the Fund for the fiscal year ending September
30, 1995:
Pension or
Retirement Total
Benefits Compensation
Aggregate Accrued as from Fund and
Compensation Part of Pioneer Family
Name of Trustee from the Fund* Fund's Expenses of Funds**
John F. Cogan, Jr. $ 500.00 $ 0 $ 11,000.00
Richard H. Egdahl, M.D. 6,715.00 0 $ 63,315.00
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Margaret B.W. Graham 6,715.00 0 $ 62,398.00
John W. Kendrick 6,715.00 0 $ 62,398.00
Marguerite A. Piret 7,978.50 0 $ 76,704.00
David D. Tripple 500.00 0 $ 11,000.00
Stephen K. West 7,418.00 0 $ 68,180.00
John Winthrop 7,682.00 0 $ 71,199.00
----------- - ---------
$ 44,223.50 0 $ 426,194.00
+ PMC fully reimburses the Fund and the other funds in the Pioneer Family of
Funds for compensation paid to Messrs. Cogan and Tripple.
* As of Fund's fiscal year end.
** Estimated as of December 31, 1995 (calendar year end for all Pioneer mutual
funds).
3. INVESTMENT ADVISER
The Fund has contracted with PMC, 60 State Street, Boston, Massachusetts, to act
as its investment adviser. A description of the services provided to the Fund
under its management contract and the expenses paid by the Fund under the
contract is set forth in the Prospectus under the caption "Management of the
Fund."
The term of the management contract is one year and is renewable annually by the
vote of a majority of the Board of Trustees of the Fund (including a majority of
the Board of Trustees who are not parties to the contract or interested persons
of any such parties). The vote must be cast in person at a meeting called for
the purpose of voting on such renewal. The contract terminates if assigned and
may be terminated without penalty by either party upon sixty days' written
notice by vote of the Board of Directors or Trustees or a majority of the
outstanding voting securities. Pursuant to the management contract, PMC will not
be liable for any error of judgment or mistake of law or for any loss sustained
by reason of the adoption of any investment policy or the purchase, sale or
retention of any securities on the recommendation of PMC. PMC, however, is not
protected against liability by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under the respective management
contract.
As compensation for its management services and expenses incurred, and certain
expenses which PMC incurs on behalf of the Fund, the Fund pays PMC a basic fee
of 0.625% of the Fund's average daily net assets (the "Basic Fee"). One twelfth
(1/12) of this annual Basic Fee is applied to the Fund's average net assets for
the current month, giving a dollar amount which is the monthly fee.
Performance Fee Adjustment
The Basic Fee is subject to an upward or downward adjustment, depending on
whether and to what extent, the investment performance of the fund for the
performance period exceeds, or is exceeded by, the record of the Standard and
Poors Mid-Cap 400 Index of mid-capitalization stocks (the "Index") over the same
period. The Index is comprised of 400 domestic stocks chosen for market size,
with company market capitalization ranging
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from $118 million to $7.487 billion, liquidity and industry group
representation. It is a market-value weighted index and was the first benchmark
of midcap stock price movements. The performance period consists of the current
month and the prior 35 months ("performance period"). Each percentage point of
difference (up to a maximum of +/-10) is multiplied by a performance adjustment
rate of 0.02%. The maximum annualized adjustment rate is +/- 0.20%. This
performance comparison is made at the end of each month. One twelfth (1/12) of
this rate is then applied to the fund's average net assets for the entire
performance period, giving a dollar amount that is added to (or subtracted from)
the Basic Fee.
The Fund's performance is calculated based on net asset value. For purposes of
calculating the performance adjustment, any dividends or capital gains
distributions paid by the Fund are treated as if reinvested in Fund shares at
the net asset value as of the record date for payment. The record for the Index
is based on change in value and is adjusted for any cash distributions from the
companies whose securities whose securities comprise the Index.
Application of Performance Adjustment
The application of the performance adjustment is illustrated by the following
hypothetical example, assuming that the net asset value of the Fund and the
level of the Index were $10 and 100, respectively, on the first day of the
performance period.
Investment Performance * Cumulative Change
First Day End of Period Absolute Percentage
Points
Fund $ 10 $ 13 +$ 3 + 30%
Index 100 123 + 23 + 23%
* Reflects performance at net asset value. Any dividends or capital gains
distributions paid by the Fund are treated as if reinvested in shares of the
Fund at net asset value as of the payment date and any dividends paid on
securities which comprise the Index are treated as if reinvested on the
ex-dividend date.
The difference in relative performance for the performance period is +7
percentage points. Accordingly, the annualized management fee rate for the last
month of the performance period would be calculated as follows: One-twelfth of
the Basic Fee of 0.625% would be applied to the Fund's average daily net assets
for the month resulting in a dollar amount. The +7 percentage point difference
is multiplied by the performance adjustment rate of 0.02% producing a rate of
0.14%. One-twelfth of this rate is then applied to the average daily net assets
of the Fund over the performance period resulting in a dollar amount which is
added to the dollar amount of the Basic Fee. The management fee paid is the
dollar amount calculated for the performance period. If the
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investment performance of the Fund during the performance period was exceeded by
the record of the Index, the dollar amount of performance adjustment would be
deducted from the Basic Fee.
Because the adjustment to the Basic Fee is based on the comparative performance
of the Fund and the record of the Index, the controlling factor is not whether
Fund performance is up or down, but whether it is up or down more or less than
the record of the Index. Moreover, the comparative investment of the Fund is
based solely on the relevant performance period without regard to the cumulative
performance over a longer or shorter period of time.
Phase-In of Performance Adjustment
For the period starting February 1, 1996 and ending June 30, 1996, the
management fee shall be paid at the annual rate of 0.50% of average net assets
up to $250 million, 0.48% of the next %50 million in net assets and 0.45% on the
net assets exceeding $300 million. Based upon the Fund's expected net assets,
this fee schedule is expected to result in an effective fee rate of
approximately 0.46% for such period. Because the performance adjustment operates
on a prospective basis only, neither investment results nor average assets from
periods prior to February 1, 1996 will be considered in the initial
implementation of the performance based fee. Additionally, no performance
adjustment increasing the Basic Fee will be made until a 12 month performance
record, starting in January 1997, has accrued. A performance adjustment that
would have the effect of lowering the Basic Fee will be made after a 6 month
performance record, starting in February 1996, has accrued.
Accordingly, starting with July 1996, the Basic Fee will take effect and will be
adjusted for the relative performance of the Fund and the record of the Index
from February 1, 1996 onward if such adjustment would have the effect of
lowering the Basic Fee. The application of a negative adjustment will continue
through December 31, 1996. Starting with January, 1997, the Basic Fee will be
adjusted to reflect both increases and decreases based upon the Fund's relative
performance relative to the Index from February 1, 1996 onward.
The performance adjustment will be applied against assets over the same period
of performance and thereafter a new month will be added to the period for
purposes of measuring performance and the average assets until the period equals
36 months. After 36 months have elapsed from February 1, 1996, the performance
period will consist of the most recent month plus the previous 35 months.
During its fiscal years ended September 30, 1993, 1994 and 1995, the Fund paid
or owed total management fees to PMC of approximately $4,295,000, $4,801,000 and
$4,701,000 pursuant to a management contract previously in effect under which
fees were paid at the annual rate of 0.50% of the average net assets up to $250
million., 0.48% of the next 50 million in assets and 0.45% on the net assets
exceeding $300 million.
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4. UNDERWRITING AGREEMENT AND DISTRIBUTION PLANS
The Fund entered into an Underwriting Agreement with PFD. The Underwriting
Agreement will continue from year to year if annually approved by the Trustees.
The Underwriting Agreement provides that PFD will bear expenses for the
distribution of the Fund's shares, except for expenses incurred by PFD for which
it is reimbursed by the Fund under the Plan. PFD bears all expenses it incurs in
providing services under the Underwriting Agreement. Such expenses include
compensation to its employees and representatives and to securities dealers for
distribution related services performed for the Fund. PFD also pays certain
expenses in connection with the distribution of the Fund's shares, including the
cost of preparing, printing and distributing advertising or promotional
materials, and the cost of printing and distributing prospectuses and
supplements to prospective shareholders. The Fund bears the cost of registering
its shares under federal and state securities law and the laws of certain
foreign countries. The Fund and PFD have agreed to indemnify each other against
certain liabilities, including liabilities under the Securities Act of 1933, as
amended. Under the Underwriting Agreement, PFD will use its best efforts in
rendering services to the Fund.
The Fund has adopted a plan of distribution pursuant to Rule 12b-1 under the
1940 Act with respect to its Class A shares (the "Class A Plan"), a plan of
distribution with respect to its Class B shares (the "Class B Plan") and a plan
of distribution with respect to its Class C shares (the "Class C Plan")
(together, the "Plans").
Class A Plan
Pursuant to the Class A Plan the Fund may reimburse PFD for its expenditures in
financing any activity primarily intended to result in the sale of Fund shares.
Certain categories of such expenditures have been approved by the Board of
Trustees and are set forth in the Prospectus. See "Distribution Plans" in each
Prospectus. The expenses of the Fund pursuant to the Class A Plan are accrued on
a fiscal year basis and may not exceed, with respect to Class A shares, the
annual rate of 0.25% of the Fund's average annual net assets attributable to
Class A.
Class B Plan
The Class B Plan provides that the Fund shall pay PFD, as the Fund's distributor
for its Class B shares, a daily distribution fee equal on an annual basis to
0.75% of the Fund's average daily net assets attributable to Class B shares and
will pay PFD a service fee equal to 0.25% of the Fund's average daily net assets
attributable to Class B shares (which PFD will in turn pay to securities dealers
which enter into a sales agreement with PFD at a rate of up to 0.25% of the
Fund's average daily net assets attributable to Class B shares owned by
investors for whom that securities dealer is the holder or dealer of record).
This service fee is intended to be in consideration of personal services and/or
account maintenance services rendered by the dealer with respect to Class B
shares. PFD will advance to dealers the first-year service fee at a rate equal
to 0.25% of the amount invested. As compensation therefor, PFD may retain the
service fee paid by the Fund with respect to such shares for the first year
after purchase. Dealers will
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become eligible for additional service fees with respect to such shares
commencing in the thirteenth month following purchase. Dealers may from time to
time be required to meet certain other criteria in order to receive service
fees. PFD or its affiliates are entitled to retain all service fees payable
under the Class B Plan for which there is no dealer of record or for which
qualification standards have not been met as partial consideration for personal
services and/or account maintenance services performed by PFD or its affiliates
for shareholder accounts.
The purpose of distribution payments to PFD under the Class B Plan is to
compensate PFD for its distribution services to the Fund. PFD pays commissions
to dealers as well as expenses of printing prospectuses and reports used for
sales purposes, expenses with respect to the preparation and printing of sales
literature and other distribution-related expenses, including, without
limitation, the cost necessary to provide distribution-related services, or
personnel, travel office expenses and equipment. The Class B Plan also provides
that PFD will receive all contingent deferred sales charges ("CDSCs")
attributable to Class B shares. (See "Distributions Plans" in the Prospectus.)
Class C Plan
The Class C Plan provides that the Fund will pay PFD, as the Fund's distributor
for its Class C shares, a distribution fee accrued daily and paid quarterly,
equal on an annual basis to 0.75% of the Fund's average daily net assets
attributable to Class C shares and will pay PFD a service fee equal to 0.25% of
the Fund's average daily net assets attributable to Class C shares. PFD will in
turn pay to securities dealers which enter into a sales agreement with PFD a
distribution fee and a service fee at rates of up to 0.75% and 0.25%,
respectively, of the Fund's average daily net assets attributable to Class C
shares owned by investors for whom that securities dealer is the holder or
dealer of record. The service fee is intended to be in consideration of personal
services and/or account maintenance services rendered by the dealer with respect
to Class C shares. PFD will advance to dealers the first-year service fee at a
rate equal to 0.25% of the amount invested. As compensation therefor, PFD may
retain the service fee paid by the Fund with respect to such shares for the
first year after purchase. Commencing in the thirteenth month following a
purchase of Class C shares, dealers will become eligible for additional service
fees at a rate of up to 0.25% of the amount invested and additional compensation
at a rate of up to 0.75% of the amount invested with respect to such shares.
Dealers may from time to time be required to meet certain other criteria in
order to receive service fees. PFD or its affiliates are entitled to retain all
service fees payable under the Class C Plan for which there is no dealer of
record or for which qualification standards have not been met as partial
consideration for personal services and/or account maintenance services
performed by PFD or its affiliates for shareholder accounts.
The purpose of distribution payments to PFD under the Class C Plan is to
compensate PFD for its distribution services with respect to the Class C shares
of the Fund. PFD pays commissions to dealers as well as expenses of printing
prospectuses and reports used for sales purposes, expenses with respect to the
preparation and printing of sales literature and other distribution-related
expenses, including, without limitation, the cost necessary
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to provide distribution-related services, or personnel, travel office expenses
and equipment. The Class C Plan also provides that PFD will receive all CDSCs
attributable to Class C shares. (See "Distributions Plans" in the Prospectus.)
General
In accordance with the terms of the Plans, PFD provides to the Fund for review
by the Trustees a quarterly written report of the amounts expended under the
respective Plan and the purpose for which such expenditures were made. In the
Trustees' quarterly review of the Plans, they will consider the continued
appropriateness and the level of reimbursement or compensation the Plans
provide.
No interested person of the Fund, nor any Trustee of the Fund who is not an
interested person of the Fund, has any direct or indirect financial interest in
the operation of the Plans except to the extent that PFD and certain of its
employees may be deemed to have such an interest as a result of receiving a
portion of the amounts expended under the Plans by the Fund and except to the
extent certain officers may have an interest in PFD's ultimate parent, PGI.
The Plans were adopted by a majority vote of the Board of Trustees, including
all of the Trustees who are not, and were not at the time they voted, interested
persons of the Fund, as defined in the 1940 Act (none of whom had or have any
direct or indirect financial interest in the operation of the Plans), cast in
person at a meeting called for the purpose of voting on the Plans. In approving
the Plans, the Trustees identified and considered a number of potential benefits
which the Plans may provide. The Board of Trustees believes that there is a
reasonable likelihood that the Plans will benefit each Fund and their current
and future shareholders. Under their terms, the Plans remain in effect from year
to year provided such continuance is approved annually by vote of the Trustees
in the manner described above. The Plans may not be amended to increase
materially the annual percentage limitation of average net assets which may be
spent for the services described therein without approval of the shareholders of
the Fund affected thereby, and material amendments of the Plans must also be
approved by the Trustees in the manner described above. A Plan may be terminated
at any time, without payment of any penalty, by vote of the majority of the
Trustees who are not interested persons of the Fund and have no direct or
indirect financial interest in the operations of the Plan, or by a vote of a
majority of the outstanding voting securities of the respective Class of the
Fund (as defined in the 1940 Act). A Plan will automatically terminate in the
event of its assignment (as defined in the 1940 Act).
During the fiscal year ended September 30, 1995, the Fund incurred distribution
fees pursuant to the Fund's Class A plan of approximately $1,799,000. No Class B
or Class C shares were outstanding during this period. Distribution fees were
paid by the Fund to PFD in reimbursement of expenses related to servicing of
shareholder accounts and to compensating dealers and sales personnel.
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5. SHAREHOLDER SERVICING/TRANSFER AGENT
The Fund has contracted with PSC, 60 State Street, Boston, Massachusetts, to act
as shareholder servicing and transfer agent for the Fund. This contract
terminates if assigned and may be terminated without penalty by either party
upon ninety days' written notice by vote of its Board of Directors or Trustees
or a majority of its outstanding voting securities.
Under the terms of its contract with the Fund, PSC services shareholder
accounts, and its duties include: (i) processing sales, redemptions and
exchanges of shares of the Fund; (ii)distributing dividends and capital gains
associated with Fund portfolio accounts; and (iii)maintaining account records
and responding to shareholder inquiries.
PSC receives an annual fee of $22.00 for each Class A, Class B and Class C
shareholder account from the Fund as compensation for the services described
above. PSC is also reimbursed by the Fund for its cash out-of-pocket
expenditures. The annual fee is set at an amount determined by vote of a
majority of the Trustees (including a majority of the Trustees who are not
parties to the contract with PSC or interested persons of any such parties) to
be comparable to fees for such services being paid by other investment
companies.
6. CUSTODIAN
Brown Brothers Harriman & Co. (the "Custodian") is the custodian of the Fund's
assets. The Custodian's responsibilities include safekeeping and controlling the
Fund's cash and securities, handling the receipt and delivery of securities, and
collecting interest and dividends on the Fund's investments. The Custodian does
not determine the investment policies of the Fund or decide which securities the
Fund will buy or sell. The Fund may, however, invest in securities, including
repurchase agreements, issued by the Custodian and may deal with the Custodian
as a principal in securities transactions. Portfolio securities may be deposited
into the Federal Reserve-Treasury Department Book Entry System or the Depository
Trust Company.
7. PRINCIPAL UNDERWRITER
PFD serves as the principal underwriter for the Fund in connection with the
continuous offering of the Class A, Class B and Class C shares of the Fund.
During the fiscal years ended September 30, 1993, September 30, 1994 and
September 30, 1995 net underwriting commissions paid to PFD in connection with
the offering of Class A shares of the Fund were, respectively, approximately
$3,535,000, $2,714,000 and $1,409,000. Commissions reallowed to dealers during
the same periods were approximately $3,141,000, $2,359,000 and $1,224,000.
The Fund will not generally issue Fund shares for consideration other than cash.
At the Fund's sole discretion, however, it may issue Fund shares for
consideration other than cash in connection with a bona fide reorganization,
statutory merger, or other acquisition of portfolio securities (other than
municipal debt securities issued by state political subdivisions or their
agencies or instrumentalities) provided (i) the securities meet the investment
objectives and policies of the Fund; (ii) the securities are acquired by the
Fund for investment and not for resale;
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(iii) the securities are not restricted as to transfer either by law or
liquidity of market; and (iv)the securities have a value which is readily
ascertainable (and not established only by evaluation procedures) as evidenced
by a listing on the American Stock Exchange or the New York Stock Exchange or
the Nasdaq National Market.
8. INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP, One International Place, Boston, Massachusetts 02110, is
the Fund's independent public accountants, providing audit services, tax return
review, and assistance and consultation with respect to the preparation of
filings with the Commission.
9. PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on behalf
of the Fund by PMC pursuant to authority contained in the Fund's management
contract. In selecting brokers or dealers, PMC will consider various relevant
factors, including, but not limited to, the size and type of the transaction;
the nature and character of the markets for the security to be purchased or
sold; the execution efficiency, settlement capability, and financial condition
of the dealer; the dealer's execution services rendered on a continuing basis;
and the reasonableness of any dealer spreads.
PMC may select broker-dealers which provide brokerage and/or research services
to the Fund and/or other investment companies managed by PMC. In addition, if
PMC determines in good faith that the amount of commissions charged by a
broker-dealer is reasonable in relation to the value of the brokerage and
research services provided by such broker, the Fund may pay commissions to such
broker-dealer in an amount greater than the amount another firm may charge. Such
services may include advice concerning the value of securities; the advisability
of investing in, purchasing or selling securities; the availability of
securities or the purchasers or sellers of securities; furnishing analyses and
reports concerning issuers, industries, securities, economic factors and trends,
portfolio strategy and performance of accounts; and effecting securities
transactions and performing functions incidental thereto (such as clearance and
settlement). PMC maintains a listing of broker-dealers who provide such services
on a regular basis. However, because it is anticipated that many transactions on
behalf of the Fund and other investment companies managed by PMC are placed with
broker-dealers (including broker-dealers on the listing) without regard to the
furnishing of such services, it is not possible to estimate the proportion of
such transactions directed to such dealers solely because such services were
provided.
The research received from broker-dealers may be useful to PMC in rendering
investment management services to the Fund as well as other investment companies
managed by PMC, although not all such research may be useful to the Fund.
Conversely, such information provided by brokers or dealers who have executed
transaction orders on behalf of such other PMC clients may be useful to PMC in
carrying out its obligations to the Fund. The receipt of such research has not
reduced PMC's normal independent research activities; however, it enables PMC to
avoid
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the additional expenses which might otherwise be incurred if it were to attempt
to develop comparable information through its own staff.
In circumstances where two or more broker-dealers offer comparable prices and
executions, preference may be given to a broker-dealer which has sold shares of
the Fund as well as shares of other investment companies or accounts managed by
PMC. This policy does not imply a commitment to execute all portfolio
transactions through all broker-dealers that sell shares of the Fund.
The Trustees periodically review PMC's performance of its responsibilities in
connection with the placement of portfolio transactions on behalf of the Fund.
In addition to the Fund, PMC acts as investment adviser to other Pioneer mutual
funds and certain private accounts with investment objectives similar to those
of the Fund. Securities frequently meet the investment objectives of the Fund,
such other funds and such private accounts. In such cases, the decision to
recommend a purchase to one fund or account rather than another is based on a
number of factors. The determining factors in most cases are the amount of
securities of the issuer then outstanding, the value of those securities and the
market for them. Other factors considered in the investment recommendations
include other investments which each fund or account presently has in a
particular industry and the availability of investment funds in each fund or
account.
It is possible that at times identical securities will be held by more than one
fund and/or account. However, positions in the same issue may vary and the
length of time that any fund or account may choose to hold its investment in the
same issue may likewise vary. To the extent that the Fund, another mutual fund
in the Pioneer group or a private account managed by PMC may not be able to
acquire as large a position in such security as it desires, it may have to pay a
higher price for the security. Similarly, the Fund may not be able to obtain as
large an execution of an order to sell or as high a price for any particular
portfolio security if PMC decides to sell on behalf of another account the same
portfolio security at the same time. On the other hand, if the same securities
are bought or sold at the same time by more than one fund or account, the
resulting participation in volume transactions could produce better executions
for the Fund or the account. In the event more than one account purchases or
sells the same security on a given date, the purchases and sales will normally
be made as nearly as practicable on a pro rata basis in proportion to the
amounts desired to be purchased or sold by each.
During the fiscal years ended September 30, 1993, September 30, 1994 and
September 30, 1995 the Fund paid aggregate brokerage and underwriting
commissions of approximately $1,786,000, $494,000 and $857,000 .
10. TAX STATUS AND DIVIDENDS
It is the Fund's policy to meet the requirements of Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), for qualification as a regulated
investment company. These requirements relate to the sources of the Fund's
income, the diversification of its assets, and the
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timing of its distributions. If the Fund meets all such requirements and
distributes to its shareholders at least annually all investment company taxable
income and net capital gain, if any, which it receives, the Fund will be
relieved of the necessity of paying federal income tax.
In order to qualify under Subchapter M, the Fund must, among other things,
derive at least 90% of its gross income for each taxable year from dividends,
interest, payments with respect to securities loans, gains from the sale or
other disposition of stock, securities or foreign currencies, or other income
(including gains from options, futures or forward contracts) derived with
respect to its business of investing in such stock, securities or currencies
(the "90% income test"), limit its gains from the sale of stock, securities and
certain other investments held for less than three months to less than 30% of
its annual gross income (the "30% test") and satisfy certain diversification and
income distribution requirements.
Dividends from investment company taxable income, which includes net investment
income, net short-term capital gain in excess of net long-term capital loss, and
certain net foreign exchange gains are taxable as ordinary income, whether
received in cash or in additional shares. Dividends from net long-term capital
gain in excess of net short-term capital loss, if any, whether received in cash
or additional shares, are taxable to the Fund's shareholders as long-term
capital gains for federal income tax purposes without regard to the length of
time shares of the Fund have been held. The federal income tax status of all
distributions will be reported to shareholders annually.
Any dividend declared by the Fund in October, November or December as of a
record date in such a month and paid during the following January will be
treated for federal income tax purposes as received by shareholders on December
31 of the calendar year in which it is declared.
Foreign exchange gains and losses realized by the Fund in connection with
certain transactions involving foreign currency-denominated debt securities,
certain options and futures contracts relating to foreign currency, forward
foreign currency contracts, foreign currencies, or payables or receivables
denominated in a foreign currency are subject to Section 988 of the Code, which
generally causes such gains and losses to be treated as ordinary income and
losses and may affect the amount, timing and character of distributions to
shareholders. Any such transactions that are not directly related to the Fund's
investment in stock or securities may increase the amount of gain it is deemed
to recognize from the sale of certain investments held for less than 3 months
for purposes of the 30% test, and may under future Treasury regulations produce
income not among the types of "qualifying income" for purposes of the 90% income
test. If the net foreign exchange loss for a year were to exceed the Fund's
investment company taxable income (computed without regard to such loss) the
resulting overall ordinary loss for such year would not be deductible by the
Fund or its shareholders in future years.
If the Fund acquires stock in certain non-U.S. corporations that receive at
least 75% of their annual gross income from passive sources (such as interest,
dividends, rents, royalties or capital gain) or hold at least 50% of their
assets in investments producing such passive income ("passive foreign investment
companies"), the Fund could be subject to Federal income tax and additional
interest charges on "excess distributions" received from such companies or gain
from the sale of
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stock in such companies, even if all income or gain actually received by the
Fund is timely distributed to its shareholders. The Fund would not be able to
pass through to its shareholders any credit or deduction for such a tax. Certain
elections may, if available, ameliorate these adverse tax consequences but any
such election would require the Fund to recognize taxable income or gain without
the concurrent receipt of cash. The Fund may limit and/or manage its holdings in
passive foreign investment companies to minimize its tax liability or maximize
its return from these investments.
At the time of an investor's purchase of Fund shares, a portion of the purchase
price is often attributable to realized or unrealized appreciation in the Fund's
portfolio or undistributed taxable income of the Fund. Consequently, subsequent
distributions from such appreciation or income may be taxable to such investor
even if the net asset value of the investor's shares is, as a result of the
distributions, reduced below the investor's cost for such shares and the
distributions in reality represent a return of a portion of the investment.
Any loss realized upon the redemption of shares with a tax holding period of six
months or less will be treated as a long-term capital loss to the extent of any
amounts treated as distributions of long-term capital gain with respect to such
shares.
In addition, if Class A shares redeemed or exchanged have been held for less
than 91 days, (1)in the case of a reinvestment at net asset value, the sales
charge paid on such shares is not included in their tax basis under the Code and
(2)in the case of an exchange, all or a portion of the sales charge paid on such
shares is not included in their tax basis under the Code, to the extent a sales
charge that would otherwise apply to the shares received is educed pursuant to
the exchange privilege. In either case, the portion of the sales charge not
included in the tax basis of the shares redeemed or surrendered in an exchange
is included in the tax basis of the shares acquired in the reinvestment or
exchange. Losses on certain redemptions may be disallowed under "wash sale"
rules in the event of other investments in the same Fund within a period of 61
days beginning 30 days before and ending 30 days after a redemption or other
sale of shares.
For federal income tax purposes, the Fund is permitted to carry forward a net
capital loss in any year to offset net capital gains, if any, during the eight
years following the year of the loss. To the extent subsequent net capital gains
are offset by such losses, they would not result in federal income tax liability
to such Fund and are not expected to be distributed as such to shareholders.
Options written or purchased and futures contracts entered into by the Fund on
certain securities, securities indices and foreign currencies, as well as
certain foreign currency forward contracts, may cause the Fund to recognize
gains or losses from marking-to-market at the end of its taxable year even
though such options may not have lapsed, been closed out, or exercised or such
futures or forward contracts may not have been closed out or disposed of and may
affect the characterization as long-term or short-term of some capital gains and
losses realized by the Fund. Certain options, futures and forward contracts on
foreign currency may be subject to Section 988, described above, and accordingly
produce ordinary income or loss. Losses on certain options, futures or forward
contracts and/or offsetting positions (portfolio securities or other positions
with respect to which the Fund's risk of loss is substantially diminished by one
or more options,
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futures or forward contracts) may also be deferred under the tax straddle rules
of the Code, which may also affect the characterization of capital gains or
losses from straddle positions and certain successor positions as long-term or
short-term. The tax rules applicable to options, futures, forward contracts and
straddles may affect the amount, timing and character of the Fund's income and
loss and hence of its distributions to shareholders. Certain tax elections may
be available that would enable the Fund to ameliorate some adverse effects of
the tax rules described in this paragraph.
For purposes of the 70% dividends-received deduction available to corporations,
dividends received by the Fund, if any, from U.S. domestic corporations in
respect of any share of stock with a tax holding period of at least 46 days (91
days in the case of certain preferred stock) held in an unleveraged position and
distributed and designated by the Fund may be treated as qualifying dividends.
Any corporate shareholder should consult its tax adviser regarding the
possibility that its tax basis in its shares may be reduced, for federal income
tax purposes, by reason of "extraordinary dividends" received with respect to
the shares. Corporate shareholders must meet the minimum holding period
requirement stated above (46 or 91 days), taking into account any holding-period
reductions from certain hedging or other transactions that diminish risk of
loss, with respect to their Fund shares in order to qualify for the deduction
and, if they borrow to acquire Fund shares, may be denied a portion of the
dividends-received deduction. The entire qualifying dividend, including the
otherwise deductible amount, will be included in determining the excess (if any)
of a corporation's adjusted current earnings over its alternative minimum
taxable income, which may increase a corporation's alternative minimum tax
liability.
The Fund may be subject to withholding and other taxes imposed by foreign
countries with respect to investments in those countries. Tax conventions
between certain countries and the U.S. may reduce or eliminate such taxes. The
Fund does not expect to satisfy the requirements for passing through to
shareholders their pro rata shares of foreign taxes paid by the Fund, with the
result that its shareholders will not include such taxes in their gross incomes
and will not be entitled to a tax deduction or credit for such taxes on their
own tax returns
Different tax treatment, including penalties on certain excess contributions and
deferrals, certain pre-retirement and post-retirement distributions, and certain
prohibited transactions is accorded to accounts maintained as qualified
retirement plans. Shareholders should consult their tax advisers for more
information.
The Fund is not subject to Massachusetts corporation franchise or excise taxes
and, provided that it qualifies as a regulated investment company under the
Code, also will not be required to pay any Massachusetts income tax.
Federal law requires that the Fund withhold (as "backup withholding") 31% of
reportable payments, including dividends, capital gain dividends, and the
proceeds of redemptions (including exchanges) and repurchases, to shareholders
who have not complied with Internal Revenue Service ("IRS") regulations. In
order to avoid this withholding requirement, shareholders must certify on their
Account Applications, or on separate W-9 Forms, that their Social Security or
other Taxpayer Identification Number is correct and that they are not currently
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subject to backup withholding, or that they are exempt from backup withholding.
The Fund may nevertheless be required to withhold if it receives notice from the
IRS or a broker that the number provided is incorrect or backup withholding is
applicable as a result of previous underreporting of interest or dividend
income.
The description above relates only to U.S. federal income tax consequences for
shareholders who are U.S. persons, i.e., U.S. citizens or residents and U.S.
domestic corporations, partnerships, trusts or estates, and who are subject to
U.S. federal income tax. The description does not address the special tax rules
applicable to particular types of investors, such as banks, insurance companies,
or tax-exempt entities. Shareholders should consult their own tax advisers on
these matters and on state, local and other applicable tax laws. Investors other
than U.S. persons may be subject to different U.S. tax treatment, including a
possible 30% U.S. withholding tax (or withholding tax at a lower treaty rate) on
amounts treated as ordinary dividends from the Fund and, unless an effective IRS
Form W-8 or authorized substitute is on file, to 31% backup withholding on
certain other payments from the Fund.
11. DESCRIPTION OF SHARES
The Fund's Declaration of Trust permits the Board of Trustees to authorize the
issuance of an unlimited number of full and fractional shares of beneficial
interest which may be divided into such separate series as the Trustees may
establish. Currently, the Fund consists of only one series. The Trustees may,
however, establish additional series of shares in the future, and may divide or
combine the shares into a greater or lesser number of shares without thereby
changing the proportionate beneficial interests in the Fund. The Declaration of
Trust further authorizes the Trustees to classify or reclassify any series of
the shares into one or more classes. Pursuant thereto, the Trustees have
authorized the issuance of three classes of shares of the Fund, designated as
Class A shares, Class B and Class C shares. Each share of a class of the Fund
represents an equal proportionate interest in the assets of the Fund allocable
to that class. Upon liquidation of the Fund, shareholders of each class of the
Fund are entitled to share pro rata in the Fund's net assets allocable to such
class available for distribution to shareholders. The Fund reserves the right to
create and issue additional series or classes of shares, in which case the
shares of each class of a series would participate equally in the earnings,
dividends and assets allocable to that class of the particular series.
Shareholders are entitled to one vote for each share held and may vote in the
election of Trustees and on other matters submitted to a meeting of
shareholders. Although Trustees are not elected annually by the shareholders,
shareholders have, under certain circumstances, the right to remove one or more
Trustees.
The shares of each series of the Fund are entitled to vote separately to approve
investment advisory agreements or changes in investment restrictions, but
shareholders of all series vote together in the election and selection of
Trustees and accountants. Shares of all series of the Fund vote together as a
class on matters that affect all series of the Fund in substantially the same
manner. As to matters affecting a single series or class, shares of such series
or class will vote separately. No amendment adversely affecting the rights of
shareholders may be made to the
-23-
<PAGE>
Fund's Declaration of Trust without the affirmative vote of a majority of its
shares. Shares have no preemptive or conversion rights. Shares are fully paid
and non-assessable by the Fund, except as stated below.
12. CERTAIN LIABILITIES
The Fund (previously named Pioneer Three) was previously organized as a
Massachusetts business trust and was reorganized as a Delaware business trust on
January 31, 1996, pursuant to an Agreement and Plan of Reorganization approved
by the shareholders of the Fund. As a Delaware business trust, the Fund's
operations are governed by its Declaration of Trust dated January 31, 1996. A
copy of the fund's Certificate of Trust, also dated January 31, 1996, is on file
with the office of the Secretary of State of Delaware. Generally, Delaware
business trust shareholders are not personally liable for obligations of the
Delaware business trust under Delaware law. The Delaware Business Trust Act (the
"Delaware Act") provides that a shareholder of a Delaware business trust shall
be entitled to the same limitation of liability extended to shareholders of
private for-profit corporations. The Fund's Declaration of Trust expressly
provides that the Fund is organized under the Delaware Act and that the
Declaration of Trust is to be governed by Delaware law. There is nevertheless a
possibility that a Delaware business trust, such as the fund, might become a
party to an action in another state whose courts refused to apply Delaware law,
in which case the trust's shareholders could become subject to personal
liability.
To guard against this risk, the Declaration of Trust (I) contains an express
disclaimer of shareholder liability for acts or obligations of the Fund and
provides that notice of such disclaimer may be given in each agreement,
obligation or instrument entered into or executed by the Fund or its Trustees,
(ii) provides for the indemnification out of Fund property of any shareholders
held personally liable for any obligations of the Fund or any series of the Fund
and (iii) provides that the Fund shall, upon request, assume the defense of any
claim made against any shareholder for any act or obligation of the Fund and
satisfy any judgment thereon. Thus, the risk of a shareholder incurring
financial loss beyond his or her investment because of shareholder liability is
limited to circumstances in which all of the following factors are present: (1)
a court refused to apply Delaware law; (2) the liability arose under tort law
or, if not, no contractual limitation of liability was in effect; and (3) the
Fund itself would be unable to meet its obligations. In light of Delaware law,
the nature of the Fund's business and the nature of its assets, the risk of
personal liability to a Fund shareholder is remote.
The Declaration of Trust further provides that the Fund shall indemnify each of
its Trustees and officers against liabilities and expenses reasonably incurred
by them, in connection with, or arising out of, any action, suit or proceeding,
threatened against or otherwise involving such Trustee or officer, directly or
indirectly, by reason of being or having been a Trustee or officer of the Fund.
The Declaration of Trust does not authorize the Fund to indemnify any Trustee or
officer against any liability to which he or she would otherwise be subject by
reason of or for willful misfeasance, bad faith, gross negligence or reckless
disregard of such person's duties.
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<PAGE>
13. LETTER OF INTENTION
Purchases in the Class A shares of the Fund of $50,000 or more (excluding any
reinvestments of dividends and capital gains distributions) made within a
13-month period pursuant to a Letter of Intention provided by PFD will qualify
for a reduced sales charge. Such reduced sales charge will be the charge that
would be applicable to the purchase of all Class A shares purchased during such
13-month period pursuant to a Letter of Intention had such shares been purchased
all at once. See "How to Buy Fund Shares" in each Prospectus. For example, a
person who signs a Letter of Intention providing for a total investment in Class
A shares of $50,000 over a 13-month period would be charged at the 4.50% sales
charge rate with respect to all purchases during that period. Should the amount
actually purchased during the 13-month period be more or less than that
indicated in the Letter, an adjustment in the sales charge will be made. A
purchase not made pursuant to a Letter of Intention may be included thereafter
if the Letter is filed within 90 days of such purchase. Any shareholder may also
obtain the reduced sales charge by including the value (at current offering
price) of all the shares of record he holds in the Fund and in all other Pioneer
mutual funds as of the date of the Letter of Intention as a credit toward
determining the applicable scale of sales charge for the Class A shares to be
purchased under the Letter of Intention.
The Letter of Intention authorizes PSC to escrow Class A shares having a
purchase price equal to 5% of the stated investment specified in the Letter of
Intention. A Letter of Intention is not a binding obligation upon the investor
to purchase, or the Fund to sell, the full amount indicated and the investor
should carefully read the provisions of the Letter of Intention set forth in the
Account Application before signing.
14. SYSTEMATIC WITHDRAWAL PLAN
The Systematic Withdrawal Plan ("SWP") is designed to provide a convenient
method of receiving fixed payments at regular intervals from Class A shares of
the Fund deposited by the applicant under this SWP. The applicant must deposit
or purchase for deposit with PSC shares of the Fund having a total value of not
less than $10,000. Periodic checks of $50 or more will be deposited monthly or
quarterly directly into a bank account designated by the applicant or will be
sent by check to the applicant, or any person designated by him monthly or
quarterly. Withdrawals from Class B share accounts are limited to 10% of the
value of the account at the time the SWP is implemented.
Any income dividends or capital gains distributions on shares under the SWP will
be credited to the Plan account on the payment date in full and fractional
shares at the net asset value per share in effect on the record date.
SWP payments are made from the proceeds of the redemption of shares deposited
under the SWP in a SWP account. To the extent that such redemptions for periodic
withdrawals exceed dividend income reinvested in the SWP account, such
redemptions will reduce and may ultimately exhaust the number of shares
deposited in the Plan account. Redemptions are taxable
-25-
<PAGE>
transactions to shareholders. In addition, the amounts received by a shareholder
cannot be considered as yield or income on his or her investment because part of
such payments may be a return of his or her investment.
The SWP may be terminated at any time (1)by written notice to PSC or from PSC to
the shareholder; (2)upon receipt by PSC of appropriate evidence of the
shareholder's death; or (3)when all shares under the Plan have been redeemed.
15. DETERMINATION OF NET ASSET VALUE
The net asset value per share of each class of the Fund is determined as of the
close of regular trading on the New York Stock Exchange (the "Exchange")
(currently 4:00 p.m., Eastern Time) on each day on which the Exchange is open
for trading. As of the date of this Statement of Additional Information, the
Exchange is open for trading every weekday except for the following holidays:
New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day. The net asset value per share of
each class of the Fund is also determined on any other day in which the level of
trading in its portfolio securities is sufficiently high that the current net
asset value per share might be materially affected by changes in the value of
its portfolio securities. The Fund is not required to determine its net asset
value per share on any day in which no purchase orders in good order for the
shares of the Fund are received and no shares are tendered for redemption.
The net asset value per share of each class of the Fund is computed by taking
the value of all of the Fund's assets attributable to a class, less the Fund's
liabilities attributable to a class, and dividing it by the number of
outstanding shares of the class. For purposes of determining net asset value,
expenses of the classes of the Fund are accrued daily.
Securities that have not traded on the date of valuation or securities for which
sales prices are not generally reported are valued at the mean between the last
bid and asked prices. Securities for which no market quotations are readily
available (excluding those whose trading has been suspended) will be valued at
fair value as determined in good faith by the Board of Trustees, although the
actual computations may be made by persons acting pursuant to the direction of
the Board of Trustees.
The Fund's maximum offering price per Class A share is determined by adding the
maximum sales charge to the net asset value per Class A share. Class B and Class
C shares are offered at net asset value without the imposition of an initial
sales charge.
16. INVESTMENT RESULTS
Quotations, Comparisons, and General Information
From time to time, in advertisements, in sales literature, or in reports to
shareholders, the past performance of the Fund may be illustrated and/or
compared with that of other mutual funds with similar investment objectives, and
to stock or other relevant indices. For example, total return of the
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<PAGE>
Fund's classes may be compared to rankings prepared by Lipper Analytical
Services, Inc., a widely recognized independent service which monitors mutual
fund performance; the Standard & Poors Mid-Cap 400 Index (described above);the
Standard & Poor's 500 Stock Index ("S&P 500"), an index of unmanaged groups of
common stock; the Dow Jones Industrial Average, a recognized unmanaged index of
common stocks of 30 industrial companies listed on the New York Stock Exchange;
or The Frank Russell Indexes ("Russell 1000," "2000," "2500," "3000,") or the
Wilshire Total Market Value Index ("Wilshire 5000"), two recognized unmanaged
indexes of broad based common stocks.
In addition, the performance of the classes of the Fund may be compared to
alternative investment or savings vehicles and/or to indexes or indicators of
economic activity, e.g., inflation or interest rates. Performance rankings and
listings reported in newspapers or national business and financial publications,
such as Barron's, Business Week, Consumers Digest, Consumer Reports, Financial
World, Forbes, Fortune, Investors Business Daily, Kiplinger's Personal Finance
Magazine, Money Magazine, New York Times, Smart Money, USA Today, U.S. News and
World Report, The Wall Street Journal, and Worth may also be cited (if the Fund
is listed in any such publication) or used for comparison, as well as
performance listings and rankings from various other sources including Bloomberg
Financial Markets, CDA/Wiesenberger, Donoghue's Mutual Fund Almanac, Investment
Company Data, Inc., Johnson's Charts, Kanon Bloch Carre and Co., Lipper
Analytical Services, Inc., Micropal, Inc., Morningstar, Inc., Schabacker
Investment Management and Towers Data Systems, Inc.
In addition, from time to time quotations from articles from financial
publications such as those listed above may be used in advertisements in sales
literature, or in reports to shareholders of the Fund.
The Fund may also present, from time to time, historical information depicting
the value of a hypothetical account in one or more classes of the Fund since
such Fund's inception.
In presenting investment results, the Fund may also include references to
certain financial planning concepts, including (a) an investor's need to
evaluate his financial assets and obligations to determine how much to invest;
(b) his need to analyze the objectives of various investments to determine where
to invest; and (c) his need to analyze his time frame for future capital needs
to determine how long to invest. The investor controls these three factors, all
of which affect the use of investments in building assets.
One of the primary methods used to measure the performance of a class of the
Fund is "total return." "Total return" will normally represent the percentage
change in value of an account, or of a hypothetical investment in a class of the
Fund, over any period up to the lifetime of that class of the Fund. Total return
calculations will usually assume the reinvestment of all dividends and capital
gains distributions and will be expressed as a percentage increase or decrease
from an initial value, for the entire period or for one or more specified
periods within the entire period. Total return percentages for periods of less
than one year will usually be annualized; total return percentages for periods
longer than one year will usually be accompanied by total return percentages for
each year within the period and/or by the average annual compounded total
-27-
<PAGE>
return for the period. The income and capital components of a given return may
be separated and portrayed in a variety of ways in order to illustrate their
relative significance. Performance may also be portrayed in terms of cash or
investment values, without percentages. Past performance cannot guarantee any
particular future result.
The Fund's average annual total return quotations for each of its classes as
that information may appear in the Fund's Prospectus, this Statement of
Additional Information or in advertising are calculated by standard methods
prescribed by the Commission.
Standardized Average Annual Total Return Quotations
Average annual total return quotations for Class A, Class B and Class C shares
are computed by finding the average annual compounded rates of return that would
cause a hypothetical investment in the class made on the first day of a
designated period (assuming all dividends and distributions are reinvested) to
equal the ending redeemable value of such hypothetical investment on the last
day of the designated period in accordance with the following formula:
P(1+T)n = ERV
Where: P = a hypothetical initial payment of $1,000, less
the maximum sales load of $57.50 for Class A
shares or the deduction of the CDSC for Class B
and Class C shares at the end of the period.
T = average annual total return
n = number of years
ERV = ending redeemable value of the hypothetical $1000
initial payment made at the beginning of the
designated period (or fractional portion thereof)
For purposes of the above computation, it is assumed that all dividends and
distributions made by the Fund are reinvested at net asset value during the
designated period. The average annual total return quotation is determined to
the nearest 1/100 of 1%.
In determining the average annual total return (calculated as provided above),
recurring fees, if any, that are charged to all shareholder accounts of a
particular class are taken into consideration. For any account fees that vary
with the size of the account, the account fee used for purposes of the above
computation is assumed to be the fee that would be charged to a class's mean
account size.
The average annual total return for the Class A shares of the Fund for
the one-year, five-year, ten-year and life-of-fund (inception November 19, 1982)
periods ended September 30, 1995 were 9.53%, 16.62%, 12.24% and 12.93%. No Class
B or Class C shares were outstanding prior to February 1, 1996.
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<PAGE>
Automated Information Line
FactFoneSM, Pioneer's 24-hour automated information line, allows shareholders to
dial toll-free 1-800-225-4321 and hear recorded fund information, including:
o net asset value prices for all Pioneer mutual funds;
o annualized 30-day yields on Pioneer's fixed income funds;
o annualized 7-day yields and 7-day effective (compound) yields
for Pioneer's money market funds; and
o dividends and capital gains distributions on all Pioneer mutual
funds.
Yields are calculated in accordance with Commission mandated standard formulas.
In addition, by using a personal identification number ("PIN"), shareholders may
enter purchases, exchanges and redemptions, access their account balance and
last three transactions and may order a duplicate statement. See "FactFoneSM" in
the Prospectus for more information.
All performance numbers communicated through FactFoneSM represent past
performance, and figures for all quoted bond funds include the maximum
applicable sales charge. A shareholder's actual yield and total return will vary
with changing market conditions. The value of Class A, Class B and Class C
shares (except for Pioneer money market funds, which seek a stable $1.00 share
price) will also vary, and such shares may be worth more or less at redemption
than their original cost.
17. FINANCIAL STATEMENTS
The Fund's financial statements for the fiscal year ended September 30, 1995 and
the Report of Independent Public Accountants included in this Statement of
Additional Information have been included in reliance upon the report of Arthur
Andersen, LLP, independent public accountants, as experts in accounting and
auditing. The report of Independent Accountants and financial statements
included in the Fund's Annual Report for the fiscal year ended September 30,
1995, filed electronically on November 29, 1995, are incorporated by reference
into this Statement of Additional Information. The financial highlights table in
the Prospectus and the financial statements incorporated by reference into the
Prospectus and Statement of Additional Information have been so included and
incorporated in reliance upon the report of Arthur Andersen, LLP, independent
public accountants, given on their authority as experts in accounting and
auditing.
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<PAGE>
APPENDIX A
Description of Bond Ratings1
Moody's Investor's Service, Inc.2
Aaa: Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risks appear somewhat bigger than in Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest susceptibility to impairment sometime in the future.
Baa: Bonds which are rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
- ---------------------------------------------
1 The ratings indicated herein are believed to be the most recent ratings
available at the date of this Prospectus for the securities listed. Ratings are
generally given to securities at the time of issuance. While the rating agencies
may from time to time revise such ratings, they undertake no obligation to do
so, and the ratings indicated do not necessarily represent ratings which will be
given to these securities on the date of the Fund's fiscal year-end.
2 Rates bonds of issuers which have $600,000 or more of debt, except bonds of
educational institutions, projects under construction, enterprises without
established earnings records and situations where current financial data is
unavailable.
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<PAGE>
<TABLE>
<CAPTION>
Pioneer Mid-Cap Fund
Date Initial Offering Price Sales Charge Shares Purchased Net Asset Value Initial Net Asset
Investment Included Per Share Value
<S> <C> <C> <C> <C> <C> <C>
11/19/82 $10,000 $10.61 5.75% 942.507 $10.00 $9,425
Dividends and Capital Gains Reinvested
Value of Shares
Date From Investment From Cap. Gains From Dividends Total Value
Reinvested Reinvested
<S> <C> <C> <C> <C>
12/31/82 $9,425 $0 $0 $9,425
12/31/83 $11,941 $161 $140 $12,242
12/31/84 $12,055 $335 $438 $12,828
12/31/85 $14,194 $803 $917 $15,914
12/31/86 $14,307 $2,094 $1,295 $17,696
12/31/87 $11,414 $3,381 $1,502 $16,297
12/31/88 $13,874 $5,060 $2,251 $21,185
12/31/89 $15,108 $7,311 $3,100 $25,519
12/31/90 $12,055 $7,039 $3,119 $22,213
12/31/91 $15,919 $9,579 $4,813 $30,311
12/31/92 $18,190 $12,106 $6,099 $36,395
12/31/93 $19,416 $15,856 $7,012 $42,284
12/31/94 $16,984 $16,297 $6,612 $39,893
12/31/95 $18,407 $21,522 $7,673 $47,602
</TABLE>
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<PAGE>
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
The following securities indices are well-known, unmanaged measures of market
performance. Advertisements and sales literature for the Fund may refer to these
indices or may present comparisons between the performance of the Fund and one
or more of the indices. Other indices may be used, if appropriate. The indices
are not available for direct investment. The data presented is not meant to be
indicative of the performance of the Fund, reflects past performance and does
not guarantee future results.
S&P 500
This index is a readily available, carefully constructed, market value weighted
benchmark of common stock performance. Currently, the S&P Composite Index
includes 500 of the largest stocks (in terms of stock market value) in the
United States; prior to March 1957 it consisted of 90 of the largest stocks.
DOW JONES INDUSTRIAL AVERAGE
This is a total return index based on the performance of 30 blue chip stocks.
U.S. SMALL STOCK INDEX
This index is a market value weighted index of the ninth and tenth deciles of
the New York Stock Exchange (NYSE), plus stocks listed on the American Stock
Exchange (AMEX) and over-the-counter (OTC) with the same or less capitalization
as the upper bound of the NYSE ninth decile.
U.S. INFLATION
The Consumer Price Index for All Urban Consumers (CPI-U), not seasonally
adjusted, is used to measure inflation, which is the rate of change of consumer
goods prices. Unfortunately, the inflation rate as derived by the CPI is not
measured over the same period as the other asset returns. All of the security
returns are measured from one month-end to the next month-end. CPI commodity
prices are collected during the month. Thus, measured inflation rates lag the
other series by about one-half month. Prior to January 1978, the CPI (as
compared with CPI-U) was used. Both inflation measures are constructed by the
U.S. Department of Labor, Bureau of Labor Statistics, Washington, DC.
S&P/BARRA INDEXES
The S&P/BARRA Growth and Value Indexes are constructed by dividing the stocks in
the S&P 500 Index according to price-to-book ratios. The Growth Index contains
stocks with higher price-to-book ratios, and the Value Index contains stocks
with lower price-to-book ratios. Both indexes are market capitalization
weighted.
LONG-TERM U.S. GOVERNMENT BONDS
The total returns on long-term government bonds from 1977 to 1991 are
constructed with data from The Wall Street Journal. Over 1926-1976, data are
obtained from the Government bond file at the Center for Research in Security
Prices (CRSP), Graduate School of Business, University of Chicago. Each year, a
one-bond portfolio with a term of approximately 20 years and a reasonably
current coupon was used, and whose returns did not reflect potential tax
benefits, impaired negotiability, or special redemption or call privileges.
Where callable bonds had to be used, the term of the bond was assumed to be a
simple average of the maturity and first call dates
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<PAGE>
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
minus the current date. The bond was "held" for the calendar year and returns
were computed. Total returns for 1977-1991 are calculated as the change in the
flat price or and-interest price.
INTERMEDIATE-TERM U.S. GOVERNMENT BONDS
Total returns of the intermediate-term government bonds for 1977-1991 are
calculated from The Wall Street Journal prices, using the change in flat price.
Returns from 1934-1986 are obtained from the CRSP Government Bond File.
Each year, one-bond portfolios are formed, the bond chosen is the shortest
noncallable bond with a maturity not less than 5 years, and this bond is "held"
for the calendar year. Monthly returns are computed. (Bonds with impaired
negotiability or special redemption privileges are omitted, as are partially or
fully tax-exempt bonds starting with 1943.) From 1934-1942, almost all bonds
with maturities near 5 years were partially or full tax-exempt and were selected
using the rules described above. Personal tax rates were generally low in that
period, so that yields on tax-exempt bonds were similar to yields on taxable
bonds. From 1926-1933, there are few bonds suitable for construction of a series
with a 5-year maturity. For this period, five year bond yield estimates are
used.
MSCI
Morgan Stanley Capital International Indices, developed by the Capital
International S.A., are based on share prices of some 1470 companies listed on
the stock exchanges around the world.
Countries in the MSCI EAFE Portfolio are:
Australia; Austria; Belgium; Denmark; Finland; France; Germany; Hong Kong;
Italy; Japan; Netherlands; N. Zealand; Norway; Singapore/Malaysia; Spain;
Sweden; Switzerland; United Kingdom.
6 MONTH CDs
Data sources include the Federal Reserve Bulletin and The Wall Street Journal.
LONG-TERM U.S. CORPORATE BONDS
For 1969-1991, corporate bond total returns are represented by the Salomon
Brothers Long-Term High-Grade Corporate Bond Index. Since most large corporate
bond transactions take place over the counter, a major dealer is the natural
source of these data. The index includes nearly all Aaa- and Aa-rated bonds. If
a bond is downgraded during a particular month, its return for the month is
included in the index before removing the bond from future portfolios.
Over 1926-1968 the total returns were calculated by summing the capital
appreciation returns and the income returns. For the period 1946-1968, Ibbotson
and Sinquefield backdated the Salomon Brothers' index, using Salomon Brothers'
monthly yield data with a methodology similar to that used by Salomon for
1969-1991. Capital appreciation returns were calculated from yields assuming (at
the beginning of each monthly holding period) a 20-year maturity, a bond price
equal to par, and a coupon equal to the beginning-of-period yield. For the
period 1926-1945, the Standard and Poor's monthly High-Grade Corporate Composite
yield data were used, assuming a 4 percent coupon and a 20-year maturity. The
conventional present-value formula for bond price for the beginning and
end-of-month prices was used. (This formula is presented in Ross, Stephen A.,
and Randolph W. Westerfield, Corporate Finance, Times
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<PAGE>
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
Mirror/Mosby, St. Louis, 1990, p. 97 ["Level-Coupon Bonds"].) The monthly income
return was assumed to be one-twelfth the coupon.
U.S. (30 DAY) TREASURY BILLS
For the U.S. Treasury bill index, data from The Wall Street Journal are used for
1977-1991; the CRSP U.S. Government Bond File is the source until 1976. Each
month a one-bill portfolio containing the shortest-term bill having not less
than one month to maturity is constructed. (The bill's original term to maturity
is not relevant.) To measure holding period returns for the one-bill portfolio,
the bill is priced as of the last trading day of the previous month-end and as
of the last trading day of the current month.
NAREIT-EQUITY INDEX
All of the data is based upon the last closing price of the month for all
tax-qualified REITs listed on the NYSE, AMSE and the NASDAQ. The data is
market-value-weighted. Prior to 1987 REITs were added to the index the January
following their listing. Since 1987 Newly formed or listed REITs are added to
the total shares outstanding figure in the month that the shares are issued.
Only common shares issued by the REIT are included in the index. The total
return calculation is based upon the weighing at the beginning of the period.
Only those REITs listed for the entire period are used in the total return
calculation. Dividends are included in the month based upon their payment date.
There is no smoothing of income. Liquidating dividends, whether full or partial,
are treated as income.
RUSSELL 2000 SMALL STOCK INDEX
Index of the 2,000 smallest stocks in the Russell 3000 Index (TM); the smallest
company has a market capitalization of approximately $13 million.
The Russell 30000 is comprised of the 3,000 largest US companies as determined
by market capitalization representing approximately 98% of the US equity market.
The largest company in the index has a market capitalization of $67 billion. The
Russell Indexes (TM) are reconstituted annually as of June 1st, based on May 31
market capitalization rankings.
WILSHIRE REAL ESTATE SECURITIES INDEX
The Wilshire Real Estate Securities Index is a market capitalization-weighted
index which measures the performance of more than 85 securities.
The index contains performance data on five major categories of property;
office, retail, industrial, apartment and miscellaneous. Additionally, the Index
has real estate portfolio encumbered by 16% third party mortgages. The companies
in the WRESEC are 79% equity and hybrid REIT's and 21% real estate operating
companies. The capitalization is 47% NYSE, 33% AMEX and 20% OTC."
STANDARD & POOR'S MIDCAP 400 INDEX
The Standard and Poor's MidCap 400 Index is a market-value-weighted index. The
performance data for the MidCap 400 Index were calculated by taking the stocks
presently in the MidCap 400 Index and tracking them backwards in time as long as
there were prices reported. No attempt was made to determine what stocks "might
have been" in the MidCap 400 Index five or ten years ago had it existed.
Dividends are reinvested on a monthly basis prior to June 30, 1991, and are
reinvested daily thereafter.
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<PAGE>
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
The S&P MidCap 400 Index and the S&P 500 together represent approximately 85% of
the total market capitalization of stocks traded in the United States.
BANK SAVINGS ACCOUNT
Data sources include the U.S. League of Savings Institutions Sourcebook; average
annual yield on savings deposits in FSLIC [FDIC] insured savings institutions
for the years 1963-1987 and The Wall Street Journal for the years 1988-1994.
Source: Ibbotson Associates
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<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
S&P 500 Dow U.S. Small S&P/ S&P/
Jones Stock U.S. BARRA BARRA
Industrials Index Inflation Growth Value
Dec 1928 43.61 55.38 39.69 -0.97 N/A N/A
Dec 1929 -8.42 -13.64 -51.36 0.20 N/A N/A
Dec 1930 -24.90 -30.22 -38.15 -6.03 N/A N/A
Dec 1931 -43.34 -49.03 -49.75 -9.52 N/A N/A
Dec 1932 -8.19 -16.88 -5.39 -10.30 N/A N/A
Dec 1933 53.99 73.71 142.87 0.51 N/A N/A
Dec 1934 -1.44 8.07 24.22 2.03 N/A N/A
Dec 1935 47.67 43.77 40.19 2.99 N/A N/A
Dec 1936 33.92 30.23 64.80 1.21 N/A N/A
Dec 1937 -35.03 -28.88 -58.01 3.10 N/A N/A
Dec 1938 31.12 33.16 32.80 -2.78 N/A N/A
Dec 1939 -0.41 1.31 0.35 -0.48 N/A N/A
Dec 1940 -9.78 -7.96 -5.16 0.96 N/A N/A
Dec 1941 -11.59 -9.88 -9.00 9.72 N/A N/A
Dec 1942 20.34 14.12 44.51 9.29 N/A N/A
Dec 1943 25.90 19.06 88.37 3.16 N/A N/A
Dec 1944 19.75 17.19 53.72 2.11 N/A N/A
Dec 1945 36.44 31.60 73.61 2.25 N/A N/A
Dec 1946 -8.07 -4.40 -11.63 18.16 N/A N/A
Dec 1947 5.71 7.61 0.92 9.01 N/A N/A
Dec 1948 5.50 4.27 -2.11 2.71 N/A N/A
Dec 1949 18.79 20.92 19.75 -1.80 N/A N/A
Dec 1950 31.71 26.40 38.75 5.79 N/A N/A
Dec 1951 24.02 21.77 7.80 5.87 N/A N/A
Dec 1952 18.37 14.58 3.03 0.88 N/A N/A
Dec 1953 -0.99 2.02 -6.49 0.62 N/A N/A
Dec 1954 52.62 51.25 60.58 -0.50 N/A N/A
Dec 1955 31.56 26.58 20.44 0.37 N/A N/A
Dec 1956 6.56 7.10 4.28 2.86 N/A N/A
Dec 1957 -10.78 -8.63 -14.57 3.02 N/A N/A
Dec 1958 43.36 39.31 64.89 1.76 N/A N/A
Dec 1959 11.96 20.21 16.40 1.50 N/A N/A
Dec 1960 0.47 -6.14 -3.29 1.48 N/A N/A
Dec 1961 26.89 22.60 32.09 0.67 N/A N/A
Dec 1962 -8.73 -7.43 -11.90 1.22 N/A N/A
Dec 1963 22.80 20.83 23.57 1.65 N/A N/A
Dec 1964 16.48 18.85 23.52 1.19 N/A N/A
Dec 1965 12.45 14.39 41.75 1.92 N/A N/A
Dec 1966 -10.06 -15.78 -7.01 3.35 N/A N/A
Dec 1967 23.98 19.16 83.57 3.04 N/A N/A
Dec 1968 11.06 7.93 35.97 4.72 N/A N/A
-36-
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
S&P 500 Dow U.S. Small S&P/ S&P/
Jones Stock U.S. BARRA BARRA
Industrials Index Inflation Growth Value
Dec 1969 -8.50 -11.78 -25.05 6.11 N/A N/A
Dec 1970 4.01 9.21 -17.43 5.49 N/A N/A
Dec 1971 14.31 9.83 16.50 3.36 N/A N/A
Dec 1972 18.98 18.48 4.43 3.41 N/A N/A
Dec 1973 -14.66 -13.28 -30.90 8.80 N/A N/A
Dec 1974 -26.47 -23.58 -19.95 12.20 N/A N/A
Dec 1975 37.20 44.75 52.82 7.01 31.72 43.38
Dec 1976 23.84 22.82 57.38 4.81 13.84 34.93
Dec 1977 -7.18 -12.84 25.38 6.77 -11.82 -2.57
Dec 1978 6.56 2.79 23.46 9.03 6.78 6.16
Dec 1979 18.44 10.55 43.46 13.31 15.72 21.16
Dec 1980 32.42 22.17 39.88 12.40 39.40 23.59
Dec 1981 -4.91 -3.57 13.88 8.94 -9.81 0.02
Dec 1982 21.41 27.11 28.01 3.87 22.03 21.04
Dec 1983 22.51 25.97 39.67 3.80 16.24 28.89
Dec 1984 6.27 1.31 -6.67 3.95 2.33 10.52
Dec 1985 32.16 33.55 24.66 3.77 33.31 29.68
Dec 1986 18.47 27.10 6.85 1.13 14.50 21.67
Dec 1987 5.23 5.48 -9.30 4.41 6.50 3.68
Dec 1988 16.81 16.14 22.87 4.42 11.95 21.67
Dec 1989 31.49 32.19 10.18 4.65 36.40 26.13
Dec 1990 -3.17 -0.56 -21.56 6.11 0.20 -6.85
Dec 1991 30.55 24.19 44.63 3.06 38.37 22.56
Dec 1992 7.67 7.41 23.35 2.90 5.07 10.53
Dec 1993 9.99 16.94 20.98 2.75 1.68 18.60
Dec 1994 1.31 5.06 3.11 2.78 3.13 -0.64
Dec 1995 37.43 36.84 34.46 2.74 38.13 36.99
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<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
Intermediate MSCI Long-
Long-Term -Term U.S. EAFE 6 Term U.S. U.S.
U.S. Gov't Government - Net of MONTH Corporate (30 Day)
Bonds Bonds Taxes CDs Bonds T- Bill
Dec 1925 N/A N/A N/A N/A N/A N/A
Dec 1926 7.77 5.38 N/A N/A 7.37 3.27
Dec 1927 8.93 4.52 N/A N/A 7.44 3.12
Dec 1928 0.1 0.92 N/A N/A 2.84 3.56
Dec 1929 3.42 6.01 N/A N/A 3.27 4.75
Dec 1930 4.66 6.72 N/A N/A 7.98 2.41
Dec 1931 -5.31 -2.32 N/A N/A -1.85 1.07
Dec 1932 16.84 8.81 N/A N/A 10.82 0.96
Dec 1933 -0.07 1.83 N/A N/A 10.38 0.30
Dec 1934 10.03 9.00 N/A N/A 13.84 0.16
Dec 1935 4.98 7.01 N/A N/A 9.61 0.17
Dec 1936 7.52 3.06 N/A N/A 6.74 0.18
Dec 1937 0.23 1.56 N/A N/A 2.75 0.31
Dec 1938 5.53 6.23 N/A N/A 6.13 -0.02
Dec 1939 5.94 4.52 N/A N/A 3.97 0.02
Dec 1940 6.09 2.96 N/A N/A 3.39 0.00
Dec 1941 0.93 0.50 N/A N/A 2.73 0.06
Dec 1942 3.22 1.94 N/A N/A 2.60 0.27
Dec 1943 2.08 2.81 N/A N/A 2.83 0.35
Dec 1944 2.81 1.80 N/A N/A 4.73 0.33
Dec 1945 10.73 2.22 N/A N/A 4.08 0.33
Dec 1946 -0.10 1.00 N/A N/A 1.72 0.35
Dec 1947 -2.62 0.91 N/A N/A -2.34 0.50
Dec 1948 3.40 1.85 N/A N/A 4.14 0.81
Dec 1949 6.45 2.32 N/A N/A 3.31 1.10
Dec 1950 0.06 0.70 N/A N/A 2.12 1.20
Dec 1951 -3.93 0.36 N/A N/A -2.69 1.49
Dec 1952 1.16 1.63 N/A N/A 3.52 1.66
Dec 1953 3.64 3.23 N/A N/A 3.41 1.82
Dec 1954 7.19 2.68 N/A N/A 5.39 0.86
Dec 1955 -1.29 -0.65 N/A N/A 0.48 1.57
Dec 1956 -5.59 -0.42 N/A N/A -6.81 2.46
Dec 1957 7.46 7.84 N/A N/A 8.71 3.14
Dec 1958 -6.09 -1.29 N/A N/A -2.22 1.54
Dec 1959 -2.26 -0.39 N/A N/A -0.97 2.95
Dec 1960 13.78 11.76 N/A N/A 9.07 2.66
Dec 1961 0.97 1.85 N/A N/A 4.82 2.13
Dec 1962 6.89 5.56 N/A N/A 7.95 2.73
Dec 1963 1.21 1.64 N/A N/A 2.19 3.12
Dec 1964 3.51 4.04 N/A 4.18 4.77 3.54
Dec 1965 0.71 1.02 N/A 4.68 -0.46 3.93
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<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
Intermediate MSCI Long-
Long-Term -Term U.S. EAFE 6 Term U.S. U.S.
U.S. Gov't Government - Net of MONTH Corporate (30 Day)
Bonds Bonds Taxes CDs Bonds T- Bill
Dec 1966 3.65 4.69 N/A 5.75 0.20 4.76
Dec 1967 -9.18 1.01 N/A 5.48 -4.95 4.21
Dec 1968 -0.26 4.54 N/A 6.44 2.57 5.21
Dec 1969 -5.07 -0.74 N/A 8.71 -8.09 6.58
Dec 1970 12.11 16.86 -11.66 7.06 18.37 6.52
Dec 1971 13.23 8.72 29.59 5.36 11.01 4.39
Dec 1972 5.69 5.16 36.35 5.38 7.26 3.84
Dec 1973 -1.11 4.61 -14.92 8.60 1.14 6.93
Dec 1974 4.35 5.69 -23.16 10.20 -3.06 8.00
Dec 1975 9.20 7.83 35.39 6.51 14.64 5.80
Dec 1976 16.75 12.87 2.54 5.22 18.65 5.08
Dec 1977 -0.69 1.41 18.06 6.12 1.71 5.12
Dec 1978 -1.18 3.49 32.62 10.21 -0.07 7.18
Dec 1979 -1.23 4.09 4.75 11.90 -4.18 10.38
Dec 1980 -3.95 3.91 22.58 12.33 -2.76 11.24
Dec 1981 1.86 9.45 -2.28 15.50 -1.24 14.71
Dec 1982 40.36 29.1 -1.86 12.18 42.56 10.54
Dec 1983 0.65 7.41 23.69 9.65 6.26 8.80
Dec 1984 15.48 14.02 7.38 10.65 16.86 9.85
Dec 1985 30.97 20.33 56.16 7.82 30.09 7.72
Dec 1986 24.53 15.14 69.44 6.30 19.85 6.16
Dec 1987 -2.71 2.90 24.63 6.58 -0.27 5.47
Dec 1988 9.67 6.10 28.27 8.15 10.70 6.35
Dec 1989 18.11 13.29 10.54 8.27 16.23 8.37
Dec 1990 6.18 9.73 -23.45 7.85 6.78 7.81
Dec 1991 19.3 15.46 12.13 4.95 19.89 5.60
Dec 1992 8.05 7.19 -12.17 3.27 9.39 3.51
Dec 1993 18.24 11.24 32.56 2.88 13.19 2.90
Dec 1994 -7.77 -5.14 7.78 5.40 -5.76 3.90
Dec 1995 31.67 16.8 11.21 5.21 26.39 5.60
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<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
S & P Bank
NAREIT - Russell Wilshire Midcap Savings
Equity 2000 Real Estate 400 Account
Dec 1925 N/A N/A N/A N/A N/A
Dec 1926 N/A N/A N/A N/A N/A
Dec 1927 N/A N/A N/A N/A N/A
Dec 1928 N/A N/A N/A N/A N/A
Dec 1929 N/A N/A N/A N/A N/A
Dec 1930 N/A N/A N/A N/A 5.30
Dec 1931 N/A N/A N/A N/A 5.10
Dec 1932 N/A N/A N/A N/A 4.10
Dec 1933 N/A N/A N/A N/A 3.40
Dec 1934 N/A N/A N/A N/A 3.50
Dec 1935 N/A N/A N/A N/A 3.10
Dec 1936 N/A N/A N/A N/A 3.20
Dec 1937 N/A N/A N/A N/A 3.50
Dec 1938 N/A N/A N/A N/A 3.50
Dec 1939 N/A N/A N/A N/A 3.40
Dec 1940 N/A N/A N/A N/A 3.30
Dec 1941 N/A N/A N/A N/A 3.10
Dec 1942 N/A N/A N/A N/A 3.00
Dec 1943 N/A N/A N/A N/A 2.90
Dec 1944 N/A N/A N/A N/A 2.80
Dec 1945 N/A N/A N/A N/A 2.50
Dec 1946 N/A N/A N/A N/A 2.20
Dec 1947 N/A N/A N/A N/A 2.30
Dec 1948 N/A N/A N/A N/A 2.30
Dec 1949 N/A N/A N/A N/A 2.40
Dec 1950 N/A N/A N/A N/A 2.50
Dec 1951 N/A N/A N/A N/A 2.60
Dec 1952 N/A N/A N/A N/A 2.70
Dec 1953 N/A N/A N/A N/A 2.80
Dec 1954 N/A N/A N/A N/A 2.90
Dec 1955 N/A N/A N/A N/A 2.90
Dec 1956 N/A N/A N/A N/A 3.00
Dec 1957 N/A N/A N/A N/A 3.30
Dec 1958 N/A N/A N/A N/A 3.38
Dec 1959 N/A N/A N/A N/A 3.53
Dec 1960 N/A N/A N/A N/A 3.86
Dec 1961 N/A N/A N/A N/A 3.90
Dec 1962 N/A N/A N/A N/A 4.08
Dec 1963 N/A N/A N/A N/A 4.17
Dec 1964 N/A N/A N/A N/A 4.19
Dec 1965 N/A N/A N/A N/A 4.23
Dec 1966 N/A N/A N/A N/A 4.45
Dec 1967 N/A N/A N/A N/A 4.67
Dec 1968 N/A N/A N/A N/A 4.68
Dec 1969 N/A N/A N/A N/A 4.80
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<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
S & P Bank
NAREIT - Russell Wilshire Midcap Savings
Equity 2000 Real Estate 400 Account
Bank Savings Account
Dec 1970 N/A N/A N/A N/A 5.14
Dec 1971 N/A N/A N/A N/A 5.30
Dec 1972 8.01 N/A N/A N/A 5.37
Dec 1973 -15.52 N/A N/A N/A 5.51
Dec 1974 -21.40 N/A N/A N/A 5.96
Dec 1975 19.30 N/A N/A N/A 6.21
Dec 1976 47.59 N/A N/A N/A 6.23
Dec 1977 22.42 N/A N/A N/A 6.39
Dec 1978 10.34 N/A 13.04 N/A 6.56
Dec 1979 35.86 43.09 70.81 N/A 7.29
Dec 1980 24.37 38.58 22.08 N/A 8.78
Dec 1981 6.00 2.03 7.18 N/A 10.71
Dec 1982 21.60 24.95 24.47 22.68 11.19
Dec 1983 30.64 29.13 27.61 26.10 9.71
Dec 1984 20.93 -7.30 20.64 1.18 9.92
Dec 1985 19.10 31.05 22.20 35.58 9.02
Dec 1986 19.16 5.68 20.30 16.21 7.84
Dec 1987 -3.64 -8.77 -7.86 -2.03 6.92
Dec 1988 13.49 24.89 24.18 20.87 7.20
Dec 1989 8.84 16.24 2.37 35.54 7.91
Dec 1990 -15.35 -19.51 -33.46 -5.12 7.80
Dec 1991 35.7 46.05 20.03 50.1 4.61
Dec 1992 14.59 18.41 7.36 11.91 2.89
Dec 1993 19.65 18.91 15.24 13.96 2.73
Dec 1994 3.17 -1.82 1.64 -3.57 4.96
Dec 1995 15.27 28.44 13.65 30.94 5.24
Source: Ibbotson Associates
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<PAGE>
APPENDIX B
OTHER PIONEER INFORMATION
The Pioneer group of mutual funds was established in 1928 with the
creation of Pioneer Fund. Pioneer is one of the oldest and most experienced
money managers in the United States.
As of December 31, 1995, PMC employed a professional investment staff
of 44, with a combined average of 15 years' experience in the financial services
industry.
Total assets of all Pioneer mutual funds at December 31, 1995, were
approximately $12 billion representing 982,369 shareholder accounts - 637,060
non-retirement accounts and 345,309 retirement accounts.
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<PAGE>
FORM N-1A
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
The financial statements of the Registrant have been incorporated by
reference into Parts A (in part) and B from the 1995 Annual Report to
Shareholders dated September 30, 1995.
(b) Exhibits:
1. Agreement and Declaration of Trust
2. By-Laws
3. None
4. Specimen Share Certificate
5. Management Contract
6.1 Underwriting Agreement
6.2 Form of Dealer Sales Agreement
7. None
8. Form of Custodian Agreement with Brown Brothers Harriman &
Co.
9. Investment Company Service Agreement
10. Legal Opinion of Morris, Nichols, Arsht & Tunnell
11. Consent of Arthur Andersen LLP
12. None
13. Form of Stock Purchase Agreement*
14. None
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<PAGE>
15.1 Class A Distribution Plan
15.2 Class B Distribution Plan
15.3 Class C Distribution Plan
16. Description of Average Annual Total Return*
17. Financial Data Schedule
18. Multiple Class Plan Pursuant to Rule 18f-3
19. Powers of Attorney
- ------------------------
* Previously filed. Incorporated by reference from the exhibits filed
with the Registration Statement (File No. 2-79140), as amended, of the
Registrant.
Item 25. Persons Controlled By or Under
Common Control With Registrant
The Pioneer Group, Inc., a publicly-traded Delaware corporation
("PGI"), owns 100% of the outstanding capital stock of Pioneering Management
Corporation, a Delaware corporation ("PMC"), Pioneering Services Corporation
("PSC"), Pioneer Funds Distributor, Inc. ("PFD"), Pioneer Capital Corporation
("PCC"), Pioneer Fonds Marketing GmbH ("GmbH"), Pioneer SBIC Corp. ("SBIC"),
Pioneer Associates, Inc., Pioneer International Corporation, Pioneer Plans
Corporation ("PPC"), Pioneer Goldfields Limited ("PGL"), and Pioneer Investments
Corporation ("PIC"), all Massachusetts corporations. PGI also owns 100% of the
outstanding capital stock of Pioneer Metals and Technology, Inc. ("PMT"), a
Delaware corporation, Pioneer Fonds Marketing GmbH, a German corporation, and
Pioneer First Polish Trust Fund Joint Stock Company ("First Polish"), a Polish
corporation. PGI owns 90% of the outstanding shares of Teberebie Goldfields
Limited ("TGL"). Pioneer Fund, Pioneer Europe Fund, Pioneer II, Pioneer U.S.
Government Trust, Pioneer Bond Fund, Pioneer Intermediate Tax-Free Fund, Pioneer
Growth Trust, Pioneer International Growth Fund, Pioneer Short-Term Income
Trust, Pioneer Tax-Free State Series Trust, and the Registrant (each of the
foregoing are Massachusetts business trusts); Pioneer Real Estate Shares,
Pioneer Interest Shares, Inc. (a Nebraska corporation); and Pioneer Growth
Shares, Pioneer Money Market Trust, Pioneer Income Fund, Pioneer Emerging
Markets Fund, Pioneer India Fund, Pioneer Small Company Fund and Pioneer
Tax-Free Income Fund (each of the foregoing are Delaware business trusts) are
all parties to management contracts with PMC. PCC owns 100% of the outstanding
capital stock of SBIC. SBIC is
C-2
<PAGE>
the sole general partner of Pioneer Ventures Limited Partnership, a
Massachusetts limited partnership. John F. Cogan, Jr. owns approximately 15% of
the outstanding shares of PGI. Mr. Cogan is Chairman of the Board, President and
Trustee of the Registrant and of each of the Pioneer mutual funds; Director and
President of PGI; President and Director of PPC, PIC, Pioneer International
Corporation and PMT; Director of PCC and PSC; Chairman of the Board and Director
of PMC, PFD and TGL; Chairman, President and Director of PGL; Chairman of the
Supervisory Board of GmbH; Chairman and Member of Supervisory Board of First
Polish and Chairman and Partner, Hale and Dorr.
Item 26. Number of Holders of Securities
At December 31, 1995, there were approximately [63,328] holders of the
Registrant's shares.
Item 27. Indemnification
Except for the Declaration of Trust dated January 12, 1996,
establishing the Registrant as a Trust under Delaware law, there is no contract,
arrangement or statute under which any director, officer, underwriter or
affiliated person of the Registrant is insured or indemnified. The Declaration
of Trust provides that no Trustee or officer will be indemnified against any
liability to which the Registrant would otherwise be subject by reason of or for
willful misfeasance, bad faith, gross negligence or reckless disregard of such
person's duties.
Item 28. Business and Other Connections of Investment Adviser
All of the information required by this item is set forth in the Form
ADV, as amended, of Pioneering Management Corporation. The following sections of
such Form ADV are incorporated herein by reference:
(a) Items 1 and 2 of Part 2;
(b) Section IV, Business Background, of each Schedule D.
Item 29. Principal Underwriter
(a) See Item 25 above.
(b) Directors and Officers of PFD:
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<PAGE>
Positions and Offices Positions and Offices
Name with Underwriter with Registrant
John F. Cogan, Jr. Director and Chairman Chairman of the Board,
President and Trustee
Robert L. Butler Director and President None
David D. Tripple Director Executive Vice-President
and Trustee
Steven M. Graziano Senior None
Vice President
Stephen W. Long Senior Vice President None
John W. Drachman Vice President None
Barry G. Knight Vice President None
William A. Misata Vice President None
Anne W. Patenaude Vice President None
Elizabeth B. Rice Vice President None
Gail A. Smyth Vice President None
Constance D. Spiros Vice President None
Marcy L. Supovitz Vice President None
Steven R. Berke Assistant None
Vice President
Mary Sue Hoban Assistant None
Vice President
William H. Keough Treasurer Treasurer
Roy P. Rossi Assistant Treasurer None
Joseph P. Barri Clerk Secretary
Robert P. Nault Assistant Clerk Assistant Secretary
(c) Not applicable.
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<PAGE>
Item 30. Location of Accounts and Records
The accounts and records are maintained at the Registrant's office at
60 State Street, Boston, Massachusetts; contact the Treasurer.
Item 31. Management Services
The Registrant is not a party to any management-related service
contract, except as described in the Prospectus and Statement of Additional
Information.
Item 32. Undertaking
(a) Not applicable.
(b) Not applicable.
(c) The Registrant hereby undertakes to deliver or cause to be
delivered with the Prospectus, to each person to whom the Prospectus is sent or
given, a copy of the Registrant's report to shareholders furnished pursuant to
and meeting the requirements of Rule 30d-1 under the Investment Company Act of
1940, as amended, from which the specified information is incorporated by
reference, unless such person currently holds securities of the Registrant and
otherwise has received a copy of such report, in which case the Registrant shall
state in the Prospectus that it will furnish, without charge, a copy of such
report on request, and the name, address and telephone number of the person to
whom such a request should be directed.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Post-Effective Amendment No. 21 to
its Registration Statement pursuant to Rule 485(b) under the Securities Act of
1933 and has duly caused this Post-Effective Amendment No. 21 to such
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Boston and The Commonwealth of Massachusetts, on
the 31st day of January, 1996.
PIONEER MID-CAP FUND
By:________________________________
John F. Cogan, Jr.
Chairman and President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 21 to the Registrant's Registration Statement has
been signed below by the following persons in the capacities and on the date
indicated:
Signature Title
Chairman of the Board )
John F. Cogan, Jr. and President )
(Principal Executive )
Officer) )
)
)
William H. Keough* Chief Financial Officer )
William H. Keough and Treasurer (Principal )
Financial and Accounting )
Officer) )
Trustees: )
)
)
John F. Cogan, Jr. )
)
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<PAGE>
)
)
Richard H. Egdahl, M.D.* )
Richard H. Egdahl, M.D. )
)
)
)
Margaret B. W. Graham* )
Margaret B. W. Graham )
)
)
)
John W. Kendrick* )
John W. Kendrick )
)
)
)
Marguerite A. Piret* )
Marguerite A. Piret )
)
)
)
David D. Tripple* )
David D. Tripple )
)
)
)
Stephen K. West* )
Stephen K. West )
)
)
)
John Winthrop* )
John Winthrop )
)
)
*By:_____________________ Dated: January 31, 1996
John F. Cogan, Jr.
Attorney-in-fact
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<PAGE>
Exhibit Index
Exhibit
Number Document Title
1. Declaration of Trust
2. By-Laws
4. Specimen Share Certificate
5. Management Contract
6.1 Underwriting Agreement
6.2 Form of Dealer Sales Agreement
8. Form of Custodian Agreement with Brown Brothers Harriman & Co.
9. Investment Company Service Agreement
10. Legal Opinion of Morris, Nichols, Arsht & Tunnell
11. Consent of Arthur Andersen LLP
15.1 Class A Distribution Plan
15.2 Class B Distribution Plan
15.3 Class C Distribution Plan
17. Financial Data Schedule
18. Multiple Class Plan Pursuant to Rule 18f-3
19. Powers of Attorney
C-8
PIONEER MID-CAP FUND
AGREEMENT AND
DECLARATION OF TRUST
This AGREEMENT AND DECLARATION OF TRUST is made on January 12, 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 Mid-Cap Fund."
Section 2. Definitions. Unless otherwise provided or required by the context:
(a)"Administrator" means the party, other than the Trust, to the
contract described in Article III, Section 3 hereof.
(b)"By-laws" means the By-laws of the Trust adopted by the Trustees, as
amended from time to time, which By-laws are expressly herein incorporated by
reference as part of the "governing instrument" within the meaning of the
Delaware Act.
(c)"Class" means the class of Shares of a Series established pursuant
to Article V.
(d)"Commission," "Interested Person" and "Principal Underwriter" have
the meanings provided in the 1940 Act. Except as such term may be otherwise
defined by the Trustees in conjunction with the establishment of any Series of
Shares, the term "vote of a majority of the Shares outstanding and entitled to
vote" shall have the same meaning as is assigned to the term "vote of a majority
of the outstanding voting securities" in the 1940 Act.
<PAGE>
(e)"Covered Person" means a person so defined in Article IV, Section 2.
(f)"Custodian" means any Person other than the Trust who has custody of
any Trust Property as required by Section 17(f) of the 1940 Act, but does not
include a system for the central handling of securities described in said
Section 17(f).
(g)"Declaration" shall mean this Agreement and Declaration of Trust, as
amended or restated from time to time. Reference in this Declaration of Trust to
"Declaration," "hereof," "herein," and "hereunder" shall be deemed to refer to
this Declaration rather than exclusively to the article or section in which such
words appear.
(h)"Delaware Act" means Chapter 38 of Title 12 of the Delaware Code
entitled "Treatment of Delaware Business Trusts," as amended from time to time.
(i)"Distributor" means the party, other than the Trust, to the contract
described in Article III, Section 1 hereof.
(j)"His" shall include the feminine and neuter, as well as the
masculine, genders.
(k)"Investment Adviser" means the party, other than the Trust, to the
contract described in Article III, Section 2 hereof.
(l)"Net Asset Value" means the net asset value of each Series of the
Trust, determined as provided in Article VI, Section 3.
(m)"Person" means and includes individuals, corporations, partnerships,
trusts, associations, joint ventures, estates and other entities, and
governments and agencies and political subdivisions, thereof, whether domestic
or foreign.
(n)"Series" means a series of Shares established pursuant to Article V.
(o)"Shareholder" means a record owner of Outstanding Shares;
(p)"Shares" means the equal proportionate transferable units of
interest into which the beneficial interest of each Series or Class is divided
from time to time (including whole Shares and fractions of Shares). "Outstanding
Shares" means
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Shares shown in the books of the Trust or its transfer agent as then issued and
outstanding, but does not include Shares which have been repurchased or redeemed
by the Trust and which are held in the treasury of the Trust.
(q)"Transfer Agent" means any Person other than the Trust who maintains
the Shareholder records of the Trust, such as the list of Shareholders, the
number of Shares credited to each account, and the like.
(r)"Trust" means Pioneer Mid-Cap Fund established hereby, and reference
to the Trust, when applicable to one or more Series, refers to that Series.
(s)"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.
(t)"Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the Trust or any Series
or the Trustees on behalf of the Trust or any Series.
(u)The "1940 Act" means the Investment Company Act of 1940, as amended
from time to time.
ARTICLE II
THE TRUSTEES
Section 1. Management of the Trust. The business and affairs of the
Trust shall be managed by or under the direction of the Trustees, and they shall
have all powers necessary or desirable to carry out that responsibility. The
Trustees may execute all instruments and take all action they deem necessary or
desirable to promote the interests of the Trust. Any determination made by the
Trustees in good faith as to what is in the interests of the Trust shall be
conclusive. In construing the provisions of this Declaration, the presumption
shall be in favor of a grant of power to the Trustees.
Section 2. Powers. The Trustees in all instances shall act as
principals, free of the control of the Shareholders. The
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Trustees shall have full power and authority to take or refrain from taking any
action and to execute any contracts and instruments that they may consider
necessary or desirable in the management of the Trust. The Trustees shall not in
any way be bound or limited by current or future laws or customs applicable to
trust investments, but shall have full power and authority to make any
investments which they, in their sole discretion, deem proper to accomplish the
purposes of the Trust. The Trustees may exercise all of their powers without
recourse to any court or other authority. Subject to any applicable limitation
herein or in the By-laws or resolutions of the Trust, the Trustees shall have
power and authority, without limitation:
(a)To operate as and carry on the business of an investment company,
and exercise all the powers necessary and appropriate to the conduct of such
operations.
(b)To invest in, hold for investment, or reinvest in, cash; securities,
including common, preferred and preference stocks; warrants; subscription
rights; profit-sharing interests or participations and all other contracts for
or evidence of equity interests; bonds, debentures, bills, time notes and all
other evidences of indebtedness; negotiable or non-negotiable instruments;
government securities, including securities of any state, municipality or other
political subdivision thereof, or any governmental or quasi-governmental agency
or instrumentality; and money market instruments including bank certificates of
deposit, finance paper, commercial paper, bankers' acceptances and all kinds of
repurchase agreements, of any corporation, company, trust, association, firm or
other business organization however established, and of any country, state,
municipality or other political subdivision, or any governmental or
quasi-governmental agency or instrumentality; or any other security, property or
instrument in which the Trust or any of its Series shall be authorized to
invest.
(c)To acquire (by purchase, subscription or otherwise), to hold, to
trade in and deal in, to acquire any rights or options to purchase or sell, to
sell or otherwise dispose of, to lend and to pledge any such securities, to
enter into repurchase agreements, reverse repurchase agreements, firm commitment
agreements and forward foreign currency exchange contracts, to purchase and sell
options on securities, securities indices, currency and other financial assets,
futures contracts and options on futures contracts of all descriptions and to
engage in all types of hedging and risk-management transactions.
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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 and distinct Series with separately defined
investment objectives and policies and distinct investment purposes, and with
separate Shares representing beneficial interests in such Series, and to
establish separate Classes, all in accordance with the provisions of Article V.
(q)To the full extent permitted by Section 3804 of the Delaware Act, to
allocate assets, liabilities and expenses of the Trust to a particular Series
and assets, liabilities and expenses to a particular Class or to apportion the
same between or among two or more Series or Classes, provided that any
liabilities or expenses incurred by a particular Series or Class shall be
payable solely out of the assets belonging to that Series or Class as provided
for in Article V, Section 4.
(r)To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or concern whose securities are held
by the Trust; to consent to any contract, lease, mortgage, purchase, or sale of
property by such corporation or concern; and to pay calls or subscriptions with
respect to any security held in the Trust.
(s)To compromise, arbitrate, or otherwise adjust claims in favor of or
against the Trust or any matter in controversy including, but not limited to,
claims for taxes.
(t)To make distributions of income, capital gains, returns of capital
(if any) and redemption proceeds to Shareholders in the manner hereinafter
provided for.
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(u)To establish committees for such purposes, with such membership, and
with such responsibilities as the Trustees may consider proper, including a
committee consisting of fewer than all of the Trustees then in office, which may
act for and bind the Trustees and the Trust with respect to the institution,
prosecution, dismissal, settlement, review or investigation of any legal action,
suit or proceeding, pending or threatened.
(v)To issue, sell, repurchase, redeem, cancel, retire, acquire, hold,
resell, reissue, dispose of and otherwise deal in Shares; to establish terms and
conditions regarding the issuance, sale, repurchase, redemption, cancellation,
retirement, acquisition, holding, resale, reissuance, disposition of or dealing
in Shares; and, subject to Articles V and VI, to apply to any such repurchase,
redemption, retirement, cancellation or acquisition of Shares any funds or
property of the Trust or of the particular Series with respect to which such
Shares are issued.
(w)To invest part or all of the Trust Property (or part or all of the
assets of any Series), or to dispose of part or all of the Trust Property (or
part or all of the assets of any Series) and invest the proceeds of such
disposition, in securities issued by one or more other investment companies
registered under the 1940 Act all without any requirement of approval by
Shareholders. Any such other investment company may (but need not) be a trust
(formed under the laws of the State of New York or of any other state) which is
classified as a partnership for federal income tax purposes.
(x)To carry on any other business in connection with or incidental to
any of the foregoing powers, to do everything necessary or desirable to
accomplish any purpose or to further any of the foregoing powers, and to take
every other action incidental to the foregoing business or purposes, objects or
powers.
(y) To sell or exchange any or all of the assets of the Trust, subject
to Article IX, Section 4.
(z)To enter into joint ventures, partnerships and other combinations
and associations.
(aa)To join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to deposit any
security with, or transfer any security to, any such committee, depositary or
trustee, and to delegate to them such power and authority with relation to any
security (whether or not so deposited or transferred) as the Trustees shall
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deem proper, and to agree to pay, and to pay, such portion of the expenses and
compensation of such Committee, depositary or trustee as the Trustees shall deem
proper;
(bb)To purchase and pay for entirely out of Trust Property such
insurance as the Trustees may deem necessary or appropriate for the conduct of
the business, including, without limitation, insurance policies insuring the
assets of the Trust or payment of distributions and principal on its portfolio
investments, and, subject to applicable law and any restrictions set forth in
the By-laws, insurance policies insuring the Shareholders, Trustees, officers,
employees, agents, investment advisers, Principal Underwriters, or independent
contractors of the Trust, individually, against all claims and liabilities of
every nature arising by reason of holding Shares, holding, being or having held
any such office or position, or by reason of any action alleged to have been
taken or omitted by any such Person as Trustee, officer, employee, agent,
investment adviser, Principal underwriter, or independent contractor, including
any action taken or omitted that may be determined to constitute negligence,
whether or not the Trust would have the power to indemnify such Person against
liability;
(cc)To adopt, establish and carry out pension, profit-sharing, share
bonus, share purchase, savings, thrift and other retirement, incentive and
benefit plans and trusts, including the purchasing of life insurance and annuity
contracts as a means of providing such retirement and other benefits, for any or
all of the Trustees, officers, employees and agents of the Trust;
(dd) To enter into contracts of any kind and description;
(ee)To interpret the investment policies, practices or limitations of
any Series or Class; and
(ff)To guarantee indebtedness and contractual obligations of others.
The clauses above shall be construed as objects and powers, and the
enumeration of specific powers shall not limit in any way the general powers of
the Trustees. Any action by one or more of the Trustees in their capacity as
such hereunder shall be deemed an action on behalf of the Trust or the
applicable Series, and not an action in an individual capacity. No one dealing
with the Trustees shall be under any obligation to make any inquiry concerning
the authority of the Trustees, or to see to the application of any payments made
or property transferred to the
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Trustees or upon their order. In construing this Declaration, the presumption
shall be in favor of a grant of power to the Trustees.
Section 3. Certain Transactions. Except as prohibited by applicable
law, the Trustees may, on behalf of the Trust, buy any securities from or sell
any securities to, or lend any assets of the Trust to, any Trustee or officer of
the Trust or any firm of which any such Trustee or officer is a member acting as
principal, or have any such dealings with any investment adviser, administrator,
distributor or transfer agent for the Trust or with any Interested Person of
such person. The Trust may employ any such person or entity in which such person
is an Interested Person, as broker, legal counsel, registrar, investment
adviser, administrator, distributor, transfer agent, dividend disbursing agent,
custodian or in any other capacity upon customary terms.
Section 4. Initial Trustees; Election and Number of Trustees. The
initial Trustees shall be the persons initially signing this Declaration. The
number of Trustees (other than the initial 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.
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
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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.
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
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meeting can communicate with each other; or by written consent of a majority of
Trustees (or such greater number as may be required by applicable law) without a
meeting. A majority of the Trustees shall constitute a quorum at any meeting.
Meetings of the Trustees may be called orally or in writing by the President or
by any one of the Trustees. Notice of the time, date and place of all Trustees'
meetings shall be given to each Trustee as set forth in the By-laws; provided,
however, that no notice is required if the Trustees provide for regular or
stated meetings. Notice need not be given to any Trustee who attends the meeting
without objecting to the lack of notice or who signs a waiver of notice either
before or after the meeting. The Trustees by majority vote may delegate to any
Trustee or Trustees or committee authority to approve particular matters or take
particular actions on behalf of the Trust. Any written consent or waiver may be
provided and delivered to the Trust by facsimile or other similar electronic
mechanism.
Section 10. Ownership of Trust Property. The Trust Property of the
Trust and of each Series shall be held separate and apart from any assets now or
hereafter held in any capacity other than as Trustee hereunder by the Trustees
or any successor Trustees. Legal title in and beneficial ownership of all of the
assets of the Trust shall at all times be considered as vested in the Trust,
except that the Trustees may cause legal title in and beneficial ownership of
any Trust Property to be held by, or in the name of one or more of the Trustees
acting for and on behalf of the Trust, or in the name of any person as nominee
acting for and on behalf of the Trust. No Shareholder shall be deemed to have a
severable ownership in any individual asset of the Trust or of any Series or any
right of partition or possession thereof, but each Shareholder shall have, as
provided in Article V, a proportionate undivided beneficial interest in the
Trust or Series or Class thereof represented by Shares. The Shares shall be
personal property giving only the rights specifically set forth in this Trust
Instrument. The Trust, or at the determination of the Trustees one or more of
the Trustees or a nominee acting for and on behalf of the Trust, shall be deemed
to hold legal title and beneficial ownership of any income earned on securities
of the Trust issued by any business entities formed, organized, or existing
under the laws of any jurisdiction, including the laws of any foreign country.
Upon the resignation or removal of a Trustee, or his otherwise ceasing to be a
Trustee, he shall execute and deliver such documents as the remaining Trustees
shall require for the purpose of conveying to the Trust or the remaining
Trustees any Trust Property held in the name of the resigning or removed
Trustee. Upon the incapacity or death of any Trustee, his legal
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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.
Section 13. Series Trustees. In connection with the establishment of
one or more Series or Classes, the Trustees establishing such Series or Class
may appoint, to the extent permitted by the Delaware Act, separate Trustees with
respect to such Series or Classes (the "Series Trustees"). Series Trustees may,
but are not required to, serve as Trustees of the Trust or any other Series or
Class of the Trust. The Series Trustees shall have, to the exclusion of any
other Trustee of the Trust, all the powers and authorities of Trustees hereunder
with respect to such Series or Class, but shall have no power or authority with
respect to any other Series or Class. Any provision of this Declaration relating
to election of Trustees by Shareholders only shall entitle the Shareholders of a
Series or Class for which Series Trustees have been appointed to vote with
respect to the election of such Series Trustees and the Shareholders of any
other Series or Class shall not be entitled to participate in such vote. In the
event that Series Trustees are appointed, the Trustees initially appointing such
Series Trustees shall, without the approval of any Outstanding Shares, amend
either the Declaration or the By-laws to provide for the respective
responsibilities of the Trustees and the Series Trustees in circumstances where
an action of the Trustees or Series Trustees affects all Series of the Trust or
two or more Series represented by different Trustees.
ARTICLE III
CONTRACTS WITH SERVICE PROVIDERS
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Section 1. Underwriting Contract. The Trustees may in their discretion
from time to time enter into an exclusive or non-exclusive distribution contract
or contracts providing for the sale of the Shares whereby the Trustees may
either agree to sell the Shares to the other party to the contract or appoint
such other party as their sales agent for the Shares, and in either case on such
terms and conditions, if any, as may be prescribed in the By-laws, and such
further terms and conditions as the Trustees may in their discretion determine
not inconsistent with the provisions of this Article III or of the By-laws; and
such contract may also provide for the repurchase of the Shares by such other
party as agent of the Trustees.
Section 2. Advisory or Management Contract. The Trustees may in their
discretion from time to time enter into one or more investment advisory or
management contracts or, if the Trustees establish multiple Series, separate
investment advisory or management contracts with respect to one or more Series
whereby the other party or parties to any such contracts shall undertake to
furnish the Trust or such Series management, investment advisory,
administration, accounting, legal, statistical and research facilities and
services, promotional or marketing activities, and such other facilities and
services, if any, as the Trustees shall from time to time consider desirable and
all upon such terms and conditions as the Trustees may in their discretion
determine. Notwithstanding any provisions of the Declaration, the Trustees may
authorize the Investment Advisers or persons to whom the Investment Adviser
delegates certain or all of their duties, or any of them, under any such
contracts (subject to such general or specific instructions as the Trustees may
from time to time adopt) to effect purchases, sales, loans or exchanges of
portfolio securities and other investments of the Trust on behalf of the
Trustees or may authorize any officer, employee or Trustee to effect such
purchases, sales, loans or exchanges pursuant to recommendations of such
Investment Advisers, or any of them (and all without further action by the
Trustees). Any such purchases, sales, loans and exchanges shall be deemed to
have been authorized by all of the Trustees.
Section 3. Administration Agreement. The Trustees may in their
discretion from time to time enter into an administration agreement or, if the
Trustees establish multiple Series or Classes, separate administration
agreements with respect to each Series or Class, whereby the other party to such
agreement shall undertake to manage the business affairs of the Trust or of a
Series or Class thereof of the Trust and furnish the Trust or a Series or a
Class thereof with office facilities, and shall be
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responsible for the ordinary clerical, bookkeeping and recordkeeping services at
such office facilities, and other facilities and services, if any, and all upon
such terms and conditions as the Trustees may in their discretion determine.
Section 4. Service Agreement. The Trustees may in their discretion from
time to time enter into service agreements with respect to one or more Series or
Classes of Shares whereby the other parties to such Service Agreements will
provide administration and/or support services pursuant to administration plans
and service plans, and all upon such terms and conditions as the Trustees in
their discretion may determine.
Section 5. Transfer Agent. The Trustees may in their discretion from
time to time enter into a transfer agency and shareholder service contract
whereby the other party to such contract shall undertake to furnish transfer
agency and shareholder services to the Trust. The contract shall have such terms
and conditions as the Trustees may in their discretion determine not
inconsistent with the Declaration. Such services may be provided by one or more
Persons.
Section 6. Custodian. The Trustees may appoint or otherwise engage one
or more banks or trust companies, each having aggregate capital, surplus and
undivided profits (as shown in its last published report) of at least two
million dollars ($2,000,000), or any other entity satisfying the requirements of
the 1940 Act, to serve as Custodian with authority as its agent, but subject to
such restrictions, limitations and other requirements, if any, as may be
contained in the By-laws of the Trust. The Trustees may also authorize the
Custodian to employ one or more sub-custodians, including such foreign banks and
securities depositories as meet the requirements of applicable provisions of the
1940 Act, and upon such terms and conditions as may be agreed upon between the
Custodian and such sub-custodian, to hold securities and other assets of the
Trust and to perform the acts and services of the Custodian, subject to
applicable provisions of law and resolutions adopted by the Trustees.
Section 7. Affiliations of Trustees or Officers, Etc. The fact that:
(i) any of the Shareholders, Trustees or officers of the
Trust or any Series thereof is a shareholder, director, officer,
partner, trustee, employee, manager, adviser or distributor of or for
any partnership, corporation, trust, association or other organization
or of or for any parent or
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affiliate of any organization, with which a contract of the character
described in this Article III or for services as Custodian, Transfer
Agent or disbursing agent or for related services may have been or may
hereafter be made, or that any such organization, or any parent or
affiliate thereof, is a Shareholder of or has an interest in the Trust,
or that
(ii) any partnership, corporation, trust, association or other
organization with which a contract of the character described in
Sections 1, 2, 3 or 4 of this Article III or for services as Custodian,
Transfer Agent or disbursing agent or for related services may have
been or may hereafter be made also has any one or more of such
contracts with one or more other partnerships, corporations, trusts,
associations or other organizations, or has other business or
interests,
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same or create any liability or accountability to the Trust or its Shareholders.
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ARTICLE IV
COMPENSATION, LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 1. Compensation. The Trustees as such shall be entitled to
reasonable compensation from the Trust, and they may fix the amount of such
compensation. Nothing herein shall in any way prevent the employment of any
Trustee for advisory, management, legal, accounting, investment banking or other
services and payment for the same by the Trust.
Section 2. Limitation of Liability. All persons contracting with or
having any claim against the Trust or a particular Series shall look only to the
assets of all Series or such particular Series for payment under such contract
or claim; and neither the Trustees nor, when acting in such capacity, any of the
Trust's officers, employees or agents, whether past, present or future, shall be
personally liable therefor. Every written instrument or obligation on behalf of
the Trust or any Series shall contain a statement to the foregoing effect, but
the absence of such statement shall not operate to make any Trustee or officer
of the Trust liable thereunder. Provided they have exercised reasonable care and
have acted under the reasonable belief that their actions are in the best
interest of the Trust, the Trustees and officers of the Trust shall not be
responsible or liable for any act or omission or for neglect or wrongdoing of
them or any officer, agent, employee, investment adviser or independent
contractor of the Trust, but nothing contained in this Declaration or in the
Delaware Act shall protect any Trustee or officer of the Trust against liability
to the Trust or to Shareholders to which he would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office.
Section 3. Indemnification. (a) Subject to the exceptions and
limitations contained in subsection (b) below:
(i)every person who is, or has been, a Trustee or an officer,
employee or agent of the Trust (including any individual who
serves at its request as director, officer, partner, trustee
or the like of another organization in which it has any
interest as a shareholder, creditor or otherwise) ("Covered
Person") shall be indemnified by the Trust or the appropriate
Series to the fullest extent permitted by law against
liability and against all expenses reasonably incurred or paid
by him in connection with any claim, action,
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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
(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
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shall inure to the benefit of the heirs, executors and administrators of a
Covered Person.
(d) To the maximum extent permitted by applicable law, expenses in
connection with the preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in subsection (a) of this
Section may be paid by the Trust or applicable Series from time to time prior to
final disposition thereof upon receipt of an undertaking by or on behalf of such
Covered Person that such amount will be paid over by him to the Trust or
applicable Series if it is ultimately determined that he is not entitled to
indemnification under this Section; provided, however, that either (i) such
Covered Person shall have provided appropriate security for such undertaking,
(ii) the Trust is insured against losses arising out of any such advance
payments or (iii) either a majority of the Trustees who are neither Interested
Persons of the Trust nor parties to the matter, or independent legal counsel in
a written opinion, shall have determined, based upon a review of readily
available facts (as opposed to a full trial-type inquiry) that there is reason
to believe that such Covered Person will not be disqualified from
indemnification under this Section.
(e) Any repeal or modification of this Article IV by the Shareholders,
or adoption or modification of any other provision of the Declaration or By-
laws inconsistent with this Article, shall be prospective only, to the extent
that such repeal, or modification would, if applied retrospectively, adversely
affect any limitation on the liability of any Covered Person or indemnification
available to any Covered Person with respect to any act or omission which
occurred prior to such repeal, modification or adoption.
Section 3. Indemnification of Shareholders. If any Shareholder or
former Shareholder of any Series shall be held personally liable solely by
reason of his being or having been a Shareholder and not because of his acts or
omissions or for some other reason, the Shareholder or former Shareholder (or
his heirs, executors, administrators or other legal representatives or in the
case of any entity, its general successor) shall be entitled out of the assets
belonging to the applicable Series to be held harmless from and indemnified
against all loss and expense arising from such liability. The Trust, on behalf
of the affected Series, shall, upon request by such Shareholder, assume the
defense of any claim made against such Shareholder for any act or obligation of
the Series and satisfy any judgment thereon from the assets of the Series.
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Section 4. No Bond Required of Trustees. No Trustee shall be obligated
to give any bond or other security for the performance of any of his duties
hereunder.
Section 5. No Duty of Investigation; Notice in Trust Instruments, Etc.
No purchaser, lender, transfer agent or other Person dealing with the Trustees
or any officer, employee or agent of the Trust or a Series thereof shall be
bound to make any inquiry concerning the validity of any transaction purporting
to be made by the Trustees or by said officer, employee or agent or be liable
for the application of money or property paid, loaned, or delivered to or on the
order of the Trustees or of said officer, employee or agent. Every obligation,
contract, instrument, certificate, Share, other security of the Trust or a
Series thereof or undertaking, and every other act or thing whatsoever executed
in connection with the Trust shall be conclusively presumed to have been
executed or done by the executors thereof only in their capacity as Trustees
under this Declaration or in their capacity as officers, employees or agents of
the Trust or a Series thereof. Every written obligation, contract, instrument,
certificate, Share, other security of the Trust or a Series thereof or
undertaking made or issued by the Trustees may recite that the same is executed
or made by them not individually, but as Trustees under the Declaration, and
that the obligations of the Trust or a Series thereof under any such instrument
are not binding upon any of the Trustees or Shareholders individually, but bind
only the Trust Property or the Trust Property of the applicable Series, and may
contain any further recital which they may deem appropriate, but the omission of
such recital shall not operate to bind the Trustees individually. The Trustees
shall at all times maintain insurance for the protection of the Trust Property
or the Trust Property of the applicable Series, its Shareholders, Trustees,
officers, employees and agents in such amount as the Trustees shall deem
adequate to cover possible tort liability, and such other insurance as the
Trustees in their sole judgment shall deem advisable.
Section 6. Reliance on Experts, Etc. Each Trustee, officer or employee
of the Trust or a Series thereof shall, in the performance of his duties, powers
and discretions hereunder be fully and completely justified and protected with
regard to any act or any failure to act resulting from reliance in good faith
upon the books of account or other records of the Trust or a Series thereof,
upon an opinion of counsel, or upon reports made to the Trust or a Series
thereof by any of its officers or employees or by the Investment Adviser, the
Administrator,
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the Distributor, Transfer Agent, selected dealers, accountants, appraisers or
other experts or consultants selected with reasonable care by the Trustees,
officers or employees of the Trust, regardless of whether such counsel or expert
may also be a Trustee.
ARTICLE V
SERIES; CLASSES; SHARES
Section 1. Establishment of Series or Class. The Trust shall consist of
one or more Series. Without limiting the authority of the Trustees to establish
and designate any further Series, the Trustees hereby establish a single Series
which shall be designated Pioneer Mid-Cap Fund. Each additional Series shall be
established and is effective upon the adoption of a resolution of a majority of
the Trustees or any alternative date specified in such resolution. The Trustees
may designate the relative rights and preferences of the Shares of each Series.
The Trustees may divide the Shares of any Series into Classes. Without limiting
the authority of the Trustees to establish and designate any further Classes,
the Trustees hereby establish three Classes of Shares which shall be designated
Class A, Class B and Class C Shares. The Classes of Shares of the existing
Series herein established and designated and any Shares of any further Series
and Classes that may from time to time be established and designated by the
Trustees shall be established and designated, and the variations in the relative
rights and preferences as between the different Series shall be fixed and
determined, by the Trustees; provided, that all Shares shall be identical except
for such variations as shall be fixed and determined between different Series or
Classes by the Trustees in establishing and designating such Class or Series. In
connection therewith with respect to the existing Classes, the purchase price,
the method of determining the net asset value, and the relative dividend rights
of holders shall be as set forth in the Trust's Registration Statement on Form
N- 1A under the Securities Act of 1933 and/or the 1940 Act and as in effect at
the time of issuing Shares of the existing Classes.
All references to Shares in this Declaration shall be deemed to be
Shares of any or all Series or Classes as the context may require. The Trust
shall maintain separate and distinct records for each Series and hold and
account for the assets thereof separately from the other assets of the Trust or
of any other Series. A Series may issue any number of Shares or any Class
thereof and need not issue Shares. Each Share of a Series shall
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represent an equal beneficial interest in the net assets of such Series. Each
holder of Shares of a Series or a Class thereof shall be entitled to receive his
pro rata share of all distributions made with respect to such Series or Class.
Upon redemption of his Shares, such Shareholder shall be paid solely out of the
funds and property of such Series. The Trustees may adopt and change the name of
any Series or Class.
Section 2. Shares. The beneficial interest in the Trust shall be
divided into transferable Shares of one or more separate and distinct Series or
Classes established by the Trustees. The number of Shares of each Series and
Class is unlimited and each Share shall have no par value per Share or such
other amount as the Trustees may establish. All Shares issued hereunder shall be
fully paid and nonassessable. Shareholders shall have no preemptive or other
right to subscribe to any additional Shares or other securities issued by the
Trust. The Trustees shall have full power and authority, in their sole
discretion and without obtaining Shareholder approval, to issue original or
additional Shares at such times and on such terms and conditions as they deem
appropriate; to issue fractional Shares and Shares held in the treasury; to
establish and to change in any manner Shares of any Series or Classes with such
preferences, terms of conversion, voting powers, rights and privileges as the
Trustees may determine (but the Trustees may not change Outstanding Shares in a
manner materially adverse to the Shareholders of such Shares); to divide or
combine the Shares of any Series or Classes into a greater or lesser number; to
classify or reclassify any unissued Shares of any Series or Classes into one or
more Series or Classes of Shares; to abolish any one or more Series or Classes
of Shares; to issue Shares to acquire other assets (including assets subject to,
and in connection with, the assumption of liabilities) and businesses; and to
take such other action with respect to the Shares as the Trustees may deem
desirable. Shares held in the treasury shall not confer any voting rights on the
Trustees and shall not be entitled to any dividends or other distributions
declared with respect to the Shares.
Section 3. Investment in the Trust. The Trustees shall accept
investments in any Series or Class from such persons and on such terms as they
may from time to time authorize. At the Trustees' discretion, such investments,
subject to applicable law, may be in the form of cash or securities in which
that Series is authorized to invest, valued as provided in Article VI, Section
3. Investments in a Series shall be credited to each Shareholder's account in
the form of full Shares at the Net Asset Value per Share next determined after
the investment is received
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or accepted as may be determined by the Trustees; provided, however, that the
Trustees may, in their sole discretion, (a) impose a sales charge upon
investments in any Series or Class, (b) issue fractional Shares, (c) determine
the Net Asset Value per Share of the initial capital contribution or (d)
authorize the issuance of Shares at a price other than Net Asset Value to the
extent permitted by the 1940 Act or any rule, order or interpretation of the
Commission thereunder. The Trustees shall have the right to refuse to accept
investments in any Series at any time without any cause or reason therefor
whatsoever.
Section 4. Assets and Liabilities of Series. All consideration received
by the Trust for the issue or sale of Shares of a particular Series, together
with all assets in which such consideration is invested or reinvested, all
income, earnings, profits, and proceeds thereof (including any proceeds derived
from the sale, exchange or liquidation of such assets, and any funds or payments
derived from any reinvestment of such proceeds in whatever form the same may
be), shall be held and accounted for separately from the assets of every other
Series and are referred to as "assets belonging to" that Series. The assets
belonging to a Series shall belong only to that Series for all purposes, and to
no other Series, subject only to the rights of creditors of that Series. Any
assets, income, earnings, profits, and proceeds thereof, funds, or payments
which are not readily identifiable as belonging to any particular Series shall
be allocated by the Trustees between and among one or more Series as the
Trustees deem fair and equitable. Each such allocation shall be conclusive and
binding upon the Shareholders of all Series for all purposes, and such assets,
earnings, income, profits or funds, or payments and proceeds thereof shall be
referred to as assets belonging to that Series. The assets belonging to a Series
shall be so recorded upon the books of the Trust, and shall be held by the
Trustees in trust for the benefit of the Shareholders of that Series. The assets
belonging to a Series shall be charged with the liabilities of that Series and
all expenses, costs, charges and reserves attributable to that Series, except
that liabilities and expenses allocated solely to a particular Class shall be
borne by that Class. Any general liabilities, expenses, costs, charges or
reserves of the Trust which are not readily identifiable as belonging to any
particular Series or Class shall be allocated and charged by the Trustees
between or among any one or more of the Series or Classes in such manner as the
Trustees deem fair and equitable. Each such allocation shall be conclusive and
binding upon the Shareholders of all Series or Classes for all purposes.
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Without limiting the foregoing, but subject to the right of the
Trustees to allocate general liabilities, expenses, costs, charges or reserves
as herein provided, the debts, liabilities, obligations and expenses incurred,
contracted for or otherwise existing with respect to a particular Series shall
be enforceable against the assets of such Series only, and not against the
assets of any other Series. Notice of this contractual limitation on liabilities
among Series may, in the Trustees' discretion, be set forth in the certificate
of trust of the Trust (whether originally or by amendment) as filed or to be
filed in the Office of the Secretary of State of the State of Delaware pursuant
to the Delaware Act, and upon the giving of such notice in the certificate of
trust, the statutory provisions of Section 3804 of the Delaware Act relating to
limitations on liabilities among Series (and the statutory effect under Section
3804 of setting forth such notice in the certificate of trust) shall become
applicable to the Trust and each Series. Any person extending credit to,
contracting with or having any claim against any Series may look only to the
assets of that Series to satisfy or enforce any debt, with respect to that
Series. No Shareholder or former Shareholder of any Series shall have a claim on
or any right to any assets allocated or belonging to any other Series.
Section 5. Ownership and Transfer of Shares. The Trust or a transfer or
similar agent for the Trust shall maintain a register containing the names and
addresses of the Shareholders of each Series and Class thereof, the number of
Shares of each Series and Class held by such Shareholders, and a record of all
Share transfers. The register shall be conclusive as to the identity of
Shareholders of record and the number of Shares held by them from time to time.
The Trustees may authorize the issuance of certificates representing Shares and
adopt rules governing their use. The Trustees may make rules governing the
transfer of Shares, whether or not represented by certificates. Except as
otherwise provided by the Trustees, Shares shall be transferable on the books of
the Trust only by the record holder thereof or by his duly authorized agent upon
delivery to the Trustees or the Trust's transfer agent of a duly executed
instrument of transfer, together with a Share certificate if one is outstanding,
and such evidence or the genuineness of each such execution and authorization
and of such other matters as may be required by the Trustees. Upon such
delivery, and subject to any further requirements specified by the Trustees or
contained in the By-laws, the transfer shall be recorded on the books of the
Trust. Until a transfer is so recorded, the Shareholder of record of Shares
shall be deemed to be the holder of such Shares for all purposes hereunder and
neither the Trustees nor the Trust, nor any
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transfer agent or registrar or any officer, employee or agent of the Trust,
shall be affected by any notice of a proposed transfer.
Section 6. Status of Shares; Limitation of Shareholder Liability.
Shares shall be deemed to be personal property giving Shareholders only the
rights provided in this Declaration. Every Shareholder, by virtue of having
acquired a Share, shall be held expressly to have assented to and agreed to be
bound by the terms of this Declaration and to have become a party hereto. No
Shareholder shall be personally liable for the debts, liabilities, obligations
and expenses incurred by, contracted for, or otherwise existing with respect to,
the Trust or any Series. The death, incapacity, dissolution, termination or
bankruptcy of a Shareholder during the existence of the Trust shall not operate
to terminate the Trust, nor entitle the representative of any such Shareholder
to an accounting or to take any action in court or elsewhere against the Trust
or the Trustees, but entitles such representative only to the rights of such
Shareholder under this Trust. Ownership of Shares shall not entitle the
Shareholder to any title in or to the whole or any part of the Trust Property or
right to call for a partition or division of the same or for an accounting, nor
shall the ownership of Shares constitute the Shareholders as partners. Neither
the Trust nor the Trustees shall have any power to bind any Shareholder
personally or to demand payment from any Shareholder for anything, other than as
agreed by the Shareholder. Shareholders shall have the same limitation of
personal liability as is extended to shareholders of a private corporation for
profit incorporated in the State of Delaware. Every written obligation of the
Trust or any Series shall contain a statement to the effect that such obligation
may only be enforced against the assets of the appropriate Series or all Series;
however, the omission of such statement shall not operate to bind or create
personal liability for any Shareholder or Trustee.
ARTICLE VI
DISTRIBUTIONS AND REDEMPTIONS
Section 1. Distributions. The Trustees or a committee of one or more
Trustees and one or more officers may declare and pay dividends and other
distributions, including dividends on Shares of a particular Series and other
distributions from the assets belonging to that Series. No dividend or
distribution, including, without limitation, any distribution paid upon
termination of the Trust or of any Series (or Class) with respect to, nor any
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redemption or repurchase of, the Shares of any Series (or Class) shall be
effected by the Trust other than from the assets held with respect to such
Series, nor shall any Shareholder of any particular Series otherwise have any
right or claim against the assets held with respect to any other Series except
to the extent that such Shareholder has such a right or claim hereunder as a
Shareholder of such other Series. The Trustees shall have full discretion to
determine which items shall be treated as income and which items as capital; and
each such determination and allocation shall be conclusive and binding upon the
Shareholders. The amount and payment of dividends or distributions and their
form, whether they are in cash, Shares or other Trust Property, shall be
determined by the Trustees. Dividends and other distributions may be paid
pursuant to a standing resolution adopted once or more often as the Trustees
determine. All dividends and other distributions on Shares of a particular
Series shall be distributed pro rata to the Shareholders of that Series in
proportion to the number of Shares of that Series they held on the record date
established for such payment, except that such dividends and distributions shall
appropriately reflect expenses allocated to a particular Class of such Series.
The Trustees may adopt and offer to Shareholders such dividend reinvestment
plans, cash dividend payout plans or similar plans as the Trustees deem
appropriate.
Section 2. Redemptions. Each Shareholder of a Series shall have the
right at such times as may be permitted by the Trustees to require the Series to
redeem all or any part of his Shares at a redemption price per Share equal to
the Net Asset Value per Share at such time as the Trustees shall have prescribed
by resolution, or, to the extent permitted by the 1940 Act, at such other
redemption price and at such times as the Trustees shall prescribe by
resolution. In the absence of such resolution, the redemption price per Share
shall be the Net Asset Value next determined after receipt by the Series of a
request for redemption in proper form less such charges as are determined by the
Trustees and described in the Trust's Registration Statement for that Series
under the Securities Act of 1933. The Trustees may specify conditions, prices,
and places of redemption, may specify binding requirements for the proper form
or forms of requests for redemption and may specify the amount of any deferred
sales charge to be withheld from redemption proceeds. Payment of the redemption
price may be wholly or partly in securities or other assets at the value of such
securities or assets used in such determination of Net Asset Value, or may be in
cash. Upon redemption, Shares may be reissued from time to time. The Trustees
may require Shareholders to redeem Shares for any reason under terms set by the
Trustees,
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including, but not limited to, the failure of a Shareholder to supply a taxpayer
identification number if required to do so, or to have the minimum investment
required, or to pay when due for the purchase of Shares issued to him. To the
extent permitted by law, the Trustees may retain the proceeds of any redemption
of Shares required by them for payment of amounts due and owing by a Shareholder
to the Trust or any Series or Class or any governmental authority.
Notwithstanding the foregoing, the Trustees may postpone payment of the
redemption price and may suspend the right of the Shareholders to require any
Series or Class to redeem Shares during any period of time when and to the
extent permissible under the 1940 Act.
Section 3. Determination of Net Asset Value. The Trustees shall cause
the Net Asset Value of Shares of each Series or Class to be determined from time
to time in a manner consistent with applicable laws and regulations. The
Trustees may delegate the power and duty to determine Net Asset Value per Share
to one or more Trustees or officers of the Trust or to a custodian, depository
or other agent appointed for such purpose. The Net Asset Value of Shares shall
be determined separately for each Series or Class at such times as may be
prescribed by the Trustees or, in the absence of action by the Trustees, as of
the close of regular trading on the New York Stock Exchange on each day for all
or part of which such Exchange is open for unrestricted trading.
Section 4. Suspension of Right of Redemption. If, as referred to in
Section 2 of this Article, the Trustees postpone payment of the redemption price
and suspend the right of Shareholders to redeem their Shares, such suspension
shall take effect at the time the Trustees shall specify, but not later than the
close of business on the business day next following the declaration of
suspension. Thereafter Shareholders shall have no right of redemption or payment
until the Trustees declare the end of the suspension. If the right of redemption
is suspended, a Shareholder may either withdraw his request for redemption or
receive payment based on the Net Asset Value per Share next determined after the
suspension terminates.
Section 5. Repurchase by Agreement. The Trust may repurchase Shares
directly, or through the Distributor or another agent designated for the
purpose, by agreement with the owner thereof at a price not exceeding the Net
Asset Value per Share determined as of the time when the purchase or contract of
purchase is made or the Net Asset Value as of any time which may be later
determined, provided payment is not made for the Shares prior to the time as of
which such Net Asset Value is determined.
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ARTICLE VII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 1. Voting Powers. The Shareholders shall have power to vote
only with respect to (a) the election of Trustees as provided in Section 2 of
this Article; (b) the removal of Trustees as provided in Article II, Section
3(d); (c) any investment advisory or management contract as provided in Article
VIII, Section 1; (d) any termination of the Trust as provided in Article IX,
Section 4; (e) the amendment of this Declaration to the extent and as provided
in Article X, Section 8; and (f) such additional matters relating to the Trust
as may be required or authorized by law, this Declaration, or the By-laws or any
registration of the Trust with the Commission or any State, or as the Trustees
may consider desirable.
On any matter submitted to a vote of the Shareholders, all Shares shall
be voted by individual Series or Class, except (a) when required by the 1940
Act, Shares shall be voted in the aggregate and not by individual Series or
Class, and (b) when the Trustees have determined that the matter affects the
interests of more than one Series or Class, then the Shareholders of all such
Series or Classes shall be entitled to vote thereon. As determined by the
Trustees without the vote or consent of shareholders, on any matter submitted to
a vote of Shareholders either (i) each whole Share shall be entitled to one vote
as to any matter on which it is entitled to vote and each fractional Share shall
be entitled to a proportionate fractional vote or (ii) each dollar of net asset
value (number of Shares owned times net asset value per share of such Series or
Class, as applicable) shall be entitled to one vote on any matter on which such
Shares are entitled to vote and each fractional dollar amount shall be entitled
to a proportionate fractional vote. Without limiting the power of the Trustees
in any way to designate otherwise in accordance with the preceding sentence, the
Trustees hereby establish that each whole Share shall be entitled to one vote as
to any matter on which it is entitled to vote and each fractional Share shall be
entitled to a proportionate fractional vote. There shall be no cumulative voting
in the election of Trustees. Shares may be voted in person or by proxy or in any
manner provided for in the By-laws. The By-laws may provide that proxies may be
given by any electronic or telecommunications device or in any other manner, but
if a proposal by anyone other than the officers or Trustees is submitted to a
vote of the Shareholders of any Series or Class, or if there is a proxy contest
or proxy solicitation or proposal in opposition to any proposal by the officers
or
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Trustees, Shares may be voted only in person or by written proxy. Until Shares
of a Series are issued, as to that Series the Trustees may exercise all rights
of Shareholders and may take any action required or permitted to be taken by
Shareholders by law, this Declaration or the By-laws. Meetings of Shareholders
shall be called and notice thereof and record dates therefor shall be given and
set as provided in the By-laws.
Section 2. Quorum; Required Vote. One-third of the Outstanding Shares
of each Series or Class, or one-third of the Outstanding Shares of the Trust,
entitled to vote in person or by proxy shall be a quorum for the transaction of
business at a Shareholders' meeting with respect to such Series or Class, or
with respect to the entire Trust, respectively. Any lesser number shall be
sufficient for adjournments. Any adjourned session of a Shareholders' meeting
may be held within a reasonable time without further notice. Except when a
larger vote is required by law, this Declaration or the By-laws, a majority of
the Shares voting at a Shareholders' meeting in person or by proxy shall decide
any matters to be voted upon with respect to the entire Trust and a plurality of
such Shares shall elect a Trustee; provided, that if this Declaration or
applicable law permits or requires that Shares be voted on any matter by
individual Series or Classes, then a majority of the Shares of that Series or
Class (or, if required by law, a majority of the Shares outstanding and entitled
to vote of that Series or Class) voting at a Shareholders' meeting in person or
by proxy on the matter shall decide that matter insofar as that Series or Class
is concerned. Shareholders may act as to the Trust or any Series or Class by the
written consent of a majority (or such other amount as may be required by
applicable law) of the Outstanding Shares of the Trust or of such Series or
Class, as the case may be.
Section 3. Record Dates. For the purpose of determining the
Shareholders of any Series (or Class) who are entitled to receive payment of any
dividend or of any other distribution, the Trustees may from time to time fix a
date, which shall be before the date for the payment of such dividend or such
other payment, as the record date for determining the Shareholders of such
Series (or Class) having the right to receive such dividend or distribution.
Without fixing a record date, the Trustees may for distribution purposes close
the register or transfer books for one or more Series (or Classes) any time
prior to the payment of a distribution. Nothing in this Section shall be
construed as precluding the Trustees from setting different record dates for
different Series (or Classes).
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Section 4. Additional Provisions. The By-laws may include further
provisions for Shareholders' votes and meetings and related matters.
ARTICLE VIII
EXPENSES OF THE TRUST AND SERIES
Section 1. Payment of Expenses by the Trust. Subject to Article V,
Section 4, the Trust or a particular Series shall pay, or shall reimburse the
Trustees from the assets belonging to all Series or the particular Series, for
their expenses (or the expenses of a Class of such Series) and disbursements,
including, but not limited to, interest charges, taxes, brokerage fees and
commissions; expenses of issue, repurchase and redemption of Shares; certain
insurance premiums; applicable fees, interest charges and expenses of third
parties, including the Trust's investment advisers, managers, administrators,
distributors, custodians, transfer agents and fund accountants; fees of pricing,
interest, dividend, credit and other reporting services; costs of membership in
trade associations; telecommunications expenses; funds transmission expenses;
auditing, legal and compliance expenses; costs of forming the Trust and its
Series and maintaining its existence; costs of preparing and printing the
prospectuses of the Trust and each Series, statements of additional information
and Shareholder reports and delivering them to Shareholders; expenses of
meetings of Shareholders and proxy solicitations therefor; costs of maintaining
books and accounts; costs of reproduction, stationery and supplies; fees and
expenses of the Trustees; compensation of the Trust's officers and employees and
costs of other personnel performing services for the Trust or any Series; costs
of Trustee meetings; Commission registration fees and related expenses; state or
foreign securities laws registration fees and related expenses; and for such
non-recurring items as may arise, including litigation to which the Trust or a
Series (or a Trustee or officer of the Trust acting as such) is a party, and for
all losses and liabilities by them incurred in administering the Trust. The
Trustees shall have a lien on the assets belonging to the appropriate Series, or
in the case of an expense allocable to more than one Series, on the assets of
each such Series, prior to any rights or interests of the Shareholders thereto,
for the reimbursement to them of such expenses, disbursements, losses and
liabilities.
Section 2. Payment of Expenses by Shareholders. The Trustees shall have
the power, as frequently as they may determine, to cause each Shareholder, or
each Shareholder of any
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particular Series, to pay directly, in advance or arrears, for charges of the
Trust's custodian or transfer, shareholder servicing or similar agent, an amount
fixed from time to time by the Trustees, by setting off such charges due from
such Shareholder from declared but unpaid dividends owed such Shareholder and/or
by reducing the number of Shares in the account of such Shareholder by that
number of full and/or fractional Shares which represents the outstanding amount
of such charges due from such Shareholder.
ARTICLE IX
MISCELLANEOUS
Section 1. Trust Not a Partnership. This Declaration creates a trust
and not a partnership. No Trustee shall have any power to bind personally either
the Trust's officers or any Shareholder.
Section 2. Trustee Action. The exercise by the Trustees of their powers
and discretion hereunder in good faith and with reasonable care under the
circumstances then prevailing shall be binding upon everyone interested. Subject
to the provisions of Article IV, the Trustees shall not be liable for errors of
judgment or mistakes of fact or law.
Section 3. Record Dates. The Trustees may fix in advance a date up to
ninety (90) days before the date of any Shareholders' meeting, or the date for
the payment of any dividends or other distributions, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
Shares shall go into effect as a record date for the determination of the
Shareholders entitled to notice of, and to vote at, any such meeting, or
entitled to receive payment of such dividend or other distribution, or to
receive any such allotment of rights, or to exercise such rights in respect of
any such change, conversion or exchange of Shares.
Section 4. Termination of the Trust. (a) This Trust shall have
perpetual existence. Subject to the vote of a majority of the Shares outstanding
and entitled to vote of the Trust or of each Series to be affected, the Trustees
may
(i)sell and convey all or substantially all of the assets of
all Series or any affected Series to another Series or to
another entity which is an open-end
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<PAGE>
investment company as defined in the 1940 Act, or is a series
thereof, for adequate consideration, which may include the
assumption of all outstanding obligations, taxes and other
liabilities, accrued or contingent, of the Trust or any
affected Series, and which may include shares of or interests
in such Series, entity, or series thereof; or
(ii) at any time sell and convert into money all or
substantially all of the assets of all Series or any affected
Series.
Upon making reasonable provision for the payment of all known liabilities of all
Series or any affected Series in either (i) or (ii), by such assumption or
otherwise, the Trustees shall distribute the remaining proceeds or assets (as
the case may be) ratably among the Shareholders of all Series or any affected
Series; however, the payment to any particular Class of such Series may be
reduced by any fees, expenses or charges allocated to that Class.
(b) The Trustees may take any of the actions specified in subsection
(a) (i) and (ii) above without obtaining the vote of a majority of the Shares
Outstanding and entitled to vote of the Trust or any Series if a majority of the
Trustees determines that the continuation of the Trust or Series is not in the
best interests of the Trust, such Series, or their respective Shareholders as a
result of factors or events adversely affecting the ability of the Trust or such
Series to conduct its business and operations in an economically viable manner.
Such factors and events may include the inability of the Trust or a Series to
maintain its assets at an appropriate size, changes in laws or regulations
governing the Trust or the Series or affecting assets of the type in which the
Trust or Series invests, or economic developments or trends having a significant
adverse impact on the business or operations of the Trust or such Series.
(c) Upon completion of the distribution of the remaining proceeds or
assets pursuant to subsection (a), the Trust or affected Series shall terminate
and the Trustees and the Trust shall be discharged of any and all further
liabilities and duties hereunder with respect thereto and the right, title and
interest of all parties therein shall be canceled and discharged. Upon
termination of the Trust, following completion of winding up of its business,
the Trustees shall cause a certificate of cancellation of the Trust's
certificate of trust to be filed in
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<PAGE>
accordance with the Delaware Act, which certificate of cancellation may be
signed by any one Trustee.
Section 5. Reorganization. (a) Notwithstanding anything else herein, to
change the Trust's form or place of organization the Trustees may, without
Shareholder approval unless such approval is required by applicable law, (i)
cause the Trust to merge or consolidate with or into one or more entities, if
the surviving or resulting entity is the Trust or another open-end management
investment company under the 1940 Act, or a series thereof, that will succeed to
or assume the Trust's registration under the 1940 Act, (ii) cause the Shares to
be exchanged under or pursuant to any state or federal statute to the extent
permitted by law, or (iii) cause the Trust to incorporate under the laws of
Delaware or any other U.S. jurisdiction. Any agreement of merger or
consolidation or certificate of merger may be signed by a majority of Trustees
and facsimile signatures conveyed by electronic or telecommunication means shall
be valid.
(b) Pursuant to and in accordance with the provisions of Section
3815(f) of the Delaware Act, an agreement of merger or consolidation approved by
the Trustees in accordance with this Section 5 may effect any amendment to the
Declaration or effect the adoption of a new trust instrument of the Trust if it
is the surviving or resulting trust in the merger or consolidation.
(c) The Trustees may create one or more business trusts to which all or
any part of the assets, liabilities, profits or losses of the Trust or any
Series or Class thereof may be transferred and may provide for the conversion of
Shares in the Trust or any Series or Class thereof into beneficial interests in
any such newly created trust or trusts or any series or classes thereof.
Section 6. Declaration of Trust. The original or a copy of this
Declaration of Trust and of each amendment hereto or Declaration of Trust
supplemental shall be kept at the office of the Trust where it may be inspected
by any Shareholder. Anyone dealing with the Trust may rely on a certificate by a
Trustee or an officer of the Trust as to the authenticity of the Declaration of
Trust or any such amendments or supplements and as to any matters in connection
with the Trust. The masculine gender herein shall include the feminine and
neuter genders. Headings herein are for convenience only and shall not affect
the construction of this Declaration of Trust. This Declaration of Trust may be
executed in any number of counterparts, each of which shall be deemed an
original.
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<PAGE>
Section 7. Applicable Law. This Declaration and the Trust created
hereunder are governed by and construed and administered according to the
Delaware Act and the applicable laws of the State of Delaware; provided,
however, that there shall not be applicable to the Trust, the Trustees or this
Declaration of Trust (a) the provisions of Section 3540 of Title 12 of the
Delaware Code, or (b) any provisions of the laws (statutory or common) of the
State of Delaware (other than the Delaware Act) pertaining to trusts which
relate to or regulate (i) the filing with any court or governmental body or
agency of trustee accounts or schedules of trustee fees and charges, (ii)
affirmative requirements to post bonds for trustees, officers, agents or
employees of a trust, (iii) the necessity for obtaining court or other
governmental approval concerning the acquisition, holding or disposition of real
or personal property, (iv) fees or other sums payable to trustees, officers,
agents or employees of a trust, (v) the allocation of receipts and expenditures
to income or principal, (vi) restrictions or limitations on the permissible
nature, amount or concentration of trust investments or requirements relating to
the titling, storage or other manner of holding of trust assets, or (vii) the
establishment of fiduciary or other standards of responsibilities or limitations
on the acts or powers of trustees, which are inconsistent with the limitations
or liabilities or authorities and powers of the Trustees set forth or referenced
in this Declaration. The Trust shall be of the type commonly called a Delaware
business trust, and, without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust under
Delaware law. The Trust specifically reserves the right to exercise any of the
powers or privileges afforded to trusts or actions that may be engaged in by
trusts under the Delaware Act, and the absence of a specific reference herein to
any such power, privilege or action shall not imply that the Trust may not
exercise such power or privilege or take such actions.
Section 8. Amendments. The Trustees may, without any Shareholder vote,
amend or otherwise supplement this Declaration by making an amendment, a
Declaration of Trust supplemental hereto or an amended and restated trust
instrument; provided, that Shareholders shall have the right to vote on any
amendment (a) which would affect the voting rights of Shareholders granted in
Article VII, Section l, (b) to this Section 8, (c) required to be approved by
Shareholders by law or by the Trust's registration statement(s) filed with the
Commission, and (d) submitted to them by the Trustees in their discretion. Any
amendment submitted to Shareholders which the Trustees determine would affect
the Shareholders of any Series shall be authorized by vote of the
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<PAGE>
Shareholders of such Series and no vote shall be required of Shareholders of a
Series not affected. Notwithstanding anything else herein, any amendment to
Article IV which would have the effect of reducing the indemnification and other
rights provided thereby to Trustees, officers, employees, and agents of the
Trust or to Shareholders or former Shareholders, and any repeal or amendment of
this sentence shall each require the affirmative vote of the holders of
two-thirds of the Outstanding Shares of the Trust entitled to vote thereon.
Section 9. Derivative Actions. In addition to the requirements set
forth in Section 3816 of the Delaware Act, a Shareholder may bring a derivative
action on behalf of the Trust only if the following conditions are met:
(a) Shareholders eligible to bring such derivative action under the
Delaware Act who hold at least 10% of the Outstanding Shares of the Trust, or
10% of the Outstanding Shares of the Series or Class to which such action
relates, shall join in the request for the Trustees to commence such action; and
(b) the Trustees must be afforded a reasonable amount of time to
consider such shareholder request and to investigate the basis of such claim.
The Trustees shall be entitled to retain counsel or other advisers in
considering the merits of the request and shall require an undertaking by the
Shareholders making such request to reimburse the Trust for the expense of any
such advisers in the event that the Trustees determine not to bring such action.
Section 10. Fiscal Year. The fiscal year of the Trust shall end on a
specified date as set forth in the By-laws. The Trustees may change the fiscal
year of the Trust without Shareholder approval.
Section 11. Severability. The provisions of this Declaration are
severable. If the Trustees determine, with the advice of counsel, that any
provision hereof conflicts with the 1940 Act, the regulated investment company
provisions of the Internal Revenue Code or with other applicable laws and
regulations, the conflicting provision shall be deemed never to have constituted
a part of this Declaration; provided, however, that such determination shall not
affect any of the remaining provisions of this Declaration or render invalid or
improper any action taken or omitted prior to such determination. If any
provision hereof shall be held invalid or unenforceable in any jurisdiction,
such invalidity or unenforceability shall attach
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<PAGE>
only to such provision only in such jurisdiction and shall not affect any other
provision of this Declaration.
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<PAGE>
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*
Dr. Richard H. Egdahl /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 MID-CAP FUND
ARTICLE I
DEFINITIONS
All capitalized terms have the respective meanings given them in the
Agreement and Declaration of Trust of Pioneer Mid-Cap Fund dated January 12,
1996, as amended or restated from time to time.
ARTICLE II
OFFICES
Section 1. Principal Office. Until changed by the Trustees, the
principal office of the Trust shall be in Boston, Massachusetts.
Section 2. Other Offices. The Trust may have offices in such other
places without as well as within the State of Delaware as the Trustees may from
time to time determine.
Section 3. Registered Office and Registered Agent. The Board of
Trustees shall establish a registered office in the State of Delaware and shall
appoint as the Trust's registered agent for service of process in the State of
Delaware an individual resident of the State of Delaware or a Delaware
corporation or a corporation authorized to transact business in the State of
Delaware; in each case the business office of such registered agent for service
of process shall be identical with the registered Delaware office of the Trust.
ARTICLE III
SHAREHOLDERS
Section 1. Meetings. Meetings of the Shareholders of the Trust or a
Series or Class thereof shall be held as provided in the Declaration of Trust at
such place within or without the State of Delaware as the Trustees shall
designate. The holders of one-third of the Outstanding Shares of the Trust or a
Series or Class thereof present in person or by proxy and entitled to vote shall
<PAGE>
constitute a quorum at any meeting of the Shareholders of the Trust or a Series
or Class thereof.
Section 2. Notice of Meetings. Notice of all meetings of the
Shareholders, stating the time, place and purposes of the meeting, shall be
given by the Trustees by mail or telegraphic or electronic means to each
Shareholder at his address as recorded on the register of the Trust mailed at
least (10) days and not more than ninety (90) days before the meeting, provided,
however, that notice of a meeting need not be given to a Shareholder to whom
such notice need not be given under the proxy rules of the Commission under the
1940 Act and the Securities Exchange Act of 1934, as amended. Only the business
stated in the notice of the meeting shall be considered at such meeting. Any
adjourned meeting may be held as adjourned without further notice. No notice
need be given to any Shareholder who shall have failed to inform the Trust of
his current address or if a written waiver of notice, executed before or after
the meeting by the Shareholder or his attorney thereunto authorized, is filed
with the records of the meeting.
Section 3. Record Date for Meetings and Other Purposes. For the purpose
of determining the Shareholders who are entitled to notice of and to vote at any
meeting, or to participate in any distribution, or for the purpose of any other
action, the Trustees may from time to time close the transfer books for such
period, not exceeding thirty (30) days, as the Trustees may determine; or
without closing the transfer books the Trustees may fix a date not more than
ninety (90) days prior to the date of any meeting of Shareholders or
distribution or other action as a record date for the determination of the
persons to be treated as Shareholders of record for such purposes, except for
dividend payments which shall be governed by the Declaration of Trust.
Section 4. Proxies. At any meeting of Shareholders, any holder of
Shares entitled to vote thereat may vote by proxy, provided that no proxy shall
be voted at any meeting unless it shall have been placed on file with the
Secretary, or with such other officer or agent of the Trust as the Secretary may
direct, for verification prior to the time at which such vote shall be taken. A
proxy shall be deemed signed if the shareholder's name is placed on the proxy
(whether by manual signature, typewriting, telegraphic transmission, facsimile,
other electronic means or otherwise) by the Shareholder or the Shareholder's
attorney-in-fact. Proxies may be given by any electronic or telecommunication
device except as otherwise provided in the Declaration of Trust. Proxies may be
solicited in the name of one or more Trustees or one or more of the officers of
the Trust. Only Shareholders of record shall be entitled to vote. As determined
by the Trustees
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<PAGE>
without the vote or consent of Shareholders, on any matter submitted to a vote
of Shareholders, either (i) each whole Share shall be entitled to one vote as to
any matter on which it is entitled to vote and each fractional Share shall be
entitled to a proportionate fractional vote or (ii) each dollar of net asset
value (number of Shares owned times net asset value per Share of such Series or
Class, as applicable) shall be entitled to one vote on any matter on which such
Shares are entitled to vote and each fractional dollar amount shall be entitled
to a proportionate fractional vote. Without limiting their power to designate
otherwise in accordance with the preceding sentence, the Trustees have
established in the Declaration of Trust that each whole share shall be entitled
to one vote as to any matter on which it is entitled by the Declaration of Trust
to vote and fractional shares shall be entitled to a proportionate fractional
vote. When any Share is held jointly by several persons, any one of them may
vote at any meeting in person or by proxy in respect of such Share, but if more
than one of them shall be present at such meeting in person or by proxy, and
such joint owners or their proxies so present disagree as to any vote to be
cast, such vote shall not be received in respect of such Share. A proxy
purporting to be executed by or on behalf of a Shareholder shall be deemed valid
unless challenged at or prior to its exercise, and the burden of proving
invalidity shall rest on the challenger. If the holder of any such share is a
minor or a person of unsound mind, and subject to guardianship or the legal
control of any other person as regards the charge or management of such Share,
he may vote by his guardian or such other person appointed or having such
control, and such vote may be given in person or by proxy.
Section 5. Abstentions and Broker Non-Votes. Outstanding Shares
represented in person or by proxy (including Shares which abstain or do not vote
with respect to one or more of any proposals presented for Shareholder approval)
will be counted for purposes of determining whether a quorum is present at a
meeting. Abstentions will be treated as Shares that are present and entitled to
vote for purposes of determining the number of Shares that are present and
entitled to vote with respect to any particular proposal, but will not be
counted as a vote in favor of such proposal. If a broker or nominee holding
Shares in "street name" indicates on the proxy that it does not have
discretionary authority to vote as to a particular proposal, those Shares will
not be considered as present and entitled to vote with respect to such proposal.
Section 6. Inspection of Records. The records of the Trust shall be
open to inspection by Shareholders to the same extent as is permitted
shareholders of a Delaware business corporation.
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<PAGE>
Section 7. Action without Meeting. Any action which may be taken by
Shareholders may be taken without a meeting if a majority of Outstanding Shares
entitled to vote on the matter (or such larger proportion thereof as shall be
required by law) consent to the action in writing and the written consents are
filed with the records of the meetings of Shareholders. Such consents shall be
treated for all purposes as a vote taken at a meeting of Shareholders.
ARTICLE IV
TRUSTEES
Section 1. Meetings of the Trustees. The Trustees may in their
discretion provide for regular or stated meetings of the Trustees. Notice of
regular or stated meetings need not be given. Meetings of the Trustees other
than regular or stated meetings shall be held whenever called by the President,
the Chairman or by any one of the Trustees, at the time being in office. Notice
of the time and place of each meeting other than regular or stated meetings
shall be given by the Secretary or an Assistant Secretary or by the officer or
Trustee calling the meeting and shall be mailed to each Trustee at least two
days before the meeting, or shall be given by telephone, cable, wireless,
facsimile or other electronic mechanism to each Trustee at his business address,
or personally delivered to him at least one day before the meeting. Such notice
may, however, be waived by any Trustee. Notice of a meeting need not be given to
any Trustee if a written waiver of notice, executed by him before or after the
meeting, is filed with the records of the meeting, or to any Trustee who attends
the meeting without protesting prior thereto or at its commencement the lack of
notice to him. A notice or waiver of notice need not specify the purpose of any
meeting. The Trustees may meet by means of a telephone conference circuit or
similar communications equipment by means of which all persons participating in
the meeting can hear each other at the same time and participation by such means
shall be deemed to have been held at a place designated by the Trustees at the
meeting. Participation in a telephone conference meeting shall constitute
presence in person at such meeting. Any action required or permitted to be taken
at any meeting of the Trustees may be taken by the Trustees without a meeting if
a majority of the Trustees consent to the action in writing and the written
consents are filed with the records of the Trustees' meetings. Such consents
shall be treated as a vote for all purposes.
Section 2. Quorum and Manner of Acting. A majority of the Trustees
shall be present in person at any regular or special
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<PAGE>
meeting of the Trustees in order to constitute a quorum for the transaction of
business at such meeting and (except as otherwise required by law, the
Declaration of Trust or these By-laws) the act of a majority of the Trustees
present at any such meeting, at which a quorum is present, shall be the act of
the Trustees. In the absence of a quorum, a majority of the Trustees present may
adjourn the meeting from time to time until a quorum shall be present. Notice of
an adjourned meeting need not be given.
ARTICLE V
COMMITTEES
Section 1. Executive and Other Committees. The Trustees by vote of a
majority of all the Trustees may elect from their own number an Executive
Committee to consist of not less than three (3) members to hold office at the
pleasure of the Trustees, which shall have the power to conduct the current and
ordinary business of the Trust while the Trustees are not in session, including
the purchase and sale of securities and the designation of securities to be
delivered upon redemption of Shares of the Trust or a Series thereof, and such
other powers of the Trustees as the Trustees may delegate to them, from time to
time, except those powers which by law, the Declaration of Trust or these
By-laws they are prohibited from delegating. The Trustees may also elect from
their own number other Committees from time to time; the number composing such
Committees, the powers conferred upon the same (subject to the same limitations
as with respect to the Executive Committee) and the term of membership on such
Committees to be determined by the Trustees. The Trustees may designate a
chairman of any such Committee. In the absence of such designation the Committee
may elect its own Chairman.
Section 2. Meetings, Quorum and Manner of Acting. The Trustees may (1)
provide for stated meetings of any Committee, (2) specify the manner of calling
and notice required for special meetings of any Committee, (3) specify the
number of members of a Committee required to constitute a quorum and the number
of members of a Committee required to exercise specified powers delegated to
such Committee, (4) authorize the making of decisions to exercise specified
powers by written assent of the requisite number of members of a Committee
without a meeting, and (5) authorize the members of a Committee to meet by means
of a telephone conference circuit.
The Executive Committee shall keep regular minutes of its meetings and
records of decisions taken without a meeting and
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<PAGE>
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 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.
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<PAGE>
Section 5. Powers and Duties of the President. The President may call
meetings of the Trustees and of any Committee thereof when he deems it necessary
and shall preside at all meetings of the Shareholders. Subject to the control of
the Trustees and to the control of any Committees of the Trustees, within their
respective spheres, as provided by the Trustees, he shall at all times exercise
a general supervision and direction over the affairs of the Trust. He shall have
the power to employ attorneys and counsel for the Trust or any Series or Class
thereof and to employ such subordinate officers, agents, clerks and employees as
he may find necessary to transact the business of the Trust or any Series or
Class thereof. He shall also have the power to grant, issue, execute or sign
such powers of attorney, proxies or other documents as may be deemed advisable
or necessary in furtherance of the interests of the Trust or any Series thereof.
The President shall have such other powers and duties, as from time to time may
be conferred upon or assigned to him by the Trustees.
Section 6. Powers and Duties of Vice Presidents. In the absence or
disability of the President, the Vice President or, if there be more than one
Vice President, any Vice President designated by the Trustees, shall perform all
the duties and may exercise any of the powers of the President, subject to the
control of the Trustees. Each Vice President shall perform such other duties as
may be assigned to him from time to time by the Trustees and the President.
Section 7. Powers and Duties of the Treasurer. The Treasurer shall be
the principal financial and accounting officer of the Trust. He shall deliver
all funds of the Trust or any Series or Class thereof which may come into his
hands to such Custodian as the Trustees may employ. He shall render a statement
of condition of the finances of the Trust or any Series or Class thereof to the
Trustees as often as they shall require the same and he shall in general perform
all the duties incident to the office of a Treasurer and such other duties as
from time to time may be assigned to him by the Trustees. The Treasurer shall
give a bond for the faithful discharge of his duties, if required so to do by
the Trustees, in such sum and with such surety or sureties as the Trustees shall
require.
Section 8. Powers and Duties of the Secretary. The Secretary shall keep
the minutes of all meetings of the Trustees and of the Shareholders in proper
books provided for that purpose; he shall have custody of the seal of the Trust;
he shall have charge of the Share transfer books, lists and records unless the
same are in the charge of a transfer agent. He shall attend to the giving and
serving of all notices by the Trust in accordance
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<PAGE>
with the provisions of these By-laws and as required by law; and subject to
these By-laws, he shall in general perform all duties incident to the office of
Secretary and such other duties as from time to time may be assigned to him by
the Trustees.
Section 9. Powers and Duties of Assistant Officers. In the absence or
disability of the Treasurer, any officer designated by the Trustees shall
perform all the duties, and may exercise any of the powers, of the Treasurer.
Each officer shall perform such other duties as from time to time may be
assigned to him by the Trustees. Each officer performing the duties and
exercising the powers of the Treasurer, if any, and any Assistant Treasurer,
shall give a bond for the faithful discharge of his duties, if required so to do
by the Trustees, in such sum and with such surety or sureties as the Trustees
shall require.
Section 10. Powers and Duties of Assistant Secretaries. In the absence
or disability of the Secretary, any Assistant Secretary designated by the
Trustees shall perform all the duties, and may exercise any of the powers, of
the Secretary. Each Assistant Secretary shall perform such other duties as from
time to time may be assigned to him by the Trustees.
Section 11. Compensation of Officers and Trustees and Members of the
Advisory Board. Subject to any applicable provisions of the Declaration of
Trust, the compensation of the officers and Trustees and members of an advisory
board shall be fixed from time to time by the Trustees or, in the case of
officers, by any Committee or officer upon whom such power may be conferred by
the Trustees. No officer shall be prevented from receiving such compensation as
such officer by reason of the fact that he is also a Trustee.
ARTICLE VII
FISCAL YEAR
The fiscal year of the Trust shall begin on the first day of October in
each year and shall end on the last day of November in each year, provided,
however, that the Trustees may from time to time change the fiscal year. The
taxable year of each Series of the Trust shall be as determined by the Trustees
from time to time.
ARTICLE VIII
SEAL
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<PAGE>
The Trustees may adopt a seal which shall be in such form and shall
have such inscription thereon as the Trustees may from time to time prescribe.
ARTICLE IX
SUFFICIENCY AND WAIVERS OF NOTICE
Whenever any notice whatever is required to be given by law, the
Declaration of Trust or these By-laws, a waiver thereof in writing, signed by
the person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto. A notice shall be deemed to
have been sent by mail, telegraph, cable, wireless, facsimile or other
electronic means for the purposes of these By-laws when it has been delivered to
a representative of any company holding itself out as capable of sending notice
by such means with instructions that it be so sent.
ARTICLE X
AMENDMENTS
These By-laws, or any of them, may be altered, amended or repealed, or
new By-laws may be adopted by (a) vote of a majority of the Outstanding Shares
voting in person or by proxy at a meeting of Shareholders and entitled to vote
or (b) by the Trustees, provided, however, that no By-law may be amended,
adopted or repealed by the Trustees if such amendment, adoption or repeal
requires, pursuant to law, the Declaration of Trust or these By-laws, a vote of
the Shareholders.
END OF BY-LAWS
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PIONEER MID-CAP FUND
ORGANIZED AS A BUSINESS TRUST UNDER THE
LAWS OF THE STATE OF DELAWARE
SEE REVERSE SIDE FOR CERTAIN DEFINITIONS
This is to certify that
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF BENEFICIAL INTEREST, WITHOUT PAR
VALUE, OF THE TRUST OR SERIES OF THE TRUST IDENTIFIED ABOVE.
transferable only on the books of the Trust, by the holder hereof, in person or
by duly authorized attorney, upon surrender of this Certificate properly
endorsed. The aforesaid holder is entitled to require the Trust to purchase all
or any part of the Shares represented by this Certificate at net asset value, as
more fully set forth on the reverse of this Certificate. This Certificate is not
valid until countersigned by the Transfer Agent.
IN WITNESS WHEREOF, the said Trust has caused this Certificate to be
signed by its duly authorized officers and its seal to be hereunto affixed.
Dated:
Countersigned:
PIONEERING SERVICES CORPORATION
Transfer Agent
Authorized Officer
Treasurer President
<PAGE>
REVERSE
THE REGISTERED HOLDER OF THIS CERTIFICATE IS ENTITLED TO ALL THE
RIGHTS, INTEREST AND PRIVILEGES OF A SHAREHOLDER AS PROVIDED BY THE ARTICLES OF
INCORPORATION AND BY-LAWS OF THE FUND, AS AMENDED, WHICH ARE INCORPORATED BY
REFERENCE HEREIN. IN PARTICULAR, THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
TRANSFERABLE BY THE HOLDER, IN PERSON OR BY HIS DULY AUTHORIZED ATTORNEY, BUT
ONLY ON SURRENDER OF THIS CERTIFICATE PROPERLY ENDORSED AND WHEN THE TRANSFER IS
MADE ON THE BOOKS OF THE FUND.
THE HOLDER OF THIS CERTIFICATE, AS PROVIDED IN SAID ARTICLES OF
INCORPORATION AND BY-LAWS, AS AMENDED, SHALL NOT IN ANY WISE BE PERSONALLY
LIABLE FOR ANY DEBT, OBLIGATION OR ACT OF THE FUND.
ANY SHAREHOLDER DESIRING TO DISPOSE OF HIS SHARES MAY DEPOSIT HIS
CERTIFICATE, DULY ENDORSED IN BLANK OR ACCOMPANIED BY AN INSTRUMENT OF TRANSFER
EXECUTED IN BLANK, AT THE OFFICE OF PIONEERING SERVICES CORPORATION OR ANY
SUCCESSOR TRANSFER AGENT OF THE FUND, TOGETHER WITH AN IRREVOCABLE OFFER IN
WRITING TO SELL THE SHARES REPRESENTED THEREBY AT THE NET ASSET VALUE THEREOF
AND THE FUND WILL THEREAFTER PURCHASE SAID SHARES FOR CASH AT NET ASSET VALUE.
THE COMPUTATION OF NET ASSET VALUE, THE LIMITATIONS UPON THE DATE OF PAYMENT AND
PROVISIONS DEALING WITH SUSPENSION OF THIS RIGHT IN CERTAIN EMERGENCIES ARE
FULLY DESCRIBED IN SAID ARTICLES OF INCORPORATION AND BY-LAWS, AS AMENDED.
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME
AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
SIGNATURES MUST BE GUARANTEED IN ACCORDANCE WITH THE THEN CURRENT
PROSPECTUS OF THE FUND.
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with rights of survivorship UGMA/"state abbreviation"
- -- Uniform Gifts to Minors UTMA/"state abbreviation/age" -- Uniform Transfer to
Minors
Additional abbreviations that do not appear in the above list may also be used.
<PAGE>
For Value Received, ______________________ hereby sell, assign and transfer
unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
| |
| |
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF
ASSIGNEE)
Shares represented by the within Certificate, and do hereby irrevocably
constitute and appoint
Attorney to transfer the said shares on the books of the within named Fund with
full power of substitution in the premises.
Dated,
Owner
Signature of Co-Owner, if any
IMPORTANT: BEFORE SIGNING, READ AND COMPLY CAREFULLY WITH
NOTICE PRINTED ABOVE.
Signature(s) guaranteed by:
MANAGEMENT CONTRACT
THIS AGREEMENT dated this 1st day of February, 1996 between Pioneer
Mid-Cap Fund, a Delaware business trust (the "Trust"), and Pioneering Management
Corporation, a Delaware corporation (the "Manager").
W I T N E S S E T H
WHEREAS, the Trust is registered as an open-end, diversified,
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and has filed with the Securities and Exchange
Commission (the "Commission") a registration statement (the "Registration
Statement") for the purpose of registering its shares for public offering under
the Securities Act of 1933, as amended (the "1933 Act"),
WHEREAS, the parties hereto deem it mutually advantageous that the
Manager should be engaged, subject to the supervision of the Trust's Board of
Trustees and officers, to manage the Trust.
NOW, THEREFORE, in consideration of the mutual covenants and benefits
set forth herein, the Trust and the Manager do hereby agree as follows:
1. (a) The Manager will regularly provide the Trust with investment
research, advice and supervision and will furnish continuously an investment
program for the Trust, consistent with the investment objectives and policies of
the Trust. The Manager will determine from time to time what securities shall be
purchased for the Trust, what securities shall be held or sold by the Trust and
what portion of the Trust's assets shall be held uninvested as cash, subject
always to the provisions of the Trust's Certificate of Trust, Agreement and
Declaration of Trust, By-Laws and its registration statements under the 1940 Act
and under the 1933 Act covering the Trust's shares, as filed with the Securities
and Exchange Commission, and to the investment objectives, policies and
restrictions of the Trust, as each of the same shall be from time to time in
effect, and subject, further, to such policies and instructions as the Board of
Trustees of the Trust may from time to time establish. To carry out such
determinations, the Manager will exercise full discretion and act for the Trust
in the same manner and with the same force and effect as the Trust itself might
or could do with respect to purchases, sales or other transactions, as well as
with respect to all other things necessary or incidental to the furtherance or
conduct of such purchases, sales or other transactions.
(b) The Manager will, to the extent reasonably required in the conduct
of the business of the Trust and upon the Trust's
<PAGE>
request, furnish to the Trust research, statistical and advisory reports upon
the industries, businesses, corporations or securities as to which such requests
shall be made, whether or not the Trust shall at the time have any investment in
such industries, businesses, corporations or securities. The Manager will use
its best efforts in the preparation of such reports and will endeavor to consult
the persons and sources believed by it to have information available with
respect to such industries, businesses, corporations or entities.
(c) The Manager will maintain all books and records with respect to the
Trust's securities transactions required by sub-paragraphs (b)(5), (6), (9) and
(10) and paragraph (f) of Rule 31a-1 under the 1940 Act (other than those
records being maintained by the custodian or transfer agent appointed by the
Trust) and preserve such records for the periods prescribed therefor by Rule
31a-2 under the 1940 Act. The Manager will also provide to the Board of Trustees
such periodic and special reports as the Board may reasonably request.
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
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<PAGE>
all taxes and corporate fees payable by the Trust to federal, state or other
governmental agencies; (vi) fees and expenses involved in registering and
maintaining registrations of the Trust and/or its shares with the Commission,
state or blue sky securities agencies and foreign countries, including the
preparation of Prospectuses and Statements of Additional Information for filing
with the Commission; (vii) all expenses of shareholders' and Trustees' meetings
and of preparing, printing and distributing prospectuses, notices, proxy
statements and all reports to shareholders and to governmental agencies; (viii)
charges and expenses of legal counsel to the Trust and the Trustees; (ix) any
distribution fees paid by the Trust in accordance with Rule 12b-1 promulgated by
the Commission pursuant to the 1940 Act; (x) compensation of those Trustees of
the Trust who are not affiliated with or interested persons of the Manager, the
Trust (other than as Trustees), The Pioneer Group, Inc. or Pioneer Trusts
Distributor, Inc.; (xi) the cost of preparing and printing share certificates;
and (xii) interest on borrowed money, if any.
(d) In addition to the expenses described in Section 2(c) above, the
Trust shall pay all brokers' and underwriting commissions chargeable to the
Trust in connection with securities transactions to which the Trust is a party.
3. (a) The Trust shall pay to the Manager, as compensation for the
Manager's services and expenses assumed hereunder, a fee as set forth below.
Management fees payable hereunder shall be computed daily and paid monthly in
arrears.
(i) For the period beginning on the date this Contract becomes
effective and ending on June 30, 1996, the fee shall be paid at the annual rate
of 0.50% of the Trust's average daily net assets up to $250 million, 0.48% of
the next $50 million, and 0.45% of the excess over $300 million (the "Carryover
Fee").
(ii) For periods after June 30, 1996, the fee payable hereunder
shall be composed of the Basic Fee (defined below) and a Performance Adjustment
(defined below) to the Basic Fee based upon the investment performance of the
Trust in relation to the Standard & Poors Mid-Cap 400 Index (the "Index").
(iii) The Basic Fee is payable at an annual rate of 0.625% of the
Trust's average daily net assets.
(iv) The Performance Adjustment consists of an adjustment to the
monthly Basic Fee to be made by applying a performance adjustment rate to the
average net assets of the Trust over the performance period. The resulting
dollar figure will be
-3-
<PAGE>
added to or subtracted from the Basic Fee depending on whether the Trust
experienced better or worse performance than the Index.
The Performance Adjustment rate is 0.02% per annum for each percentage
point rounded to the nearer point (the higher point if exactly one-half point)
that the Trust's investment performance for the period was better or worse than
the record of the index as then constituted. The maximum performance adjustment
is 0.20% per annum.
The performance period will commence on February 1, 1996. During the
first five months thereafter there will be no Performance Adjustment and the
Carryover Fee will be in effect. Starting with July, 1996 and ending with
December, 1997 (the "Transition Period"), the Performance Adjustment will take
effect only if this would have the effect of lowering the Basic Fee. Starting
with January, 1997, the Performance Fee will take effect for purposes of both
raising and lowering the Basic Fee.
Starting with July, 1996, a new month will be added to the performance
period each month until the performance period equals 36 months. Thereafter, the
performance period will consist of the current month plus the preceding 35
months.
The Trust's investment performance will be measured by comparing the
(i) opening net asset value of one share of the Trust on the first business day
of the performance period with (ii) the closing net asset value of the one share
of the Trust as of the last business day of such period. In computing the
investment performance of the Trust and the investment record of the Index,
distributions of realized capital gains, the value of capital gains taxes per
share paid or payable on undistributed realized long-term capital gains
accumulated to the end of such period and dividends paid out of investment
income on the part of the Trust, and all cash distributions of the companies
whose stock comprise the Index, will be treated as reinvested in accordance with
Rule 205-1 or any other applicable rule under the Investment Advisers Act of
1940, as the same from time to time may be amended.
The computation of the performance adjustment will not be cumulative.
Except during the Transition Period, a positive fee adjustment will apply even
though the performance of the Trust over some period of time shorter than the
performance period has been behind that of the Index, and, conversely, a
negative fee adjustment will apply for the month even though the performance of
the Trust over some period of time shorter than the performance period has been
ahead of that of the Index.
-4-
<PAGE>
(v) One-twelth of the annual Performance Adjustment rate shall be
applied to the average of the net assets of the Trust (computed in the manner
set forth in the Declaration of Trust of the Trust adjusted as provided above,
if applicable) determined as of the close of business on each business day
through out the performance period. The resulting dollar amount is added to or
deducted from the Basic Fee.
(vi) In the event of termination of this Agreement, the Carryover
Fee or Basic Fee then in effect 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. The amount of any
Performance Adjustment to the Basic Fee will be computed on the basis of and
applied to net assets averaged over the 36 month period ending on the last
business day on which this Agreement is in effect, provided that if this
Agreement has been in effect less than 36 months, the computation will be made
on the basis of the period of time during which it has been in effect.
(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.It is understood that the Manager may employ one or more
sub-investment advisers (each a "Subadviser") to provide investment advisory
services to the Trust by entering into a written agreement with each such
Subadviser; provided, that any such agreement first shall be approved by the
vote of a majority of the Trustees, including a majority of the Trustees who are
not "interested persons" (as defined in the 1940 Act) of the Trust, the Manager
or any such Subadviser, at a meeting of Trustees called for the purpose of
voting on such approval and by the
-5-
<PAGE>
affirmative vote of a "majority of the outstanding voting securities" (as
defined in the 1940 Act) of the Trust. The authority given to the Manager in
Sections 1 through 6 hereof may be delegated by it under any such agreement;
provided, that any Subadviser shall be subject to the same restrictions and
limitations on investments and brokerage discretion as the Manager. The Trust
agrees that the Manager shall not be accountable to the Trust or the Trust's
shareholders for any loss or other liability relating to specific investments
directed by any Subadviser, even though the Manager retains the right to reverse
any such investment, because, in the event a Subadviser is retained, the Trust
and the Manager will rely almost exclusively on the expertise of such Subadviser
for the selection and monitoring of specific investments.
5.The Manager will not be liable for any error of judgment or mistake
of law or for any loss sustained by reason of the adoption of any investment
policy or the purchase, sale, or retention of any security on the recommendation
of the Manager, whether or not such recommendation shall have been based upon
its own investigation and research or upon investigation and research made by
any other individual, firm or corporation, but nothing contained herein will be
construed to protect the Manager against any liability to the Trust or its
shareholders by reason of willful misfeasance, bad faith or gross negligence in
the performance of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement.
6. (a) Nothing in this Agreement will in any way limit or restrict the
Manager or any of its officers, Trustees, or employees from buying, selling or
trading in any securities for its or their own accounts or other accounts. The
Manager may act as an investment advisor to any other person, firm or
corporation, and may perform management and any other services for any other
person, association, corporation, firm or other entity pursuant to any contract
or otherwise, and take any action or do any thing in connection therewith or
related thereto; and no such performance of management or other services or
taking of any such action or doing of any such thing shall be in any manner
restricted or otherwise affected by any aspect of any relationship of the
Manager to or with the Trust or deemed to violate or give rise to any duty or
obligation of the Manager to the Trust except as otherwise imposed by law. The
Trust recognizes that the Manager, in effecting transactions for its various
accounts, may not always be able to take or liquidate investment positions in
the same security at the same time and at the same price.
(b) In connection with purchases or sales of securities for the account
of the Trust, neither the Manager nor any of its Trustees, officers or employees
will act as a principal or agent
-6-
<PAGE>
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, as well as the expenses incurred in the
transaction, will be made by the Manager in the manner it considers to be the
most equitable and consistent with its fiduciary obligations to the Trust and to
such clients.
7.This Agreement shall become effective on the date hereof and shall
remain in force until , 1997 and from year to year thereafter, but only so long
as its continuance is approved annually by a vote of the Trustees of the Trust
voting in person, including a majority of its Trustees who are not parties to
this Agreement or "interested persons" (as defined in the 1940 Act) of any such
parties, at a meeting of Trustees called for the purpose of voting on such
approval or by a vote of a "majority of the outstanding voting securities" (as
defined in the 1940 Act) of the Trust, subject to the right of the Trust and the
Manager to terminate this contract as provided in Section 8 hereof.
8.Either party hereto may, without penalty, terminate this Agreement by
vote of its Board of Trustees or Directors, as the case may be, or by vote of a
"majority of its outstanding voting securities" (as defined in the 1940 Act) and
the giving of 60 days' written notice to the other party.
-7-
<PAGE>
9.This Agreement shall automatically terminate in the event of its
assignment. For purposes of this Agreement, the term "assignment" shall have the
meaning given it by Section 2(a)(4) of the 1940 Act.
10. The Trust agrees that in the event that neither the Manager nor any
of its affiliates acts as an investment adviser to the Trust, the name of the
Trust will be changed to one that does not contain the name "Pioneer" or
otherwise suggest an affiliation with the Manager.
11.The Manager is an independent contractor and not an employee of the
Trust for any purpose. If any occasion should arise in which the Manager gives
any advice to its clients concerning the shares of the Trust, the Manager will
act solely as investment counsel for such clients and not in any way on behalf
of the Trust or any series thereof.
12.This Agreement states the entire agreement of the parties hereto,
and is intended to be the complete and exclusive statement of the terms hereof.
It may not be added to or changed orally, and may not be modified or rescinded
except by a writing signed by the parties hereto and in accordance with the 1940
Act, when applicable.
13.This Agreement and all performance hereunder shall be governed by
and construed in accordance with the laws of The Commonwealth of Massachusetts.
14.Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms or provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction.
15.This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
<PAGE>
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.
<PAGE>
ATTEST: PIONEER MID-CAP FUND
/s/Joseph P. Barri By: /s/John F. Cogan, Jr.
Joseph P. Barri John F. Cogan, Jr.
Secretary Chairman and President
ATTEST: PIONEERING MANAGEMENT CORPORATION
/s/Joseph P. Barri By: /s/David D. Tripple
Joseph P. Barri David D. Tripple
Secretary President
UNDERWRITING AGREEMENT
THIS UNDERWRITING AGREEMENT, dated this 1st day of February, 1996, by and
between Pioneer Mid-Cap Fund, a Delaware business trust ("Pioneer"), and Pioneer
Funds Distributor, Inc., a Massachusetts corporation (the "Underwriter").
W I T N E S S E T H
WHEREAS, Pioneer is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and has filed a registration statement (the "Registration
Statement") with the Securities and Exchange Commission (the "Commission") for
the purpose of registering shares of beneficial interest for public offering
under the Securities Act of 1933, as amended;
WHEREAS, the Underwriter engages in the purchase and sale of securities both as
a broker and a dealer and is registered as a broker-dealer with the Commission
and is a member in good standing of the National Association of Securities
Dealers, Inc. (the "NASD");
WHEREAS, the parties hereto deem it mutually advantageous that the Underwriter
should act as Principal Underwriter, as defined in the 1940 Act, for the sale to
the public of the shares of beneficial interest of the securities portfolio of
each series of Pioneer which the Trustees may establish from time to time
(individually, a "Portfolio" and collectively, the "Portfolios"); and
NOW, THEREFORE, in consideration of the mutual covenants and benefits set forth
herein, Pioneer and the Underwriter do hereby agree as follows:
1.Pioneer does hereby grant to the Underwriter the right and option to
purchase shares of beneficial interest of each class of each Portfolio of
Pioneer (the "Shares") for sale to investors either directly or indirectly
through other broker-dealers. The Underwriter is not required to purchase any
specified number of Shares, but will purchase from Pioneer only a sufficient
number of Shares as may be necessary to fill unconditional orders received from
time to time by the Underwriter from investors and dealers.
2.The Underwriter shall offer Shares to the public at an offering price
based upon the net asset value of the Shares, to be calculated for each class of
shares as described in the Registration Statement, including the Prospectus,
filed with the
<PAGE>
Commission and in effect at the time of the offering, plus sales charges as
approved by the Underwriter and the Trustees of Pioneer and as further outlined
in Pioneer's Prospectus. The offering price shall be subject to any provisions
set forth in the Prospectus from time to time with respect thereto, including,
without limitation, rights of accumulation, letters of intention,
exchangeability of shares, reinstatement privileges, net asset value purchases
by certain persons and reinvestments of dividends and capital gain
distributions.
3.In the case of all Shares sold to investors through other
broker-dealers, a portion of applicable sales charges will be reallowed to such
broker-dealers who are members of the NASD or, in the case of certain sales by
banks or certain sales to foreign nationals, to brokers or dealers exempt from
registration with the Commission. The concession reallowed to broker-dealers
shall be set forth in a written sales agreement and shall be generally the same
for broker-dealers providing comparable levels of sales and service.
4.This Agreement shall terminate on any anniversary hereof if its terms
and renewal have not been approved by a majority vote of the Trustees of Pioneer
voting in person, including a majority of its Trustees who are not "interested
persons" of the Trust and who have no direct or indirect financial interest in
the operation of the Underwriting Agreement (the "Qualified Trustees"), at a
meeting of Trustees called for the purpose of voting on such approval. This
Agreement may also be terminated at any time, without payment of any penalty, by
Pioneer on 60 days' written notice to the Underwriter, or by the Underwriter
upon similar notice to Pioneer. This Agreement may also be terminated by a party
upon five (5) days' written notice to the other party in the event that the
Commission has issued an order or obtained an injunction or other court order
suspending effectiveness of the Registration Statement covering these Shares of
Pioneer. Finally, this Agreement may also be terminated by Pioneer upon five (5)
days' written notice to the Underwriter provided either of the following events
has occurred: (i) the NASD has expelled the Underwriter or suspended its
membership in that organization; or (ii) the qualification, registration,
license or right of the Underwriter to sell Shares in a particular state has
been suspended or cancelled in a state in which sales of the Shares of Pioneer
during the most recent 12 month period exceeded 10% of all Shares of Pioneer
sold by the Underwriter during such period.
5.The compensation for the services of the Underwriter as a principal
underwriter under this Agreement shall be (i) that part of the sales charge
which is retained by the Underwriter after allowance of discounts to dealers as
set forth in the Registration Statement, including the Prospectus, filed with
the
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<PAGE>
Commission and in effect at the time of the offering, as amended, and (ii) those
amounts payable to the Underwriter as reimbursement of expenses pursuant to any
distribution plan for Pioneer which may be in effect. Nothing contained herein
shall relieve Pioneer of any obligation under its management contract or any
other contract with any affiliate of the Underwriter.
6.The parties to this Agreement acknowledge and agree that all
liabilities arising hereunder, whether direct or indirect, of any nature
whatsoever, including without limitation, liabilities arising in connection with
any agreement of Pioneer or its Trustees as set forth herein to indemnify any
party to this Agreement or any other person, if any, shall be satisfied out of
the assets of Pioneer and that no Trustee, officer or holder of shares of
beneficial interest of Pioneer shall be personally liable for any of the
foregoing liabilities. Pioneer's Agreement and Declaration of Trust, as amended
from time to time, is on file in the Office of the Secretary of State of the
State of Delaware. The Declaration of Trust describes in detail the respective
responsibilities and limitations on liability of the Trustees, officers, and
holders of Shares of beneficial interest.
7.This Agreement shall automatically terminate in the event of its
assignment (as that term is defined in the 1940 Act).
8.In the event of any dispute between the parties, this Agreement shall
be construed according to the laws of The Commonwealth of Massachusetts.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized officers and their seal to be hereto affixed
as of the day and year first above written.
ATTEST: PIONEER MID-CAP FUND
- ---------------------------- ---------------------------
Joseph P. Barri John F. Cogan, Jr.
Secretary President
ATTEST: PIONEER FUNDS DISTRIBUTOR, INC.
- --------------------------- ---------------------------
Joseph P. Barri Robert L. Butler
Clerk President
-3-
PIONEER FUNDS DISTRIBUTOR, INC.
60 State Street
Boston, MA 02109
(617) 742-7825
SALES AGREEMENT
Gentlemen:
Pioneer Funds Distributor, Inc. (PFD), acts as principal underwriter, as
defined in the Investment Company Act of 1940, for the registered investment
companies (the "Funds") listed on Appendix A attached (as amended from time to
time by PFD.) Acting as a principal, PFD offers to sell shares of the Funds
subject to the conditions set forth in this agreement and subsequent amendments
thereto.
1. Shares purchased from PFD for sale to the public shall be offered and
sold at the price or prices, and on the terms and conditions, set forth in the
currently effective prospectus of the Funds, as amended or supplemented from
time to time (the "Prospectus" or "Prospectuses"). In the sale of such shares to
the public you shall act as dealer for your own account or as agent for your
customer and in no transaction shall you have any authority to act or hold
yourself out as agent for PFD, any of the Funds, the Funds' Custodians, the
Funds' Transfer agent, or any other party, and nothing in this agreement shall
constitute you a partner, employee or agent of ours or give you any authority to
act for PFD. Neither PFD nor the funds shall be liable for any of your acts or
obligations as a broker-dealer under this agreement. Nothing herein shall be
construed to prohibit your acting as agent for one or both customers in the sale
of shares by one customer to another and charging such customer(s) a reasonable
commission.
2. Shares purchased from PFD for sale to the public shall be purchased
only to cover orders previously received by you from your customers. Shares
purchased for your own bona fide investment shall not be reoffered or sold
except to the applicable Fund or to PFD. PFD also agrees to purchase shares only
for investment or to cover orders received.
3. If you purchase shares from your customers, you agree to pay such
customers not less than the redemption price in effect on the date of purchase,
as defined in the prospectus of the applicable Fund. Sales of shares at prices
reflecting a discount, concession, commission or other reallowance shall be made
only to registered broker-dealers which are members of the National Association
of Securities Dealers Inc. (NASD) and who also have entered into sales
agreements with PFD.
4. Only unconditional orders for a designated number of shares or dollar
amount of investment shall be accepted. Procedures relating to handling orders
shall be conveyed to you from time to time. All orders are subject to acceptance
or rejection by PFD in our sole discretion.
5. If any shares sold to or through you under the terms of this agreement
are repurchased by PFD or by the issuer or are tendered for redemption within
seven business days after the date of our confirmation of the original purchase
by you, we both agree to pay to the Fund all commissions on such shares.
6. Sales by you to the public shall earn a commission computed as a
percentage of the applicable offering price and which varies with the size and
nature of each such purchase. The terms and conditions affecting the applicable
offering prices on shares sold with a front-end sales charge , including
features such as combined purchase, rights of accumulation, Letters of Intention
and net asset value purchases, are described in the prospectuses. The schedules
of commissions generally payable with respect to sales of the Funds are outlined
on Appendix A to this agreement. Commission checks for less than $1 will not be
issued.
PFD may, from time to time, offer additional commissions or bonuses on
sales by you or your representatives without otherwise revising this agreement.
Any such additional commissions or bonuses shall take effect in accordance with
the terms and conditions contained in written notification to you.
7. Remittance of the net amount due for shares purchased from PFD shall
be made payable to Pioneering Services Corporation (PSC) Agent for the
Underwriter, in New York or Boston funds, within three days of our confirmation
of sale to you, or within such shorter time as specified by the rules of the
NASD or of a registered clearing agent through which the transaction is settled.
Payments made to PSC should be sent to Post Office Box 9014, Boston, MA 02205
(or wired to an account designated by PSC), along with your transfer
instructions on the appropriate copy of our confirmation of sale to you. If such
payment is not received by PSC, we reserve the right to liquidate the shares
purchased for your account and risk. Promptly upon receipt of payment, shares
sold to you shall be deposited by PSC to an account on the books of the Fund(s)
in accordance with your instructions. Certificates will not be issued unless
specifically requested and we reserve the right to levy a charge for issuance of
certificates.
8. You represent that you are and, at the time of purchasing any shares
of the Funds, will be registered as a broker-dealer with the US. Securities and
Exchange Commission (SEC) or are exempt from such registration; if required to
be registered as a broker-dealer you are a member in good standing of the NASD;
you are qualified to act as a broker-dealer in the states or jurisdictions in
which you intend to offer shares of the Funds; you will abide by all applicable
federal and state statutes and the rules of the NASD; and when making sales to
citizens or residents of foreign countries, that you will abide by all
applicable laws and regulations of that country. Expulsion or suspension from
the NASD or revocation or suspension of SEC registration shall act as an
immediate cancellation of this agreement.
9. No person is authorized to make any representations concerning shares
of any of the Funds except those contained in the then current Prospectus or
Statement of Additional Information for such Fund. In purchasing shares from PFD
you shall rely solely on the representations contained in such Prospectuses and
Statements of Additional Information.
10. Additional copies of the current prospectuses, Statements of
Additional Information (SAI), and other literature will be supplied in
reasonable quantities upon request.
<PAGE>
11. We reserve the right in our discretion to suspend sales or withdraw
the offering of shares of any Fund entirely. Either party hereto has the right
to cancel this agreement upon five days' written notice to the other party. We
reserve the right to amend this agreement at any time and you agree that an
order to purchase shares of any one of the Funds placed by you after notice of
such amendment has been sent to you shall constitute your agreement to any such
amendment.
12. All written communications to PFD should be sent to the above address.
All written communications to you will be sent to your address listed below.
13. This agreement shall become effective upon receipt by us of your
acceptance hereof and supersedes any prior agreement between us with respect to
the sales of Shares of any of the Funds.
14. This agreement shall be construed in accordance with the laws of
Massachusetts. The parties hereby agree that all disputes between us of whatever
subject matter, whether existing on the date hereof or arising hereafter, shall
be submitted to arbitration in accordance with the then current Code of
Arbitration Procedure of the NASD, the Uniform Arbitration Act or similar rules.
Arbitration shall take place in the city of Boston, Massachusetts. Any decision
that shall be made in such arbitration shall be final and binding and shall have
the same force and effect as a judgment made in a court of competent
jurisdiction.
15. You appoint the transfer agent for each Fund as your agent to execute
the purchase transactions of Shares of such Fund in accordance with the terms
and provisions of any account, program, plan or service established or used by
your customers and to confirm each purchase to your customers on your behalf,
except as modified in writing by the transfer agent, and you guarantee to us and
the Fund the legal capacity of your customers so purchasing such Shares and any
other person in whose name the Shares are to be registered.
PIONEER FUNDS DISTRIBUTOR, INC.
Date: ,
By:__________________________________
William A. Misata
Vice President
The undersigned hereby accepts the offer set forth in above letter.
By:__________________________________________________
Title:________________________________________________
RETAIN ONE COPY AND RETURN THE OTHER
<PAGE>
APPENDIX A
CLASS A
Schedule 1
<TABLE>
<CAPTION>
<S> <C> <C>
Pioneer Fund Pioneer Three Pioneer Equity-Income Fund
Pioneer II Pioneer Gold Shares Pioneer Growth Shares
Pioneer International Growth Fund Pioneer Europe Fund Pioneer Real Estate Shares
Pioneer Capital Growth Fund Pioneer Emerging Markets Fund Pioneer Small Company Fund
Pioneer India Fund
Sales Charge
as % of Public Broker/Dealer
Offering Price Commission
Purchase Amount
Less than $ 50,000.......... 5.75 5.00%
$ 50,000 - 99,999.......... 4.50 4.00
100,000 - 249,999.......... 3.50 3.00
250,000 - 499,999.......... 2.50 2.00
500,000 - 999,999.......... 2.00 1.75
1,000,000 or more .......... none a) see below
Schedule 2
Pioneer Bond Fund Pioneer America Income Trust Pioneer Tax-Free Income Fund
Pioneer Income Fund
Sales Charge
as % of Public Broker/Dealer
Purchase Amount Offering Price Commission
Less than $100,000.......... 4.50 4.00%
$100,000 - 249,999.......... 3.50 3.00
250,000 - 499,000......... 2.50 2.00
500,000 - 999,999......... 2.00 1.75
1,000,000 or more .......... none a) see below
Schedule 3
Pioneer Massachusetts Double Pioneer New York Triple Pioneer California Double
Tax-Free Fund Tax-Free Fund Tax-Free Fund
Pioneer Intermediate Tax-Free Fund
Sales Charge
as % of Public Broker/Dealer
Purchase Amount Offering Price Commission
Less than $ 50,000.......... 3.50 3.00%
$ 50,000 - 99,999......... 3.00 2.50
100,000 - 499,999.......... 2.50 2.00
500,000 - 999,999.......... 2.00 1.75
1,000,000 or more .......... none a) see below
Schedule 4
Pioneer Short-Term Income Trust
Sales Charge
as % of Public Broker/Dealer
Purchase Amount Offering Price Commission
Less than $ 50,000.......... 2.50 2.00%
$ 50,000 - 99,999......... 2.00 1.75
100,000 - 249,999.......... 1.50 1.25
250,000 - 999,999.......... 1.00 1.00
1,000,000 or more .......... none a) see below
a) Purchases of $1 million or more, and certain group plans, are not subject to
an initial sales charge. PFD may pay a commission to broker-dealers who initiate
and are responsible for such purchases at the following rate: for funds listed
on schedules 3 and 4 above, .50 of 1% on purchases of $1 million to $5 million
and .10 of 1% on the excess over $5 million. For funds listed on shedules 1 and
2, the rate is as follows: 1% on the first $5 million invested, .50 of 1% on the
next $45 million and .25 of 1% on the excess over 50 million. A one-year prepaid
service fee is included in this commission. These commissions shall not be
payable if the purchaser is affiliated with the broker-dealer or if the purchase
represents the reinvestment of a redemption made during the previous 12 calendar
months. A contingent deferred sales charge will be payable on these investments
in the event of share redemption within 12 months following the share purchase,
at the rate of 1% on funds in schedules 1 and 2 ; and .50 of 1% on funds in
schedules 3 and 4, of the lesser of the value of the shares redeemed (exclusive
of reinvested dividend and capital gain distributions) or the total cost of such
shares. For additional information about the broker-dealer commission and
contingent deferred sales charge applicable to these transactions, refer to the
Fund's prospectus.
</TABLE>
PLEASE RETAIN THIS COPY
<PAGE>
Schedule 5
<TABLE>
<CAPTION>
<S> <C> <C>
Pioneer Cash Reserves Fund Pioneer U.S. Pioneer Tax-Free Money Fund
Government Money Fund
No Load
CLASS B
Schedule 1 Schedule 2 Schedule 3
---------- ---------- --------
<S> <C> <C>
Pioneer Equity Income Fund Pioneer Intermediate Tax-Free Pioneer Short-Term Income Trust
Pioneer Bond Fund Fund
Pioneer Capital Growth Fund
Pioneer Europe Fund
Pioneer Gold Share
Pioneer America Income Trust
Pioneer Emerging Markets Fund
Pioneer India Fund
Pioneer Cash Reserves Fund
Pioneer Growth Shares
Pioneer Income Fund
Pioneer Tax-Free Income Fund
Pioneer Small Company Fund
Broker/Dealer
Commission 4.00% 3.00% 2.00%
- ----------
Year Since
Purchase CDSC% CDSC% CDSC%
First 4.0 3.0 2.0
Second 4.0 3.0 2.0
Third 3.0 2.0 1.0
Fourth 3.0 1.0 none
Fifth 2.0 none none
Sixth 1.0 none To A Class
Seventh none To A Class
Eigth none
Ninth To A Class
b) Dealer Commission includes a first year service fee equal to 0.25% of the
amount invested in all Class B shares.
</TABLE>
<PAGE>
PIONEER FUNDS DISTRIBUTOR, INC.
60 State Street
Boston, MA 02109
(617) 742-7825
SUPPLEMENTAL SALES AND SERVICE AGREEMENT
You have entered into a Sales Agreement with Pioneer Funds Distributor, Inc.
("PFD") with respect to the Pioneer mutual funds for which PFD serves as
principal underwriter ("the Funds").
This agreement incorporates and supplements that agreement. In consideration of
your sales of shares of the Funds, for providing services to shareholders of the
Funds and of the Pioneer money market funds and assisting PFD and its affiliates
in providing such services, we are authorized to pay you certain service fees as
specified herein. Receipt by you of any such service fees is subject to the
terms and conditions contained in the Funds' prospectuses and/or specified
below, as may be amended from time to time.
1. You agree to cooperate as requested with programs that the Funds, PFD or
their affiliates provide to enhance shareholder service.
2. You agree to take an active role in providing such shareholder services as
processing purchase and redemption transactions and, where applicable, exchanges
and account transfers; establishing and maintaining shareholder accounts;
providing certain information and assistance with respect to the Funds;
responding to shareholder inquiries or advising us of such inquiries where
appropriate.
3., You agree to assign an active registered representative to each shareholder
account on your and our records and to reassign accounts when registered
representatives leave your firm. You also agree, with respect to accounts which
are held in nominee or "street" name, to provide such documentation and
verification that active representatives are assigned to all such accounts as
PFD may require from time to time.
4. You agree to pay to the registered representatives assigned to shareholder
accounts a share of any service fees paid to you pursuant to this agreement. You
also agree to instruct your representatives to regularly contact shareholders
whose accounts are assigned to them.
5. You acknowledge that service fee payments are subject to terms and conditions
set forth herein and in the Funds' prospectuses, Statements of Additional
Information and Plans of Distribution and that this agreement may be terminated
by either party at any time by written notice to the other. Any order to
purchase or sell shares received by PFD from you subsequent to the date of our
notification to you of an amendment of the Agreement shall be deemed to be your
acceptance of such an amendment.
6. You acknowledge that your continued participation in this agreement is
subject to your providing a level of support to PFD's marketing and shareholder
retention efforts that is deemed acceptable by PFD. Factors which may be
considered by PFD in this respect include, but are not limited to, the level of
shareholder redemptions, the level of assistance in disseminating shareholder
communications, reasonable access to your offices and/or representatives by PFD
wholesalers or other employees and whether your compensation system or
"preferential list" unduly discriminates against the sale of shares of the
Funds.
7. Service fees will generally be paid quarterly, at the rates and under the
conditions specified on schedule A hereto.
8. All communications to PFD should be sent to the above address. Any notice to
you shall be duly given if mailed or telegraphed to the address specified by you
below. This agreement, in conjunction with the Sales Agreement, describes the
complete understanding of the parties. This agreement shall be construed under
the laws of the Commonwealth of Massachusetts.
Accepted: Execute this Agreement in duplicate
and return one of the duplicate
originals to us.
By:________________________________
By: _________________________________
Title:_____________________________ William A. Misata
Vice President
RETAIN ONE COPY AND RETURN THE OTHER
<PAGE>
SUPPLEMENTAL SALES AND SERVICE AGREEMENT
WITH PIONEER FUNDS DISTRIBUTOR, INC.
SCHEDULE A
1. Except as specified in Section 4 below, service fees on the
aggregate net asset value of each account assigned to you in Pioneer Fund,
Pioneer II, and Pioneer Three will be paid at the rate of:
a. 0.15% annually on shares acquired prior to August 19, 1991.
b. 0.25% annually on shares acquired on or after August 19,
1991.
2. Except as specified in Section 4 below, service fees on the
aggregate net asset value of each account assigned to you in:
Pioneer America Income Trust Pioneer International Growth Fund
Pioneer Bond Fund Pioneer Growth Shares
Pioneer Intermediate-Free Fund Pioneer Real Estate Shares
Pioneer Europe Fund Pioneer Income Fund Pioneer
Capital Growth Fund Pioneer Tax-Free Income Fund
Pioneer Equity-Income Fund Pioneer Short-Term Income Trust
Pioneer Gold Shares Pioneer India Fund
Pioneer Emerging Markets Fund Pioneer Small Company Fund*
will be paid at the rate of:
a. 0.15% annually if the shares are acquired on or after August
19, 1991, as a result of an exchange from Pioneer Fund,
Pioneer II, or Pioneer Three of shares owned prior to August
19, 1991.
b. 0.25% annually on all other shares.
3. Except as specified in Section 4 below, service fees will be paid at
an annual rate of 0.15% of the aggregate net asset value of each account
assigned to you in:
Pioneer Cash Reserves Fund
Pioneer US. Government Money Fund
Pioneer Tax-Free Money Fund
Pioneer California Double Tax-Free Fund
Pioneer Massachusetts Double Tax-Free Fund
Pioneer New York Triple Tax-Free Fund
4. Exceptions -- Service fees will not be paid on accounts representing:
a. Purchases by you or your affiliates, employees or
representatives.
b Shares which were purchased at net asset value, except for
sales of the money market funds or sales on which you are
paid a commission and which are subject to the contingent
deferred sales charge described in the funds' prospectuses.
c. "House" accounts or any other accounts not assigned to an
active registered representative(s).
d. Accounts established in Pioneer Bond Fund prior to January
1, 1986.
e. Service fees of less than $50 per calendar quarter will not
be paid.
f. Pioneer reserves the right to reduce the service fee paid on
individual accounts of more than $10 million.
g. First year services fees on shares subject to a CDSC are at
the rate of 0.25% and are prepaid as part of the initial
sales commission.
5. Service fees on shares sold with a front-end sales charge normally
begin to be earned as soon as the transaction settles, unless specified
otherwise in the fund prospectus. Since the commission on shares sold with a
CDSC includes a prepaid one year service fee , periodic service fees on such
shares are paid beginning one year following the transaction.
* Service fees begin accruing January 1, 1996
AGREEMENT BETWEEN
BROWN BROTHERS HARRIMAN & CO.
AND
PIONEER MID-CAP FUND
<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 4
F.Sales of Securities 4
G.Depositary Receipts 5
H.Exercise of Rights; Tender Offers 6
I.Stock Dividends, Rights, Etc. 6
J.Options 6
K.Borrowings 7
L.Demand Deposit Bank Accounts 7
M.Interest Bearing Call or Time Deposits 8
N.Foreign Exchange Transactions
and Futures Contracts 9
O.Stock Loans 10
P.Collections 10
Q.Dividends, Distributions and Redemptions 11
R.Proxies, Notices, Etc. 12
S.Nondiscretionary Details 12
T.Bills13
U.Deposit of Fund Assets in Securities Systems 13
V.Other Transfers 15
W.Investment Limitations 16
X.Proper Instructions 16
Y.Segregated Account 18
3. Powers and Duties of the Custodian with
Respect to the Appointment of Subcustodians 19
4. Assistance by the Custodian as to Certain Matters 23
5. Powers and Duties of the Custodian with
Respect to its Role as Financial Agent 23
A. Records 23
B. Accounts 23
C. Access to Records 24
D. Disbursements 24
<PAGE>
6. Standard of Care and Related Matters 24
A.Liability of the Custodian with
Respect to Proper Instructions;
Evidence of Authority; Etc. 24
B.Liability of the Custodian with
Respect to Use of Securities System 25
C.Liability of the Custodian with
respect to Subcustodians 26
D.Standard of Care; Liability;
Indemnification 27
E.Reimbursement of Advances 28
F.Security for Obligations to Custodian 29
G.Appointment of Agents 29
H.Powers of Attorney 30
7. Compensation of the Custodian 30
8. Termination; Successor Custodian 30
9. Amendment 31
10. Governing Law 32
11. Notices 32
12. Binding Effect 32
13. Counterparts 32
<PAGE>
CUSTODIAN AGREEMENT
AGREEMENT made this 23rd day of December, 1991 between PIONEER MID-CAP
FUND (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:
<PAGE>
A. Safekeeping - To keep safely the securities and other assets of the
Fund that have been delivered to the Custodian and, on behalf of the Fund,
from time to time to receive delivery of securities for safekeeping.
B. Manner of Holding Securities - To hold securities of the Fund (1) by
physical possession of the share certificates or other instruments
representing such securities in registered or bearer form, or (2) in
book-entry form by a Securities System (as said term is defined in Section
2U).
C. Registered Name; Nominee - To hold registered securities of the Fund
(1) in the name or any nominee name of the Custodian or the Fund, or in the
name or any nominee name of any Agent appointed pursuant to Section 6F, or (2)
in street certificate form, so-called, and in any case with or without any
indication of fiduciary capacity, provided that securities are held in an
account of the Custodian containing only assets of the Fund or only assets
held as fiduciary or custodian for customers.
D. Purchases - Upon receipt of Proper Instructions, as defined in
Section X on Page 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
-2-
<PAGE>
Fund, the Custodian (as well as an Agent) may release funds to a
Securities System or to a Subcustodian prior to the receipt of advice from the
Securities System or Subcustodian that the securities underlying such
repurchase agreement have been transferred by book entry into the Account (as
defined in Section 2U) of the Custodian (or such Agent) maintained with such
Securities System or Subcustodian, so long as such payment instructions to the
Securities System or Subcustodian include a requirement that delivery is only
against payment for securities, (ii) in the case of foreign exchange
contracts, options, time deposits, call account deposits, currency deposits,
and other deposits, contracts or options pursuant to Sections 2J, 2L, 2M and
2N, the Custodian may make payment therefor without receiving an instrument
evidencing said deposit, contract or option so long as such payment
instructions detail specific securities to be acquired, and (iii) in the case
of securities in which payment for the security and receipt of the instrument
evidencing the security are under generally accepted trade practice or the
terms of the instrument representing the security expected to take place in
different locations or through separate parties, such as commercial paper
which is indexed to foreign currency exchange rates, derivatives and similar
securities, the Custodian may make payment for such securities prior to
delivery thereof in accordance with such generally accepted trade practice or
the terms of the instrument representing such security.
-3-
<PAGE>
E. Exchanges - Upon receipt of proper instructions, to exchange
securities held by it for the account of the Fund for other securities in
connection with any reorganization, recapitalization, split-up of shares,
change of par value, conversion or other event relating to the securities or
the issuer of such securities and to deposit any such securities in accordance
with the terms of any reorganization or protective plan. Without proper
instructions, the Custodian may surrender securities in temporary form for
definitive securities, may surrender securities for transfer into a name or
nominee name as permitted in Section 2C, and may surrender securities for a
different number of certificates or instruments representing the same number
of shares or same principal amount of indebtedness, provided the securities to
be issued are to be delivered to the Custodian.
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
-4-
<PAGE>
representing securities, the Custodian may make delivery to the broker
buying the securities, against receipt therefor, for examination in accordance
with "street delivery" custom, provided that the payment therefor is to be
made to the Custodian (which payment may be made by a broker's check) or that
such securities are to be returned to the Custodian, and (ii) in the case of
securities referred to in clause (iii) of the last sentence of Section 2D, the
Custodian may make settlement, including with respect to the form of payment,
in accordance with generally accepted trade practice relating to such
securities or the terms of the instrument representing said security.
G. Depositary Receipts - Upon receipt of proper instructions, to
instruct a Subcustodian or an Agent to surrender securities to the depositary
used by an issuer of American Depositary Receipts or International Depositary
Receipts (hereinafter collectively referred to as "ADRs") for such securities
against a written receipt therefor adequately describing such securities and
written evidence satisfactory to the Subcustodian or Agent that the depositary
has acknowledged receipt of instructions to issue with respect to such
securities ADRs in the name of the Custodian, or a nominee of the Custodian,
for delivery to the Custodian in Boston, Massachusetts, or at such other place
as the Custodian may from time to time designate.
Upon receipt of proper instructions, to surrender ADRs to
-5-
<PAGE>
the issuer thereof against a written receipt therefor adequately
describing the ADRs surrendered and written evidence satisfactory to the
Custodian that the issuer of the ADRs has acknowledged receipt of instructions
to cause its depositary to deliver the securities underlying such ADRs to a
Subcustodian or an Agent.
H. Exercise of Rights; Tender Offers - Upon timely receipt of proper
instructions, to deliver to the issuer or trustee thereof, or to the agent of
either, warrants, puts, calls, rights or similar securities for the purpose of
being exercised or sold, provided that the new securities and cash, if any,
acquired by such action are to be delivered to the Custodian, and, upon
receipt of proper instructions, to deposit securities upon invitations for
tenders of securities, provided that the consideration is to be paid or
delivered or the tendered securities are to be returned to the Custodian.
I. Stock Dividends, Rights, Etc. - To receive and collect all stock
dividends, rights and other items of like nature; and to deal with the same
pursuant to proper instructions relative thereto.
J. Options - Upon receipt of proper instructions, to receive and retain
confirmations or other documents evidencing the purchase 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
-6-
<PAGE>
the Fund; and to release and/or transfer such securities or other assets only
in accordance with the provisions of any agreement among the Fund, the
Custodian and a broker-dealer relating to such securities or other assets a
notice or other communication evidencing the expiration, termination or
exercise of such covered option furnished by The Options Clearing
Corporation, the securities or options exchange on which such covered option
is traded or such other organization as may be responsible for handling such
options transactions.
K. Borrowings - Upon receipt of proper instructions, to deliver
securities of the Fund to lenders or their agents as collateral for
borrowings effected by the Fund, provided that such borrowed money is payable
to or upon the Custodian's order as Custodian for the Fund.
L. Demand Deposit Bank Accounts - To open and operate an account or
accounts in the name of the Fund on the Custodian's books subject only to
draft or order by the Custodian. All funds received by the Custodian from or
for the account of the Fund shall be deposited in said account(s). The
responsibilities of the Custodian to the Fund for deposits accepted on the
Custodian's books shall be that of a U. S. bank for a similar deposit. If and
when authorized by proper instructions, the Custodian may open and operate an
additional account(s) in such other banks or trust companies as may be
designated by the Fund in such
-7-
<PAGE>
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 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
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<PAGE>
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
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of any futures commission merchant or to pay to such futures commission
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
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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 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),
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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 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
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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.
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 O 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 O, 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
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<PAGE>
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 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
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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 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
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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 course of
carrying out instructions given by the Fund of any investment limitations to
which the Fund is subject or other limitations with respect to the Fund's
powers to make expenditures, encumber securities, borrow or take similar
actions affecting the Fund.
X. Proper Instructions - Proper instructions shall mean a tested telex
from the Fund or a written request, direction,
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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 reponsibilities which is authorized to give proper
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instructions on behalf of the Fund to the Custodian. Proper
instructions may relate to specific transactions or to types or classes of
transactions, and may be in the form of standing instructions.
Proper instructions may include communications effected directly
between electro-mechanical or electronic devices or systems, in addition to
tested telex, provided that the Fund and the Custodian agree to the use of
such device or system.
Y. Segregated Account - The Custodian shall upon receipt of proper
instructions establish and maintain on its books a segregated account or
accounts for and on behalf of the Fund, into which account or accounts may be
transferred cash and/or securities of the Fund, including securities
maintained by the Custodian 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
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<PAGE>
options purchased sold or written by the Fund or commodity futures
contracts or options thereon purchased or sold by the Fund, (iii) for the
purposes of compliance by the Fund with the procedures required by Investment
Company Act Release No. 10666, or any subsequent release or releases of the
Securities and Exchange Commission relating to the maintenance of segregated
accounts by registered investment companies, and (iv) as mutually agreed from
time to time between the Fund and the Custodian.
3. Powers and Duties of the Custodian with Respect to the Appointment
of Subcustodians: The Fund hereby authorizes and instructs the Custodian to
hold securities, funds and other property of the Fund which are maintained
outside the United States at subcustodians appointed pursuant to the
provisions of this Section 3 (a "Subcustodian"). The Fund shall approve in
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
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<PAGE>
Custodian is authorized on behalf of the Fund to notify each
Subcustodian of its appointment as such. The Custodian may, at any time in its
discretion, remove any Subcustodian that has been appointed as such but will
promptly notify the Fund of any such action.
Those Subcustodians, and the countries where and the securities
depositories through which they or the Custodian may hold securities, cash and
other property of the Fund which the Fund has approved to date are set forth
on Appendix A hereto. Such Appendix shall be amended from time to time as
Subcustodians, and/or countries and/or securities depositories are changed,
added or deleted. The Fund shall be responsible for informing the Custodian
sufficiently in advance of a proposed investment which is to be held in a
country not listed on Appendix A, in order that there shall be sufficient time
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
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Custodian shall have recovered from such agent for any damages caused
the Fund by such agent. At the request of the Fund, Custodian agrees to remove
any securities held on behalf of the Fund by such agent, if practical, to an
approved Subcustodian. Under such circumstances Custodian will collect income
and respond to corporate actions on a best efforts basis.
With respect to securities and funds held by a Subcustodian, either
directly or indirectly (including by a securities depository or clearing
agency), notwithstanding any provision of this Agreement to the contrary,
payment for securities purchased and delivery of securities sold may be made
prior to receipt of the securities or payment, respectively, and securities or
payment may be received in a form, in accordance with governmental
regulations, rules of securities depositories and clearing agencies, or
generally accepted trade practice in the applicable local market.
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
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subcustodian agreement and, if necessary or desirable, appoint another
subcustodian in accordance with the provisions of this Section 3. At the
election of the Fund, it shall have the right to enforce, to the extent
permitted by the subcustodian agreement and applicable law, the Custodian's
rights against any such Subcustodian for loss or damage caused the Fund by
such Subcustodian.
The Custodian will not amend any subcustodian agreement or agree to
change or permit any changes thereunder except upon the prior written approval
of the Fund.
The Custodian may, at any time in its discretion upon notification to
the Fund, terminate any Subcustodian of the Fund in accordance with the
termination provisions under the applicable Subcustodian Agreement, and at the
written request of the Fund, the Custodian will terminate any Subcustodian in
accordance with the termination provisions under the applicable Subcustodian
Agreement.
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
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subcustodian agreement the Custodian shall promptly give written notice
to the Fund of such claim. No more than thirty days after written notice to
the Fund of the Custodian's intention to make such payment, the Fund will
reimburse the Custodian the amount of such payment except in respect of any
negligence or misconduct of the Custodian.
4. Assistance by the Custodian as to Certain Matters: The Custodian may
assist generally in the preparation of reports to Fund shareholders and
others, audits of accounts, and other ministerial matters of like nature.
5. Powers and Duties of the Custodian with Respect to its Role as
Financial Agent: The Fund hereby also appoints the Custodian as the Funds
financial agent. With respect to the appointment as financial agent, the
Custodian shall have and perform the following powers and duties:
A. Records - To create, maintain and retain such records relating to
its activities and obligations under this Agreement as are required under the
Investment Company Act of 1940 and the 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
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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). 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.
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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 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
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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 adjudicated to govern such agreement and in accordance with any
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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.
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It is also understood that the Custodian shall not be liable for any
loss involving any securities, currencies, deposits or other property of the
Fund, whether maintained by it, a Subcustodian, a securities depository, an
agent of the Custodian or a Subcustodian, a Securities System, or a Banking
Institution, or for any loss arising from a foreign currency transaction or
contract, where the loss results from a Sovereign Risk or where the entity
maintaining such securities, currencies, deposits or other property of the
Fund, whether the Custodian, a Subcustodian, a securities depository, an agent
of the Custodian or a Subcustodian, a Securities System or a Banking
Institution, has exercised reasonable care maintaining such property or in
connection with the transaction involving such property. A "Sovereign Risk"
shall mean nationalization, expropriation, devaluation, revaluation,
confiscation, seizure, cancellation, destruction or similar action by any
governmental authority, de facto or de jure; or enactment, promulgation,
imposition or enforcement by any such governmental authority of currency
restrictions, exchange controls, taxes, levies or other charges affecting the
Fund's property; or acts of war, terrorism, 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,
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expenses and charges (including the fees and expenses of any
Subcustodian or any Agent) in connection with this Agreement, but excluding
salaries and usual overhead expenses.
F. Security for Obligations to Custodian - If the Fund shall require
the Custodian to advance cash or securities for any purpose for the benefit of
the Fund, including in connection with foreign exchange contracts or options
(collectively, an "Advance"), or if the Custodian or any nominee thereof shall
incur or be assessed any taxes, charges, expenses, assessments, claims or
liabilities in connection with the performance of this Agreement (collectively
a "Liability"), except such as may arise from its or such nominee's breach of
the relevant standard of conduct set forth in this Agreement, then in such
event any property at any time held for the account of the Fund by the
Custodian or a Subcustodian shall be security for such Advance or Liability
and if the Fund shall fail to repay or indemnify the Custodian promptly, the
Custodian shall be entitled to utilize available cash and to dispose of the
Fund's property, including securities, to the extent necessary to obtain
reimbursement or indemnification.
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
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of such Agent (other than an Agent appointed pursuant to the third
paragraph of Section 3) shall not relieve the Custodian of any of its
responsibilities under this agreement.
H. Powers of Attorney - Upon request, the Fund shall deliver to the
Custodian such proxies, powers of attorney or other instruments as may be
reasonable and necessary or desirable in connection with the performance by
the Custodian or any Subcustodian of their respective obligations under this
Agreement or any applicable subcustodian agreement.
7. Compensation of the Custodian: The Fund shall pay the Custodian a
custody fee based on such fee schedule as may from time to time be agreed upon
in writing by the Custodian and the Fund. Such fee, together with all amounts
for which the Custodian is to be reimbursed in accordance with Section 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
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<PAGE>
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
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
-31-
<PAGE>
restrict the contractual obligations of the parties set forth in this
Agreement.
10. Governing Law: This instrument is executed and delivered in The
Commonwealth of Massachusetts and shall be governed by and construed
according to the laws of said Commonwealth.
11. Notices: Notices and other writings delivered or mailed postage
prepaid to the Fund addressed to the Fund at 60 State Street, Boston,
Massachusetts 02109 or to such other address as the Fund may have designated
to the Custodian in writing, or to the Custodian at 40 Water Street, Boston,
Massachusetts 02109, Attention: Manager, Securities Department, or to such
other address as the Custodian may have designated to the Fund in writing,
shall be deemed to have been properly delivered or given hereunder to the
respective addressee.
12. Binding Effect: This Agreement shall be binding on and shall inure
to the benefit of the Fund and the Custodian and their respective successors
and assigns, provided that neither party hereto may assign this Agreement or
any of its rights or obligations hereunder without the prior written consent
of the other party.
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.
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<PAGE>
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 MID-CAP FUND BROWN BROTHERS HARRIMAN & CO.
By _____________________________ per pro __________________________
-33-
INVESTMENT COMPANY SERVICE AGREEMENT
February 1, 1996
Pioneer Mid-Cap Fund, a Delaware business trust with its principal
place of business at 60 State Street, Boston, Massachusetts 02109 ("Customer")
and Pioneering Services Corporation, a Massachusetts corporation ("PSC"), hereby
agree as follows:
1.SERVICES TO BE PROVIDED BY PSC. During the term of this Agreement,
PSC will provide to each series of shares of beneficial interest (the "Series")
of Customer, which may be established, from time to time (the "Account"), with
the services described in Exhibits A, B, C and D (collectively, the "Exhibits")
that are attached hereto and incorporated herein by reference. It is understood
that PSC may subcontract any of such services to one or more firms designated by
PSC, provided that PSC (i) shall be solely responsible for all compensation
payable to any such firm and (ii) shall be liable to Customer for the acts or
omissions of any such firm to the same extent as PSC would be liable to Customer
with respect to any such act or omission hereunder.
2.EFFECTIVE DATE. This Agreement shall become effective on the date
hereof (the "Effective Date") and shall continue in effect until it is
terminated in accordance with Section 11 below.
3.DELIVERY, VERIFICATION AND RECEIPT FOR DATA AND ASSETS. Prior to the
Effective Date, Customer agrees to deliver to PSC all such documentation, data
and materials as PSC may reasonably prescribe to enable it to perform the
services contemplated by this Agreement. If PSC so requests, Customer agrees to
confirm the accuracy of any starting records of Customer's assets and accounts
produced from PSC's computer or held in other recording systems. In the event
Customer does not, prior to the Effective Date, comply fully with any of the
foregoing provisions of this Section 3, the date for commencement of PSC's
services hereunder may be postponed by PSC until such compliance has taken
place.
Customer shall, from time to time, while this Agreement is in effect
deliver all such materials and data as may be necessary or desirable to enable
PSC to perform its services hereunder, including without limitation, those
described in Section 12 hereof.
4.REPORTS AND MAINTENANCE OF RECORDS BY PSC. PSC will furnish to
Customer and to properly authorized auditors, examiners, distributors, dealers,
underwriters, salesmen, insurance companies, investors, and others designated by
Customer
<PAGE>
in writing, such books, any and all records and reports at such times as are
prescribed for each service in the Exhibits attached hereto. Customer agrees to
examine or to ask any other authorized recipient to examine each such report or
copy promptly and will report or cause to be reported any errors or
discrepancies therein of which Customer then has any knowledge. PSC may at its
option at any time, and shall forthwith upon Customer's demand, turn over to
Customer and cease to retain in PSC's files, any and all records and documents
created and maintained by PSC pursuant to this Agreement which are no longer
needed by PSC in the performance of its services or for its protection.
If not so turned over to Customer, such documents and reports will be
retained by PSC for six years from the year of creation, during the first two of
which the same will be in readily accessible form. At the end of six years, such
records and documents will be turned over to Customer by PSC unless Customer
authorizes their destruction.
5.PSC'S DUTY OF CARE. PSC shall at all time use reasonable care and act
in good faith in performing its duties hereunder. PSC shall incur no liability
to Customer in connection with its performance of services hereunder except to
the extent that it does not comply with the foregoing standards.
PSC shall at all times adhere to various procedures and systems
consistent with industry standards in order to safeguard Customer's checks,
records and other data from loss or damage attributable to fire or theft. PSC
shall maintain insurance adequate to protect against the costs of reconstructing
checks, records and other data in the event of such loss and shall notify
Customer in the event of a material adverse change in such insurance coverage.
In the event of damage or loss occurring to Customer's records or data such that
PSC is unable to meet the terms of this Agreement, PSC shall transfer all
records and data to a transfer agent of Customer's choosing upon Customer's
written authorization to do so.
Without limiting the generality of the foregoing, PSC shall not be
liable or responsible for delays or errors occurring by reason of circumstances
beyond its control including acts of civil, military or banking authority,
national emergencies, labor difficulties, fire, flood or other catastrophes,
acts of God, insurrection, war, riots, failure of transportation, communication
or power supply.
6.CONFIDENTIALITY. PSC will keep confidential all records and
information provided by Customer or by the shareholders of the Account to PSC,
except to the extent disclosures are required by this Agreement, are required by
the Customer's Prospectus
-2-
<PAGE>
and Statement of Additional Information, or are required by a valid subpoena or
warrant issued by a court of competent jurisdiction or by a state or federal
agency or governmental authority.
7.CUSTOMER INSPECTION. Upon reasonable notice, in writing signed by
Customer, PSC shall make available, during regular business hours, all records
and other data created and maintained pursuant to this Agreement for reasonable
audit and inspection by Customer or Customer's agents, including reasonable
visitation by Customer or Customer's agents, including inspecting PSC's
operation facilities. PSC shall not be liable for injury to or responsible in
any way for the safety of any individual visiting PSC's facilities under the
authority of this section. Customer will keep confidential and will cause to
keep confidential all confidential information obtained by its employees or
agents or any other individual representing Customer while on PSC's premises.
Confidential information shall include (1) any information of whatever nature
regarding PSC's operations, security procedures, and data processing
capabilities, (2) financial information regarding PSC, its affiliates, or
subsidiaries, and (3) any information of whatever kind or description regarding
any customer of PSC, its affiliates or subsidiaries.
8.RELIANCE BY PSC ON INSTRUCTIONS AND ADVICE; INDEMNITY. PSC shall be
entitled to seek advice of Customer's legal counsel with respect to PSC's
responsibilities and duties hereunder and shall in no event be liable to
Customer for any action taken pursuant to such advice, except to the extent that
Customer's legal counsel determines in its sole discretion that the rendering of
advice to PSC would result in a conflict of interest.
Whenever PSC is authorized to take action hereunder pursuant to proper
instructions from Customer, PSC shall be entitled to rely upon any certificate,
letter or other instrument or telephone call reasonably believed by PSC to be
genuine and to have been properly made or signed by an officer or other
authorized agent of Customer, and shall be entitled to receive as conclusive
proof of any fact or matter required to be ascertained by it hereunder a
certificate signed by an officer of Customer or any other person authorized by
Customer's Board of Trustees.
Subject to the provisions of Section 13 of this Agreement, Customer
agrees to indemnify and hold PSC, its employees, agents and nominees harmless
from any and all claims, demands, actions and suits, whether groundless or
otherwise, and from and against any and all judgments, liabilities, losses,
damages, costs, charges, counsel fees and other expenses of every nature and
character arising out of or in any way relating to PSC's
-3-
<PAGE>
action or non-action upon information, instructions or requests given or made to
PSC by Customer with respect to the Account.
Notwithstanding the above, whenever Customer may be asked to indemnify
or hold PSC harmless, Customer shall be advised of all pertinent facts arising
from the situation in question. Additionally, PSC will use reasonable care to
identify and notify Customer promptly concerning any situation which presents,
actually or potentially, a claim for indemnification against Customer. Customer
shall have the option to defend PSC against any claim for which PSC is entitled
to indemnification from Customer under the terms hereof, and in the event
Customer so elects, it will notify PSC and, thereupon, Customer shall take over
complete defense of the claim and PSC shall sustain no further legal or other
expenses in such a situation for which indemnification shall be sought or
entitled. PSC may in no event confess any claim or make any compromise in any
case in which Customer will be asked to indemnify PSC except with Customer's
prior written consent.
9.MAINTENANCE OF DEPOSIT ACCOUNTS. PSC shall maintain on behalf of
Customer such deposit accounts as are necessary or desirable from time to time
to enable PSC to carry out the provisions of this Agreement.
10.COMPENSATION AND REIMBURSEMENT TO PSC. For the services rendered by
PSC under this Agreement, Customer agrees to pay an annual fee of $22.00 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):
-4-
<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 Account first and then of Customer and
that no Trustee, officer or holder of shares of beneficial interest of Customer
shall be personally liable for any of the foregoing liabilities. Customer's
Agreement and Declaration of Trust, dated August 8, 1995, 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.
-6-
<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 MID-CAP FUND
- -------------------------- -----------------------------
Joseph P. Barri, Secretary John F. Cogan, Jr.
President
-7-
<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.
<PAGE>
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.
MORRIS, NICHOLS, ARSHT & TUNNELL
1201 North Market Street
P.O. Box 1347
Wilmington, Delaware 19899-1347
January 31, 1996
Pioneer Mid-Cap Fund
60 State Street
Boston, Massachusetts 02109
Re: Pioneer Mid-Cap Fund
Ladies and Gentlemen:
We have acted as special Delaware counsel to Pioneer Mid-Cap
Fund, a Delaware business trust (the "Trust"), in connection with certain
matters relating to the formation of the Trust and the issuance of Shares of
beneficial interest in the Trust. Capitalized terms used herein and not
otherwise herein defined are used as defined in the Agreement and Declaration of
Trust of the Trust dated January 12, 1996 (the "Governing Instrument").
In rendering this opinion, we have examined copies of the
following documents, each in the form provided to us: the Certificate of Trust
of the Trust as filed in the Office of the Secretary of State of the State of
Delaware (the "Recording Office") on January 29, 1996 (the "Certificate"); the
Governing Instrument; the By-laws of the Trust; certain resolutions of the
Trustees of the Trust; an Adoption Of And Amendment To Notification Of
Registration to be filed with the Securities and Exchange Commission on or about
February 1, 1996 by which the Trust will adopt the Notification of Registration
Filed Pursuant to Section 8(a) of the Investment Company Act of 1940 on Form
N-8A of Pioneer Three, a Massachusetts business trust; Post-Effective Amendment
No. 21 to the Registration Statement on Form N-1A of Pioneer Three, a
Massachusetts business trust, by which the Trust will adopt such Registration
Statement to be filed with the Securities and Exchange Commission on or about
February 1, 1996 (the "Post-Effective Amendment"); and a certification of good
standing of the Trust obtained as of a recent date from the Recording Office. In
such examinations, we have assumed the genuineness of all signatures, the
conformity to original documents of all documents submitted to us as copies or
drafts of documents to be executed, and the legal capacity of natural persons to
complete the execution of documents.
<PAGE>
Pioneer Mid-Cap Fund
January 31, 1996
Page 2
We have further assumed for the purpose of this opinion: (i) the due
authorization, execution and delivery by, or on behalf of, each of the parties
thereto of the above-referenced instruments, certificates and other documents,
and of all documents contemplated by the Governing Instrument, the By-laws and
applicable resolutions of the Trustees to be executed by investors desiring to
become Shareholders; (ii) the payment of consideration for Shares, and the
application of such consideration, as provided in the Governing Instrument, and
compliance with the other terms, conditions and restrictions set forth in the
Governing Instrument and all applicable resolutions of the Trustees of the Trust
in connection with the issuance of Shares (including, without limitation, the
taking of all appropriate action by the Trustees to designate Series of Shares
and the rights and preferences attributable thereto as contemplated by the
Governing Instrument); (iii) that appropriate notation of the names and
addresses of, the number of Shares held by, and the consideration paid by,
Shareholders will be maintained in the appropriate registers and other books and
records of the Trust in connection with the issuance, redemption or transfer of
Shares; (iv) that no event has occurred subsequent to the filing of the
Certificate that would cause a termination or reorganization of the Trust under
Section 4 or Section 5 of Article IX of the Governing Instrument; (v) that the
activities of the Trust have been and will be conducted in accordance with the
terms of the Governing Instrument and the Delaware Business Trust Act, 12 Del.
C. ss.ss. 3801 et seq. (the "Delaware Act"); and (vi) that each of the documents
examined by us is in full force and effect and has not been modified,
supplemented or otherwise amended, except as herein referenced. No opinion is
expressed herein with respect to the requirements of, or compliance with,
federal or state securities or blue sky laws. Further, we express no opinion on
the sufficiency or accuracy of any registration or offering documentation
relating to the Trust or the Shares. As to any facts material to our opinion,
other than those assumed, we have relied without independent investigation on
the above-referenced documents and on the accuracy, as of the date hereof, of
the matters therein contained.
Based on and subject to the foregoing, and limited in all
respects to matters of Delaware law, it is our opinion that:
1. The Trust is a duly organized and validly existing business
trust in good standing under the laws of the State of Delaware.
2. The Shares (including the Shares registered by the
Post-Effective Amendment), when issued to Shareholders in accordance with the
terms, conditions, requirements and procedures set forth in the Governing
Instrument, will constitute legally issued,
<PAGE>
Pioneer Mid-Cap Fund
January 31, 1996
Page 3
fully paid and non-assessable Shares of beneficial interest in the Trust.
3. Under the Delaware Act and the terms of the Governing
Instrument, each Shareholder of the Trust, in such capacity, will be entitled to
the same limitation of personal liability as that extended to stockholders of
private corporations for profit organized under the general corporation law of
the State of Delaware; provided, however, that we express no opinion with
respect to the liability of any Shareholder who is, was or may become a named
Trustee of the Trust. Neither the existence nor exercise of the voting rights
granted to Shareholders under the Governing Instrument will, of itself, cause a
Shareholder to be deemed a trustee of the Trust under the Delaware Act.
Notwithstanding the foregoing or the opinion expressed in paragraph 2 above, we
note that, pursuant to Section 2 of Article VIII of the Governing Instrument,
the Trustees have the power to cause Shareholders, or Shareholders of a
particular Series, to pay certain custodian, transfer, servicing or similar
agent charges by setting off the same against declared but unpaid dividends or
by reducing Share ownership (or by both means).
We understand that you are about to register 694,726 Shares of
beneficial interest in the Trust by the Post-Effective Amendment and are
currently in the process of registering or qualifying Shares in the various
states, and we hereby consent to the filing of a copy of this opinion with the
Securities and Exchange Commission as part of the Post-Effective Amendment and
with the securities administrators of such states. In giving this consent, we do
not thereby admit that we come within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended, or the rules
and regulations of the Securities and Exchange Commission thereunder. Except as
provided in this paragraph, the opinion set forth above is expressed solely for
the benefit of the addressee hereof and may not be relied upon by, or filed
with, any other person or entity for any purpose without our prior written
consent.
Sincerely,
/S/MORRIS, NICHOLS, ARSHT & TUNNELL
MORRIS, NICHOLS, ARSHT & TUNNELL
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
dated October 27, 1995 included in Pioneer Mid-Cap Fund's (formerly Pioneer
Three) 1995 annual report (and to all references to our firm) included in or
made a part of the Pioneer Mid-Cap Fund Post-Effective Amendment No. 21 and
Amendment No. 21 to Registration Statement File Nos. 2-79140 and 811-3564,
respectively.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
February 1, 1996
CLASS A SHARES DISTRIBUTION PLAN
PIONEER MID-CAP FUND
CLASS A SHARES DISTRIBUTION PLAN, dated as of February 1, 1996, of PIONEER
MID-CAP FUND, a Delaware business trust (the "Trust").
WITNESSETH
WHEREAS, the Trust is engaged in business as an open-end, diversified,
management investment company and is registered under the Investment Company Act
of 1940, as amended (collectively with the rules and regulations promulgated
thereunder, the "1940 Act");
WHEREAS, the Trust intends to distribute shares of beneficial interest (the
"Class A Shares") of each series of the Trust ("Portfolio") in accordance with
Rule 12b-1 promulgated by the Securities and Exchange Commission under the 1940
Act ("Rule 12b-1"), and desires to adopt this Class A distribution plan (the
"Class A Plan") as a plan of distribution pursuant to such Rule;
WHEREAS, the Trust desires that Pioneer Funds Distributor, Inc., a Massachusetts
corporation ("PFD"), provide certain distribution services for the Trust's Class
A Shares in connection with the Class A Plan;
WHEREAS, the Trust has entered into an underwriting agreement (in a form
approved by the Trust's Board of Trustees in a manner specified in such Rule
12b-1) with PFD, whereby PFD provides facilities and personnel and renders
services to the Trust in connection with the offering and distribution of Class
A Shares (the "Underwriting Agreement");
WHEREAS, the Trust also recognizes and agrees that (a) PFD may retain the
services of firms or individuals to act as dealers or wholesalers (collectively,
the "Dealers") of the Class A Shares in connection with the offering of Class A
Shares, (b) PFD may compensate any Dealer that sells Class A Shares in the
manner and at the rate or rates to be set forth in an agreement between PFD and
such Dealer and (c) PFD may make such payments to the Dealers for distribution
services out of the fee paid to PFD hereunder, any deferred sales charges
imposed by PFD in connection with the repurchase of Class A Shares, its profits
or any other source available to it;
WHEREAS, the Trust recognizes and agrees that PFD may impose certain deferred
sales charges in connection with the repurchase of Class A Shares by the Trust,
and PFD may retain (or receive
<PAGE>
from the Trust, as the case may be) all such deferred sales charges; and
WHEREAS, the Board of Trustees of the Trust, in considering whether the Trust
should adopt and implement this Class A Plan, has evaluated such information as
it deemed necessary to an informed determination whether this Class A Plan
should be adopted and implemented and has considered such pertinent factors as
it deemed necessary to form the basis for a decision to use assets of the Trust
for such purposes, and has determined that there is a reasonable likelihood that
the adoption and implementation of this Class A Plan will benefit the Trust and
its Class A shareholders;
NOW, THEREFORE, the Board of Trustees of the Trust hereby adopts this Class A
Plan for the Trust as a plan of distribution of Class A Shares in accordance
with Rule 12b-1, on the following terms and conditions:
1.The Trust may expend pursuant to this Class A Plan amounts not to
exceed 0.25% of the average daily net assets attributable to Class A Shares of
each Portfolio per annum.
2.Subject to the limit in paragraph 1, the Trust shall reimburse PFD
for amounts expended by PFD to finance any activity which is primarily intended
to result in the sale of Class A Shares of the Trust or the provision of
services to Class A shareholders of the Trust, including but not limited to
commissions or other payments to Dealers and salaries and other expenses of PFD
relating to selling or servicing efforts, provided, that the Board of Trustees
of the Trust shall approve categories of expenses for which reimbursement shall
be made pursuant to this paragraph 2 and, without limiting the generality of the
foregoing, the initial categories of such expenses shall be (i) a service fee to
be paid to qualified broker-dealers in an amount not to exceed 0.25% per annum
of each Portfolio's daily net assets attributable to Class A Shares; (ii)
reimbursement to PFD for its expenditures for broker-dealer commissions and
employee compensation on certain sales of the Trust's Class A Shares with no
initial sales charge; and (iii) reimbursement to PFD for expenses incurred in
providing services to Class A shareholders and supporting broker-dealers and
other organizations, such as banks and trust companies, in their efforts to
provide such services (any addition of such categories shall be subject to the
approval of the Qualified Trustees, as defined below, of the Trust). Such
reimbursement shall be paid ten (10) days after the end of the month or quarter,
as the case may be, in which such expenses are incurred. The Trust acknowledges
that PFD will charge an initial sales load or a contingent sales load in
connection with certain sales of Class A Shares of the Trust and that PFD will
reallow to Dealers all or a portion of such sales loads, as described in the
Trust's Prospectus from time to time.
-2-
<PAGE>
Nothing contained herein is intended to have any effect whatsoever on PFD's
ability to charge any such sales loads or to reallow all or any portion thereof
to Dealers.
3.The Trust understands that agreements between PFD and Dealers may
provide for payment of fees to Dealers in connection with the sale of Class A
Shares and the provision of services to Class A shareholders of the Trust.
Nothing in this Class A Plan shall be construed as requiring the Trust to make
any payment to any Dealer or to have any obligations to any Dealer in connection
with services as a dealer of the Class A Shares. PFD shall agree and undertake
that any agreement entered into between PFD and any Dealer shall provide that
such Dealer shall look solely to PFD for compensation for its services
thereunder and that in no event shall such Dealer seek any payment from the
Trust.
4.Nothing herein contained shall be deemed to require the Trust to take
any action contrary to its Declaration of Trust or By-Laws or any applicable
statutory or regulatory requirement to which it is subject or by which it is
bound, or to relieve or deprive the Trust's Board of Trustees of the
responsibility for and control of the conduct of the affairs of the Trust.
5.This Class A Plan shall become effective upon approval by (i) a
"majority of the outstanding voting securities" of Class A of the Trust, (ii) a
vote of the Board of Trustees, and (iii) a vote of a majority of the Trustees
who are not "interested persons" of the Trust and who have no direct or indirect
financial interest in the operation of the Class A Plan or in any agreement
related to the Class A Plan (the "Qualified Trustees"), such votes with respect
to (ii) and (iii) above to be cast in person at a meeting called for the purpose
of voting on this Class A Plan.
6.This Class A Plan will remain in effect indefinitely, provided that
such continuance is "specifically approved at least annually" by a vote of both
a majority of the Trustees of the Trust and a majority of the Qualified
Trustees. If such annual approval is not obtained, this Class A Plan shall
expire on , 1997. This Class A Plan shall automatically terminate upon
assignment. In the event of termination or non-continuance of this Class A Plan,
each Portfolio has twelve months to reimburse any expense which it incurs prior
to such termination or non-continuance, provided that payments by such Portfolio
during such twelve-month period shall not exceed 0.25% of each Portfolio's
average daily net assets attributable to Class A Shares during such period.
7.This Class A Plan may be amended at any time by the Board of
Trustees, provided that this Class A Plan may not be amended to increase
materially the limitation on the annual percentage of average net assets which
may be expended hereunder
-3-
<PAGE>
without the approval of holders of a "majority of the outstanding voting
securities" of Class A of the Trust and may not be materially amended in any
case without a vote of a majority of both the Trustees and the Qualified
Trustees. Any amendment of this Class A Plan to increase or modify the expense
categories initially designated by the Trustees in paragraph 2 above shall only
require approval of a majority of the Trustees and the Qualified Trustees if
such amendment does not include an increase in the expense limitation set forth
in paragraph 1 above. This Class A Plan may be terminated at any time by a vote
of a majority of the Qualified Trustees or by a vote of the holders of a
"majority of the outstanding voting securities" of the Trust.
8.In the event of termination or expiration of this Class A Plan, the
Trust may nevertheless, within twelve months of such termination or expiration
reimburse any expense which it incurs prior to such termination or expiration,
provided that payments by the Trust during such twelve-month period shall not
exceed 0.25% of the Trust's average daily net assets attributable to Class A
Shares during such period and provided further that such payments are
specifically approved by the Board of Trustees, including a majority of the
Qualified Trustees.
9.The Trust and PFD shall provide to the Trust's Board of Trustees, and
the Board of Trustees shall review, at least quarterly, a written report of the
amounts expended under this Class A Plan and the purposes for which such
expenditures were made.
10.While this Class A Plan is in effect, the selection and nomination
of Qualified Trustees shall be committed to the discretion of the Trustees who
are not "interested persons" of the Trust.
11.For the purposes of this Class A Plan, the terms "assignment,"
"interested persons," "majority of the outstanding voting securities" and
"specifically approved at least annually" are used as defined in the 1940 Act.
12.The Trust shall preserve copies of this Class A Plan, and each
agreement related hereto and each report referred to in paragraph 9 hereof
(collectively, the "Records"), for a period of not less than six (6) years from
the end of the fiscal year in which such Records were made and, for a period of
two (2) years, each of such Records shall be kept in an easily accessible place.
13.This Class A Plan shall be governed by and construed in accordance
with the laws of The Commonwealth of Massachusetts and the applicable provisions
of the 1940 Act.
-4-
<PAGE>
14.If any provision of this Class A Plan shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the Plan shall
not be affected thereby.
-5-
CLASS B SHARES DISTRIBUTION PLAN
PIONEER MID-CAP FUND
CLASS B SHARES DISTRIBUTION PLAN, dated as of February 1, 1996 of PIONEER
MID-CAP FUND, a Delaware business trust (the "Trust").
WITNESSETH
WHEREAS, the Trust is engaged in business as an open-end, diversified,
management investment company and is registered under the Investment Company Act
of 1940, as amended (collectively with the rules and regulations promulgated
thereunder, the "1940 Act");
WHEREAS, the Trust intends to distribute shares of beneficial interest (the
"Class B Shares") of the Trust in accordance with Rule 12b-1 promulgated by the
Securities and Exchange Commission under the 1940 Act ("Rule 12b-1"), and
desires to adopt this Class B Shares distribution plan (the "Class B Plan") as a
plan of distribution pursuant to such Rule;
WHEREAS, the Trust desires that Pioneer Trusts Distributor, Inc., a
Massachusetts corporation ("PFD"), provide certain distribution services for the
Trust's Class B Shares in connection with the Class B Plan;
WHEREAS, the Trust has entered into an underwriting agreement (in a form
approved by the Trust's Board of Trustees in a manner specified in such Rule
12b-1) with PFD, whereby PFD provides facilities and personnel and renders
services to the Trust in connection with the offering and distribution of Class
B Shares (the "Underwriting Agreement");
WHEREAS, the Trust also recognizes and agrees that (a) PFD may retain the
services of firms or individuals to act as dealers or wholesalers (collectively,
the "Dealers") of the Class B Shares in connection with the offering of Class B
Shares, (b) PFD may compensate any Dealer that sells Class B Shares in the
manner and at the rate or rates to be set forth in an agreement between PFD and
such Dealer and (c) PFD may make such payments to the Dealers for distribution
services out of the fee paid to PFD hereunder, any deferred sales charges
imposed by PFD in connection with the repurchase of Class B shares, its profits
or any other source available to it;
<PAGE>
WHEREAS, the Trust recognizes and agrees that PFD may impose certain deferred
sales charges in connection with the repurchase of Class B Shares by the Trust,
and PFD may retain (or receive from the Trust, as the case may be) all such
deferred sales charges; and
WHEREAS, the Board of Trustees of the Trust, in considering whether the Trust
should adopt and implement this Class B Plan, has evaluated such information as
it deemed necessary to an informed determination whether this Class B Plan
should be adopted and implemented and has considered such pertinent factors as
it deemed necessary to form the basis for a decision to use assets of the Trust
for such purposes, and has determined that there is a reasonable likelihood that
the adoption and implementation of this Class B Plan will benefit the Trust and
its Class B shareholders;
NOW, THEREFORE, the Board of Trustees of the Trust hereby adopts this Class B
Plan for the Trust as a plan of distribution of Class B Shares in accordance
with Rule 12b-1, on the following terms and conditions:
1. (a)The Trust is authorized to compensate PFD for (1) distribution
services and (2) personal and account maintenance services performed
and expenses incurred by PFD in connection with the Trust's Class B
Shares. Such compensation shall be calculated and accrued daily and
paid monthly or at such other intervals as the Board of Trustees may
determine.
(b)The amount of compensation paid during any one year for
distribution services with respect to Class B Shares shall be .75% of
the Trust's average daily net assets attributable to Class B Shares
for such year.
(c)Distribution services and expenses for which PFD may be
compensated pursuant to this Plan include, without limitation:
compensation to and expenses (including allocable overhead, travel and
telephone expenses) of (i) Dealers, brokers and other dealers who are
members of the National Association of Securities Dealers, Inc.
("NASD") or their officers, sales representatives and employees, (ii)
PFD and any of its affiliates and any of their respective officers,
sales representatives and employees, (iii) banks and their officers,
sales representatives and employees, who engage in or support
distribution of the Trust's Class B Shares; printing of reports and
prospectuses for other than existing shareholders; and preparation,
printing and distribution of sales literature and advertising
materials.
-2-
<PAGE>
(d)The amount of compensation paid during any one year for
personal and account maintenance services and expenses shall be .25%
of the Trust's average daily net assets attributable to Class B Shares
for such year. As partial consideration for personal services and/or
account maintenance services provided by PFD to the Class B Shares,
PFD shall be entitled to be paid any fees payable under this clause
(d) with respect to Class B Shares for which no dealer of record
exists, where less than all consideration has been paid to a dealer of
record or where qualification standards have not been met.
(e)Personal and account maintenance services for which PFD or any
of its affiliates, banks or Dealers may be compensated pursuant to
this Plan include, without limitation: payments made to or on account
of PFD or any of its affiliates, banks, other brokers and dealers who
are members of the NASD, or their officers, sales representatives and
employees, who respond to inquiries of, and furnish assistance to,
shareholders regarding their ownership of Class B Shares or their
accounts or who provide similar services not otherwise provided by or
on behalf of the Trust.
(f)PFD may impose certain deferred sales charges in connection
with the repurchase of Class B Shares by the Trust and PFD may retain
(or receive from the Trust as the case may be) all such deferred sales
charges.
(g)Appropriate adjustments to payments made pursuant to clauses
(b) and (d) of this paragraph 1 shall be made whenever necessary to
ensure that no payment is made by the Trust in excess of the
applicable maximum cap imposed on asset based, front-end and deferred
sales charges by subsection (d) of Section 26 of Article III of the
Rules of Fair Practice of the NASD.
2.The Trust understands that agreements between PFD and Dealers may
provide for payment of fees to Dealers in connection with the sale of Class B
Shares and the provision of services to shareholders of the Trust. Nothing in
this Class B Plan shall be construed as requiring the Trust to make any payment
to any Dealer or to have any obligations to any Dealer in connection with
services as a dealer of the Class B Shares. PFD shall agree and undertake that
any agreement entered into between PFD and any Dealer shall provide that such
Dealer shall look solely to PFD for
-3-
<PAGE>
compensation for its services thereunder and that in no event shall such Dealer
seek any payment from the Trust.
3.Nothing herein contained shall be deemed to require the Trust to take
any action contrary to its Declaration of Trust, as it may be amended or
restated from time to time, or By-Laws or any applicable statutory or regulatory
requirement to which it is subject or by which it is bound, or to relieve or
deprive the Trust's Board of Trustees of the responsibility for and control of
the conduct of the affairs of the Trust.
4.This Class B Plan shall become effective upon approval by (i) a
"majority of the outstanding voting securities" of Class B of the Trust, (ii) a
vote of the Board of Trustees, and (iii) a vote of a majority of the Trustees
who are not "interested persons" of the Trust and who have no direct or indirect
financial interest in the operation of the Class B Plan or in any agreements
related to the Class B Plan (the "Qualified Trustees"), such votes with respect
to (ii) and (iii) above to be cast in person at a meeting called for the purpose
of voting on this Class B Plan.
5.This Class B Plan will remain in effect indefinitely, provided that
such continuance is "specifically approved at least annually" by a vote of both
a majority of the Trustees of the Trust and a majority of the Qualified
Trustees. If such annual approval is not obtained, this Class B Plan shall
expire on , 1997.
6.This Class B Plan may be amended at any time by the Board of
Trustees, provided that this Class B Plan may not be amended to increase
materially the limitations on the annual percentage of average net assets which
may be expended hereunder without the approval of holders of a "majority of the
outstanding voting securities" of Class B of the Trust and may not be materially
amended in any case without a vote of a majority of both the Trustees and the
Qualified Trustees. This Class B Plan may be terminated at any time by a vote of
a majority of the Qualified Trustees or by a vote of the holders of a "majority
of the outstanding voting securities" of Class B of the Trust.
7.The Trust and PFD shall provide to the Trust's Board of Trustees, and
the Board of Trustees shall review, at least quarterly, a written report of the
amounts expended under this Class B Plan and the purposes for which such
expenditures were made.
8.While this Class B Plan is in effect, the selection and nomination of
Qualified Trustees shall be committed to the discretion of the Trustees who are
not "interested persons" of the Trust.
-4-
<PAGE>
9.For the purposes of this Class B Plan, the terms "assignment,"
"interested persons," "majority of the outstanding voting securities" and
"specifically approved at least annually" are used as defined in the 1940 Act.
10.The Trust shall preserve copies of this Class B Plan, and each
agreement related hereto and each report referred to in Paragraph 7 hereof
(collectively, the "Records"), for a period of not less than six (6) years from
the end of the fiscal year in which such Records were made and, for a period of
two (2) years, each of such Records shall be kept in an easily accessible place.
11.This Class B Plan shall be construed in accordance with the laws of
The Commonwealth of Massachusetts and the applicable provisions of the 1940 Act.
12.If any provision of this Class B Plan shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the Class B
Plan shall not be affected thereby.
-5-
CLASS C SHARES DISTRIBUTION PLAN
PIONEER MID-CAP FUND
CLASS C SHARES DISTRIBUTION PLAN, dated as of February 1, 1996 of PIONEER
MID-CAP FUND, a Delaware business trust (the "Trust").
WITNESSETH
WHEREAS, the Trust is engaged in business as an open-end, diversified,
management investment company and is registered under the Investment Company Act
of 1940, as amended (collectively with the rules and regulations promulgated
thereunder, the "1940 Act");
WHEREAS, the Trust intends to distribute shares of beneficial interest (the
"Class C Shares") of the Trust in accordance with Rule 12b-1 promulgated by the
Securities and Exchange Commission under the 1940 Act ("Rule 12b-1"), and
desires to adopt this Class C Shares distribution plan (the "Class C Plan") as a
plan of distribution pursuant to such Rule;
WHEREAS, the Trust desires that Pioneer Funds Distributor, Inc., a Massachusetts
corporation ("PFD"), provide certain distribution services for the Trust's Class
C Shares in connection with the Class C Plan;
WHEREAS, the Trust has entered into an underwriting agreement (in a form
approved by the Trust's Board of Trustees in a manner specified in such Rule
12b-1) with PFD, whereby PFD provides facilities and personnel and renders
services to the Trust in connection with the offering and distribution of Class
C Shares (the "Underwriting Agreement");
WHEREAS, the Trust also recognizes and agrees that (a) PFD may retain the
services of firms or individuals to act as dealers or wholesalers (collectively,
the "Dealers") of the Class C Shares in connection with the offering of Class C
Shares, (b) PFD may compensate any Dealer that sells Class C Shares in the
manner and at the rate or rates to be set forth in an agreement between PFD and
such Dealer and (c) PFD may make such payments to the Dealers for distribution
services out of the fee paid to PFD hereunder, any deferred sales charges
imposed by PFD in connection with the repurchase of Class C shares, its profits
or any other source available to it;
<PAGE>
WHEREAS, the Trust recognizes and agrees that PFD may impose certain deferred
sales charges in connection with the repurchase of Class C Shares by the Trust,
and PFD may retain (or receive from the Trust, as the case may be) all such
deferred sales charges; and
WHEREAS, the Board of Trustees of the Trust, in considering whether the Trust
should adopt and implement this Class C Plan, has evaluated such information as
it deemed necessary to an informed determination whether this Class C Plan
should be adopted and implemented and has considered such pertinent factors as
it deemed necessary to form the basis for a decision to use assets of the Trust
for such purposes, and has determined that there is a reasonable likelihood that
the adoption and implementation of this Class C Plan will benefit the Trust and
its Class C shareholders;
NOW, THEREFORE, the Board of Trustees of the Trust hereby adopts this Class C
Plan for the Trust as a plan of distribution of Class C Shares in accordance
with Rule 12b-1, on the following terms and conditions:
1. (a)The Trust is authorized to compensate PFD for (1) distribution
services and (2) personal and account maintenance services performed
and expenses incurred by PFD in connection with the Trust's Class C
Shares. Such compensation shall be calculated and accrued daily and
paid monthly or at such other intervals as the Board of Trustees may
determine.
(b)The amount of compensation paid during any one year for
distribution services with respect to Class C Shares shall be .75% of
the Trust's average daily net assets attributable to Class C Shares
for such year.
(c)Distribution services and expenses for which PFD may be
compensated pursuant to this Plan include, without limitation:
compensation to and expenses (including allocable overhead, travel and
telephone expenses) of (i) Dealers, brokers and other dealers who are
members of the National Association of Securities Dealers, Inc.
("NASD") or their officers, sales representatives and employees, (ii)
PFD and any of its affiliates and any of their respective officers,
sales representatives and employees, (iii) banks and their officers,
sales representatives and employees, who engage in or support
distribution of the Trust's Class C Shares; printing of reports and
prospectuses for other than existing shareholders; and preparation,
printing and distribution of sales literature and advertising
materials.
-2-
<PAGE>
(d)The amount of compensation paid during any one year for
personal and account maintenance services and expenses shall be .25%
of the Trust's average daily net assets attributable to Class C Shares
for such year. As partial consideration for personal services and/or
account maintenance services provided by PFD to the Class C Shares,
PFD shall be entitled to be paid any fees payable under this clause
(d) with respect to Class C shares for which no dealer of record
exists, where less than all consideration has been paid to a dealer of
record or where qualification standards have not been met.
(e)Personal and account maintenance services for which PFD or any
of its affiliates, banks or Dealers may be compensated pursuant to
this Plan include, without limitation: payments made to or on account
of PFD or any of its affiliates, banks, other brokers and dealers who
are members of the NASD, or their officers, sales representatives and
employees, who respond to inquiries of, and furnish assistance to,
shareholders regarding their ownership of Class C Shares or their
accounts or who provide similar services not otherwise provided by or
on behalf of the Trust.
(f)PFD may impose certain deferred sales charges in connection
with the repurchase of Class C Shares by the Trust and PFD may retain
(or receive from the Trust as the case may be) all such deferred sales
charges.
(g)Appropriate adjustments to payments made pursuant to clauses
(b) and (d) of this paragraph 1 shall be made whenever necessary to
ensure that no payment is made by the Trust in excess of the
applicable maximum cap imposed on asset based, front-end and deferred
sales charges by subsection (d) of Section 26 of Article III of the
Rules of Fair Practice of the NASD.
2.The Trust understands that agreements between PFD and Dealers may
provide for payment of fees to Dealers in connection with the sale of Class C
Shares and the provision of services to shareholders of the Trust. Nothing in
this Class C Plan shall be construed as requiring the Trust to make any payment
to any Dealer or to have any obligations to any Dealer in connection with
services as a dealer of the Class C Shares. PFD shall agree and undertake that
any agreement entered into between PFD and any Dealer shall provide that such
Dealer shall look solely to PFD for
-3-
<PAGE>
compensation for its services thereunder and that in no event shall such Dealer
seek any payment from the Trust.
3.Nothing herein contained shall be deemed to require the Trust to take
any action contrary to its Declaration of Trust, as it may be amended or
restated from time to time, or By-Laws or any applicable statutory or regulatory
requirement to which it is subject or by which it is bound, or to relieve or
deprive the Trust's Board of Trustees of the responsibility for and control of
the conduct of the affairs of the Trust.
4.This Class C Plan shall become effective upon approval by (i) a
"majority of the outstanding voting securities" of Class C of the Trust, (ii) a
vote of the Board of Trustees, and (iii) a vote of a majority of the Trustees
who are not "interested persons" of the Trust and who have no direct or indirect
financial interest in the operation of the Class C Plan or in any agreements
related to the Class C Plan (the "Qualified Trustees"), such votes with respect
to (ii) and (iii) above to be cast in person at a meeting called for the purpose
of voting on this Class C Plan.
5.This Class C Plan will remain in effect indefinitely, provided that
such continuance is "specifically approved at least annually" by a vote of both
a majority of the Trustees of the Trust and a majority of the Qualified
Trustees. If such annual approval is not obtained, this Class C Plan shall
expire on ________ __, 1997.
6.This Class C Plan may be amended at any time by the Board of
Trustees, provided that this Class C Plan may not be amended to increase
materially the limitations on the annual percentage of average net assets which
may be expended hereunder without the approval of holders of a "majority of the
outstanding voting securities" of Class C of the Trust and may not be materially
amended in any case without a vote of a majority of both the Trustees and the
Qualified Trustees. This Class C Plan may be terminated at any time by a vote of
a majority of the Qualified Trustees or by a vote of the holders of a "majority
of the outstanding voting securities" of Class C of the Trust.
7.The Trust and PFD shall provide to the Trust's Board of Trustees, and
the Board of Trustees shall review, at least quarterly, a written report of the
amounts expended under this Class C Plan and the purposes for which such
expenditures were made.
8.While this Class C Plan is in effect, the selection and nomination of
Qualified Trustees shall be committed to the discretion of the Trustees who are
not "interested persons" of the Trust.
-4-
<PAGE>
9.For the purposes of this Class C Plan, the terms "assignment,"
"interested persons," "majority of the outstanding voting securities" and
"specifically approved at least annually" are used as defined in the 1940 Act.
10.The Trust shall preserve copies of this Class C Plan, and each
agreement related hereto and each report referred to in Paragraph 7 hereof
(collectively, the "Records"), for a period of not less than six (6) years from
the end of the fiscal year in which such Records were made and, for a period of
two (2) years, each of such Records shall be kept in an easily accessible place.
11.This Class C Plan shall be construed in accordance with the laws of
The Commonwealth of Massachusetts and the applicable provisions of the 1940 Act.
12.If any provision of this Class C Plan shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the Class C
Plan shall not be affected thereby.
-5-
[ARTICLE] 6
[CIK] 0000706155
[NAME] PIONEER THREE
[MULTIPLIER] 1,000
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] SEP-30-1995
[PERIOD-END] SEP-30-1995
[INVESTMENTS-AT-COST] 794776
[INVESTMENTS-AT-VALUE] 1086537
[RECEIVABLES] 3261
[ASSETS-OTHER] 32
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 1089830
[PAYABLE-FOR-SECURITIES] 6072
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 1604
[TOTAL-LIABILITIES] 7676
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 712460
[SHARES-COMMON-STOCK] 50391
[SHARES-COMMON-PRIOR] 51071
[ACCUMULATED-NII-CURRENT] 6320
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 71679
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 291695
[NET-ASSETS] 1082154
[DIVIDEND-INCOME] 17273
[INTEREST-INCOME] 2593
[OTHER-INCOME] 750
[EXPENSES-NET] (8605)
[NET-INVESTMENT-INCOME] 12011
[REALIZED-GAINS-CURRENT] 76657
[APPREC-INCREASE-CURRENT] 66524
[NET-CHANGE-FROM-OPS] 155192
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (11708)
[DISTRIBUTIONS-OF-GAINS] (57659)
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 4235
[NUMBER-OF-SHARES-REDEEMED] 8669
[SHARES-REINVESTED] 3754
[NET-CHANGE-IN-ASSETS] 64921
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 61071
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 4701
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 8675
[AVERAGE-NET-ASSETS] 1035675
[PER-SHARE-NAV-BEGIN] 19.92
[PER-SHARE-NII] 0.24
[PER-SHARE-GAIN-APPREC] 2.70
[PER-SHARE-DIVIDEND] 0.23
[PER-SHARE-DISTRIBUTIONS] 1.15
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 21.48
[EXPENSE-RATIO] 0.85
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
PIONEER MID-CAP FUND
on behalf of
PIONEER MID-CAP FUND
Multiple Class Plan Pursuant to Rule 18f-3
Class A Shares, Class B Shares and Class C Shares
February 1, 1996
Each class of shares of Pioneer Mid-Cap Fund (the "Fund"), a series of
Pioneer Mid-Cap Fund (the "Trust"), will have the same relative rights and
privileges and be subject to the same sales charges, fees and expenses, except
as set forth below. The Board of Trustees may determine in the future that other
distribution arrangements, allocations of expenses (whether ordinary or
extraordinary) or services to be provided to a class of shares are appropriate
and amend this Plan accordingly without the approval of shareholders of any
class. Except as set forth in the Fund's prospectus, shares may be exchanged
only for shares of the same class of another Pioneer mutual fund.
Article I. Class A Shares
Class A Shares are sold at net asset value and subject to the initial
sales charge schedule or contingent deferred sales charge ("CDSC") and minimum
purchase requirements as set forth in the Fund's prospectus. Class A Shares
shall be entitled to the shareholder services set forth from time to time in the
Fund's prospectus with respect to Class A Shares. Class A Shares are subject to
fees calculated as a stated percentage of the net assets attributable to Class A
shares under the Fund's Class A Rule 12b-1 Distribution Plan as set forth in
such Distribution Plan. The Class A Shareholders have exclusive voting rights,
if any, with respect to the Class A Rule 12b-1 Distribution Plan. Transfer
agency fees are allocated to Class A Shares on a per account basis except to the
extent, if any, such an allocation would cause the Fund to fail to satisfy any
requirement necessary to obtain or rely on a private letter ruling from the
Internal Revenue Service ("IRS") relating to the issuance of multiple classes of
shares. Class A shares shall bear the costs and expenses associated with
conducting a shareholder meeting for matters relating to Class A shares.
Article II. Class B Shares
Class B Shares are sold at net asset value per share without the
imposition of an initial sales charge. However, Class B
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shares redeemed within a specified number of years of purchase will be subject
to a CDSC as set forth in the Fund's prospectus. Class B Shares are sold subject
to the minimum purchase requirements set forth in the Fund's prospectus. Class B
Shares shall be entitled to the shareholder services set forth from time to time
in the Fund's prospectus with respect to Class B Shares. Class B Shares are
subject to fees calculated as a stated percentage of the net assets attributable
to Class B shares under the Class B Rule 12b-1 Distribution Plan as set forth in
such Distribution Plan. The Class B Shareholders of the Fund have exclusive
voting rights, if any, with respect to the Fund's Class B Rule 12b-1
Distribution Plan. Transfer agency fees are allocated to Class B Shares on a per
account basis except to the extent, if any, such an allocation would cause the
Fund to fail to satisfy any requirement necessary to obtain or rely on a private
letter ruling from the IRS relating to the issuance of multiple classes of
shares. Class B shares shall bear the costs and expenses associated with
conducting a shareholder meeting for matters relating to Class B shares.
Class B Shares will automatically convert to Class A Shares of the Fund
at the end of a specified number of years after the initial purchase date of
Class B shares, except as provided in the Fund's prospectus. Such conversion
will occur at the relative net asset value per share of each class without the
imposition of any sales charge, fee or other charge. The conversion of Class B
Shares to Class A Shares may be suspended if it is determined that the
conversion constitutes or is likely to constitute a taxable event under federal
income tax law.
The initial purchase date for Class B shares acquired through (i)
reinvestment of dividends on Class B Shares or (ii) exchange from another
Pioneer mutual fund will be deemed to be the date on which the original Class B
shares were purchased.
Article III. Class C Shares
Class C Shares are sold at net asset value per share without the
imposition of an initial sales charge. However, Class C shares redeemed within
one year of purchase will be subject to a CDSC as set forth in the Fund's
prospectus. Class C Shares are sold subject to the minimum purchase requirements
set forth in the Fund's prospectus. Class C Shares shall be entitled to the
shareholder services set forth from time to time in the Fund's prospectus with
respect to Class C Shares. Class C Shares are subject to fees calculated as a
stated percentage of the net assets attributable to Class C shares under the
Class C Rule 12b-1 Distribution Plan as set forth in such Distribution Plan. The
Class C Shareholders of the Fund have exclusive voting rights, if any, with
respect to the Fund's Class C Rule 12b-1 Distribution Plan. Transfer agency fees
are allocated to Class C Shares on a
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per account basis except to the extent, if any, such an allocation would cause
the Fund to fail to satisfy any requirement necessary to obtain or rely on a
private letter ruling from the IRS relating to the issuance of multiple classes
of shares. Class C shares shall bear the costs and expenses associated with
conducting a shareholder meeting for matters relating to Class C shares.
The initial purchase date for Class C shares acquired through (i)
reinvestment of dividends on Class C Shares or (ii) exchange from another
Pioneer mutual fund will be deemed to be the date on which the original Class C
shares were purchased.
Article IV. Approval by Board of Trustees
This Plan shall not take effect until it has been approved by the vote
of a majority (or whatever greater percentage may, from time to time, be
required under Rule 18f-3 under the Investment Company Act of 1940, as amended
(the "Act")) of (a) all of the Trustees of the Trust, on behalf of the Fund, and
(b) those of the Trustees who are not "interested persons" of the Trust, as such
term may be from time to time defined under the Act.
Article V. Amendments
No material amendment to the Plan shall be effective unless it is
approved by the Board of Trustees in the same manner as is provided for approval
of this Plan in Article IV.
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POWER OF ATTORNEY
Dated February 1, 1996
We, the undersigned Trustees of Pioneer Mid-Cap Fund, a Delaware
business trust, do hereby severally constitute and appoint John F. Cogan, Jr.,
David D. Tripple, and Joseph P. Barri, and each of them acting singly, to be our
true, sufficient and lawful attorneys, with full power to each of them, and each
of them acting singly, to sign for each of us, in the name of each of us and in
the capacity as trustee, any and all amendments to the Registration Statement on
Form N-1A to be filed by Pioneer Mid-Cap Fund under the Investment Company Act
of 1940, as amended (the "1940 Act"), and under the Securities Act of 1933, as
amended (the "1933 Act"), with respect to the offering of its shares of
beneficial interest and any and all other documents and papers relating thereto,
and generally to do all such things in the name of each of us and on behalf of
each of us in the capacity as trustee to enable Pioneer Mid-Cap Fund to comply
with the 1940 Act and the 1933 Act, and all requirements of the Securities and
Exchange Commission thereunder, hereby ratifying and confirming the signature of
each of us as it may be signed by said attorneys or each of them to any and all
amendments to said Registration Statement.
IN WITNESS WHEREOF, we have hereunder set our hands on this Instrument
as of the date first written above.
/s/ John W. Kendrick /s/ Marguerite A. Piret
John W. Kendrick, Trustee Marguerite A. Piret, Trustee
/s/ Richard H. Edgahl, M.D. /s/ Stephen K. West
Richard H. Egdahl, M.D., Stephen K. West, Trustee
Trustee
/s/ Margaret B.W. Graham /s/ John Winthrop
Margaret B.W. Graham, Trustee John Winthrop, Trustee
/s/John F. Cogan, Jr. /s/David D. Tripple
John F. Cogan, Jr., Chairman David D. Tripple, Trustee
of the Board, President and and Executive Vice President
Principal Executive Officer
/s/ William H. Keough
William H. Keough, Chief
Financial Officer, Treasurer
(Principal Financial and
Accounting Officer)
