File No. 2-32773
As filed with the Securities and Exchange Commission on January 26, 1996
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
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Pre-Effective Amendment No. ___ /___/
Post-Effective Amendment No. 44 / X /
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT ____
OF 1940 /_X_/
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Amendment No. 27 /_X_/
(Check appropriate box or boxes)
PIONEER II
(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 (check appropriate box)
X immediately upon filing pursuant to paragraph (b)
___ on [date] pursuant to paragraph (b)
___ 60 days after filing pursuant to paragraph (a)
___ on [date] pursuant to paragraph (a) 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 or about November 28, 1995.
<PAGE>
PIONEER II
Cross-Reference Sheet Showing Location in Prospectus and Statement
of Additional Information of Information Required by Items of
the Registration Form
Location in Prospectus
or Statement of
Form N-1A Item Number and Caption Additional Information
1. Cover Page............................ Prospectus - Cover Page
2. Synopsis.............................. Prospectus - Expense
Information
3. Condensed Financial Information....... Prospectus - Financial
Highlights
4. General Description of Registrant..... Prospectus - Investment
Objectives and Policies;
Management of the Fund;
Information About Fund Shares
5. Management of the Fund................ Prospectus - Management of the
Fund
6. Capital Stock and Other Securities.... Prospectus - Investment
Objectives and Policies;
Information About Fund Shares
7. Purchase of Securities Being Offered.. Prospectus - Information About
Fund Shares; Distribution
Plan; Shareholder Services
8. Redemption or Repurchase.............. Prospectus - Information About
Fund Shares; Shareholder
Services
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
<PAGE>
12. General Information and History....... Statement of Additional
Information - Cover Page;
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
15. Control Persons and Principal 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;
Shareholder Servicing/Transfer
Agent; Custodian; Independent
Accountant
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; Certain Liabilities
19. Purchase, Redemption and Pricing of
Securities Being Offered............ Statement of Additional
Information - Determination of
Net Asset Value; Letter of
Intention; Systematic
Withdrawal Plan
<PAGE>
20. Tax Status............................ Statement of Additional
Information - Tax Status
21. Underwriters.......................... Statement of Additional
Information - Principal
Underwriter; Distribution Plan
22. Calculation of Performance Data....... Statement of Additional
Information - Investment
Results
23. Financial Statements.................. Statement of Additional
Information - Cover Page
<PAGE>
PIONEER II [Pioneer Logo]
Prospectus
January 26, 1996
The investment objectives of Pioneer II (the "Fund") are reasonable income
and growth of capital. The Fund seeks these objectives by investing in a broad
list of carefully selected, reasonably priced securities rather than in
securities whose prices reflect a premium resulting from their current market
popularity. Pioneer II follows a policy of investing a portion of its assets,
not to exceed 25%, in foreign securities.
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 SECURITIES ISSUED BY FOREIGN COMPANIES OR GOVERNMENTS
ENTAIL RISKS IN ADDITION TO THOSE CUSTOMARILY ASSOCIATED WITH INVESTING IN U.S.
SECURITIES. 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 OBJECTIVES AND POLICIES" FOR A DISCUSSION OF THESE RISKS.
This Prospectus (Part A of the Registration Statement) provides the
information about the Fund that you should know before investing in the Fund.
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
January 26, 1996, which is incorporated into this Prospectus by reference. A
copy of the Statement of Additional Information and the Fund's most recent
Annual Report may be obtained free of charge by calling Shareholder Services at
1-800-225-6292 or by written request to the Fund at 60 State Street, Boston,
Massachusetts 02109.
TABLE OF CONTENTS PAGE
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I. EXPENSE INFORMATION................................. 2
II. FINANCIAL HIGHLIGHTS................................ 3
III. INVESTMENT OBJECTIVES AND POLICIES.................. 3
IV. MANAGEMENT OF THE FUND.............................. 5
V. DISTRIBUTION PLAN................................... 6
VI. INFORMATION ABOUT FUND SHARES....................... 6
How to Purchase Shares............................ 6
Net Asset Value and Pricing of Orders............. 8
Dividends, Distributions and Taxation............. 8
Redemptions and Repurchases....................... 9
Redemption of Small Accounts...................... 10
Description of Shares and Voting Rights........... 10
VII. SHAREHOLDER SERVICES................................. 10
Account and Confirmation Statements............... 10
Additional Investments............................ 10
Automatic Investment Plans........................ 10
Financial Reports and Tax Information............. 10
Distribution Options.............................. 11
Directed Dividends................................ 11
Direct Deposit.................................... 11
Voluntary Tax Withholding......................... 11
Exchange Privilege................................ 11
Telephone Transactions and Related Liabilities.... 11
FactFone [SM]..................................... 12
Retirement Plans.................................. 12
Telecommunications Device for the Deaf (TDD)...... 12
Systematic Withdrawal Plans....................... 12
Reinstatement Privilege........................... 12
VIII. INVESTMENT RESULTS.................................. 12
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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
This 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 below is an estimate based on actual expenses
for the year ended September 30, 1995 expressed as a percentage of the average
net assets of the Fund.
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Charge on Purchases[1].................................5.75%
Maximum Sales Charge on Reinvestment
of Dividends....................................................none
Deferred Sales Charge[1]..............................................none
Redemption Fee[2].....................................................none
Exchange Fee..........................................................none
ANNUAL OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS):[3]
Management Fee.......................................................0.45%
12b-1 Fees...........................................................0.19%
Other Expenses (including shareholder accounting
and transfer agent fees, custodian fees and
printing expenses)...................................................0.29%
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TOTAL OPERATING EXPENSES...................................................0.93%
=====
- ---------------------
[1] Purchases of $1,000,000 or more and certain purchases by participants in a
"Group Plan" (as described under "How to Purchase Shares") are not subject
to an initial sales charge. A contingent deferred sales charge of 1% may,
however, be charged on redemptions by such accounts of shares held less than
one year, as further described under "Redemptions and Repurchases."
[2] Separate fees (currently $10 and $20, respectively) apply to domestic or
international bank wire transfers of redemption proceeds.
[3] Expenses include amounts paid in connection with third party
brokerage/service and certain expense offset arrangements. See "Financial
Highlights."
EXAMPLE:
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return and redemption at the end of each time period:
ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
-------- ----------- ---------- ---------
$66 $85 $106 $165
- ------------------------
These are cumulative totals.
The example above assumes 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 PAST OR FUTURE EXPENSES OR RETURN. ACTUAL FUND
EXPENSES AND RETURN 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 Plan" and "How to Purchase Shares" in this Prospectus and
"Management of the Fund" and "Principal Underwriter" and "Distribution Plan" in
the Statement of Additional Information. The Fund's payment 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 the Rules of Fair Practice of the
National Association of Securities Dealers, Inc. ("NASD").
The maximum sales charge is reduced on purchases of specified amounts and
the value of shares owned in other Pioneer mutual funds is taken into account in
determining the applicable sales charge. See "How to Purchase Shares." No sales
charge is applied to exchanges of shares of other publicly available Pioneer
mutual funds. See "Exchange Privilege."
2
<PAGE>
II. FINANCIAL HIGHLIGHTS
The following information has been derived from financial statements which
have been audited by Arthur Andersen LLP, independent public accountants, 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. 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.
<TABLE>
<CAPTION>
PIONEER II -- FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
FOR THE YEAR ENDED SEPTEMBER 30,
- ------------------------------------------------------------------------------------------------------------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..... $19.38 $20.55 $18.86 $18.22 $16.65
------ ------ ------ ------ ------
Income from investment operations --
Net investment income .................. $ 0.35 $ 0.36 $ 0.38 $ 0.44 $ 0.52
(loss) on investments, forward
foreign currency contracts and
other foreign currency related
transactions .......................... 3.04 1.05 2.85 1.27 3.16
------ ------ ------ ------ ------
Total income (loss) from
investment operations ............... $ 3.39 $ 3.04 $ 1.41 $ 3.23 $ 1.71
Distribution to shareholders from --
Net investment income ................. (0.30) (0.33) (0.39) (0.47) (0.55)
Net realized capital gains ............ (1.81) (2.25) (1.15) (0.60) (0.26)
------ ------ ------ ------ ------
Net increase (decrease) in
net asset value ....................... $ 1.28 $1.28 $(1.17) $ 1.69 $ 0.64
------ ------ ------ ------ ------
Net asset value, end of period ........... $20.66 $19.38 $20.55 $18.86 $18.22
====== ====== ====== ====== ======
Total return* ............................ 19.92% 7.37% 18.15% 9.92% 24.61%
Ratio of net operating expenses to
average net assets ..................... 0.93%** 0.90%+ 0.96%+ 0.95%+ 0.83%
Ratio of net investment income to
average net assets ..................... 1.85%** 1.59%+ 1.89%+ 2.31%+ 3.02%
Portfolio turnover rate .................. 63% 68% 66% 64% 46%
Net assets end of period
(in thousands) ......................... 5,114,963 4,509,225 4,347,672 3,974,712 4,039,234
Ratios net of expenses paid through
third party brokerage/service and
certain expense offset arrangements:
Net operating expenses ............... 0.91% 0.90% 0.95% 0.93% --
Net investment income ................ 1.87% 1.59% 1.90% 2.32% --
1990 1989 1988 1987 1986
---- ---- ---- ---- ----
Net asset value, beginning of period ..... $21.12 $18.29 $24.09 $18.48 $16.65
------ ------ ------ ------ ------
Income from investment operations --
Net investment income .................. $0.59 $ 0.65 $ 0.54 $ 0.46 $ 0.43
Net realized and unrealized gain
(loss) on investments, forward
foreign currency contracts and
other foreign currency related
transactions .......................... (3.81) 3.84 (3.86) 6.67 3.07
------ ------ ------ ------ ------
Total income (loss) from
investment operations ............... $3.68 $(3.22) $ 4.49 $(3.32) $ 7.13
Distribution to shareholders from --
Net investment income ................. (0.64) (0.62) (0.48) (0.49) (0.52)
Net realized capital gains ............ (1.91) (1.04) (2.00) (1.03) (1.15)
------ ------ ------ ------ ------
Net increase (decrease) in
net asset value ....................... $ 2.87 $(5.77) $ 2.83 $(5.80) $ 5.61
------ ------ ------ ------ ------
Net asset value, end of period ........... $15.35 $21.12 $18.29 $24.09 $18.48
====== ====== ====== ====== ======
Total return* ............................ (17.16%) 26.55% (12.04%) 41.37% 22.77%
Ratio of net operating expenses to
average net assets ..................... 0.75% 0.77% 0.81% 0.75% 0.72%
Ratio of net investment income to
average net assets ..................... 3.18% 3.31% 3.06% 2.18% 2.43%
Portfolio turnover rate .................. 42% 34% 30% 26% 29%
Net assets end of period
(in thousands) ......................... 3,588,735 4,411,923 3,724,615 4,456,459 2,841,545
Ratios net of expenses paid through
third party brokerage/service and
certain expense offset arrangements:
Net operating expenses ............... -- -- -- -- --
Net investment income ................ -- -- -- -- --
<FN>
* Assumes initial investment at net asset value at the beginning of each year, reinvestment of all distributions, and the
complete redemption of the investment at the 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 third party brokerage/service and certain expense offset arrangements.
+ Ratios for 1994, 1993 and 1992 have been modified to comply with certain provisions of SEC Release No. 33-7197: Payment for
Investment Company Services with Brokerage Commissions. Ratios of net operating expenses and net investment income to average
net assets prior to 1992 have not been modified as such.
</FN>
</TABLE>
III. INVESTMENT OBJECTIVES AND POLICIES
The objectives of the Fund are reasonable income and growth of capital. The
Fund seeks these objectives by investing in a broad list of carefully selected,
reasonably priced securities rather than in securities whose prices reflect a
premium resulting from their current market popularity. As all investments are
subject to inherent market risks and fluctuations in value due to earnings,
economic conditions and other factors, the Fund, of course, cannot give
assurance that its investment objectives will be achieved.
The major portion of the Fund's assets will be invested in equity
securities, including common and preferred stocks and securities convertible
into common or preferred stocks. Assets of the Fund will be substantially fully
invested at all times and, by this means, management intends to avoid
speculating upon broad changes in the level of the market.
In general, the largest portion of the Fund's portfolio, at any time, will
consist of securities which have yielded their holders an interest or dividend
return within the preceding twelve months; but non-income-producing securities
may be held for anticipated increases in value.
It is the policy of the Fund not to engage in trading for short-term
profits and the Fund intends to limit its portfolio turnover to the extent
practicable. 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 investment decision, and usually without reference to the length of time a
security has been held. Accordingly, portfolio turnover rate will not be
considered a limiting factor in the execution of investment decisions.
The Fund may purchase put and call options on securities indices to manage
cash flow and to attempt to remain fully invested in the stock market, instead
of or in addition to buying and selling stocks. The Fund may also purchase these
options in
3
<PAGE>
order to hedge against risks of market-wide price fluctuations. Options on
securities indices are similar to options on securities except that the delivery
requirements are different. Unlike a securities option, which gives the holder
the right to purchase or sell a specified security at a specified price, an
option on a securities index gives the holder the right to receive a cash
"exercise settlement amount" equal to (i) the difference between the exercise
price of the option and the value of the underlying securities index on the
exercise date, (ii) multiplied by a fixed "index multiplier." In exchange for
undertaking the obligation to make such a cash payment, the writer of the
securities index option receives a premium.
Gains or losses on the Fund's transactions in securities index options
depend on price movements in the securities market generally (or, for narrow
market indices, in a particular industry or segment of the market) rather than
the price movement of individual securities held by the Fund. The effectiveness
of hedging through the purchase of stock index options will depend upon the
extent to which price movements in the portion of the securities portfolio being
hedged correlate with the price movements in the selected stock index. Perfect
correlation may not be possible because the securities held or to be acquired by
the Fund may not exactly match the composition of the stock index on which
options are written. If the forecasts of the Fund's investment adviser regarding
movements in securities prices are incorrect, the Fund's investment results may
have been better without the hedge. A more thorough description of these
investment practices and their associated risks is contained in the Fund's
Statement of Additional Information.
The Fund may sell a securities index option it has purchased or write a
similar option prior to the expiration of the purchased option in order to close
out its position in a securities index option which it has purchased. The Fund
may also allow options to expire unexercised, which would result in the loss of
the premium paid. There is no assurance that a liquid secondary market will
exist for any particular option at any particular time, and the Fund may
therefore be unable to effect closing transactions on, or sell, options it has
purchased. The Fund will not invest more than 20% of its net assets in premiums
on index put and call options.
The Fund may enter into repurchase agreements with banks, generally not
exceeding seven days. Such repurchase agreements will be fully collateralized
with U.S. Treasury and/or U.S. government agency obligations with a market value
of not less than 100% of the obligations, valued daily. Collateral will be held
in a segregated, safekeeping account for the benefit of the Fund. 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 also invest a portion of its portfolio in temporary cash
investments including finance company obligations, corporate commercial paper
and other short-term commercial obligations, in each case rated or issued by
companies with similar securities outstanding that are rated Prime-1 or Aa or
better by Moody's Investors Service or A-1 or AA or better by Standard & Poor's
Ratings Group or, if unrated, of comparable quality as determined by the Fund's
investment adviser.
The objectives and policies described above may not be changed without
shareholder approval. Other investment policies and restrictions on investment
are described in the Statement of Additional Information, including a policy on
lending portfolio securities. Among these other investment policies and
restrictions on investments, the Fund follows a practice of generally investing
between 10% and 25% of its assets in foreign securities. The Fund may invest up
to 5% of its net assets in securities of issuers located in countries with
emerging economies or securities markets. See "Investments in Emerging Markets"
in the Statement of Additional Information. In addition, no more than 5% of the
Fund's net assets may be invested in debt securities, including convertible
securities, which are rated below investment grade or the equivalent.
Investing in securities of foreign companies and countries involves certain
considerations and risks which are not typically associated with investing in
U.S. government securities and securities of domestic companies. Foreign
companies are not generally subject to uniform accounting, auditing and
financial standards and requirements comparable to those applicable to 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. Interest and dividends paid by foreign issuers and, in some
cases, gains realized upon the sale of foreign securities may be subject to
withholding and other foreign taxes which may decrease the net return on such
investments as compared to the Fund's net return from securities issued by the
U.S. government or by domestic companies. In addition, there may be the
possibility of expropriations, confiscatory taxation, political, economic or
social instability or diplomatic developments which could affect assets of the
Fund held in foreign countries. The value of foreign securities may be adversely
affected by fluctuations in the relative rates of exchange between the
currencies of different nations and by exchange control regulations. There may
be less publicly available information about foreign companies and governments
compared to reports and ratings published about U.S. companies. 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. Each of these risks may be heightened
in the case of investments in emerging markets. See "Investment Policies and
Restrictions" in the Statement of Additional Information.
The Fund has the ability to hold a portion of its assets in foreign
currencies and to enter into forward foreign currency contracts to facilitate
settlement of foreign securities transactions or to protect against changes in
foreign currency exchange rates. A forward foreign currency contract involves an
obligation to purchase or sell a specific currency on a future date, at a price
set at the time of the contract. The Fund might sell a foreign currency on
either a spot or forward basis to hedge against an anticipated decline in the
dollar value of securities in its portfolio or securities it intends or has
contracted to sell or to preserve the U.S. dollar value of dividends, interest
or other amounts it expects to receive. Although this strategy could minimize
the risk of loss due to a decline in the value of the hedged foreign currency,
it could also limit any potential gain which might result from an increase in
the value of the currency. Alternatively, the Fund might purchase a foreign
currency or enter into a forward purchase contract for the currency to preserve
the U.S. dollar price of securities it is authorized to purchase or has
contracted to purchase.
4
<PAGE>
The Fund may also engage in cross-hedging by using forward contracts in one
currency to hedge against fluctuations in the value of securities denominated in
a different currency (including the U.S. dollar), if the Fund's investment
adviser determines that there is a pattern of correlation between the two
currencies. Cross-hedging may also include entering into a forward transaction
involving two foreign currencies, using one foreign currency as a proxy for the
U.S. dollar to hedge against variations in the other foreign currency if the
investment adviser determines that there is a pattern of correlation between the
proxy currency and the U.S. dollar.
If the Fund enters into a forward contract to buy foreign currency for any
purpose, the Fund will be required to place cash or liquid, high grade debt
securities in a segregated account with the Fund's custodian in an amount equal
to the value of the Fund's total assets committed to the consummation of the
forward contract. The Fund may enter into forward currency contracts having an
intrinsic value of up to 30% of its net assets.
The Fund may purchase and write put and call options on foreign currencies
for the purpose of protecting against declines in the dollar value of foreign
portfolio securities and against increases in the U.S. dollar cost of foreign
securities to be acquired. The Fund may also use options on currency to
cross-hedge, which involves writing or purchasing options on one currency to
hedge against changes in exchange rates of a different currency (including the
U.S. dollar) with a pattern of correlation. Cross-hedging may also include using
a foreign currency as a proxy for the U.S. dollar if the investment adviser
determines that there is a pattern of correlation between that currency and the
U.S. dollar. The writing of an option on foreign currency will constitute only a
partial hedge, up to the amount of the premium received, and the Fund could be
required to purchase or sell foreign currencies at disadvantageous exchange
rates, thereby incurring losses. The purchase of an option on a foreign currency
may constitute an effective hedge against exchange rate fluctuations. However,
in the event of unanticipated rate movements adverse to the Fund's option
position, the Fund may forfeit the entire amount of the premium plus related
transaction costs. Options on foreign currencies to be written or purchased by
the Fund will be traded on U.S. or foreign exchanges or over-the-counter.
Options on foreign currencies which are traded in the over-the-counter market
may be considered illiquid securities and there can be no assurance that a
liquid secondary market will exist at any particular time for any particular
option. The Fund may not invest more than 10% of its net assets in premiums on
purchased currency options. See "Other Policies and Risks" in the Statement of
Additional Information.
The Fund's transactions in options on securities indices, currencies,
options on currencies and forward foreign currency contracts may be limited by
the requirements for qualification of the Fund as a regulated investment company
for tax purposes. See "Tax Status" in the Statement of Additional Information.
IV. MANAGEMENT OF THE FUND
The Fund's Board of Trustees 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 ("PMC") 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 background of
each Trustee and executive officer of the Fund. The Fund is managed under a
contract with PMC. 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 Delaware corporation. Pioneer Funds
Distributor, Inc. ("PFD"), an indirect wholly-owned subsidiary of PGI, is the
principal underwriter of shares of the Fund.
Each domestic equity portfolio managed by PMC, including the 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 the Pioneer mutual funds. Mr. Tripple joined PMC in 1974 and has
had general responsibility for PMC's investment operations and specific
portfolio assignments for over five years. The day-to-day management of the Fund
is the primary responsibility of Mr. Francis J. Boggan, Vice President of the
Fund and PMC. Mr. Boggan joined PMC in 1991, and assumed full responsibility for
the Fund as of January 1, 1996. Previously, he was responsible for managing from
80% to 90% of the Fund's portfolio. Prior to joining PMC, Mr. Boggan was
Director of Equity Investments at Farmers Group, Inc. 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 assists in the
management of the Fund and is authorized in its discretion to buy and sell
securities for the account of the Fund, subject to the right of the Fund's
Trustees to disapprove any such purchase or sale. PMC pays all the expenses,
including executive salaries, and the rental of office space, related to its
services for the Fund with the exception of the following, which are 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 Securities and Exchange Commission, 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 custodians, 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) bookkeeping and appraisal charges; and (n) distribution fees in
accordance with the Plan of Distribution described below.
5
<PAGE>
The Fund also pays all brokerage commissions 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 where 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 any Pioneer mutual fund. See the Statement of Additional Information for a
further description of PMC's brokerage allocation practices.
As compensation for its management services and certain expenses which PMC
incurs, PMC is entitled to a management fee equal to 0.50% per annum of the
Fund's average daily net assets up to $250 million, 0.48% of the next $50
million, and 0.45% of the excess over $300 million. The fee is normally computed
daily and paid monthly. During the fiscal year ended September 30, 1995, the
Fund incurred expenses of approximately $43,240,000, including management fees
paid to PMC of approximately $21,051,000.
John F. Cogan, Jr., Chairman and President of the Fund, Chairman of PFD,
and President and a Director of PGI and PMC, owned approximately 15% of the
outstanding capital stock of PGI as of the date of this Prospectus.
V. DISTRIBUTION PLAN
The Fund has a Plan of Distribution (the "Plan") adopted in accordance with
Rule 12b-1 under the 1940 Act pursuant to which certain distribution fees are
paid to PFD. As required by Rule 12b-1, the Plan was approved by a majority of
the outstanding shares held by the shareholders of the Fund and by the Trustees,
including a majority of the Trustees who are not "interested persons" of the
Fund.
Pursuant to the Plan, the Fund reimburses PFD for its actual expenditures
to finance any activity primarily intended to result in the sale of Fund shares
or to provide services to Fund shareholders, 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 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; (ii) reimbursement to PFD for its expenditures for broker-dealer
commissions and employee compensation on certain sales of the Fund's shares with
no initial sales charge (See "How to Purchase Shares"); and (iii) reimbursement
to PFD for expenses incurred in providing services to 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 Plan are accrued daily and may not
exceed 0.25% of average daily net assets. Distribution expenses of PFD are
expected to substantially exceed the distribution fees paid by the Fund in a
given year. The Plan does not provide for the carryover of reimbursable expenses
beyond 12 months from the time the Fund is first invoiced for an expense. The
limited carryover provision in the Plan may result in an expense invoiced to the
Fund in one fiscal year being paid in the subsequent fiscal year and thus being
treated for purposes of calculating the maximum expenditures of the Fund as
having been incurred in the subsequent fiscal year. In the event of termination
or non-continuance of the Plan, the Fund has twelve months to reimburse any
expense which it incurs prior to such termination or non-continuance, provided
that payments by the Fund during such 12-month period shall not exceed 0.25% of
the Fund's average daily net assets during such period. The 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.
VI. INFORMATION ABOUT FUND SHARES
HOW TO PURCHASE 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 A 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 $50. Separate minimum investment requirements apply to
retirement plans and to telephone and wire orders placed by broker-dealers; no
sales charges or minimum requirements apply to the reinvestment of dividends or
capital gains distributions.
The Fund has a minimum account requirement of $500. As a new purchaser, you
will be given at least 24 months from your initial purchase to increase the
value of the account to $500. See "Redemptions and Repurchases."
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 Individual Retirement Accounts ("IRAs") 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
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<PAGE>
elect to deliver purchases to PSC by mail. See "Telephone Transactions and
Related Liabilities" for additional information.
The public offering price is the net asset value per share next computed after
receipt of a purchase order, plus a sales charge 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
$1,000,000 or more, but for such investments a contingent deferred sales charge
("CDSC") of 1% is imposed in the event of certain redemption transactions 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% on the first $5 million invested; 0.50% on the
next $45 million; and 0.25% on the excess over $50 million. 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 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 commission paid or a pro rata portion
thereof if the retirement plan redeems its shares within 12 months of purchase.
See also "Redemptions and Repurchases." 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 Funds' shares
through such dealer. Shares sold outside the U.S. to persons who are not U.S.
citizens may be subject to different sales charges, CDSCs and dealer
compensation arrangements in accordance with local laws and business practices.
The schedule of sales charges above is applicable to purchases of shares of
the Fund by (i) an individual, (ii) an individual, his or her spouse and
children under the age of 21 and (iii) a trustee or other fiduciary of a trust
estate or fiduciary account, or related trusts or accounts, including pension,
profit-sharing and other employee benefit trusts qualified under Sections 401 or
408 of the Internal Revenue Code of 1986, although more than one beneficiary is
involved.
The sales charge applicable to a current purchase of 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 current offering price) of shares of any of
the 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 so qualify. (Pioneer mutual funds include all mutual funds for which
PFD serves as principal underwriter.) For example, a person investing $5,000 in
the Fund who currently owns shares of the Pioneer mutual funds with a value of
$45,000 would pay a sales charge of 4.50% of the offering price on the new
investment.
Sales charges may also be reduced through an agreement to purchase a
specified quantity of 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 in the Account Application as well as in the Statement of Additional
Information.
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. In addition shares of the
Fund may be sold at net asset value per share without a sales charge to Optional
Retirement Program (the "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 company providers to Program
participants and (iv) the Program provides for a matching contribution for each
participant contribution. Information about the above arrangements is available
from PFD.
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
employees and partners of its legal counsel; (b) current or former directors,
officers, employees or sales representatives of PGI or 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 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 depends upon the receipt by PFD of
written notification of eligibility. Shares 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.
Investors who are clients of a broker-dealer with a current sales agreement
with PFD may purchase 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 shares of the Fund; that the client paid a sales
charge on the original purchase of the shares redeemed; and that the mutual fund
whose shares were redeemed
7
<PAGE>
also offers net asset value purchases to redeeming shareholders of any of the
Pioneer mutual funds. Further details may be obtained from PFD.
NET ASSET VALUE AND PRICING OF ORDERS
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 the Fund is determined by dividing the value of its assets, less
liabilities, by the number of shares outstanding. The net asset value is
computed once daily, on each day the New York Stock Exchange (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 last 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 regular trading hours on the Exchange. The values of such
securities used in computing the net asset value of the Fund's shares are
determined as of such times. Foreign currency exchange rates are also generally
determined prior to the close of regular trading hours on the Exchange.
Occasionally, events which affect the values of such securities and such
exchange rates may occur between the times at which they are determined and the
close of regular trading hours on the Exchange and will therefore not be
reflected in the computation of the Fund's net asset value. If events materially
affecting the value of such securities occur during such period, then these
securities 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.
An order for shares received by a broker-dealer prior to the the close of
regular trading on the Exchange (currently 4:00 p.m. Eastern Time) is confirmed
at the redemption price determined at the close of regular trading on the
Exchange on the day the order is received, provided the order is received by PFD
prior to PFD's close of business. It is the responsibility of broker-dealers to
transmit orders so that they will be received by PFD prior to its close of
business. An order received by a broker-dealer following the close of regular
trading on the Exchange will be confirmed at the redemption price as of the
close of regular trading on the Exchange on the next trading day.
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.
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 the Internal Revenue Code of
1986, as amended (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% excise tax
on a portion of its undistributed ordinary income and capital gains if it fails
to meet certain distribution requirements with respect to each 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
distribute 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 of dividends 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, certain net foreign exchange gains, and
net short-term capital 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 shareholder 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 to shareholders annually.
Distributions by the Fund of dividend income it receives from U.S. domestic
corporations may qualify for the dividends-received deduction for corporate
shareholders, subject to certain minimum holding period requirements and
debt-financing restrictions under the Code.
The Fund may be subject to foreign withholding taxes or other foreign taxes
on income (possibly including capital gains) on certain of its foreign
investments, if any, which will reduce the yield or return from those
investments. The Fund anticipates that it will not qualify to pass such taxes
through to its shareholders, who consequently will not include them in income or
be entitled to associated foreign tax credits or deductions.
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 31% backup withholding of federal income tax if the
Fund is not provided with the shareholder's correct taxpayer identification
number and certification that the number is correct and the shareholder is not
subject to such backup withholding or 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 described above. Shareholders
should consult their own tax advisors regarding state, local and other
applicable tax laws.
8
<PAGE>
REDEMPTIONS AND REPURCHASES
REDEMPTIONS BY MAIL. As a shareholder, you have the right to offer your
shares for redemption by delivering to PSC a written request for redemption,
signed by all registered owners, in proper form and, if applicable, your share
certificates properly endorsed and in good order for transfer. Redemptions will
be made in cash less any applicable CDSC at the net asset value per share next
determined following receipt by PSC of all necessary documents.
Good order means that the certificates must be endorsed by the record
owner(s) exactly as the shares are registered and the signature(s) must be
guaranteed by any of the following eligible guarantor institutions: (i) all
brokers, dealers, municipal securities dealers and/or brokers, and government
securities dealers and/or brokers who are members of a clearing agency or whose
net capital exceeds $100,000; (ii) all banks; (iii) all credit unions; (iv) all
savings associations, including all savings and loan associations; (v) all
national securities exchanges, registered securities associations, and all
clearing agencies; and (vi) all trust companies. In addition, in some cases
(involving fiduciary or corporate transactions), good order may require the
furnishing of additional documents. Signature guarantees may be waived for
redemption requests of $50,000 or less, provided that the record holder executes
the redemption request, payment is directed to the record holder at the address
of record and the address was not changed in the prior 30 days. You cannot
provide a signature guarantee by facsimile ("fax"). Payment normally will be
made within seven days after receipt in good order of the aforementioned
documents. The Fund reserves the right to withhold payment until checks received
in payment of shares purchased have cleared, which may take up to 15 calendar
days from the purchase date. For additional information about the necessary
documentation for redemption by mail, please contact PSC at 1-800-225-6292.
REDEMPTIONS BY TELEPHONE OR 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 your 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 redemptions will be priced as described
above. YOU ARE STRONGLY URGED TO CONSULT WITH YOUR FINANCIAL REPRESENTATIVE
PRIOR TO REQUESTING A TELEPHONE REDEMPTION.
ADDITIONAL CONDITIONS OF REDEMPTION. For the convenience of shareholders,
the Fund has authorized PFD to act as its agent in the repurchase of shares of
the Fund. Offers to sell shares to the Fund may be communicated to PFD by wire
or telephone by broker-dealers for their customers. The Fund's practice will be
to repurchase shares offered to it at the net asset value per share determined
as of the close of regular trading on the Exchange on the day the offer for
repurchase is received and accepted by the broker-dealer if the offer is
received by PFD before the close of business on that day.
A broker-dealer which receives an offer for repurchase is responsible for
the prompt transmittal of such offer to PFD. Payment of the repurchase proceeds
will be made in cash to the broker-dealer placing the order. Except for certain
large accounts subject to a contingent deferred sales charge (as described
below), neither the Fund nor PFD charges any fee or commission upon such
repurchase which is then settled as an ordinary transaction with the
broker-dealer (which may charge the shareholder for this service) delivering the
shares repurchased. Payment will be made within seven days of the receipt by PSC
of valid instructions, including validly endorsed certificates, if appropriate,
in good order as described above.
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 upon the market
value of the portfolio at the time of redemption or repurchase. Redemptions and
repurchases are taxable transactions.
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 Securities and Exchange Commission (the "SEC"),
by order, so permits.
Purchases of $1,000,000 or more, and purchases by participants in a Group
Plan which have not been subject to a sales charge, may be subject to a CDSCupon
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. In
determining whether a CDSC is payable, and, if so, the amount of the charge, it
is assumed that shares purchased with reinvested dividend and capital gain
distributions and then such other shares which are held the longest will be the
first redeemed. 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 CDSCis payable with respect to purchases of 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.
WAIVER OR REDUCTION OF CONTINGENT DEFERRED SALES CHARGE. The CDSC on 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
9
<PAGE>
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 any 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
shareholder's account.
REDEMPTION OF SMALL ACCOUNTS
A new shareholder has a minimum of 24 months (including the six months
following the mailing of the notice described below) to increase the value of
his/her account to $500 or more. If you hold shares of the Fund in an account
with a net asset value of less than $500 due to redemptions or exchanges or
failure to meet the initial minimum account requirement set forth above, 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 $500 within six
months of notice by the Fund to you of the Fund's intention to redeem the
shares.
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Fund is an open-end diversified management investment company (commonly
referred to as a mutual fund) organized as a Massachusetts corporation on March
18, 1969, and reorganized as a Massachusetts business trust on February 15,
1985.
The Fund has authorized an unlimited number of shares of beneficial
interest and the Trustees are authorized to create additional series of the
Fund. The Fund is not required to hold annual meetings, although special
meetings may be called for the purposes of electing or removing Trustees,
changing fundamental investment restrictions or approving a management contract.
Each share represents an equal proportionate interest in the Fund with each
other share. Each share has equal rights as to voting, redemption, dividends and
liquidation. Shares will remain on deposit with PSC and certificates will not be
issued unless requested. Certificates for fractional shares will not be issued.
The Fund reserves the right to charge a fee for the issuance of certificates.
The Fund will recognize stock certificates representing shares of Pioneer
II, Inc. issued prior to its reorganization as a Massachusetts business trust as
evidence of ownership of an equivalent number of shares of beneficial interest.
Any shareholder desiring to surrender a stock certificate to the Fund for a
share certificate representing an equivalent number of shares of beneficial
interest may do so by making a written request for such exchange to PSC. Such
request must be accompanied by the surrendered stock certificate which must be
endorsed on the back exactly in the manner as such certificate is registered.
VII. SHAREHOLDER SERVICES
PSC is the shareholder 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 Shareholder Services, Pioneering Services
Corporation, P.O. Box 9014, Boston, Massachusetts 02205-9014. Brown Brothers
Harriman & Co. (the "Custodian") serves as custodian of the Fund's securities.
The principal business address of the Custodian's Mutual Fund Division is 40
Water Street, Boston, Massachusetts 02109.
ACCOUNT AND CONFIRMATION STATEMENTS
PSC maintains an account for each shareholder and all transactions of the
shareholder are recorded in this account. Confirmation statements showing the
details of transactions are sent to shareholders as transactions occur. The
Pioneer Combined Account Statement, mailed quarterly, is available to all
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 ($50 minimum) to PSC
(account number 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 regular trading on the
Exchange on the day of receipt.
AUTOMATIC INVESTMENT PLANS
You may also arrange for regular investments of $50 or more through
government/military allotments or through a Pioneer Investomatic Plan. A Pioneer
Investomatic Plan provides for a monthly or quarterly investment by means of a
preauthorized 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 PGI in maintaining these plans.
FINANCIAL REPORTS AND TAX INFORMATION
As a shareholder, you will receive financial reports at least
semi-annually. In January of each year, the Fund will mail you information about
the tax status of dividends and distributions.
10
<PAGE>
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 new account application.
Two other options available are (a) dividends in cash and capital gains
distributions in additional shares; and (b) all dividends and 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 the 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 mutual
fund account invested in a second Pioneer mutual fund account. The value of this
second account must be at least $1,000 ($500 for the Fund or Pioneer Fund).
Invested dividends may be in any amount, and there are no fees or charges for
this service. This option is not currently available for retirement plan
accounts.
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 NOWbank 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 Internal Revenue Service as a credit against
your federal income taxes. This option is not available for retirement plan
accounts or for accounts subject to backup withholding.
EXCHANGE PRIVILEGE
You may exchange your shares of the Fund at net asset value, without a
sales charge, for shares of other Pioneer mutual funds which do not offer
different classes of shares or for the Class A shares of those Pioneer mutual
funds that offer more than one class of shares. There are currently no fees or
sales charges on such an exchange.
Exchanges must be at least $1,000. A new Pioneer mutual fund account opened
through an exchange must have a registration identical to that on the original
account. PSC will process exchanges only after receiving an exchange request in
proper form. An exchange of shares may be made only in states where legally
permitted.
WRITTEN EXCHANGES. If the exchange request is in writing, it must be
signed by all record owner(s) exactly as the shares are registered. If your
original account includes an Investomatic or Systematic Withdrawal Plan and
you open a new account by exchange, you should specify whether the plans
should continue in your new account or remain with your original account.
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 the Fund. Proper account
identification will be required for each telephone exchange. Each telephone
exchange request, whether by voice or by FactFone, will be recorded. YOU
ARE STRONGLY URGED TO CONSULT WITH YOUR FINANCIAL REPRESENTATIVE PRIOR TO
REQUESTING A TELEPHONE EXCHANGE. Telephone exchange requests may not exceed
$500,000 per account per day.
AUTOMATIC EXCHANGE. You may automatically exchange shares from one
Pioneer mutual fund account to another Pioneer mutual fund account on a
regular schedule, either monthly or quarterly. The accounts must have
identical registrations and the originating account must have a minimum
balance of $5,000. The exchange will occur on the 18th day of each month.
If an exchange request is received by PSC before 4:00 p.m. Eastern Time,
the exchange usually will occur on that day if the requirements above have been
met. If the exchange request is received after 4:00 p.m. Eastern Time, the
exchange will usually occur on the following business day.
You should consider the differences in objectives and policies of the
funds, as described in each fund's current prospectus, before making any
exchange. For federal and (generally) state income tax purposes, an exchange
represents a sale of the shares exchanged and a purchase of shares in another
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.
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.
TELEPHONE TRANSACTIONS AND RELATED LIABILITIES
Your account is automatically authorized to have telephone transaction
privileges unless you indicated otherwise on your Account Application or by
writing to PSC. You may purchase, sell or exchange Fund shares by telephone. See
"Net Asset Value" and "Pricing of Orders" for more information. 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 may be available to shareholders who
have pre-recorded certain bank information (see "FactFoneSM"). YOU ARE STRONGLY
URGED TO CONSULT WITH YOUR FINANCIAL REPRESENTATIVE PRIOR TO REQUESTING ANY
TELEPHONE TRANSACTION. To confirm that each transaction instruction received by
telephone is genuine, the Fund will record each telephone transaction, require
the caller to provide the personal
11
<PAGE>
identification number ("PIN") for the account and send you a written
confirmation of each telephone transaction. Different procedures may apply to
accounts that are held in the name of an institution or in the name of an
investment broker-dealer or other third-party. If reasonable procedures, such as
those described above, are not followed, the Fund may be liable for any loss due
to unauthorized or fraudulent instructions. The Fund may implement other
procedures from time to time. In all other cases, neither the Fund, PSC nor PFD
will be responsible for the authenticity of instructions received by telephone,
therefore, you bear the risk of loss for unauthorized or fraudulent telephone
transactions.
During times of economic turmoil or market volatility or as a result of
severe weather or a natural disaster, it may be difficult to contact the Fund by
telephone to institute a 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 mutual fund 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 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 FactFoneSM. See "How
to Purchase Shares," "Exchange Privilege," Redemptions and Repurchases" 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 business, 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 Pioneer Mutual Funds
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 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."
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. You may also direct that withdrawal checks be paid to another person,
although if you make this designation after you have opened your account, a
signature guarantee must accompany your instructions. Purchases of shares of the
Fund at a time when you have a Systematic Withdrawal Plan 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
If you redeem all or part of your shares of the Fund you may reinvest all
or part of the redemption proceeds without a sales commission in 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 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 "Exchange Privilege" above, you may also reinvest in shares of certain
other Pioneer mutual funds; in this case you must meet the minimum investment
requirement 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.
VIII. INVESTMENT RESULTS
The Fund may include in advertisements, and furnish to existing or
prospective shareholders, information concerning the average annual total return
on an investment in the Fund for a designated period of time. Whenever this
information is provided, it includes a standardized calculation of average
annual total return computed by determining the average annual compounded rate
of return that would cause a hypothetical investment (after deduction of the
maximum sales charge) made on the first day of the designated period (assuming
all dividends and distributions are reinvested) to equal the resulting net asset
value of such hypothetical investment on the last day of the designated period.
The periods illustrated would normally include one, five and ten years. These
standardized calculations do not reflect the impact of federal or state income
taxes.
The computation method above is prescribed for advertising and other
communications subject to SEC Rule 482. Communications not subject to this rule
may contain one or more additional
12
<PAGE>
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. 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.
Investment results of the Fund may also be compared to other investments or
savings vehicles and/or to unmanaged market indexes, indicators of economic
activity or averages of mutual funds results. 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. Therefore, any prior
investment results of the Fund should not be considered representative of what
an investment in the Fund may earn in any future period. These factors and
possible differences in the methods used in calculating investment results
should be considered when comparing performance information regarding the Fund
to information published for other investment companies, investment vehicles and
unmanaged indexes. The Fund's investment results should also be considered
relative to the risks associated with the Fund's investment objectives and
policies. For further information about the calculation methods and uses of the
Fund's investment results, see the Statement of Additional Information.
13
<PAGE>
NOTES
14
<PAGE>
THE PIONEER FAMILY OF MUTUAL FUNDS
INTERNATIONAL GROWTH FUNDS
Pioneer International Growth Fund
Pioneer Europe Fund
Pioneer Emerging Markets Fund
Pioneer India Fund
GROWTH FUNDS
Pioneer Capital Growth Fund
Pioneer Growth Shares
Pioneer Mid-Cap Fund
Pioneer Small Company Fund
Pioneer Gold Shares
GROWTH AND INCOME FUNDS
Pioneer Equity-Income Fund
Pioneer Fund
Pioneer II
Pioneer Real Estate Shares
INCOME FUNDS
Pioneer Short-Term Income Trust
Pioneer America Income Trust
Pioneer Bond Fund
Pioneer Income Fund
TAX-FREE INCOME FUNDS
Pioneer Intermediate Tax-Free Fund*
Pioneer Tax-Free Income Fund*
Pioneer New York Triple Tax-Free Fund*
Pioneer Massachusetts Double Tax-Free Fund*
Pioneer California Double Tax-Free Fund*
MONEY MARKET FUNDS
Pioneer U.S. Government Money Fund
Pioneer Cash Reserves Fund
*Not suitable for retirement accounts
15
<PAGE>
Pioneer II [Pioneer Logo]
60 State Street
Boston, Massachusetts 02109
OFFICERS
JOHN F. COGAN, JR., Chairman And President
DAVID D. TRIPPLE, Executive Vice President
FRANCIS J. BOGGAN, 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, Mass. 02109
Telephone: (617) 742-7825
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, automated
prices and account information........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
0196-3007
[Copyright] Pioneer Funds Distributor, Inc.
<PAGE>
PIONEER II
60 State Street
Boston, Massachusetts 02109
STATEMENT OF ADDITIONAL INFORMATION
January 26, 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 (the "Prospectus") dated January 26, 1996 of Pioneer II (the "Fund").
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 the Fund at 60 State Street,
Boston, Massachusetts 02109. The most recent Annual Report to Shareholders is
attached to this Statement of Additional Information and is hereby incorporated
in this Statement of Additional Information by reference.
TABLE OF CONTENTS
Page
1. Investment Policies and Restrictions....................................2
2. Management of the Fund..................................................8
3. Investment Adviser......................................................12
4. Shareholder Servicing/Transfer Agent....................................12
5. Custodian...............................................................13
6. Principal Underwriter...................................................13
7. Distribution Plan.......................................................14
8. Independent Public Accountants..........................................14
9. Portfolio Transactions..................................................15
10. Tax Status..............................................................16
11. Description of Shares...................................................19
12. Certain Liabilities.....................................................19
13. Determination of Net Asset Value........................................20
14. Systematic Withdrawal Plan..............................................20
15. Letter of Intention.....................................................21
16. Investment Results......................................................21
17. Financial Statements................................................... 24
Appendix A.............................................................A-1
Appendix B.............................................................B-1
--------------------
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 Prospectus identifies the investment objectives and the
principal investment policies of the Fund. Other investment policies of the Fund
are set forth below.
Securities Index Options
The Fund may purchase call and put options on securities indices for
the purpose of hedging against the risk of unfavorable price movements adversely
affecting the value of the Fund's securities or securities the Fund intends to
buy.
Securities index options will not be used for speculative purposes.
Currently, options on stock indices are traded only on national
securities exchanges. A securities index fluctuates with changes in the market
values of the securities included in the index. For example, some stock index
options are based on a broad market index such as the S&P 500 or the Value Line
Composite Index, or a narrower market index such as the S&P 100. Indices may
also be based on an industry or market segment such as the AMEX Oil and Gas
Index or the Computer and Business Equipment Index. Options on stock indices are
currently traded on the Chicago Board Options Exchange, the New York Stock
Exchange and the American Stock Exchange.
The Fund may purchase put options on securities indices in order to
hedge against an anticipated decline in securities prices that might adversely
affect the value of the Fund's portfolio securities. If the Fund purchases a put
option on a securities index, the amount of the payment it would receive upon
exercising the option would depend on the extent of any decline in the level of
the securities index below the exercise price. Such payments would tend to
offset a decline in the value of the Fund's portfolio securities. However, if
the level of the securities index increases and remains above the exercise price
while the put option is outstanding, the Fund will not be able to profitably
exercise the option and will lose the amount of the premium and any transaction
costs. Such loss may be partially offset by an increase in the value of the
Fund's portfolio securities.
The Fund may purchase call options on securities indices in order to
remain fully invested in the stock market or to lock in a favorable price on
securities that it intends to buy in the future. If the Fund purchases a call
option on a securities index, the amount of the payment it receives upon
exercising the option depends on the extent of any increase in the level of the
securities index above the exercise price. Such payments would in effect allow
the Fund to benefit from securities market appreciation even though it may not
have had sufficient cash to purchase the underlying securities. Such payments
may also offset increases in the price of securities that the Fund intends to
purchase. If, however, the level of the securities index declines and remains
below the exercise price while the call option is outstanding, the Fund will not
be able to exercise the option profitably and will lose the amount of the
premium and transaction costs. Such loss may be partially offset by a reduction
in the price the Fund pays to buy additional securities for its portfolio.
The Fund may sell the securities index option it has purchased or
write a similar offsetting securities index option in order to close out a
position in a securities index option which it has purchased. These closing sale
transactions enable the Fund immediately to realize gains or minimize losses on
its options positions. All securities index options purchased by the Fund will
be listed and traded on an exchange. However, there is no assurance that a
liquid secondary market on an options exchange will exist for any particular
option, or at any particular time, and for some options no secondary market may
exist. In addition, securities index prices may be
-2-
<PAGE>
distorted by interruptions in the trading of securities of certain companies or
of issuers in certain industries, or by restrictions that may be imposed by an
exchange on opening or closing transactions, or both, which could disrupt
trading in options on such indices and preclude the Fund from closing out its
options positions. If the Fund is unable to effect a closing sale transaction
with respect to options that it has purchased, it would have to exercise the
options in order to realize any profit.
The hours of trading for options may not conform to the hours during
which the underlying securities are traded. To the extent that the options
markets close before the markets for the underlying securities, significant
price and rate movements can take place in the underlying markets that cannot be
reflected in the options markets. The purchase of options is a highly
specialized activity which involves investment techniques and risks different
from those associated with ordinary portfolio securities transactions. Personnel
of the Fund's investment adviser have considerable experience in options
transactions.
In addition to the risks of imperfect correlation between the Fund's
portfolio and the index underlying the option, the purchase of securities index
options involves the risk that the premium and transaction costs paid by the
Fund in purchasing an option will be lost. This could occur as a result of
unanticipated movements in prices of the securities comprising the securities
index on which the option is based.
Investments in Emerging Markets
The Fund may invest up to 5% of its net assets in securities of
issuers located in countries with emerging economies or securities markets.
Countries with emerging economies or securities markets include among others:
Argentina, Bangladesh, Brazil, Chile, China, Columbia, Czech Republic, Egypt,
Hungary, India, Indonesia, Israel, Jamaica, Jordan, Kenya, Korea, Kuwait,
Morocco, Nigeria, Pakistan, Philippines, Poland, Sri Lanka, Taiwan, Thailand,
Turkey, Venezuela and Zimbabwe. Political and economic structures in many of
such countries may be undergoing significant evolution and rapid development,
and such countries may lack the social, political and economic stability
characteristic of more developed countries. As a result, the risks associated
with foreign markets which are described in the Prospectus under the caption
"Investment Objectives and Policies," including the risks of nationalization or
expropriation of assets, may be heightened. In addition, unanticipated political
or social developments may affect the values of the Fund's investments and the
availability to the Fund of additional investments in such countries. The small
size and inexperience of the securities markets in certain of such countries and
the limited volume of trading in securities in those countries may make the
Fund's investments in such countries less liquid and more volatile than
investments in countries with more developed securities markets (such as Japan
or most Western European countries).
Forward Foreign Currency Transactions
The foreign currency transactions of the Fund 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
purchase and/or write forward foreign currency exchange contracts involving
currencies of the different countries in which it will invest as a hedge against
possible variations in the foreign exchange rates between these currencies and
the U.S. Dollar. This is accomplished through contractual agreements to purchase
or sell a specified currency at a specified future date and price set at the
time of the contract. The Fund's transactions 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 contracts with respect to specific receivables or payables of the Fund
-3-
<PAGE>
accruing in connection with the purchase and sale of its 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 will
enter into such transactions only to the extent, if any, deemed appropriate by
the Fund's 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, its custodian bank will segregate cash or high grade liquid debt
securities in a separate account of the Fund in an amount equal to the value of
the Fund's 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 account 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 limit the
opportunity for gain if the value of the hedged currency should rise. Moreover,
it may not be possible for the Fund to hedge against a devaluation that is so
generally anticipated that the Fund is not able to contract to sell the currency
at a price above the devaluation level it anticipates.
The 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 entering into
an offsetting forward contract.
Options on Foreign Currencies
The Fund may purchase and write options on foreign currencies for
hedging purposes in a manner similar to that of transactions in forward
contracts. For example, a decline in the dollar value of a foreign currency in
which portfolio securities are denominated will reduce the dollar value of such
securities, even if their value in the foreign currency remains constant. In
order to protect against such decreases in the value of portfolio securities,
the Fund may purchase put options on the foreign currency. If the value of the
currency declines, the Fund will have the right to sell such currency for a
fixed amount of dollars which exceeds the market value of such currency. This
would result in a gain that may offset, in whole or in part, the negative effect
of currency depreciation on the value of the Fund's securities denominated in
that currency.
Conversely, if a rise in the dollar value of a currency is projected
for those securities to be acquired, thereby increasing the cost of such
securities, the Fund may purchase call options on such currency. If the value of
such currency increases, the purchase of such call options would enable the Fund
to purchase currency for a fixed amount of dollars which is less than the market
value of such currency. Such a purchase would result in a gain that may offset,
at least partially, the effect of any currency related increase in the price of
securities the Fund intends to acquire. As in the case of other types of options
transactions, however, the benefit the Fund derives from purchasing foreign
currency options will be reduced by the amount of the premium and related
transaction costs. In addition, if currency exchange rates do not move in the
direction or to the
-4-
<PAGE>
extent anticipated, the Fund could sustain losses on transactions in foreign
currency options which would deprive it of a portion or all of the benefits of
advantageous changes in such rates.
The Fund may also write options on foreign currencies for hedging
purposes. For example, if the Fund anticipates a decline in the dollar value of
foreign currency denominated securities because of declining exchange rates, it
may, instead of purchasing a put option, write a covered call option on the
relevant currency. If the expected decline occurs, the option will most likely
not be exercised, and the decrease in value of portfolio securities will be
offset by the amount of the premium received by the Fund.
Similarly, the Fund could write a put option on the relevant
currency, instead of purchasing a call option, to hedge against an anticipated
increase in the dollar cost of securities to be acquired. If exchange rates move
in the manner projected, the put option will expire unexercised allowing the
Fund to offset such increased cost up to the amount of the premium. However, as
in the case of other types of options transactions, the writing of a foreign
currency option will constitute only a partial hedge up to the amount of the
premium, only if rates move in the expected direction. If unanticipated exchange
rate fluctuations occur, the option may be exercised and the Fund would be
required to purchase or sell the underlying currency at a loss which may not be
fully offset by the amount of the premium. As a result of writing options on
foreign currencies, the Fund also may be required to forego all or a portion of
the benefits which might otherwise have been obtained from favorable movements
in currency exchange rates.
A call option written on foreign currency by the Fund is "covered" if
the Fund owns the underlying foreign currency subject to the call, or if it has
an absolute and immediate right to acquire that foreign currency without
additional cash consideration. A call option is also covered if the Fund holds a
call on the same foreign currency for the same principal amount as the call
written where the exercise price of the call held is (a) equal to or less than
the exercise price of the call written or (b) greater than the exercise price of
the call written if the amount of the difference is maintained by the Fund in
cash and high grade liquid debt securities in a segregated account with its
custodian.
The Fund may close out its position in a currency option by either
selling the option it has purchased or entering into an offsetting option.
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
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 any 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 their 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 only lend portfolio securities to
firms which have been approved in advance by the Fund's Board of Trustees, which
will monitor the creditworthiness of any such firms. At no time would the value
of the securities loaned exceed 30% of the value of the Fund's total assets. In
-5-
<PAGE>
the Fund's last fiscal year, it did not lend portfolio securities with a value
exceeding 5% of the Fund's net assets and, while it reserves the right to do so,
the Fund has no present intention of lending portfolio securities with any such
value during the coming year.
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 of
the Fund's outstanding voting securities. The Fund may not:
(1) purchase securities "on margin" or effect "short sales" of
securities;
(2) underwrite any issue of securities;
(3) acquire the securities of any other domestic or foreign
investment company or investment fund (except in connection with a plan of
merger or consolidation with or acquisition of substantially all the assets of
such other investment company); provided, however, that nothing herein contained
shall prevent the Fund from investing in the securities issued by a real estate
investment trust, provided that such trust shall not be permitted to invest in
real estate or interests in real estate other than mortgages or other security
interests;
(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) purchase securities for the purpose of controlling
management of other companies;
(7) invest in commodities, commodity contracts or real estate;
(8) purchase "investment letter" securities (i.e., securities
that must be registered under the Securities Act of 1933 before they may be
offered or sold to the public);
(9) purchase the securities of any enterprise which has a
business history of less than three years, including the operation of any
predecessor business to which it has succeeded;
(10) purchase or retain the securities of any company if those
officers and Trustees of the Fund, or officers and directors of its adviser or
principal underwriter, owning individually more than one-half of 1% of the
securities of such company, together own more than 5% of the securities of such
company;
(11) make loans, provided that (i) the purchase of publicly
distributed debt securities pursuant to the Fund's investment objectives shall
not be deemed loans for the purposes of this restriction; (ii) loans of
portfolio securities as described, from time to time, under "Lending of
Portfolio Securities" shall be made only in accordance with the terms and
conditions therein set forth and (iii) in seeking a return on temporarily
available cash the Fund may engage in repurchase transactions with banks
maturing in seven days or less and involving obligations of the U.S. Government,
its agencies or instrumentalities;
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(12) borrow money, except that, as a temporary measure for
extraordinary or emergency purposes and not for investment purposes, the Fund
may borrow from banks up to 5% of the value of its total assets at the time of
the borrowing; or
(13) guarantee the securities of any other company, or
mortgage, pledge, hypothecate, assign or otherwise encumber as security for
indebtedness its securities or receivables in an amount exceeding the amount of
the borrowing secured thereby.
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, investments are concentrated in a
particular industry if such investments aggregate 25% or more of the Fund's
total assets. The Fund has agreed to abide by the foregoing non-fundamental
policy which it will not change without the affirmative vote of the holders of a
majority of the Fund's outstanding shares of beneficial interest.
In addition, in connection with the offering of its shares in various
states and foreign countries, the Fund has agreed not to: (1) invest in puts,
calls, straddles, spreads, or any combination thereof other than the purchase
and sale of put and call options on currencies and the purchase of put and call
options on securities indices, or in oil, gas or other mineral leases or
exploration or development programs; (2) invest more than 5% of its total 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, mortgage, hypothecate or otherwise encumber
its assets; (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 either the New York or American Stock Exchanges;
and (5) invest in real estate limited partnerships. These restrictions may not
be changed without the approval of the regulatory agencies in such states or
foreign countries.
Other Policies and Risks
The Fund expects that its investments in foreign securities will
range from 10% to 25% of its assets. However, the Fund reserves the right to
reduce or eliminate its holdings of foreign securities whenever management
believes such action to be in the best interests of the shareholders.
The Fund is managed by Pioneering Management Corporation ("PMC")
which also serves as investment adviser to other Pioneer Funds and private
accounts with investment objectives identical or similar to those of the Fund.
Securities frequently meet the investment objectives of the Fund, the other
Pioneer 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 presently has in a particular industry
and the availability of investment funds in each fund or account.
It is possible that at times identical securities will be held by
more than one fund and/or account. However, positions in the same issue may vary
and the length of time that any fund or account may choose to hold its
investment in the same issue may likewise vary. To the extent that more than one
of the Pioneer Funds or a private account managed by PMC seeks to acquire the
same security at about the same time, the Fund may not be able to acquire as
large a position in such security as it desires or it may have to pay a higher
price for the security. Similarly, the Fund may not be able to obtain as large
an execution of an order to sell or as high a price for any
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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. 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. Although the other Pioneer Funds may
have the same or similar investment objectives and fundamental policies as the
Fund, their portfolios do not generally consist of the same investments as the
Fund or each other and their performance results are likely to differ from those
of the Fund.
Debt Securities
No more than 5% of the Fund's net assets may be invested in debt
securities, including convertible securities, rated below "BBB" by Standard &
Poor's Corporation or the equivalent. Debt securities rated "BBB" may have
speculative characteristics and changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity to make principal
and interest payments. Debt securities rated lower than "BBB" are speculative
investments and the yields on these bonds will fluctuate over time. If the
rating of a debt security is reduced below investment grade ("BBB"), PMC will
consider whatever action is appropriate, consistent with the Fund's investment
objective and policies.
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,
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, Date of Birth
("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"), Luscina, Inc.,
Pioneer First Russia, Inc. ("First Russia"), Pioneer Omega, Inc. ("Omega") and
Theta Enterprises, Inc.; 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, since
1988; 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;
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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, between 1991
and 1994; Professor of Operations Management and Management of Technology,
Boston University School of Management ("BUSM"), between 1989 and 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 2363, Boston, MA 02108
President, Newbury, Piret & Company, Inc. (merchant banking firm) and
Trustee of all of the Pioneer mutual funds.
DAVID D. TRIPPLE*, Trustee and Executive Vice President, DOB: February 1944
Executive Vice President and a Director of PGI; Director of PFD, PCC,
PIC, PIntl and Pioneer SBIC Corporation; President, Chief Investment Officer and
a Director of PMC, Executive Vice President and Trustee of all of the Pioneer
mutual funds.
STEPHEN K. WEST, Trustee, DOB: September 1928
125 Broad Street, New York, New York 10004
Partner, Sullivan & Cromwell (law firm); Trustee, The Winthrop Focus
Funds (mutual funds) and Trustee of all of the Pioneer mutual funds except
Pioneer Variable Contracts Trust.
JOHN WINTHROP, Trustee, DOB: June 1936
One North Adgers Wharf, Charleston, South Carolina 29401
President, John Winthrop & Co., Inc. (a 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.
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<PAGE>
WILLIAM H. KEOUGH, Treasurer, DOB: April 1937
Senior Vice President, Chief Financial Officer and Treasurer of PGI and
Treasurer of PFD, PMC, PSC, PCC, PIC, PIntl, PMT, PGL and Pioneer SBIC
Corporation and 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 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 and Compliance of PMC since May 1994,
Manager of Auditing 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 of PGI since 1995; formerly of Hale and Dorr (counsel
to the Fund) where he most recently served as junior partner, and Assistant
Secretary of all of the Pioneer mutual funds.
FRANCIS J. BOGGAN, Vice President, DOB: July 1957
Vice President of PMC.
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
private accounts.
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
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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 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 or certain
qualified pension plans.
PMC, the Fund's investment adviser, also manages the investments of
certain institutional private accounts. Messrs. Cogan, Tripple, Keough and
Barri, officers and/or Trustees of the Fund, are also officers and/or directors
of PFD, PMC, PSC (except Mr. Tripple) and PGI. 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 as of the date of this Statement of Additional Information, except
Mr. Cogan who then owned approximately 15% of such shares.
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
trustees' 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
will also 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
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annual trustees' fee, except for the Audit Committee Chair who will receive an
annual trustees' fee equal to 20% of the aggregate annual trustees' 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
trustees' fee, except for the Committee Chair who will receive an annual
trustees' fee equal to 10% of the annual trustees' 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:
Pension or Total Compensation
Retirement Benefits from the Fund
Accrued as Part and all other
Aggregate of the Fund's Pioneer Mutual
Compensation Expenses Funds **
Name of Trustee from the Fund*
John F. Cogan, Jr. $ 500.00 $0 $11,000
Richard H. Egdahl, M.D. 11,805.00 0 63,315
Margaret B.W. Graham 11,805.00 0 62,398
John W. Kendrick 11,805.00 0 62,398
Marguerite A. Piret 13,442.50 0 76,704
David D. Tripple 500.00 0 11,000
Stephen K. West 12,360.00 0 68,180
John Winthrop 12,900.00 0 71,199
--------- -- ------
Total $75,117.50 $0 $426,194
========== == ========
* As of Fund's fiscal year end.
** As of December 31, 1995 (calendar year end for all Pioneer Funds).
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3. INVESTMENT ADVISER
The Fund has contracted with PMC, 60 State Street, Boston,
Massachusetts, to act as its investment adviser. The term of the contract is one
year, but it is renewable annually after such date 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)
cast in person at a meeting called for the purpose of voting on such renewal.
This contract terminates if assigned and may be terminated without penalty by
either party by vote of its Board of Directors or Trustees or a majority of its
outstanding voting securities and the giving of sixty days' written notice. The
management contract was approved by the shareholders of the Fund in 1990. As
compensation for its management services and expenses incurred, PMC is entitled
to a management fee at the rate of 0.50% per annum of the Fund's average daily
net assets up to $250,000,000, 0.48% of the next $50,000,000, and 0.45% of any
excess over $300,000,000. The fee is normally computed daily and paid monthly.
During its fiscal years ended September 30, 1993, 1994 and 1995, the
Fund paid total management fees to PMC of approximately $18,959,000, $20,186,000
and $21,051,000, respectively.
4. SHAREHOLDER SERVICING/TRANSFER AGENT
The Fund has contracted with PSC, 60 State Street, Boston,
Massachusetts, to act as dividend disbursing agent and transfer agent for the
Fund. This contract terminates if assigned and may be terminated without penalty
by either party by vote of its Board of Directors or Trustees or a majority of
its outstanding voting securities and the giving of ninety days' written notice.
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 routine shareholder inquiries.
PSC receives an annual fee of $22.00 per shareholder account from the
Fund as compensation for the services described above. This 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.
5. CUSTODIAN
Brown Brothers Harriman & Co., 40 Water Street, Boston, Massachusetts
02109 (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 principal in securities transactions. Portfolio securities may be deposited
into the Federal Reserve-Treasury Department Book Entry System or the Depository
Trust Company.
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<PAGE>
6. PRINCIPAL UNDERWRITER
PFD, 60 State Street, Boston, Massachusetts, serves as the principal
underwriter for the Fund in connection with the continuous offering of its
shares. The Fund entered into its most recent Underwriting Agreement with PFD,
effective November 1, 1991. The Trustees who are not, and were not at the time
they voted, interested persons of the Fund, as defined in the Investment Company
Act of 1940 (the "Act"), approved the Underwriting Agreement. The Underwriting
Agreement will continue from year to year if annually approved by the Trustees
in conjunction with the continuance of the Plan (as defined below). The
Underwriting Agreement provides that PFD will bear the distribution expenses not
borne by the Fund. During the fiscal years ending September 30, 1993, 1994 and
1995, net underwriting commissions retained by PFD in connection with its
offering of Fund shares were approximately $1,363,000, $1,982,000 and
$1,498,000, respectively. Commissions reallowed to dealers for the same years
were approximately $9,628,000, $13,259,000, and $10,054,000, respectively.
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.
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 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 an acquisition of portfolio
securities (other than municipal debt securities issued by state political
subdivisions or their agencies or instrumentalities) or pursuant to a bona fide
purchase of assets, merger or other reorganization 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; (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 by quotation under the NASD Automated
Quotation System.
7. DISTRIBUTION PLAN
The Fund has adopted a plan of distribution, effective November 1,
1991, pursuant to Rule 12b-1 promulgated by the Securities and Exchange
Commission under the 1940 Act (the "Plan") pursuant to which the Fund may
reimburse PFD for its expenditures in financing any activity primarily intended
to result in the sale of the shares of the Fund. Certain categories of such
expenditures have been approved by the Board of Trustees and are set forth in
the Prospectus. See "Distribution Plan" in the Prospectus. The expenses of the
Fund pursuant to the Plan are accrued on a fiscal year basis and may not exceed
the annual rate of 0.25% of the Fund's average daily net assets. In accordance
with the terms of the Plan, PFD provides to the Fund for review by the Trustees
a quarterly written report of the amounts expended under the Plan and the
purpose for which such expenditures were made.
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<PAGE>
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 Plan 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 Plan by the Fund and except to the
extent certain officers may have an interest in PFD's ultimate parent, PGI.
The Plan was 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 has or
had any direct or indirect financial interest in the operation of the Plan),
cast in person at a meeting called for the purpose of voting on the Plan. In
approving the Plan, the Trustees identified and considered a number of potential
benefits which the Plan may provide. The Board of Trustees believes that there
is a reasonable likelihood that the Plan will benefit the Fund and its current
and future shareholders. Under its terms, the Plan remains in effect from year
to year provided such continuance is approved annually by vote of the Trustees
in the manner described above. The 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, and material amendments of the Plan must also be approved by the
Trustees in the manner described above. The 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 Fund (as defined in the 1940 Act). The Plan
will automatically terminate in the event of its assignment (as defined in the
1940 Act). In the Trustees' quarterly review of the Plan, they will consider its
continued appropriateness and the level of compensation it provides.
During the fiscal year ended September 30, 1995, the Fund paid total
distribution fees pursuant to the Plan of approximately $8,744,000. 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.
8. INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP, One International Place, Boston, Massachusetts
02110, are 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 Securities and Exchange 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
management contract (subject to the right of the Trustees to reverse any such
transaction). The primary consideration in placing portfolio security
transactions is execution at the most favorable prices. Additionally, 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 dealers which provide brokerage and/or research
services to the Fund and/or other investment companies managed by PMC.
Consistent with Section 28(e) of the Securities Exchange Act of 1934, as
amended, the Fund may pay commissions to such broker-dealers in an amount
greater than the amount another firm might charge as compensation for such
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<PAGE>
services if PMC determines in good faith that the amount of commissions charged
by a broker is reasonable in relation to the value of the brokerage and research
services provided by such broker. Such services may include advice concerning
the value of securities; the advisability of investing in, purchasing or selling
securities; the availability of securities or the purchasers or sellers of
securities; providing stock price quotation services; furnishing analyses,
manuals and reports concerning issuers, industries, securities, economic factors
and trends, portfolio strategy, performance of accounts, comparative fund
statistics and credit rating service information; 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 broker-dealers solely because such services
were provided. Management believes that no exact dollar value can be calculated
for such services.
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 of 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 the additional expenses which might otherwise be incurred
if it were to attempt to develop comparable information through its own staff.
Pursuant to certain directed brokerage arrangements with third party
broker-dealers, such broker-dealers may pay certain of the Fund's custody
expenses. See "Financial Highlights" in the Prospectus.
The Trustees periodically review PMC's performance of its
responsibilities in connection with the placement of portfolio transactions on
behalf of the Fund.
During the fiscal years ended September 30, 1993, 1994 and 1995, the
Fund paid or owed aggregate brokerage commissions of approximately $16,655,000,
$15,295,000 and $11,552,000, respectively.
10. TAX STATUS
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 its
income, the diversification of its assets and the timing of its distributions.
If the Fund meets all such requirements and distributes to its shareholders, in
accordance with the Code's timing requirements, 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.
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 reinvested 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 reinvested in additional shares, are taxable to
the Fund's shareholders as long-term capital gains for federal income tax
purposes without regard to the
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<PAGE>
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, forward foreign currency contracts, foreign currencies, options on
certain 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, which gain is limited
under the Code to less than 30% of its annual gross income, and may under future
Treasury regulations produce income not among the types of "qualifying income"
from which the Fund must derive at least 90% of its annual gross income. 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 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 may be attributable to realized or unrealized appreciation in
the Fund's portfolio or undistributed taxable income of the Fund, subsequent
distributions on such shares from such appreciation or income may be taxable to
such investor even if the net asset value of the investor's shares is, as a
result of the distributions, reduced below the investor's cost for such shares
and the distributions in reality represent a return of a portion of the
investment.
Redemptions and exchanges are taxable events. Any loss realized by an
investor upon the redemption or other sale of Fund 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 distributions of long-term capital gain with respect to such
shares.
In addition, if shares redeemed or exchanged have been held for less
than 91 days, (1) in the case of a reinvestment at net asset value pursuant to
the reinvestment privilege, the sales charge paid on such shares is not included
in their tax
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<PAGE>
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 reduced 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 Fund
(including pursuant to automatic dividend reinvestments) 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 capital gains, if any, during
the eight years following the year of the loss. To the extent subsequent capital
gains are offset by such losses, they would not result in federal income tax
liability to the Fund and are not expected to be distributed as such to
shareholders.
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) in an unleveraged
position and distributed and designated by the Fund to its shareholders 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) with respect to
their Fund shares, taking into account any holding period reductions from
hedging or other transactions that diminish their risk of loss, 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 its 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 shareholders will not include such taxes in their gross incomes
(in addition to dividends actually received) 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 corporate excise or
franchise taxes. Provided that the Fund qualifies as a regulated investment
company under the Code, it will also not be required to pay any Massachusetts
income tax.
Options written or purchased by the Fund on certain 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 and such forward contracts may
not have been disposed of or closed out and delivery may not have been made
thereunder. The tax rules applicable to these derivative instruments may affect
the characterization as long-term or
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<PAGE>
short-term of some capital gains and losses realized by the Fund. Certain
options and forward contracts on foreign currency may be subject to Section 988,
described above, and accordingly may produce ordinary income or loss. Losses on
certain options and 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 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, forward contracts and straddles may affect the amount, timing and
character of the Fund's income and loss and hence of 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.
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 IRS regulations. In order to avoid this withholding
requirement, shareholders must certify on their Account Applications, or on
separate W-9 Forms, that the Social Security or other Taxpayer Identification
Number they provide is their correct number and that they are not currently
subject to backup withholding, or that they are exempt from backup withholding.
The Fund may nevertheless be required to withhold if it receives notice from the
IRS or a broker that the number provided is incorrect or backup withholding is
applicable as a result of previous underreporting of interest or dividend
income.
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. Investors who are not U.S. persons
may be subject to different U.S. tax treatment, including a possible 30% U.S.
nonresident alien withholding tax (or U.S. nonresident alien withholding tax at
a lower treaty rate) on any 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. 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 advisors on these matters and on
state, local and other applicable tax laws.
11. DESCRIPTION OF SHARES
The Fund's Declaration of Trust permits its 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.
Each share represents an equal proportionate interest in the Fund with each
other share. The shares of any additional series would participate equally in
the earnings, dividends and assets of the particular series, and would be
entitled to vote separately to approve investment advisory agreements or changes
in investment restrictions, but shareholders of all series would vote together
in the election and selection of Trustees and accountants. Upon liquidation of
the Fund, the Fund's shareholders are entitled to share pro rata in the Fund's
net assets available for distribution to shareholders.
Shareholders are entitled to one vote for each share held and may
vote in the election of Trustees and on other matters submitted to meetings of
shareholders. Although Trustees are not
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elected annually by the shareholders, shareholders have under certain
circumstances the right to remove one or more Trustees. No material amendment
may be made to the Fund's Declaration of Trust without the affirmative vote of a
majority of the outstanding "voting securities" of its shares, as defined in the
1940 Act. Shares have no preemptive or conversion rights. Shares are fully paid
and non-assessable by the Fund, except as set forth below. See "Certain
Liabilities."
12. CERTAIN LIABILITIES
As a Massachusetts business trust, the Fund's operations are governed
by its Declaration of Trust, dated January 8, 1985, a copy of which is on file
with the office of the Secretary of State of the Commonwealth of Massachusetts.
Theoretically, shareholders of a Massachusetts business trust may, under certain
circumstances, be held personally liable for the obligations of the trust.
However, the Declaration of Trust contains an express disclaimer of shareholder
liability for acts or obligations of the Fund or any series of the Fund and
requires that notice of such disclaimer be given in each agreement, obligation
or instrument entered into or executed by the Fund or its Trustees. Moreover,
the Declaration of Trust 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. The Declaration of Trust also 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 would be limited to
circumstances in which the Fund itself would be unable to meet its obligations.
In light of the nature of the Fund's business and the nature and amount of its
assets, the possibility of the Fund's liabilities exceeding its assets, and
therefore a shareholder's risk of personal liability, 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.
13. DETERMINATION OF NET ASSET VALUE
The net asset value per share of the Fund is determined as of the
close of regular trading on the New York Stock Exchange (currently 4:00 PM,
Eastern Time) on each day on which the New York Stock Exchange is open for
trading. As of the date of this Statement of Additional Information, the New
York Stock Exchange is open for trading every weekday except for the following
holidays: New Year's Day, President's Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The net asset
value per share of the Fund is also determined on any other day in which the
level of trading in its portfolio securities is sufficiently high so that the
current net asset value per share might be materially affected by changes in the
value of its portfolio securities. On any day in which no purchase orders for
the shares of the Fund become effective and no shares are tendered for
redemption, the net asset value per share is not determined.
The net asset value per share of the Fund is computed by taking the
amount of the value of all of its assets, less its liabilities, and dividing it
by the number of outstanding shares. 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 last bid and asked prices.
Securities for
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which no market quotations are readily available (including those the trading of
which 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. The Fund's maximum
offering price per share is determined by adding the maximum distribution charge
to the net asset value per share.
14. SYSTEMATIC WITHDRAWAL PLAN
The Systematic Withdrawal Plan is designed to provide a convenient
method of receiving fixed payments at regular intervals from shares of the Fund
deposited by the applicant under this Plan. 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 payments 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 the applicant.
Designation of another person to receive the checks subsequent to opening an
account must be accompanied by a signature guarantee.
Any income dividends or capital gains distributions on shares under
the Systematic Withdrawal Plan 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.
Systematic Withdrawal Plan payments are made from the proceeds of the
redemption of shares deposited under the Plan in a Plan account. To the extent
that such redemptions for periodic withdrawals exceed dividend income reinvested
in the Plan account, such redemptions will reduce and may ultimately exhaust the
number of shares deposited in the Plan account. Redemptions are taxable
transactions. In addition, the amounts received by a shareholder cannot be
considered as an actual yield or income on his or her investment because part of
such payments may be a return of his or her capital.
The Systematic Withdrawal Plan 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. LETTER OF INTENTION
Purchases of $50,000 or over (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 shares purchased during such 13-month period
pursuant to a Letter of Intention had such shares been purchased all at once.
See "Information About Fund Shares" in the Prospectus. For example, a person who
signs a Letter of Intention providing for a total investment in Fund 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 Funds except
Pioneer Money Market Trust as of the date of his Letter of Intention as a credit
toward determining the applicable sales charge for the shares to be purchased
under the Letter of Intention.
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The Letter of Intention authorizes PSC to escrow 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 read the provisions of the Letter of Intention contained in the Account
Application carefully before signing.
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, the Fund's
total return may be compared to rankings prepared by Lipper Analytical Services,
Inc., a widely recognized independent service which monitors mutual fund
performance; 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"),
recognized unmanaged indexes of broad-based common stocks. In addition, the
performance 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/Weisenberger Investment Companies Service, 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.
Standardized Average Annual Total Return Quotations and Other Performance
Quotations
One of the primary methods used to measure the Fund's performance is
"total return." "Total return" will normally represent the percentage change in
value of an account, or of a hypothetical investment in the Fund, over any
period up to the lifetime 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 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.
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<PAGE>
Generally, performance illustrations will include or be accompanied
by the Funds' average annual total return over the prior one year, five year and
ten year periods. The average annual total return ("T") is computed by equating
the value at the end of the period ("ERV") with a hypothetical initial
investment of $1,000 ("P") over a period of years ("n") according to the
following formula specified by the Securities and Exchange Commission: p(l+T)n =
ERV. These computations will assume the deduction of the maximum sales charge of
5.75% from the initial investment, the reinvestment of dividends and
distributions at net asset value on the appropriate dates, and a redemption of
the account at the end of the period.
The average annual compounded total returns of the Fund are reflected
in the table below:
Returns as of 9/30/95
Average Annual Total Return (%)
1 Year 5 Year 10 Year Life Inception
12.11 14.90 11.72 14.33 9/30/69
The Fund may also present, from time to time, historical information
depicting the value of a hypothetical account over the time period from the
Fund's inception in 1969 until the present. The Fund may also depict summary
results of assumed investments in the Fund for each of the ten-calendar-year
periods in the Fund's history and for the ten-year periods which began at
recognized market highs or ended at recognized market lows. An example of this
historical information describing various performance characteristics of the
Fund from 1969 until the present is set forth below.
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.
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:
(degree) net asset value prices for all Pioneer mutual funds;
(degree annualized 30-day yields on Pioneer's bond funds;
(degree) annualized 7-day yields and 7-day effective (compound)
yields for Pioneer's money market funds; and
(degree) dividends and capital gains distributions on all
Pioneer mutual funds.
Yields are calculated in accordance with standard formulas mandated
by the Securities and Exchange Commission.
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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; 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 they may be worth more or less at redemption than
their original cost.
17. FINANCIAL STATEMENTS
The Fund's financial statements for the year ended September 30, 1995
are included in the Fund's Annual Report to Shareholders, which report is
incorporated by reference into and attached to this Statement of Additional
Information. The Fund's Annual Report to Shareholders is so incorporated and
attached in reliance upon the report of Arthur Andersen LLP, independent public
accountants, as experts in accounting and auditing.
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Pioneer II Fund
<TABLE>
<CAPTION>
Date Initial Investment Offering Price Sales Charge Shares Purchased Net Asset Value Initial Net Asset
Included Per Share Value
<S> <C> <C> <C> <C> <C> <C>
9/30/69 $10,000 $5.31 5.75% 1,883.239 $5.00 $9,425
</TABLE>
Dividends and Capital Gains Reinvested
Value of Shares
Date From Investment From Cap. Gains From Dividends Total Value
Reinvested Reinvested
12/31/69 $8,842 $0 $0 $8,842
12/31/70 $8,051 $0 $163 $8,214
12/31/71 $9,500 $385 $355 $10,240
12/31/72 $9,708 $2,199 $510 $12,417
12/31/73 $8,559 $2,177 $616 $11,352
12/31/74 $6,252 $1,990 $607 $8,849
12/31/75 $9,021 $3,129 $1,120 $13,270
12/31/76 $13,616 $5,712 $2,045 $21,373
12/31/77 $15,903 $7,532 $2,960 $26,395
12/31/78 $16,309 $10,027 $3,889 $30,225
12/31/79 $19,623 $14,350 $6,047 $40,020
12/31/80 $23,333 $19,059 $9,037 $51,429
12/31/81 $22,788 $22,247 $10,820 $55,855
12/31/82 $25,725 $28,010 $15,010 $68,745
12/31/83 $30,640 $37,959 $20,820 $89,419
12/31/84 $27,909 $36,527 $22,120 $86,556
12/31/85 $33,033 $50,984 $29,727 $113,744
12/31/86 $34,163 $59,663 $34,106 $127,932
12/31/87 $29,473 $65,731 $32,289 $127,493
12/31/88 $32,788 $81,884 $40,573 $155,245
12/31/89 $35,217 $105,331 $49,177 $189,725
12/31/90 $29,435 $90,721 $46,749 $166,905
12/31/91 $34,783 $114,167 $60,936 $209,886
12/31/92 $34,972 $128,226 $66,364 $229,562
12/31/93 $36,422 $162,514 $74,033 $272,969
12/31/94 $31,845 $167,857 $68,549 $268,251
12/31/95 $36,648 $221,052 $83,393 $341,093
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WORST CASE/BEST CASE INVESTMENT
SCENARIOS 5000 Yearly Investments in Pioneer
II from January 1, 1976
The table below shows the year-by-year valuation of an annual additional
investment of $5,000. The Worst Case scenario assumes the investment was made on
the day that the Dow Jones Industrial Average ("DJIA") was at its yearly high.
The Best Case scenario assumes that the investment was made on the day that DJIA
was at its yearly low. Both scenarios assume reinvestment of all dividends and
capital gains without sales charge. The DJIA is a recognized unmanaged index of
common stocks of 30 industrial companies listed on the New York Stock Exchange.
Worst Case Best Case
(Purchase at Yearly DJIA Highs) (Purchase at Yearly DJIA Highs)
Cumulative Value Cumulative Value
Year High Date Investment on 12/31 Low Date Investment on 12/31
12/31
1976 9/21/76 5000 4,831 1/2/76 5000 7,078
1977 1/3/77 10000 11,505 11/2/77 10000 13,674
1978 9/8/78 15000 17,175 2/28/78 15000 20,868
1979 10/5/79 20000 27,306 11/7/79 20000 32,724
1980 11/20/80 25000 39,586 4/21/80 25000 48,532
1981 4/27/81 30000 47,566 9/25/81 30000 57,775
1982 12/27/82 35000 63,202 8/12/82 35000 77,579
1983 11/29/83 40000 86,876 1/3/83 40000 107,024
1984 1/6/84 45000 88,561 7/24/84 45000 109,071
1985 12/16/85 50000 121,076 1/4/85 50000 149,577
1986 12/2/86 55000 140,743 1/22/86 55000 173,642
1987 8/25/87 60000 143,686 10/19/87 60000 177,785
1988 10/21/88 65000 179,671 1/20/88 65000 222,238
1989 10/9/89 70000 224,172 1/3/89 70000 277,402
1990 7/16/90 75000 201,323 10/11/90 75000 249,173
1991 12/31/91 80000 258,043 1/9/91 80000 319,692
1992 6/1/92 85000 287,341 10/9/92 85000 354,996
1993 12/29/93 90000 346,566 1/20/93 90000 427,878
1994 1/31/94 95000 345,243 4/4/94 95000 425,647
1995 12/13/95 100000 443,895 1/30/95 100000 547,394
Annual Growth Rate: 13.39% 14.84%
(Internal Rate of Return)
The valuation columns in the table include the effect of sales charges on
these yearly investments. Sales charges have been reduced, as appropriate, to
reflect the rate applicable to the value of the total account, according to the
schedule in the Fund's prospectus. The figures shown above should not be
considered as representative of future returns. Income taxes have not been
considered.
-26-
<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
<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
<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.
<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
<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
<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
<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
<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
<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
<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
<PAGE>
APPENDIX B
Additional 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.
B-1
<PAGE>
<PAGE>
FORM N-1A
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
The financial highlights of the Registrant are included in
Part A of the Registration Statement and the financial
statements of the Registrant are incorporated by reference
into Part B of the Registration Statement from the 1995 Annual
Report to Shareholders for the year ended September 30, 1995
(filed electronically on November 27, 1995; file no. 2-32773;
accession number 0000078758-95-000011).
(b) Exhibits:
1. Declaration of Trust*
2. By-Laws*
3. None
4. None
5. Management Contract*
6.1 Underwriting Agreement*
6.2 Dealer Sales Agreement*
7. None
8. Custodian Agreement with Brown Brothers Harriman
& Co.*
9. Investment Company Service Agreement*
10. None
11. Consent of Arthur Andersen LLP*
12. None
13. Form of Stock Purchase Agreement**
14. None
15. Distribution Plan*
16. Description of Average Annual Total Return*
17. Financial Data Schedule*
18. Power of Attorney*
- ------------------------
* Filed electronically herewith.
** Incorporated by reference from exhibits filed with the Registration
Statement (File No. 2-32773). To be filed electronically by amendment.
Item 25. Persons Controlled By or Under
Common Control With Registrant
Percent State/Country
of of
Company Owned By Shares Incorporation
Pioneering Management Corp. (PMC) PGI 100% DE
Pioneering Services Corp. (PSC) PGI 100% MA
Pioneer Capital Corp. (PCC) PGI 100% MA
Pioneer Fonds Marketing GmbH (GmbH) PGI 100% MA
Pioneer SBIC Corp. (SBIC) PGI 100% MA
Pioneer Associates, Inc. (PAI) PGI 100% MA
Pioneer International Corp. (PInt) PGI 100% MA
Pioneer Plans Corp. (PPC) PGI 100% MA
Pioneer Goldfields Ltd (PGL) PGI 100% MA
Pioneer Investments Corp. (PIC) PGI 100% MA
Pioneer Metals and Technology, Inc.
(PMT) PGI 100% DE
Pioneer First Polish Trust Fund Joint
Stock Co. (First Polish) PGI 100% Poland
Teberebie Goldfields Ltd. (TGL) PGI 90% Ghana
Pioneer Funds Distributor, Inc. (PFD) PMC 100% MA
SBIC's outstanding capital stock PCC 100% MA
THE FUNDS: All are parties to management contracts with PMC.
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BUSINESS
FUND TRUST
Pioneer International Growth Fund MA
Pioneer Europe Fund MA
Pioneer Emerging Markets Fund DE
Pioneer India Fund DE
Pioneer Growth Trust MA
Pioneer Mid-Cap Fund DE
Pioneer Growth Shares DE
Pioneer Small Company Fund DE
Pioneer Fund MA
Pioneer II MA
Pioneer Real Estate Shares DE
Pioneer Short-Term Income Fund MA
Pioneer America Income Trust MA
Pioneer Bond Fund MA
Pioneer Income Fund DE
Pioneer Intermediate Tax-Free Fund MA
Pioneer Tax-Free Income Fund DE
Pioneer Tax-Free State Series Trust MA
Pioneer Money Market Trust DE
Pioneer Variable Contracts Trust DE
Pioneer Interest Shares, Inc. NE Corporation
OTHER:
.. SBIC is the sole general partner of Pioneer Ventures Limited Partnership,
a Massachusetts limited partnership.
.. ITI Pioneer AMC Ltd. (ITI Pioneer) (Indian Corp.), is a joint venture
between PMC and Investment Trust of India Ltd. (ITI) (Indian Corp.)
.. ITI and PMC own approximately 54% and 45%, respectively, of the total
equity capital of ITI Pioneer.
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<PAGE>
JOHN F. COGAN, JR.
Owns approximately 15% of the outstanding shares of PGI.
TRUSTEE/
ENTITY CHAIRMAN PRESIDENT DIRECTOR OTHER
Pioneer Family of Mutual Funds X X X
PGL X X X
PGI X X X
PPC X X
PIC X X
Pintl X X
PMT X X
PCC X
PSC X
PMC X X
PFD X X
TGL X X
First Polish X Member of
Supervisory
Board
Hale and Dorr Partner
GmbH Chairman of
Supervisory
Board
Item 26. Number of Holders of Securities
At September 30, 1995, there were approximately 397,769 holders of the
Registrant's shares.
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<PAGE>
Item 27. Indemnification
Except for the Declaration of Trust dated January 8, 1985,
establishing the Registrant as a Trust under Massachusetts 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. See the Registrant's undertaking with respect
to indemnification in Item 32 below.
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:
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
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<PAGE>
Stephen W. Long Senior None
Vice President
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
Mary Kleeman Vice President None
(c) Not applicable.
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.
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<PAGE>
Item 31. Management Services
The Registrant is not a party to any management-related service
contract, except as described in the Prospectus and the Statement of Additional
Information.
Item 32. Undertaking
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 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.
The Registrant further undertakes to limit indemnification of officers
and Trustees as follows:
Indemnification
Section 1. The Registrant shall indemnify each of its trustees and
officers (including persons who serve at the Registrant's request as directors,
trustees or officers of another organization in which the Registrant has any
interest as a shareholder, creditor or otherwise) (hereinafter referred to as a
"Covered Person") against all liabilities and expenses, including but not
limited to amounts paid in satisfaction of judgments, in compromise or as fines
and penalties, and counsel fees reasonably incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been involved
as a party or been threatened, while in office or thereafter, by reason of being
or having been such a Covered Person except with respect to any matter as to
which such Covered Person shall have been finally adjudicated in any such
action, suit or other proceeding (a) not to have acted in good faith in the
reasonable belief that such Covered Person's action was in the best interest of
the Registrant or (b) to be liable to the Registrant or its shareholders by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of such Covered Person's office,
("disabling conduct"). Expenses, including counsel fees so
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<PAGE>
incurred by any such Covered Person (but excluding amounts paid in satisfaction
of judgments, in compromise or as fines or penalties) shall be paid from time to
time by the Registrant in advance of the final disposition of any such action,
suit or proceeding upon receipt of an undertaking by or on behalf of such
Covered Person to repay amounts so paid to the Registrant if it is ultimately
determined that indemnification of such expenses is not authorized under
Sections 1, 2 and 3 hereof, provided, however, that either (a) such Covered
Person shall have provided appropriate security of such undertaking, (b) the
Registrant shall be insured against losses arising from any such advance
payments or (c) either a majority of the disinterested Trustees acting on the
matter (provided that a majority of the disinterested Trustees then in office
act on 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 be found entitled to indemnification under Section 1 or 2 hereof.
Compromise Payment
Section 2. As to any matter disposed of (whether by a compromise
payment, pursuant to a consent decree or otherwise) without an adjudication by a
court, or by any other body before which the proceeding was brought, that such
Covered Person either (a) did not act in good faith in the reasonable belief
that his or her action was in the best interests of the Registrant or (b) is
liable to the Registrant or its shareholders by reason of disabling conduct,
indemnification shall be provided if (a) approved as in the best interests of
the Registrant, after notice that it involves such indemnification, by at least
a majority of the disinterested Trustees acting on the matter (provided that a
majority of the disinterested Trustees then in office act on the matter) upon a
determination, based upon a review of readily available facts (as opposed to a
full trial type inquiry) that such Covered Person acted in good faith in the
reasonable belief that his or her action was in the best interests of the
Registrant and is not liable to the Registrant or its shareholders by reason of
disabling conduct, or (b) there has been obtained an opinion in writing of
independent legal counsel, based upon a review of readily available facts (as
opposed to a full trial type inquiry) to the effect that such Covered Person
appears to have acted in good faith in the reasonable belief that his or her
action was in the best interests of the Registrant and that such indemnification
would not protect such Covered Person against any liability to the Registrant to
which he or she would otherwise be subject by reason of disabling conduct. Any
approval pursuant to this Section shall not prevent the recovery from any
Covered Person of any amount paid to such Covered Person in accordance with this
Section as
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<PAGE>
indemnification if such Covered Person is subsequently adjudicated by a court of
competent jurisdiction not to have acted in good faith in the reasonable belief
that such Covered Person's action was in the best interests of the Registrant or
to have been liable to the Registrant or its shareholders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of such Covered Person's office.
Indemnification Not Exclusive
Section 3. The right of indemnification hereby provided shall not be
exclusive of or affect any other rights to which such Covered Person may be
entitled. As used in Sections 1, 2 and 3 hereof, the term "Covered Person" shall
include such person's heirs, executors and administrators, and a "disinterested
Trustee" is a Trustee who is not an "interested person" of the Registrant as
defined in Section 2(a)(19) of the 1940 Act, as amended (or who has been
exempted from being an "interested person" by any rule, regulation or order of
the Commission and against whom none of such actions, suits or other proceedings
or another action, suit or other proceeding on the same or similar grounds is
then or has been pending). Nothing contained in Sections 1, 2 and 3 hereof shall
affect any rights to indemnification to which personnel of the Registrant, other
than Trustees or officers, and other persons may be entitled by contract or
otherwise under law, nor the power of the Registrant to purchase and maintain
liability insurance on behalf of any such person; provided, however, that the
Registrant shall not purchase or maintain any such liability insurance in
contravention of applicable law, including without limitation the 1940 Act, and
the rules and regulations thereunder.
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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 has duly caused this
Post-Effective Amendment No. 44 to its Registration Statement (the "Amendment")
(which meets all the requirements for effectiveness pursuant to paragraph (b) of
Rule 485 and the Securities Act of 1933) to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Boston and The
Commonwealth of Massachusetts, on the 26th day of January, 1996.
PIONEER II
By: /s/John F. Cogan, Jr.
John F. Cogan, Jr.
Chairman
Pursuant to the requirements of the Securities Act of 1933, this
Amendment has been signed below by the following persons in the capacities and
on the dates indicated:
Signature Date
Principal Executive Officer: )
)
)
/s/John F. Cogan, Jr. )
John F. Cogan, Jr. )
)
)
Principal Financial and ) January 26, 1996
Accounting Officer: )
)
)
)
/s/William H. Keough )
William H. Keough, Treasurer* )
<PAGE>
A MAJORITY OF THE BOARD OF TRUSTEES:
)
/s/John F. Cogan, Jr. )
John F. Cogan, Jr. )
)
)
/s/John W. Kendrick )
John W. Kendrick* )
)
)
/s/Marguerite A. Piret )
Marguerite A. Piret* )
)
)
/s/David D. Tripple )
David D. Tripple* )
)
)
/s/John Winthrop ) January 26, 1996
John Winthrop* )
)
)
/s/Margaret B.W. Graham )
Margaret B.W. Graham* )
)
)
/s/Richard H. Egdahl, M.D. )
Richard H. Egdahl, M.D.* )
)
)
/s/Stephen K. West )
Stephen K. West* )
*By: /s/John F. Cogan, Jr.
John F. Cogan, Jr.
Attorney-in-fact
<PAGE>
Exhibit Index
Exhibit
Number Document Title
1. Declaration of Trust
2. By-Laws
5. Management Contract
6.1 Underwriting Agreement
6.2 Dealer Sales Agreement
8. Custodian Agreement
with Brown Brothers Harriman & Co.
9. Investment Company Service Agreement
11. Consent of Arthur Andersen LLP
15. Distribution Plan
16. Description of Average Annual Total Return
17. Financial Data Schedule
18. Power of Attorney
DECLARATION OF TRUST
PIONEER II
<PAGE>
TABLE OF CONTENTS
ARTICLE I
NAME AND DEFINITIONS
Section Page
1. Name and Principal Place of Business............................ 1
2. Definitions..................................................... l
ARTICLE II
PURPOSE OF TRUST
Section Page
1. Purpose of Trust................................................ 2
ARTICLE III
BENEFICIAL INTEREST
Section Page
1. Shares of Beneficial Interest................................... 2
2. Establishment of Series......................................... 3
3. Ownership of Shares............................................. 3
4. Investment in the Trust......................................... 3
5. Assets and Liabilities of Series................................ 4
6. No Preemptive Rights............................................ 5
7. Status of Shares and Limitation of Personal Liability........... 5
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<PAGE>
ARTICLE IV
THE TRUSTEES
Section Page
1. Management of the Trust......................................... 5
2. Election: Initial Trustees...................................... 5
3. Term of Office of Trustees...................................... 6
4. Resignation and Appointment of Trustees......................... 6
5. Temporary Absence of Trustee.................................... 7
6. Number of Trustees.............................................. 7
7. Effect of Death, Resignation, Etc. of a Trustee................. 7
8. Ownership of Assets of the Trust................................ 7
ARTICLE V
POWERS OF THE TRUSTEES
Section Page
l. Powers.......................................................... 8
2. Trustees and Officers as Shareholders.......................... 11
3. Action by the Trustees......................................... 11
4. Chairman of the Trustees....................................... 11
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<PAGE>
ARTICLE VI
EXPENSES OF THE TRUST
Section Page
1. Trustee Reimbursement........................................... 12
ARTICLE VII
INVESTMENT ADVISOR, PRINCIPAL UNDERWRITER AND TRANSFER AGENT
Section Page
1. Investment Advisor............................................. 12
2. Principal Underwriter........................................... 13
3. Transfer Agent.................................................. 13
4. Parties to Contract............................................. 14
5. Provisions and Amendments....................................... 14
ARTICLE VIII
SHAREHOLDERS VOTING POWERS AND MEETINGS
Section Page
1. Voting Powers................................................... 14
2. Meetings........................................................ 15
3. Quorum and Required Vote........................................ 16
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<PAGE>
ARTICLE IX
CUSTODIAN
Section Page
1. Appointment and Duties.......................................... 16
2. Central Certificate System...................................... 17
ARTICLE X
DISTRIBUTIONS AND REDEMPTIONS
Section Page
1. Distributions................................................... 18
2. Redemption of Shares............................................ 18
3. Determination of Net Asset Value and Valuation
of Portfolio Assets............................................. 19
4. Suspension of the Right of Redemption........................... 19
ARTICLE XI
COMPENSATION AND LIMITATION OF LIABILITY OF TRUSTEES
Section Page
1. Compensation.................................................... 20
2. Limitation of Liability......................................... 2O
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<PAGE>
ARTICLE XII
INDEMNIFICATION
Section Page
1. Covered Persons................................................. 2O
2. Shareholders.................................................... 23
ARTICLE XIII
MISCELLANEOUS
Section Page
1. Trust Not A Partnership; Trustees, Shareholders,
Etc. Not Personally Liable; Notice.............................. 23
2. Trustee's Good Faith Action, Expert Advice,
No Bond or Surety............................................... 24
3. Establishment of Record Dates................................... 24
4. Termination of Trust............................................ 25
5. Filing of Copies, References, Headings,
Gender, Etc............................................................. 26
6. Applicable Law.................................................. 26
7. Amendments...................................................... 27
8. Fiscal Year..................................................... 27
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<PAGE>
DECLARATION OF TRUST
DATED January 8, 1985
DECLARATION OF TRUST, made January 8, 1985 by Philip L. Carret,
John F. Cogan, Jr., George R. Cooley, Franklin R. Johnson, John W. Kendrick,
Marguerite A. Piret and Edwards C. Whitmore (the "Trustees"), and by the holders
of shares of beneficial interest to be issued hereunder as hereina(pound)ter
provided (the "Shareholders").
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust fund hereunder shall be held and managed in trust under
this Declaration of Trust as herein set forth below.
ARTICLE I
NAME AND DEFINITIONS
NAME AND PRINCIPAL PLACE OF BUSINESS
Section l. This Trust shall be known as "Pioneer II", and the
Trustees shall conduct the business of the Trust under that name or any other
name as they may from time to time determine. The principal place of business of
the Trust shall be 60 State Street, Boston, Massachusetts.
DEFINITIONS
Section 2. Wherever used herein, unless otherwise required by the
context or specifically provided:
(a) The Terms "Affiliated Person", "Assignment",
"Commission", "Interested Person" Majority Shareholder Vote" (the
67% or 50% requirement of the third sentence of Section 2(a) (42)
of the 1940 Act, whichever may be applicable) and "Principal
Underwriter" shall have the meanings given them in the 1940 Act, as
amended from time to time;
(b) The "Trust" refers to Pioneer II and reference to the
Trust, when applicable to one or more Series of the Trust, shall
refer to any such Series;
<PAGE>
(c) "Net Asset Value" means the net asset value of each
Series of the Trust determined in the manner provided in Article X,
Section 3;
(d) "Shareholder" means a record owner of Shares of the
Trust;
(e) The "Trustees" refer to the individual Trustees in their
capacity as trustees hereunder of the Trust and their successor or
successors for the time being in office as such trustee or
trustees;
(f) "Shares" means the equal proportionate transferable units
of interest into which the beneficial interest of each Series shall
be divided from time to time, and includes fractions of shares as
well as whole shares consistent with the requirements of Federal
and/or other securities laws;
(g) The "1940 Act" refers to the Investment Company Act of
1940, as amended from time to time;
(h) "Series" refers to series of Shares, which may be
established, of the Trust established in accordance with the
provisions of Article III; and
(i) "Bylaws" shall mean the Bylaws of the Trust as amended
from time to time.
ARTICLE II
PURPOSE OF TRUST
Section l. The purpose of this Trust is to provide investors a
continuous source of managed investment in securities and debt instruments
selected by the Trustees or by an investment adviser under their direction to
carry out the investment policies and achieve the investment objectives of the
Trust or any Series thereof.
ARTICLE III
BENEFICIAL INTEREST
SHARES OF BENEFICIAL INTEREST
Section l. The beneficial interest in the Trust shall be divided
into such transferable Shares which may be of one or
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<PAGE>
more separate and distinct Series as the Trustees shall from time to time create
and establish. The number of Shares is unlimited and each Share shall have $1.00
par value and, when duly issued and paid for, in accordance with the terms and
conditions of the Trust and any authorized offering Prospectus relating thereto,
shall be fully paid and nonassessable. The Trustees shall have full power and
authority, in their sole discretion and without obtaining any prior
authorization or vote of the Shareholders of the Trust, to create and establish
(and to change hereafter in any manner not materially adverse to the interests
of the shareholders of the Trust) Shares with such preferences, voting powers,
rights and privileges as the Trustees may from time to time determine, to divide
or combine the Shares into a greater or lesser number, to classify or reclassify
any issued Shares into one or more Series of Shares, to abolish any one or more
Series of Shares, and to take such other action consistent with the foregoing
with respect to the Shares as the Trustees may deem desirable.
ESTABLISHMENT OF SERIES
Section 2. The establishment of any Series shall be effective upon
the adoption of a resolution by a majority of the then Trustees setting forth
such establishment and designation and the relative rights and preferences of
the Shares of such Series. At any time that there are no Shares outstanding of
any particular Series previously established and designated, the Trustees may by
a majority vote abolish that Series and the establishment and designation
thereof.
OWNERSHIP OF SHARES
Section 3. The ownership of Shares shall be recorded in the books
of the Trust or a transfer or similar agent. The Trustees may make such rules as
they consider appropriate for the transfer of Shares and similar matters. The
record books of the Trust shall be conclusive as to who are the record holders
of Shares and as to the number of Shares held from time to time by each such
Shareholder.
INVESTMENT IN THE TRUST
Section 4. The Trustees shall accept investments in the Trust from
such persons and on such terms as they may from time to time authorize. Such
investments may be in the form of cash or securities in which the appropriate
Series is authorized to
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<PAGE>
invest, valued as provided in Article X, Section 3. After the date of the
initial contribution of capital, the number of Shares to represent the initial
contribution may in the Trustees' discretion be considered as outstanding and
the amount received by the Trustees on account of the contribution shall be
treated as an asset of the Trust. Subsequent investments in the Trust shall be
credited to each Shareholder's account in the form of full or fractional Shares
at the Net Asset Value per Share next determined after the investment is
received; provided, however, that the Trustees may, in their sole discretion
impose a sales charge upon investments in the Trust. Anything herein to the
contrary notwithstanding, certificates for fractional Shares shall not be issued
at any time.
ASSETS AND LIABILITIES OF SERIES
Section 5. 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
referred to as "assets belonging to" that Series. In addition 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 of the Series in such
manner as they, in their sole discretion, deem fair and equitable. Each such
allocation shall be conclusive and binding upon the Shareholders of all Series
for all purposes, and shall be referred to as assets belonging to that Series.
The assets belonging to a particular 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
holders of Shares of that Series. The assets belonging to each particular Series
shall be charged with the liabilities of that Series and all expenses, costs,
charges and reserves attributable to that Series. Any general liabilities,
expenses, costs, charges or reserves of the Trust which are not readily
identifiable as belonging to any particular Series shall be allocated and
charged by the Trustees between or among any one or more of the Series in such
manner as the Trustees in their sole discretion deem fair and equitable, and
shall be referred to as "liabilities of" that Series. Each such allocation shall
be conclusive and binding upon the Shareholders of all Series for all purposes.
Any creditor of any Series may look only to the assets of that Series to satisfy
such creditor's debt.
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<PAGE>
NO PREEMPTIVE RIGHTS
Section 6. Shareholders shall have no preemptive or other right to
subscribe to any additional Shares or other securities issued by the Trust or
the Trustees.
STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY
Section 7. Shares shall be deemed to be personal property giving
only the rights provided in this instrument. Every Shareholder by virtue of
having become a Shareholder shall be held to have expressly assented and agreed
to the terms hereof and to have become a party hereof. The death of a
Shareholder during the continuance of the Trust shall not operate to terminate
the same or entitle the representative of any deceased Shareholder to an
accounting or to take any action in court or elsewhere against the Trust or the
Trustees, but only to the rights of said decedent 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 nor any right to call for a partition or division of
the same or for an accounting. The Trustees shall have no power to bind any
Shareholder personally or to call upon any Shareholder for the payment of any
sum of money or assessment whatsoever other than such as the Shareholder may at
any time personally agree to pay by way of subscription for any Shares or
otherwise. Every note, bond, contract or other undertaking issued by or on
behalf of the Trust or the Trustees relating to the Trust shall include a
recitation limiting the obligation represented thereby to the Trust and its
assets (but the omission of such a recitation shall not operate to bind any
Shareholder).
ARTICLE IV
THE TRUSTEES
MANAGEMENT OF THE TRUST
Section l. The business and affairs of the Trust shall be managed
by the Trustees, and they shall have all powers necessary and desirable to fully
carry out that responsibility.
ELECTION: INITIAL TRUSTEES
Section 2. On a date fixed by the Trustees, the Shareholders shall
elect not less than three Trustees. A Trustee
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<PAGE>
shall not be required to be a Shareholder of the Trust. The initial Trustees
shall be Philip L. Carret, John F. Cogan, Jr., George R. Cooley, Franklin R.
Johnson, John W. Kendrick, Marguerite A. Piret, and Edwards C. Whitmore and such
other individuals as the Board of Trustees shall appoint pursuant to Section 4
of Article IV.
TERM OF OFFICE OF TRUSTEES
Section 3. The Trustees shall hold office during the lifetime of
this Trust, and until its termination as hereinafter provided; except (a) that
any Trustee may resign his trust by written instrument signed by him and
delivered to the other Trustees, which shall take effect upon such delivery or
upon such later date as is specified therein; (b) that any Trustee may be
removed at any time by written instrument, signed by at least two-thirds of the
number of Trustees prior to such removal, specifying the date when such removal
shall become effective; (c) that any Trustee who requests in writing to be
retired or who has become incapacitated by illness or injury may be retired by
written instrument signed by a majority of the other Trustees, specifying the
date of his retirement; and (d) a Trustee may be removed at any Special Meeting
of the Trust by a vote of two-thirds of the outstanding Shares.
RESIGNATION AND APPOINTMENT OF TRUSTEES
Section 4. In case of the declination, death, resignation,
retirement, removal, incapacity, or inability of any of the Trustees, or in case
a vacancy shall, by reason of an increase in number, or for any other reason,
exist, the remaining Trustees shall fill such vacancy by appointing such other
person as they in their discretion shall see fit consistent with the limitations
under the Investment Company Act of 1940. Such appointment shall be evidenced by
a written instrument signed by a majority of the Trustees in office or by
recording in the records of the Trust, whereupon the appointment shall take
effect. Within three months of such appointment the Trustees shall cause notice
of such appointment to be mailed to each Shareholder at his address as recorded
on the books of the Trust. An appointment of a Trustee may be made by the
Trustees then in office and notice thereof mailed to Shareholders as aforesaid
in anticipation of a vacancy to occur by reason of retirement, resignation or
increase in number of Trustees effective at a later date, provided that said
appointment shall become effective only at or after the effective date of said
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<PAGE>
retirement, resignation or increase in number of Trustees. As soon as any
Trustee so appointed shall have accepted this trust, the trust estate shall vest
in the new Trustee or Trustees, together with the continuing Trustees, without
any further act or conveyance, and he shall be deemed a Trustee hereunder. The
power of appointment is subject to the provisions of Section 16(a) of the 1940
Act.
TEMPORARY ABSENCE OF TRUSTEE
Section 5. Any Trustee may, by power of attorney, delegate his
powers hereunder for a period not exceeding six months at any one time to any
other Trustee or Trustees, provided that in no case shall less than two Trustees
personally exercise the other powers hereunder except as herein otherwise
expressly provided.
NUMBER OF TRUSTEES
Section 6. The number of Trustees, not less than three (3) nor more
than nine (9), serving hereunder at any time shall be determined by the Trustees
themselves.
Whenever a vacancy in the Board of Trustees shall occur, until such
vacancy is filled, or while any Trustee is absent from The Commonwealth of
Massachusetts or, if not a domiciliary of Massachusetts, is absent from his
state of domicile, or is physically or mentally incapacitated by reason of
disease or otherwise, the other Trustees shall have all the powers hereunder and
the certificate of the other Trustees of such vacancy, absence or incapacity,
shall be conclusive, provided, however, that no vacancy shall remain unfilled
for a period longer than six calendar months.
EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE
Section 7. The death, declination, resignation, retirement,
removal, incapacity, or inability 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 of Trust.
OWNERSHIP OF ASSETS OF THE TRUST
Section 8. The assets of the Trust shall be held separate and apart
from any assets now or hereafter held in any capacity other than as Trustee
hereunder by the Trustees or any
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successor Trustees. All of the assets of the Trust shall at all times be
considered as vested in the Trustees. No Shareholder shall be deemed to have a
severable ownership in any individual asset of the Trust or any right of
partition or possession there- of, but each Shareholder shall have a
proportionate undivided beneficial interest in the Trust.
ARTICLE V
POWERS OF THE TRUSTEES
POWERS
Section l. The Trustees in all instances shall act as principals,
and are and shall be free from the control of the Shareholders. The Trustees
shall have full power and authority to do any and all acts and to make and
execute any and all contracts and instruments that they may consider necessary
or appropriate in connection with the management of the Trust. The Trustees
shall not in any way be bound or limited by present or future laws or customs in
regard to trust investments, but shall have full authority and power to make any
and all investments which they, in their uncontrolled discretion, shall deem
proper to accomplish the purpose of this Trust. Subject to any applicable
limitation in the Declaration of Trust or the Bylaws, the Trustees shall have
power and authority:
(a) To invest and reinvest cash and other property, and to
hold cash or other property uninvested, without in any event being
bound or limited by any present or future law or custom in regard
to investments by Trustees, and to sell, exchange, lend, pledge,
mortgage, hypothecate, write options on and lease any or all of the
assets of the Trust.
(b) To adopt Bylaws not inconsistent with this Declaration of
Trust providing for the conduct of the business of the Trust and to
amend and repeal them to the extent that right is not reserved to
the Shareholders.
(c) To elect and remove such officers and appoint and
terminate such agents as they consider appropriate.
(d) To employ one or more banks or trust companies as
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custodian of any assets of the Trust subject to any conditions set forth in the
law, this Declaration of Trust or in the Bylaws, if any.
(e) To retain a transfer agent and Shareholder servicing
agent, or both.
(f) To provide for the issuance and distribution of Shares of
the Trust or Series thereof, either through a principal underwriter
in the manner hereinafter provided for or by the Trust itself, or
both, or to temporarily or permanently discontinue such issuance or
distribution.
(g) To set record dates in the manner hereinafter provided
for.
(h) To delegate such authority as they consider desirable to
any officers of the Trust and to any agent, custodian or
underwriter.
(i) To sell or exchange any or all of the assets of the
Trust, subject to the provisions of Article XIII, Section 4(b)
hereof.
(j) To vote or give assent, or exercise any rights of
ownership, with respect to stock or other securities or property;
and to execute and deliver powers of attorney to such person or
persons as the Trustees shall deem proper, granting to such person
or persons such power and discretion with relation to securities or
property as the Trustees shall deem proper.
(k) To exercise powers and rights of subscription or
otherwise which in any manner arise out of ownership of securities.
(l) To hold any security or property in a form not indicating
any trust, whether in bearer, bookkeeping entry, unregistered or
other negotiable form; or either in its own name or in the name of
a custodian or a nominee or nominees, subject in either case to
proper safeguards according to the usual practice of investment
companies.
(m) To establish separate and distinct Series with separately
defined investment objectives and policies
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and distinct investment purposes in accordance with the provisions of Article
III.
(n) To allocate assets, liabilities and expenses of the Trust
to a particular Series or to apportion the same between or among
two or more Series, provided that any liabilities or expenses
incurred by a particular Series shall be payable solely out of the
assets belonging to that Series as provided for in Article III.
(o) To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation,
partnership, or concern, any security of which is held in the
Trust; to consent to any contract, lease, mortgage, purchase, or
sale of property by such corporation, partnership, or concern, and
to pay calls or subscriptions with respect to any security held in
the Trust.
(p) 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.
(q) To pay dividends and other distributions of income and of
capital gains to Shareholders in the manner hereinafter provided
for.
(r) To borrow money from a bank for temporary or emergency
purposes and not for investment purposes. The Trustees shall not
pledge, mortgage or hypothecate the assets of the Trust except
that, to secure borrowings, the Trustees may pledge securities.
(s) To adopt such form or forms of Share Certificates as the
Trustees may, from time to time, deem appropriate.
(t) To establish, from time to time, a minimum or maximum
total investment for Shareholders, and to require the redemption in
whole or in part, of the Shares of any Shareholders whose
investment is less than or greater than such minimum or maximum, as
the case may be, upon giving notice to such Shareholder.
No one dealing with the Trustees shall be under any obligation to make any
inquiry concerning the authority of the
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Trustees, or to see to the application of any payments made or property
transferred to the Trustees or upon their order.
TRUSTEES AND OFFICERS AS SHAREHOLDERS
Section 2. Any Trustee, officer or other agent of the Trust may
acquire, own and dispose of Shares to the same extent as if he were not a
Trustee, officer or agent; and the Trustees may issue and sell or cause to be
issued and sold Shares to and buy such Shares from any such person or any firm
or company in which he is interested, subject only to the general limitations
herein contained as to the sale and purchase of such Shares; and all subject to
any restrictions which may be contained in the Bylaws.
ACTION BY THE TRUSTEES
Section 3. The Trustees shall act by majority vote at a meeting
duly called or by unanimous written consent without a meeting or by telephone
consent provided a quorum of Trustees participate in any such telephonic
meeting, unless the 1940 Act requires that a particular action be taken only at
a meeting of the Trustees. At any meeting of the Trustees, a majority of the
Trustees shall constitute a quorum. Meetings of the Trustees may be called
orally or in writing by the Chairman of the Trustees or at his order or
direction or by any two other Trustees. Notice of the time, date and place of
all meetings of the Trustees shall be given by the party calling the meeting to
each Trustee by telephone or telegram sent to his home or business address at
least twenty-four hours in advance of the meeting or by written notice mailed to
his home or business address at least seventy-two hours in advance of the
meeting. Notice need not be given to any Trustee who attends the meeting without
objecting to the lack of notice or who executes a written waiver of notice with
respect to the meeting. Subject to the requirements of the 1940 Act, the
Trustees by majority vote may delegate to any one of their number their
authority to approve particular matters or take particular actions on behalf of
the Trust.
CHAIRMAN OF THE TRUSTEES
Section 4. The Trustees may appoint one of their number to be
Chairman of the Board of Trustees. The Chairman shall preside at all meetings of
the Trustees, and he may be the chief executive, financial and accounting
officer of the Trust.
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ARTICLE VI
EXPENSES OF THE TRUST
TRUSTEE REIMBURSEMENT
Section l. Subject to the provisions of Article III, Section 5, the
Trustees shall be reimbursed from the Trust estate or the assets belonging to
the appropriate Series for their expenses and disbursements, including, without
limitation, fees and expenses of Trustees who are not Interested Persons of the
Trust, interest expense, taxes, fees and commissions of every kind, expenses of
pricing Trust portfolio securities, expenses of issue, repurchase and redemption
of shares including expenses attributable to a program of periodic repurchases
or redemptions, expenses of registering and qualifying the Trust and its Shares
under Federal and State laws and regulations, charges of custodians, transfer
agents, and registrars, expenses of preparing and setting up in type
Prospectuses and Statements of Additional Information, expenses of printing and
distributing prospectuses sent to existing Shareholders, auditing and legal
expenses, reports to Shareholders, expenses of meetings of Shareholders and
proxy solicitations therefor, insurance expense, association membership dues and
for such non-recurring items as may arise, including litigation to which the
Trust is a party, and for all losses and liabilities by them incurred in
administering the Trust, and for the payment of such expenses, disbursements,
losses and liabilities the Trustees shall have a lien on the assets belonging to
the appropriate Series prior to any rights or interests of the Shareholders
thereto. This section shall not preclude the Trust from directly paying any of
the aforementioned fees and expenses.
ARTICLE VII
INVESTMENT ADVISER, PRINCIPAL UNDERWRITER AND TRANSFER AGENT
INVESTMENT ADVISER
Section l. Subject to a Majority Shareholder Vote, the Trustees may
in their discretion from time to time enter into an investment advisory or
management contract(s) with respect to the Trust or any Series thereof whereby
the other party(ies) to such contract(s) shall undertake to furnish the Trustees
such management, investment advisory, statistical and research facilities and
services and such other facilities and services, if
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any, and all upon such terms and conditions, as the Trustees may in their
discretion determine. Notwithstanding any provisions of this Declaration of
Trust, the Trustees may authorize the investment adviser(s) (subject to such
general or specific instructions as the Trustees may from time to time adopt) to
effect purchases, sales or exchanges of portfolio securities and other
investment instruments of the Trust on behalf of the Trustees or may authorize
any officer, agent, or Trustee to effect such purchases, sales or exchanges
pursuant to recommendations of the investment adviser (and all without further
action by the Trustees). Any such purchases, sales and exchanges shall be deemed
to have been authorized by all of the Trustees.
The Trustees may, subject to applicable requirements of the 1940
Act, including those relating to Shareholder approval, authorize the investment
adviser to employ one or more sub-advisers from time to time to perform such of
the acts and services of the investment adviser, and upon such terms and
conditions, as may be agreed upon between the investment adviser and
sub-adviser.
PRINCIPAL UNDERWRITER
Section 2. The Trustees may in their discretion from time to time
enter into (a) contract(s) providing for the sale of the Shares, whereby the
Trust may either agree to sell the Shares to the other party to the contract or
appoint such other party its sales agent for such Shares. In either case, the
contract shall be on such terms and conditions as may be prescribed in the
Bylaws, if any, and such further terms and conditions as the Trustees may in
their discretion determine not inconsistent with the provisions of this Article
VII, or of the Bylaws, if any; and such contract may also provide for the
repurchase or sale of Shares by such other party as principal or as agent of the
Trust.
TRANSFER AGENT
Section 3. The Trustees may in their discretion from time to time
enter into a transfer agency and Shareholder service contract whereby the other
party shall undertake to furnish the Trustees with transfer agency and
Shareholder services. The contract shall be on such terms and conditions as the
Trustees may in their discretion determine not inconsistent with the provisions
of this Declaration of Trust or of the Bylaws, if any.
Such services may be provided by one or more entities.
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PARTIES TO CONTRACT
Section 4. Any contract of the character described in Sections l, 2
and 3 of this Article VII or in Article IX hereof may be entered into with any
corporation, firm, partnership, trust or association, although one or more of
the Trustees or officers of the Trust may be an officer, director, trustee,
shareholder, partner or member of such other party to the contract, and no such
contract shall be invalidated or rendered voidable by reason of the existence of
any such relationship, nor shall any person holding such relationship be liable
merely by reason of such relationship for any loss or expense to the Trust under
or by reason of said contract or accountable for any profit realized directly or
indirectly therefrom, provided that the contract when entered into was
reasonable and fair and not inconsistent with the provisions of this Article VII
or the Bylaws, if any. The same person (including a firm, corporation,
partnership, trust, or association) may be the other party to contracts entered
into pursuant to Sections l, 2 and 3 above or Article IX, and any individual may
be financially interested or otherwise affiliated with persons who are parties
to any or all of the contracts mentioned in this Section 4.
PROVISIONS AND AMENDMENTS
Section 5. Any contract entered into pursuant to Sections l and 2
of this Article VII shall be consistent with and subject to the requirements of
Section 15 of the 1940 Act (including any amendments thereof or other applicable
Act of Congress hereafter enacted) with respect to its continuance in effect,
its termination, and the method of authorization and approval of such contract
or renewal thereof, and no amendment to any contract, entered into pursuant to
Section l shall be effective unless assented to by a majority Shareholder Vote.
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
VOTING POWERS
Section l. The Shareholders shall have power to vote (i) for the
election of Trustees as provided in Article IV, Section 2, (ii) for the removal
of Trustees as provided in Article IV, Section 3(d), (iii) with respect to any
investment advisory or management contract as provided in Article VII,
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Section l, (iv) with respect to the amendment of this Declaration of Trust as
provided in Article XIII, Section 7, (v) to the same extent as the shareholders
of a Massachusetts business corporation, as to whether or not a court action,
proceeding or claim should be brought or maintained derivatively or as a class
action on behalf of the Trust or the Shareholders, provided, however, that a
Shareholder of a particular Series shall not be entitled to bring any derivative
or class action on behalf of any other Series of the Trust, and (vi) with
respect to such additional matters relating to the Trust as may be required or
authorized by law, by this Declaration of Trust, or the Bylaws, if any, or any
registration of the Trust with the Securities and Exchange Commission (the
"Commission") or any State, as the Trustees may consider desirable. On any
matter submitted to a vote of the Shareholders, all shares shall be voted by
individual Series, except (i) when required by the 1940 Act, Shares shall be
voted in the aggregate and not by individual Series; and (ii) when the Trustees
have determined that the matter affects only the interests of one or more
Series, then only the Shareholders of such Series shall be entitled to vote
thereon. 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. Until Shares
are issued, the Trustees may exercise all rights of Shareholders and may take
any action required or permitted by law, this Declaration of Trust or any Bylaws
of the Trust to be taken by Shareholders.
MEETINGS
Section 2. The first Shareholders' meeting shall be
held as specified in Section 2 of Article IV at the principal office of the
Trust or such other place as the Trustees may designate. Special meetings of the
Shareholders of any Series may be called by the Trustees and shall be called by
the Trustees upon the written request of Shareholders owning at least one-tenth
of the outstanding Shares entitled to vote. Whenever ten or more Shareholders
meeting the qualifications set forth in Section 16(c) of the 1940 Act, as the
same may be amended from time to time, seek the opportunity of furnishing
materials to the other Shareholders with a view to obtaining signatures on such
a request for a meeting, the Trustees shall comply with the provisions of said
Section 16(c) with respect to providing such Shareholders access to the list of
the Shareholders of record of the Trust or the mailing of such materials to such
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Shareholders of record. Shareholders shall be entitled to at least fifteen days'
notice of any meeting.
QUORUM AND REQUIRED VOTE
Section 3. A majority of Shares entitled to vote in person or by
proxy shall be a quorum for the transaction of business at a Shareholders'
meeting, except that where any provision of law or of this Declaration of Trust
permits or requires that holders of any Series shall vote as a Series, then a
majority of the aggregate number of Shares of that Series entitled to vote shall
be necessary to constitute a quorum for the transaction of business by that
Series. Any lesser number shall be sufficient for adjournments. Any adjourned
session or sessions may be held, within a reasonable time after the date set for
the original meeting, without the necessity of further notice. Except when a
larger vote is required by any provision of this Declaration of Trust or the
Bylaws, a majority of the Shares voted in person or by proxy shall decide any
questions and a plurality shall elect a Trustee, provided that where any
provision of law or of this Declaration of Trust permits or requires that the
holders of any Series shall vote as a Series, then a majority of the Shares of
that Series voted on the matter shall decide that matter insofar as that Series
is concerned.
ARTICLE IX
CUSTODIAN
APPOINTMENT AND DUTIES
Section l. The Trustees shall at all times employ one or several
banks or trust companies, each having capital, surplus and undivided profits of
at least two million dollars ($2,000,000) as custodian with authority as its
agent, but subject to such restrictions, limitations and other requirements, if
any, as may be contained in the Bylaws:
(l) to hold the securities owned by the Trust and deliver the
same upon written order;
(2) to receive and receipt for any moneys due to the Trust
and deposit the same in its own banking department or elsewhere as
the Trustees may direct; and
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(3) to disburse such funds upon orders or vouchers;
and the Trust may also employ such custodian or custodians as its agent:
(l) to keep the books and accounts of the Trust and furnish
clerical and accounting services; and
(2) to compute, if authorized to do so by the Trustees, the
Net Asset Value of any Series in accordance with the provisions
hereof;
all upon such basis of compensation as may be agreed upon between the Trustees
and the custodian(s). If so directed by a Majority Shareholder Vote, the
custodian(s) shall deliver and pay over all property of the Trust held by it as
specified in such vote.
The Trustees may also authorize the custodian(s) to employ one or
more sub-custodians from time to time to perform such of the acts and services
of the custodian(s), and upon such terms and conditions, as may be agreed upon
between the custodian(s) and such sub-custodian and approved by the Trustees,
provided that in every case such sub-custodian shall be a bank or trust company
organized under the laws of the United States or one of the states thereof and
having capital, surplus and undivided profits of at least two million dollars
($2,000,000) or such other person as may be permitted by the Commission, or
otherwise in accordance with the 1940 Act as from time to time amended.
CENTRAL CERTIFICATE SYSTEM
Section 2. Subject to such rules, regulations and orders as the
Commission may adopt, the Trustees may direct the custodian(s) to deposit all or
any part of the securities owned by the Trust in a system for the central
handling of securities established by a national securities exchange or a
national securities association registered with the Commission under the
Securities Exchange Act of 1934, or such other person as may be permitted by the
Commission, or otherwise in accordance with the 1940 Act as from time to time
amended, pursuant to which system all securities of any particular class or
series of any issuer deposited within the system are treated as fungible and may
be transferred or pledged by bookkeeping entry without physical
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delivery of such securities, provided that all such deposits shall be subject to
withdrawal only upon the order of the Trust.
ARTICLE X
DISTRIBUTIONS AND REDEMPTIONS
DISTRIBUTIONS
Section l.
(a) The Trustees may from time to time declare and pay
dividends and other distributions. The amount of such dividends and
other distributions and the payment of them shall be wholly in the
discretion of the Trustees.
(b) The Trustees shall have power, to the fullest extent
permitted by the laws of Massachusetts, at any time to declare and
cause to be paid dividends and other distributions on Shares of a
particular Series, from the assets belonging to that Series, which
dividends or other distributions, at the election of the Trustees,
may be paid daily or otherwise pursuant to a standing resolution or
resolutions adopted only once or with such frequency as the
Trustees may determine, and may be payable in Shares of that Series
at the election of each Shareholder of that Series.
(c) Anything in this instrument to the contrary
notwithstanding, the Trustees may at any time declare and
distribute pro rata among the Shareholders of a particular Series
as of the record date of that Series fixed as provided in Section 3
hereof a "stock dividend."
REDEMPTION Of SHARES
Section 2. In case any holder of record of Shares of a particular
Series desires to dispose of his Shares, he may deposit at the office of the
transfer agent or other authorized agent of-that Series a written request or
such other form of request as the Trustees may from time to time authorize,
requesting that the Series redeem or purchase the Shares in accordance with this
Section 2; and the Shareholder so requesting shall be entitled to
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require the Series to redeem or purchase, and the Series or the principal
underwriter of the Series shall redeem or purchase his said Shares, but only at
the Net Asset Value thereof (as described in Section 3 hereof)o The Series shall
make payment for any such Shares to be redeemed or purchased, as aforesaid, in
cash from the assets of that Series and payment for such Shares shall be made by
the Series or the principal underwriter of the Series to the Shareholder of
record within seven (7) days after the date upon which the request is effective.
DETERMINATION OF NET ASSET VALUE AND
VALUATION OF PORTFOLIO ASSETS
Section 3. The term "Net Asset Value" of any Series shall mean that
amount by which the assets of that Series, exceed its liabilities, all as
determined by or under the direction of the Trustees. Such value per Share shall
be determined separately for each Series of Shares and shall be determined on
such days and at such times as the Trustees may determine. Such determination
shall be made with respect to securities for which market quotations are readily
available, at the market value of such securities; and with respect to other
securities and assets, at the fair value as determined in good faith by the
Trustees, provided, however, that the Trustees, without Shareholder approval,
may alter the method of appraising portfolio securities insofar as permitted
under the 1940 Act and the rules, regulations and interpretations thereof
promulgated or issued by the Commission or insofar as permitted by any Order of
the Commission applicable to the Series. The Trustees may delegate any of their
powers and duties under this Section 3 with respect to appraisal of assets and
liabilities. At any time the Trustees may cause the value per Share last
determined to be determined again in similar manner and may fix the time when
such redetermined value shall become effective.
SUSPENSION OF THE RIGHT OF REDEMPTION
Section 4. The Trustees may declare a suspension of the right of
redemption or postpone the date of payment as permitted under the 1940 Act. Such
suspension shall take effect at such time as the Trustees shall specify but not
later than the close of business on the business day next following the
declaration of suspension, and thereafter there shall be no right of redemption
or payment until the Trustees shall declare the suspension at an end. In the
case of a suspension of the right of redemption, a Shareholder may either
withdraw his request for redemption
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or receive payment based on the Net Asset Value per Share existing after the
termination of the suspension
ARTICLE XI
COMPENSATION AND LIMITATION OF LIABILITY OF TRUSTEES
COMPENSATION
Section l. The Trustees as such shall be entitled to reasonable
compensation from the Trust; they may fix the amount of their 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.
LIMITATION OF LIABILITY
Section 2. 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 shall not be responsible for or liable in any event for
neglect or wrongdoing of them or any officer, agent, employee or investment
adviser of the Trust, but nothing contained herein shall protect any Trustee
against any liability 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. Every note, bond, contract,
instrument, certificate or undertaking and every other act or obligation
whatsoever executed or performed by or on behalf of the Trust or the Trustees or
any of them in connection with the Trust shall be conclusively deemed to have
been executed or done only in or with respect to their or his capacity as
Trustees or Trustee, and such Trustees or Trustee shall not be personally liable
thereon.
ARTICLE XII
INDEMNIFICATION
COVERED PERSONS
Section l.
(a) Subject to the exceptions and limitations contained in
Section (b) below:
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(i) every person who is, or has been, a
Trustee or officer of the Trust (including persons who serve
at the Trust's request as directors, officers or trustees of
another organization in which the Trust has any interest as a
shareholder, creditor or otherwise) (hereinafter referred to
as a "Covered Person") shall be indemnified by the appropriate
Series to the fullest extent permitted by law against
liability and against all expenses reasonably incurred or paid
by him in connection with any claim, action, suit or
proceeding in which he becomes involved as a party or
otherwise by virtue of his being or having been a Covered
Person and against amounts paid or incurred by him in the
settlement thereof;
(ii) 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 while in office or thereafter, and the
words "liability" an "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 Trustee or officer 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;
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(B) by at least a majority of those Trustees
who are neither interested persons of the Trust (as
defined in Section 2(a) (19) of the 1940 Act) nor are
parties to the matter based upon a review of readily
available facts (as opposed to a full trial-type
inquiry); or
(C) by written opinion of independent legal
counsel based upon a review of readily available
facts (as opposed to a full trial-type inquiry);
provided, however, that any Shareholder may, by appropriate legal proceedings,
challenge any such determination by the Trustees, or by independent counsel.
(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, shall
continue as to a person who has ceased to be such Trustee or
officer and shall inure to the benefit of the heirs, executors and
administrators of such a person. Nothing contained herein shall
affect any rights to indemnification to which Trust personnel,
other than Trustees and officers, and other persons may be entitled
by contract or otherwise under law.
(d) Expenses in connection with the preparation and
presentation of a defense to any claim, action, suit or proceeding
of the character described in paragraph (a) of this Section l may
be paid by the 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 applicable Series if it is ultimately determined that he is not
entitled to indemnification under this Section l; provided,
however, that either (a) such Covered Person shall have provided
appropriate security for such undertaking, (b) the Trust is insured
against losses arising out of any such advance payments or (c)
either a majority of the Trustees who are neither interested
persons of the Trust (as defined above) 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 trial-type inquiry or full investigation), that there
is reason to believe that such Covered Person will be found
entitled to indemnification under this Section l.
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SHAREHOLDERS
Section 2. In case any Shareholder or former Shareholder of any
Series of the Trust shall be held to be 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 a
corporation or other entity, its corporate or other 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 Series shall, upon request by the Shareholder, assume the defense
of any claim made against the Shareholder for any act or obligation of the
Series and satisfy any judgment thereon.
ARTICLE XIII
MISCELLANEOUS
TRUST NOT A PARTNERSHIP; TRUSTEES, SHAREHOLDERS, ETC.
NOT PERSONALLY LIABLE; NOTICE
Section l. It is hereby expressly declared that a trust and not a
partnership is created hereby. No Trustee hereunder shall have any power to bind
personally either the Trust's officers or any Shareholder. All persons extending
credit to, contracting with or having any claim against the Trust or the
Trustees shall look only to the assets of the appropriate Series for payment
under such credit, contract or claim; and neither the Shareholders nor the
Trustees, nor any of their agents, whether past, present or future, shall be
personally liable therefor. Nothing in this Declaration of Trust shall protect a
Trustee against any liability to which the Trustee would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of the office of Trustee hereunder. Every
note, bond, contract, instrument, certificate or undertaking made or issued by
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the Trustees or by any officer or officers shall give notice that this
Declaration of Trust is on file with the Secretary of The Commonwealth of
Massachusetts and shall recite that the same was executed or made by or on
behalf of the Trust or by them as Trustee or Trustees or as officer or officers
and not individually and that the obligations of such instrument are not binding
upon any of them or the Shareholders individually but are binding only upon the
assets and property of the Trust, and may contain such further recital as he or
they may deem appropriate, but the omission thereof shall not operate to bind
any Trustee or Trustees or officer or officers or Shareholder or Shareholders
individually.
TRUSTEE'S GOOD FAITH ACTION, EXPERT
ADVICE, NO BOND OR SURETY
Section 2. The exercise by the Trustees of their powers and
discretions hereunder in good faith and with reasonable care under the
circumstances then prevailing, shall be binding upon everyone interested.
Subject to the provisions of Section l of this Article XIII and to Article XII,
the Trustees shall not be liable for errors of judgment or mistakes of fact or
law. The Trustees may take advice of counsel or other experts with respect to
the meaning and operation of this Declaration of Trust, and subject to the
provisions of Section l of this Article XIII and to Article XII, shall be under
no liability for any act or omission in accordance with such advice or for
failing to follow such advice. The Trustees shall not be required to give any
bond as such, nor any surety if a bond is obtained.
ESTABLISHMENT OF RECORD DATES
Section 3. The Trustees may close the stock transfer books of the
Trust for a period not exceeding sixty (60) days preceding the date of any
meeting of Shareholders, 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; or in lieu of
closing the stock transfer books as aforesaid, the Trustees may fix in advance a
date, not exceeding sixty (60) days preceding the date of any meeting of
Shareholders, or the date for payment of any dividend or other distribution, 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
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determination of the Shareholders entitled to notice of, and to vote at, any
such meeting, or entitled to receive payment of any such dividend or other
distribution, or to any such allotment of rights, or to exercise the rights in
respect of any such change, conversion or exchange of Shares, and in such case
such Shareholders and only such Shareholders as shall be Shareholders of record
on the date so fixed shall be entitled to such notice of, and to vote at, such
meeting, or to receive payment of such dividend or other distribution, or to
receive such allotment or rights, or to exercise such rights, as the case may
be, notwithstanding any transfer of any Shares on the books of the Trust after
any such record date fixed or aforesaid.
TERMINATION OF TRUST
Section 4.
(a) This Trust shall continue without limitation of time but
subject to the provisions of sub-section (b) of this Section 4.
(b) Subject to a Majority Shareholder Vote of each Series
affected by the matter or, if applicable, to a Majority Shareholder
Vote of the Trust, the Trustees may
(i) sell and convey the assets of the Trust or any
affected Series to another trust, partnership, association or
corporation organized under the laws of any state which is a
diversified open-end management investment company as defined
in the 1940 Act, 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 beneficial
interest or stock of such trust, partnership, association or
corporation; or
(ii) at any time sell and convert into money all of
the assets of the Trust or any affected Series.
Upon making provision for the payment of all such liabilities 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 holders of
the Shares of the Trust or any affected Series then outstanding.
(c) Upon completion of the distribution of the remaining
proceeds or the remaining assets as provided
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in sub-section (b), the Trust or any affected Series shall
terminate and the Trustees shall be discharged of any and all
further liabilities and duties hereunder and the right, title and
interest of all parties shall be cancel led and discharged.
FILING OF COPIES, REFERENCES, HEADINGS, GENDER, ETC.
Section 5. The original or a copy of this instrument and of each
declaration of trust supplemental hereto shall be kept at the office of the
Trust where it may be inspected by any Shareholder. A copy of this instrument
and of each supplemental declaration of trust shall be filed by the Trustees
with the Secretary of The Commonwealth of Massachusetts and the Boston City
Clerk, as well as any other governmental office where such filing may from time
to time be required. Anyone dealing with the Trust may rely on a certificate by
an officer or Trustee of the Trust as to whether or not any such supplemental
declarations of trust have been made and as to any matters in connection with
the Trust hereunder, and with the same effect as if it were the original, may
rely on a copy certified by an officer or Trustee of the Trust to be a copy of
this instrument or of any such supplemental declaration of trust. In this
instrument or in any such supplemental declaration of trust, references to this
instrument, and all expressions like "herein," "hereof" and "hereunder," shall
be deemed to refer to this instrument as amended or affected by any such
supplemental declaration of trust. Headings are placed herein for convenience of
reference only and in case of any conflict, the text of this instrument, rather
than the headings, shall control. This instrument may be executed in any number
of counterparts each of which shall be deemed an original. In the case of all
terms used in this instrument, the singular shall include the plural and the
masculine gender shall include the feminine and neuter, and vice versa, as the
context requires.
APPLICABLE LAW
Section 6. The trust set forth in this instrument is made in The
Commonwealth of Massachusetts, and it is created under and is to be governed by
and construed and administered according to the laws of said Commonwealth. The
Trust shall be of the type commonly called a Massachusetts business trust, and
without limiting the provisions hereof, the Trust may exercise all powers which
are ordinarily exercised by such a trust.
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<PAGE>
AMENDMENTS
Section 7. If authorized by votes of the Trustees and a Majority
Shareholder Vote, or by any larger vote which may be required by applicable law
or this Declaration of Trust in any particular case, the Trustees shall amend or
otherwise supplement this instrument, by making a declaration of trust
supplemental hereto, which thereafter shall form a part hereof, except that an
amendment which shall affect the Shareholders of one or more Series but not the
Shareholders of all outstanding Series shall be authorized by vote of the
Shareholders holding a majority of the Shares entitled to vote of each Series
affected and no vote of Shareholders of a Series not affected shall be required.
Amendments having the purpose of changing the name of the Trust or supplying any
omission, curing any ambiguity or curing, correcting or supplementing any
defective or inconsistent provision contained herein shall not require
authorization by Shareholder vote. Copies of the supplemental declaration of
trust shall be filed as specified in Section 5 of this Article XIII.
FISCAL YEAR
Section 8. The fiscal year of the Trust shall end on a specified
date as set forth in the Bylaws, provided, however, that the Trustees may,
without Shareholder approval, change the fiscal year of the Trust.
IN WITNESS WHEREOF, the undersigned, being all of the initial
Trustees of the Trust, have executed this instrument this 8th day of January,
1985.
/s/ Philip L. Carret
Philip L. Carret
50 Baham Road
Scarsdale, NY 10583
/s/ John F. Cogan, Jr.___
John F. Cogan, Jr.
29 Patterson Road
Lexington, MA 02173
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<PAGE>
/s/ George R. Cooley George
R. Cooley Hickory Hill
Rensselaerville, NY 12147
/s/ Franklin R. Johnson
Franklin R. Johnson 1717
Wedgewood Common Concord,
MA 01742
/s/ John W. Kendrick John
W. Kendrick 6363 Waterway
Drive Falls Church, VA
22044
/s/ Marguerite A. Piret
Marguerite A. Piret 162
Washington Street Belmont,
MA 02178
/s/ Edwards C. Whitmore
Edwards C. Whitmore 300
Timbercove North Longwood,
FL 32779
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<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss. Boston, January 8, 1985
Then personally appeared the above named Philip L. Carret and
acknowledged the foregoing instrument to be his free act and deed, before me,
/s/ Steven R. Berke
Notary Public
My Commission expires:
THE COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss. Boston, January 8, 1985
Then personally appeared the above named John F. Cogan, Jr. and
acknowledged the foregoing instrument to be his free act and deed, before me,
/s/ Steven R. Berke
Notary Public
My Commission expires:
THE COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss. Boston, January 8, 1985
Then personally appeared the above named George R. Cooley and
acknowledged the foregoing instrument to be his free act and deed, before me,
/s/ Steven R. Berke
Notary Public
My Commission expires:
THE COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss. Boston, January 8, 1985
Then personally appeared the above named Franklin R. Johnson and
acknowledged the foregoing instrument to be his free act and deed, before me,
/s/ Steven R. Berke
Notary Public
My Commission expires:
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<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss. Boston, January 8, 1985
Then personally appeared the above named John W. Kendrick and
acknowledged the foregoing instrument to be his free act and deed, before me,
/s/ Steven R. Berke
Notary Public
My Commission expires:
THE COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss. Boston, January 8, 1985
Then personally appeared the above named Marguerite A. Piret and
acknowledged the foregoing instrument to be her free act and deed, before me,
/s/ Steven R. Berke
Notary Public
My Commission expires:
THE COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss. Boston, January 8, 1985
Then personally appeared the above named Edwards C. Whitmore and
acknowledged the foregoing instrument to be his free act and deed, before me,
/s/ Steven R. Berke
Notary Public
My Commission expires:
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<PAGE>
The Trustees' principal business address is:
60 State Street
Boston, MA 02109
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BY-LAWS
of
PIONEER II
ARTICLE 1
Officers and Their Election
SECTION 1. Officers. The officers of the Trust shall be a Chairman, a President,
a Treasurer, a Secretary, and such other officers with such other titles as
provided for herein or as the Trustees may from time to time elect. It shall not
be necessary for any Trustee or other officer to be a holder of shares in the
Trust.
SECTION 2. Election of Officers. The Treasurer and Secretary shall be chosen
annually by the Trustees. The Chairman and President shall be chosen annually by
and from the Trustees.
Two or more offices may be held by a single person except the offices of
President and Secretary. The officers shall hold office until their successors
are chosen and qualified.
SECTION 3. Resignations and Removals. Any officer of the Trust may resign by
filing a written resignation with the President or with the Trustees or with the
Secretary, which shall take effect on being so filed unless it is specified to
be effective at some other time or upon the happening of some other event. Any
officer may be removed at any time, with or without cause, by vote of a majority
of the entire number of Trustees.
SECTION 4. Vacancies. The Trustees may fill any vacancy occurring in any office
for any reason and may, in its discretion, leave unfilled for such period as it
may determine any offices other than those of Chairman, President, Treasurer and
Secretary. Each such successor shall hold office until his successor is chosen
and qualified.
ARTICLE II
Powers and Duties of Officers and Trustees
SECTION 1. Trustees. The business and affairs of the Trust shall be managed by
the Trustees, and they shall have all powers necessary and desirable to fully
carry out that responsibility
SECTION 2. Executive and other Committees. The Trustees may elect from their own
number an Executive Committee to consist of not less than three nor more than
five members, which shall have the power and duty to conduct the current and
ordinary business of the Trust, and such other powers and duties as the Trustees
may from time to time delegate to such Committee. The Trustees may also elect
from their own number other Committees from time to time, the number composing
such Committees and the powers conferred upon the same to be determined by vote
of the Trustees.
SECTION 3. Chairman of the Trustees. The Chairman shall preside at all meetings
of the Trustees and he may be the chief executive, financial and accounting
officer of the Trust. The Chairman may also perform such other duties as the
Trustees may from time to time designate.
SECTION 4. President. The President shall be the chief operating officer of the
Trust and, subject to the Trustees, shall have general supervision over the
business and policies of the Trust. The President shall have full power and
authority to bind the Trust and in connection therewith may execute and deliver
in the name and on behalf of the Trust any and all agreements, instruments,
notes and writings of any nature that he may consider necessary or appropriate
in connection with the management of the Trust. The President shall perform such
duties additional to all of the foregoing as the Trustees may from time to time
designate.
SECTION 5. Treasurer. Subject to Section 4 of Article V of the Declaration of
Trust, the Treasurer may be the principal financial and accounting officer of
the Trust. He shall deliver all funds and securities of the Trust which may come
into his hands to such bank(s) or trust compan(ies) as the Trustees shall employ
as Custodian(s) in accordance with Article IX of the Declaration of Trust and
these By-Laws. He shall have the custody of the seal of the Trust. He shall make
annual reports in writing of the business conditions of the Trust, which reports
shall be preserved upon its records, and he shall furnish such other reports
regarding its business and condition as the Trustees may from time to time
require. The Treasurer shall perform such duties additional to all of the
foregoing as the Trustees or the President may from time to time designate.
SECTION 6. Secretary. The Secretary shall record in books kept for the purpose
all votes and proceedings of the Trustees and the shareholders at their
respective meetings.
The Secretary shall perform such duties and possess such powers additional to
the foregoing as the Trustees or the President may from time to time designate.
SECTION 7. Vice Presidents. Each Vice President of the Trust shall perform such
duties and possess such powers as the Trustees or the President may from time to
time designate. In the event of the absence, inability or refusal to act of the
President, the Vice President (or if there shall be more than one, the Vice
Presidents in the order determined by the Trustees) shall perform the duties of
the President and when so performing shall have all the powers of and be subject
to all the restrictions upon the President.
SECTION 8. Assistant Treasurer. The Assistant Treasurer of the Trust shall
perform such duties and possess such powers as the Trustees, the President or
the Treasurer may from time to time designate.
ARTICLE III
Shareholders' Meetings
SECTION l. Voting powers and meetings of Shareholders shall be governed by
applicable provisions of law, the Declaration of Trust and as hereinafter
provided by these By-Laws.
SECTION 2. Special Meetings. A special meeting of the Shareholders of any Series
shall be called by the Secretary whenever ordered by the Trustees or requested
in writing by the holder or holders of at least one-tenth of the outstanding
Shares of any such Series entitled to vote. If the Secretary, when so ordered or
requested, refuses or neglects for more than two days to call such special
meeting, the Trustees or the Shareholders so requesting may, in the name of the
Secretary, call the meeting by giving notice thereof in the manner required when
notice is given by the Secretary.
SECTION 3. Notices. Except as above provided, notices of any special meeting of
the Shareholders shall be given by the Secretary by delivering or mailing,
postage prepaid, to each Shareholder entitled to vote at said meeting, a written
or printed notification of such meeting, at least fifteen days before the
meeting, to such address as may be registered with the Trust by the Shareholder.
SECTION 4. Place of Meeting. All special meetings of the Shareholders shall be
held at the principal place of business of the Trust in Boston, Massachusetts or
at such other place in the United States as the Trustees may designate.
ARTICLE IV
Trustees' Meetings
SECTION 1. Meetings. Meetings of the Trustees shall be called orally or in
writing by the Chairman or at his order or direction or by any two other
Trustees, and if the Secretary when so requested refuses or fails for more than
one day to call such meeting, the Chairman, or such two other Trustees, may in
the name of the Secretary call such meeting by giving due notice in the manner
required when notice is given by the Secretary.
SECTION 2. Quorum. A majority of the Trustees shall constitute a quorum for the
transaction of business.
SECTION 3. Notices. Except as otherwise provided, notice of any meeting of the
Trustees shall be given by the Secretary to each Trustee, by mailing to him,
postage prepaid, addressed to him at his address as registered on the books of
the Trust or, if not so registered, at his last known address, a written or
printed notification of such meeting at least three days before the meeting or
by delivering such notice to him at least two days before the meeting, or by
telephoning him or by sending to him at least one day before the meeting, by
prepaid telegram, addressed to him at his said registered address, if any, or if
he has no such registered address, at his last known address, notice of such
meeting.
SECTION 4. Place of Meeting. All meetings of the Trustees shall be held at the
principal place of business of the Trustees in Boston, Massachusetts, or such
other place within or without the Commonwealth as the person or persons
requesting said meeting to be called may designate, but any meeting may adjourn
to any other place.
SECTION 5. Special Action. When all the Trustees shall be present at any
meeting, however called, or wherever held, or shall assent to the holding of the
meeting without notice, or after the meeting shall sign a written assent thereto
on the record of such meeting, the acts of such meeting shall be valid as if
such meeting had been regularly held.
SECTION 6. Action by Consent. Any action by the Trustees may be taken without a
meeting if a written consent thereto is signed by all the Trustees and filed
with the records of the Trustees meetings, or by telephone consent provided a
quorum of Trustees participate in any such telephone meeting. Such consent shall
be treated as a vote of the Trustees for all purposes.
ARTICLE V
Shares of Beneficial Interest
SECTION 1. Beneficial Interest. The beneficial interest in the Trust and the
status of the owners thereof shall be defined, established and governed by
applicable provisions of law, the Declaration of Trust and as herein provided by
these By-Laws.
SECTION 2. Certificate of Shares of Beneficial Interest. Subject to certain
minimum investment requirements as may be set by the Trustees, each shareholder
shall be entitled to a certificate of shares of beneficial interest of the Trust
in such form as may be prescribed from time to time by the Trustees. The
certificate shall be signed by the President or a Vice President, and by the
Treasurer or an Assistant Treasurer, but when a certificate is countersigned by
a transfer agent or a registrar, other than a Trustee, officer or employee of
the Trust, such signature may be a facsimile. In case any officer who has signed
or whose facsimile signature has been placed upon such certificate shall have
ceased to be such officer before such certificate is issued, it may be issued by
the Trust with the same effect as if he were such officer at the time of its
issue.
Every certificate for shares of beneficial interest which are subject to
any restriction on transfer pursuant to the Declaration of Trust, the By-Laws,
applicable securities laws or any agreement to which the Trust is a party, shall
have conspicuously noted on the face or back of the certificate either the full
text of the restriction or a statement of the existence of such restrictions and
a statement that the Trust will furnish a copy of the restrictions to the holder
of such certificate upon written request and without charge. Every certificate
issued when the Trust is authorized to issue more than one class or series of
shares of beneficial interest shall set forth on its face or back either the
full text of the preferences, voting powers, qualifications and special and
relative rights of the shares of each class and series authorized to be issued
or a statement of the existence of such preferences, powers, qualifications and
rights and a statement that the Trust will furnish a copy thereof to the holder
of such certificate upon written request and without charge.
SECTION 3. Transfers. Subject to the restrictions, if any, stated or noted on
the share certificates, shares may be transferred on the books of the Trust by
the surrender to the Trust or its transfer agent of the certificate representing
such shares properly endorsed or accompanied by a written assignment or power of
attorney properly executed, and with such proof of authority or the authenticity
of signature as the Trust or its transfer agent may reasonably require. Except
as may be otherwise required by law, by the Declaration of Trust or by these
By-Laws, the Trust shall be entitled to treat the record holder of shares of
beneficial interest as shown on its books as the owner of such shares for all
purposes, including the payment of dividends and the right to vote with respect
thereto, regardless of any transfer, pledge or other disposition of such shares
until the shares have been transferred on the books of the Trust in accordance
with the requirements of these By-Laws.
SECTION 4. Replacement of Certificates. In case of the alleged loss or
destruction or the mutilation of a certificate of shares of beneficial interest,
a duplicate certificate may be issued in place of the lost, destroyed or
mutilated certificate, upon such terms as the Trustees may prescribe, including
the presentation of reasonable evidence of such loss, destruction or mutilation
and the giving of such indemnity as the Trustees may require for the protection
of the Trust or any transfer agent or registrar.
ARTICLE VI
Inspection of Books
The Trustees shall from time to time determine whether and to what
extent, and at what times and places, and under what conditions and regulations
the accounts and books of the Trust or any of them shall be open to the
inspection of the shareholders; and no shareholder shall have any right to
inspect any account or book or document of the Trust except as conferred by law
or otherwise by the Trustees or by resolution of the shareholders.
ARTICLE VII
Custodian
The Custodian(s) employed by the Trust pursuant to Article IX of the
Declaration of Trust shall be required to enter into a contract with the Trust
which shall contain in substance the following provisions:
(a) The Trust will cause all securities and funds owned by the Trust to be
delivered or paid to the Custodian(s).
(b) The Custodian(s) will receive and receipt for any moneys due to the
Trust and deposit the same in its own banking department and in such
other banking institutions, if any, as the Custodian(s) and the
Trustees may approve. The Custodian(s) shall have the sole power to
draw upon any such account.
(c) The Custodian(s) shall release and deliver securities owned by the
Trust in the following cases only:
(1) Upon the sale of such securities for the account of the Trust and
receipt of payment therefor;
(2) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable; provided
that in any such case, the cash is to be delivered to the
Custodian(s);
(3) To the issuer thereof or its agent for transfer into the name of
the Trust, the Custodian(s) or a nominee of either, or for
exchange for a different number of bonds or certificates
representing the same aggregate face amount or number of units;
provided that in any such case the new securities are to be
delivered to the Custodian(s);
(4) To the broker selling the same for examination, in accord with
the "street delivery" custom;
(5) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment
of the securities of the issuer of such securities or pursuant to
provisions to any deposit agreement; provided that, in any such
case, the new securities and cash, if any, are to be delivered to
the Custodian(s);
(6) In the case of warrants, rights, or similar securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or
temporary securities for definitive securities;
(7) To any pledge by way of pledge or hypothecation to secure any
loan, but only within the limits permitted to the Trust by
Article V, Section 1(r) of the Declaration of Trust.
(8) For deposit in a system for the central handling of securities in
accordance with the provisions of Article IX, Section 2 of the
Declaration of Trust.
(d) The Custodian(s) shall pay out moneys of the Trust only upon the
purchase of securities for the account of the Trust and the delivery
in due course of such securities to the Custodian(s), or in connection
with the conversion, exchange or surrender of securities owned by the
Trust as set forth in (c), or for the redemption or repurchase of
shares issued by the Trust or for the making of any disbursements
authorized by the Trustees pursuant to the Declaration of Trust or
these By-Laws, or for the payment of any expense or liability incurred
by the Trust; provided that, in every case where payment is made by
the Custodian(s) in advance of receipt of the securities purchased,
the Custodian(s) shall be absolutely liable to the Trust for such
securities to the same extent as if the securities had been received
by the Custodian(s).
(e) The Custodian(s) shall make deliveries of securities and payments of
cash only upon written instructions signed or initialed by such
officer or officers or other agent or agents of the Trust as may be
authorized to sign or initial such instructions by resolution of the
Trustees; it being understood that the Trustees may from time to time
authorize a different person or persons to sign or initial
instructions for different purposes.
The contract between the Trust and the Custodian(s) may contain any
such other provisions not inconsistent with the provisions of Article IX of the
Declaration of Trust or with these By-Laws as the Trustees may approve.
Such contract shall be terminable by either party upon written notice
to the other within such time not exceeding sixty (60) days as may be specified
in the contract; provided, however, that upon termination of the contract or
inability of the Custodian(s) to continue to serve, the Custodian(s) shall, upon
written notice of appointment of another bank or trust company as custodian,
deliver and pay over to such successor custodian all securities and moneys held
by it for account of the Trust. In such case, the Trustees shall promptly
appoint a successor custodian, but in the event that no successor custodian can
be found having the required qualifications and willing to serve, it shall be
the duty of the Trustees to call as promptly as possible a special meeting of
the Shareholders to determine whether the Trust shall function without a
custodian or shall be liquidated. If so directed by vote of the holders of a
majority of the outstanding Shares, the Custodian(s) shall deliver and pay over
all property of the Trust held by it as specified in such vote.
Such contract shall also provide that, pending appointment of a
successor custodian or a vote of the shareholders specifying some other
disposition of the funds and property, the Custodian(s) shall not deliver funds
and property of the Trust to the Trust, but it may deliver them to a bank or
trust company doing business in Boston, Massachusetts, of its own selection
having aggregate capital, surplus and undivided profits, as shown by its last
published report, of not less than $2,000,000 as the property of the Trust to be
held under terms similar to those on which they were held by the retiring
custodian.
Any sub-custodian employed by the Custodian(s) pursuant to
authorization to do so granted by the Trust pursuant to Article IX of the
Declaration of Trust shall be required to enter into a contract with the
Custodian containing in substance the same provisions as those described in
paragraphs (a) through (e) above, except that any contract with a sub-custodian
performing its duties outside the United States and its territories and
possessions, may omit or limit any of such conditions, provided that, any such
omission or limitation shall be expressly approved by a majority of the Trustees
of the Trust.
ARTICLE VIII
Miscellaneous Provisions
SECTION 1. Seal. The seal of the Trust shall be circular in form bearing the
inscription:
"PIONEER II"
"A MASSACHUSETTS BUSINESS TRUST 1985"
SECTION 2. Fiscal Year. The fiscal year of the Trust shall be the period of
twelve months ending on the 30th day of September in each calendar year.
SECTION 3. Reports to Shareholders. The Trustees shall at least semi-annually
submit to the shareholders a written financial report of the transactions of the
Trust including financial statements which shall at least annually be certified
by independent public accountants.
SECTION 4. Voting of Securities. Except as the Trustees may otherwise designate,
the President or Treasurer may waive notice of, and act as, or appoint any
person or persons to act as, proxy or attorney-in-fact for the Trust (with or
without power of substitution) at, any meeting of stockholders or shareholders
of any corporation or other organization, the securities of which may be held by
the Trust.
SECTION 5. Evidence of Authority. A certificate by the Secretary or Assistant
Secretary, or a temporary Secretary, as to any action taken by the shareholders,
Trustees, any committee or any officer or representative of the Trust shall as
to all persons who rely on the certificate in good faith be conclusive evidence
of such action.
SECTION 6. Declaration of Trust. All references in these By-Laws to the
Declaration of Trust shall be deemed to refer to the Declaration of Trust of the
Trust dated January 8, 1985, and known as "Pioneer II," as amended and in effect
from time to time.
SECTION 7. Severability. Any determination that any provision of these By-Laws
is for any reason inapplicable, illegal or ineffective shall not affect or
invalidate any other provision of these By-Laws or the Declaration of Trust.
SECTION 8. Pronouns. All pronouns used in these By-Laws shall be deemed to refer
to the masculine, feminine or neuter, singular or plural, as the identity of the
person or persons may require.
MANAGEMENT CONTRACT
THIS AGREEMENT dated this 15th of February, 1985 between Pioneer II, a
Massachusetts business trust, hereinafter called "Pioneer", and Pioneering
Management Corporation, a Delaware corporation, hereinafter called the
"Manager".
Recitals
Pioneer is registered as an open end management investment company
under the Investment Company Act of 1940 and has registered its shares for
public offering under the Securities Act of 1933.
The parties hereto deem it mutually advantageous that the Manager
should assist the Board of Trustees and officers of Pioneer in the management of
the securities portfolio of Pioneer.
Agreements
NOW, THEREFORE, Pioneer and the Manager do hereby agree as follows:
1. The Manager is authorized to buy and sell securities and to
designate brokers to carry out such transactions, subject to a number of
limitations. Pioneer may not:
a. make any purchase the cost of which exceeds Pioneer's currently
available funds;
b. purchase securities "on margin" or effect "short sales" of
securities;
c. underwrite any issue of securities;
d. acquire the securities of any other domestic or foreign
investment company or investment fund (except in connection with
a plan of merger or consolidation with or acquisition of
substantially all the assets of such other investment company);
provided, however, that Pioneer may invest in the securities
issued by a real estate investment trust, provided that such
trust shall not be permitted to invest in real estate or
interests in real estate other than mortgages or other security
interests;
e. purchase securities of a company if the purchase would result in
Pioneer's having more than 5% of the value of its total assets
invested in securities of such company;
<PAGE>
f. purchase securities of a company if the purchase would result in
Pioneer's owning more than 10% of the outstanding voting
securities of such company;
g. purchase securities for the purpose of controlling management of
other companies;
h. invest in commodities, commodity contracts, or real estate;
i. purchase "investment letter" securities (i.e. securities that
must be registered under the Securities Act of 1933 before they
may be offered or sold to the public);
j. purchase the securities of any enterprise which has a business
history of less than three years, including the operation of any
predecessor business to which it has succeeded;
k. purchase or retain the securities of any company if those
officers and Trustees of Pioneer, its adviser or principal
underwriter, owning individually more than one-half of 1% of the
securities of such company, together own more than 5% of the
securities of such company;
2. Further, the Manager's discretion is limited by the following
general rules:
a. notice of each purchase or sale of securities for Pioneer's
account shall be forwarded promptly to each Trustee;
b. if any three Trustees disapprove in writing of any transaction
within forty- eight hours after dispatch of such notice, the
Manager shall immediately repurchase or resell the security
involved in such transaction, as the case may be, at the expense
and risk of Pioneer;
c. all transactions will be made at the best price and execution
available.
3. The Manager, at its own expense, shall furnish to Pioneer 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 affairs and investments and supervising the keeping of the
books of Pioneer, and shall arrange, if desired by Pioneer, for members of the
Manager's organization to serve as officers or agents of Pioneer. The Manager
assumes and shall pay or reimburse Pioneer for: (1) the compensation (if any) of
the Trustees who are affiliated with,
-2-
<PAGE>
or interested persons of, Manager and all officers of Pioneer as such, and (2)
all expenses not hereinafter specifically assumed by Pioneer where such expenses
are incurred by the Manager or by Pioneer in connection with the management of
the investment and reinvestment of the assets of Pioneer, and the management of
the affairs of Pioneer. Pioneer assumes and shall pay: (1) charges and expenses
for determining from time to time the value of the net assets of Pioneer and the
keeping of its books and records, (2) the charges and expenses of auditors, (3)
the charges and expenses of any custodian, transfer agent, plan agent, dividend
disbursing agent and registrar appointed by Pioneer, (4) broker's commissions,
and issue and transfer taxes, chargeable to Pioneer in connection with
securities transactions to which Pioneer is a party, (5) insurance premiums,
interest charges, dues and fees for membership in trade associations and all
taxes and corporate fees payable by Pioneer to federal, state or other
governmental agencies, (6) the cost of share certificates representing shares of
beneficial interest of Pioneer, (7) fees and expenses involved in registering
and maintaining registrations of Pioneer and of its shares with the Securities
and Exchange Commission, including the preparation of prospectuses for filing
with said Commission, (8) all expenses of shareholders' and Trustees' meetings
and of preparing, printing and distributing notices, proxy statements and all
reports to shareholders and to governmental agencies, (9) charges and expenses
of legal counsel to Pioneer and (10) compensation of those Trustees of Pioneer
as such who are not affiliated with or interested persons of the Manager,
Pioneer (other than as Trustees) or The Pioneer Group, Inc.
4. Pioneer shall pay to the Manager, as compensation for the Manager's
services hereunder, a management fee at the rate of .50% per annum of the
average daily net assets of Pioneer up to $250,000,000 of such assets, .48% per
annum of such assets in excess of $250,000,000 and up to $300,000,000 and .45%
per annum of such assets in excess of $300,000,000. The management fee payable
hereunder shall be computed daily and paid monthly, subject to the following:
(a) in the event that the management fee payable by Pioneer hereunder, when
added to the fees, costs and expenses borne by Pioneer under Section 2 above
(exclusively of broker's commissions and taxes and interest charges, if any),
exceed on an annual basis 1% of the average daily net assets of Pioneer for such
period, then the management fee payable by Pioneer shall be reduced to the
extent necessary so that the amount of such management fee plus the amount of
said fees, costs and expenses borne by Pioneer shall not exceed said limitation;
and (b) if such fees, costs, and expenses, exclusive of (i) any management fee,
(ii) taxes and interest charges, if any, (iii) broker's commissions and (iv)
extraordinary expenses beyond the control of the Manager, exceed said annual
limitation on a proportionate basis, then the Manager shall pay to Pioneer the
balance, if any, of any such excess. The calculations provided for
-3-
<PAGE>
in (a) and (b) will be made monthly for each calendar month and for the
cumulative period beginning on the first day of Pioneer's fiscal year and ending
on the last day of the last calendar month for which the calculations are made
and, on the basis of the cumulative monthly calculations, the management fee
payable to Pioneer shall be reduced if and to the extent required by (a), and
the Manager shall reimburse Pioneer if and to the extent required by (b). As
used herein, "extraordinary expenses beyond the control of the Manager" means
any extraordinary expenses not caused by the bad faith, negligence or
malfeasance of the Manager.
5. Either party hereto may terminate this contract by vote of its Board
of Directors or its Board of Trustees, as the case may be, or by vote of a
majority of its outstanding voting securities and the giving of sixty days'
written notice to the other without penalty. -
6. This contract shall terminate on December 31 of any year in which
its terms and renewal shall not have been approved by a majority vote of the
Trustees of Pioneer voting in person, including a majority of its Trustees who
are not parties to this contract or interested persons (as the term "interested
persons" is defined in the Investment Company Act of 1940, as amended) of any
such parties, at a meeting of Trustees called for the purpose of voting on such
approval.
7. The Manager and its directors, officers, agents, employees and
stockholders may engage in other businesses and may render investment advisory
services to other investment companies or to any other corporation, association,
firm, individual or account.
8. Otherwise than as provided in Section 5 hereof, this contract shall
continue in full force and effect until terminated by written notice given by
one of the parties hereto as provided in Section 4.
9. This contract shall automatically terminate in the event of its
assignment. For purposes of this contract, the term "assignment" shall have the
meaning given it by Section 2(a) (4) of the Investment Company Act of 1940, as
from time to time amended.
10. This contract shall become effective as of the date of execution
hereof.
11. Nothing in this contract shall be deemed to relieve or deprive the
Board of Trustees of Pioneer of its responsibility for and control of Pioneer.
-4-
<PAGE>
12. The parties to this contract acknowledge and agree that all
liabilities arising, directly or indirectly, under this contract, of any and
every nature whatsoever, including without limitation, liabilities arising in
connection with the agreement, if any of Pioneer or its Trustees set forth
herein to indemnify any party to this contract or any other person, 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 Declaration of Trust, as amended from time
to time, is on file in the Office of the Secretary of State of The Commonwealth
of Massachusetts. Such Declaration of Trust describes in detail the respective
responsibilities and limitations on liability of the Trustees, officers, and
holders of shares of beneficial interest.
IN WITNESS WHEREOF Pioneer has caused this contract to be executed by
its duly authorized officers and its seal to be hereto affixed, and the Manager
has caused this instrument to be executed by its duly authorized officers and
its seal to be hereto affixed, as of the day and year first above written.
PIONEER II
By: /s/ Albert L. Runge
Treasurer
Attest: /s/ Joseph P. Barri
Secretary
PIONEERING MANAGEMENT CORPORATION
By: /s/ Albert L. Runge
Attest: /s/ Joseph P. Barri
Secretary
Exhibit 8
UNDERWRITING CONTRACT
THIS AGREEMENT, dated this 30th day of January, 1990, by and between
Pioneer II ("Pioneer") and Pioneer Funds Distributor, Inc., a Massachusetts
corporation (the "Underwriter").
1. Pioneer, a Massachusetts business trust, is a registered open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and has filed a 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 1993, as amended.
2. The Underwriter, a corporation organized under the laws of the
Commonwealth of Massachusetts in 1989, engages in the purchase and sale of
securities both as a broker and dealer. The Underwriter is registered as a
broker-dealer with the Commission and is a member in good standing of the
National Association of Securities Dealers, Inc. ("NASD").
3. The parties hereto deem it mutually advantageous that the
Underwriter should act as Principal Underwriter, as defined in the 1940 Act, for
the sale of shares of beneficial interest of Pioneer to the public.
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 Pioneer ("Shares") for the 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 Pioneer's Shares, to be calculated as
described in the Registration Statement including the Prospectus filed with the
Commission (collectively the "Prospectus") which is in effect at the time of the
offering, plus sales charges as approved by the Underwriter and the Trustees of
Pioneer and as outlined in the Prospectus. Such 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, reinvestment 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 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 in the Prospectus and such concession shall be
generally the same for broker-dealers providing comparable levels of sales and
service.
4. Shares purchased by the Underwriter from Pioneer shall be delivered
to The First National Bank of Boston, Boston, Massachusetts, Agent for the
Underwriter at its offices in Boston, against payment in New York or Boston of
funds of the full amount represented by the net asset value as calculated. All
purchases by the Underwriter are subject to confirmation by Pioneer.
5. This contract may be terminated by either party hereto upon sixty
days written notice.
6. This contract shall terminate on December 31 of any year in which
its terms and renewal have not been approved by majority vote of the Trustees of
Pioneer voting in person, including a majority of its Trustees who are not
parties to this contract or interested persons (as that term is defined in the
1940 Act) of any such parties (other than as Trustee of Pioneer) at a meeting of
Trustees called for the purpose of voting on such approval.
7. The parties to this contract acknowledge and agree that all
liabilities arising, directly or indirectly, under this contract, of any and
every 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 contract or any other person, if any, shall be
satisfied out of the assets of Pioneer and no Trustee, officer or holder of
Shares shall be personally liable for any of the foregoing liabilities.
Pioneer's Declaration of Trust, as amended from time to time, is on file in the
Office of the Secretary of State of The Commonwealth of Massachusetts. Such
Declaration of Trust describes in detail the respective responsibilities and
limitations on liability of the Trustees, officers, and holders of shares of
beneficial interest.
8. This contract shall automatically terminate in the event of its
assignment (as that term is defined in the 1940 Act).
9. In the event of any dispute between the parties, this contract shall
be construed according to the laws of the Commonwealth of Massachusetts.
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 30th day of January, 1990.
Attest: PIONEER II
/s/ Joseph P. Barri By: /s/ William H. Keough
Secretary Treasurer
Attest: PIONEER FUND DISTRIBUTOR, INC.
/s/ Jospeh P. Barri By: /s/ William H. Keough
Secretary Treasurer
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 II
<PAGE>
CUSTODIAN AGREEMENT
AGREEMENT made this 23rd day of December, 1991 between PIONEER II (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:
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 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.
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 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 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 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 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 receipt evidencing the deposit, if any,
as may be forwarded to the Custodian by the Banking Institution. Such deposits,
other than those placed with the Custodian, shall be deemed portfolio securities
of the Fund and the responsibilities of the Custodian therefor shall be the same
as those for demand deposit bank accounts placed with other banks, as described
in Section K of this Agreement. The responsibility of the Custodian for such
deposits accepted on the Custodian's books shall be that of a U. S. bank for a
similar deposit.
N. Foreign Exchange Transactions and Futures Contracts Pursuant to proper
instructions, to enter into foreign exchange contracts or options to purchase
and sell foreign currencies for spot and future delivery on behalf and for the
account of the Fund. Such transactions may be undertaken by the Custodian with
such Banking Institutions, including the Custodian and Subcustodian(s) as
principals, as approved and authorized by the Fund. Foreign exchange contracts
and options other than those executed with the Custodian, shall be deemed to be
portfolio securities of the Fund and the responsibilities of the Custodian
therefor shall be the same as those for demand deposit bank accounts placed with
other banks as described in Section 2L of this agreement. Upon receipt of proper
instructions, to receive and retain confirmations evidencing the purchase or
sale of a futures contract or an option on a futures contract by the Fund; to
deposit and maintain in a segregated account, for the benefit of any futures
commission merchant or to pay to such futures commission 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.
0. Stock Loans - Upon receipt of proper instructions, to deliver securities of
the Fund, in connection with loans of securities by the Fund, to the borrower
thereof prior to receipt of the collateral, if any, for such borrowing, provided
that for stock loans secured by cash collateral the Custodian's instructions to
the Securities System require that the Securities System may deliver the
securities to the borrower thereof only upon receipt of the collateral for such
borrowing.
P. Collections - To collect, receive and deposit in said account or accounts all
income, payments of principal and other payments with respect to the securities
held hereunder, and in connection therewith to deliver the certificates or other
instruments representing the securities to the issuer thereof or its agent when
securities are called, redeemed, retired or otherwise become payable; provided,
that the payment is to be made in such form and manner and at such time, which
may be after delivery by the Custodian of the instrument representing the
security, as is in accordance with the terms of the instrument representing the
security, or such proper instructions as the Custodian may receive, or
governmental regulations, the rules of Securities Systems or other U.S.
securities depositories and clearing agencies or, with respect to securities
referred to in clause (iii) of the last sentence of Section 2D, in accordance
with generally accepted trade practice; (ii) to execute ownership and other
certificates and affidavits for all federal and state tax purposes in connection
with receipt of income or other payments with respect to securities of the Fund
or in connection with transfer of securities, and (iii) pursuant to proper
instructions to take such other actions with respect to collection or receipt of
funds or transfer of securities which involve an investment decision.
Q. Dividends, Distributions and Redemptions - Upon receipt of proper
instructions from the Fund, or upon receipt of instructions from the Fund's
shareholder servicing agent or agent with comparable duties (the "Shareholder
Servicing Agent") (given by such person or persons and in such manner on behalf
of the Shareholder Servicing Agent as the Fund shall have authorized), the
Custodian shall release funds or securities to the Shareholder Servicing Agent
or otherwise apply funds or securities, insofar as available, for the payment of
dividends or other distributions to Fund shareholders. Upon receipt of proper
instructions from the Fund, or upon receipt of instructions from the Shareholder
Servicing Agent (given by such person or persons and in such manner on behalf of
the Shareholder Servicing Agent as the Fund shall have authorized), the
Custodian shall release funds or securities, insofar as available, to the
Shareholder Servicing Agent or as such Agent shall otherwise instruct for
payment to Fund shareholders who have delivered to such Agent a request for
repurchase or redemption of their shares of capital stock of the Fund.
R. Proxies, Notices, Etc. - Promptly to deliver or mail to the Fund all forms of
proxies and all notices of meetings and any other notices or announcements
affecting or relating to securities owned by the Fund that are received by the
Custodian, and upon receipt of proper instructions, to execute and deliver or
cause its nominee to execute and deliver such proxies or other authorizations as
may be required. Neither the Custodian nor its nominee shall vote upon any of
such securities or execute any proxy to vote thereon or give any consent or take
any other action with respect thereto (except as otherwise herein provided)
unless ordered to do so by proper instructions.
S. Nondiscretionary Details - Without the necessity of express authorization
from the Fund, (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 0 of Treasury
Circular No. 300, 31 CFR 306, Subpart B of 31 CFR Part 350, or the book-entry
regulations of federal agencies substantially in the form of Subpart 0, or (iii)
any other domestic clearing agency registered with the Securities and Exchange
Commission under Section 17A of the Securities Exchange Act of 1934 which acts
as a securities depository and whose use the Fund has previously approved in
writing (each of the foregoing being referred to in this Agreement as a
"Securities System"). Utilization of a Securities System shall be in accordance
with applicable Federal Reserve Board and Securities and Exchange Commission
rules and regulations, if any, and subject to the following provisions:
1) The Custodian may deposit and/or maintain Fund securities, either directly or
through one or more Agents appointed by the Custodian (provided that any such
agent shall be qualified to act as a custodian of the Fund pursuant to the
Investment Company Act of 1940 and the rules and regulations thereunder), in a
Securities System provided that such securities are represented in an account
("Account") of the Custodian or such Agent in the Securities System which shall
not include any assets of the Custodian or Agent other than assets held as a
fiduciary, custodian, or otherwise for customers;
2) The records of the Custodian with respect to securities of the Fund which are
maintained in a Securities System shall identify by book-entry those securities
belonging to the Fund;
3) The Custodian shall pay for securities purchased for the account of the Fund
upon (i) receipt of advice from the Securities System that such securities have
been transferred to the Account, and (ii) the making of an entry on the records
of the Custodian to reflect such payment and transfer for the account of the
Fund. The Custodian shall transfer securities sold for the account of the Fund
upon (i) receipt of advice from the Securities System that payment for such
securities has been transferred to the Account, and (ii) the making of an entry
on the records of the Custodian to reflect such transfer and payment for the
account of the Fund. Copies of all advices from the Securities System of
transfers of securities for the account of the Fund shall identify the Fund, be
maintained for the Fund by the Custodian or an Agent as referred to above, and
be provided to the Fund at its request. The Custodian shall furnish the Fund
confirmation of each transfer to or from the account of the Fund in the form of
a written advice or notice and shall furnish to the Fund copies of daily
transaction sheets reflecting each day's transactions in the Securities System
for the account of the Fund on the next business day;
4) The Custodian shall provide the Fund with any report obtained by the
Custodian or any Agent as referred to above on the Securities System's
accounting system, internal accounting control and procedures for safeguarding
securities deposited in the Securities System; and the Custodian and such Agents
shall send to the Fund such reports on their own systems of internal accounting
control as the Fund may reasonably request from time to time.
5) At the written request of the Fund, the Custodian will terminate the use of
any such Securities System on behalf of the Fund as promptly as practicable.
V. Other Transfers - Upon receipt of proper instructions, to deliver securities,
funds and other property of the Fund to a Subcustodian or another custodian of
the Fund; and, upon receipt of proper instructions, to make such other
disposition of securities, funds or other property of the Fund in a manner other
than or for purposes other than as enumerated elsewhere in this Agreement,
provided that the instructions relating to such disposition shall include a
statement of the purpose for which the delivery is to be made, the amount of
securities to be delivered and the name of the person or persons to whom
delivery is to be made.
W. Investment Limitations - In performing its duties generally, and more
particularly in connection with the purchase, sale and exchange of securities
made by or for the Fund, the Custodian may assume unless and until notified in
writing to the contrary that proper instructions received by it are not in
conflict with or in any way contrary to any provisions of the Fund's Declaration
of Trust or Certificate of Incorporation or By-Laws (or comparable documents) or
votes or proceedings of the shareholders or Directors of the Fund. The Custodian
shall in no event be liable to the Fund and shall be indemnified by the Fund for
any violation which occurs in the course of carrying out instructions given by
the Fund of any investment limitations to which the Fund is subject or other
limitations with respect to the Fund's powers to make expenditures, encumber
securities, borrow or take similar actions affecting the Fund.
X. Proper Instructions - Proper instructions shall mean a tested telex from the
Fund or a written request, direction, instruction or certification signed or
initialled on behalf of the Fund by one or more person or persons as the Board
of Directors or Trustees of the Fund shall have from time to time authorized,
provided, however, that no such instructions directing the delivery of
securities or the payment of funds to an authorized signatory of the Fund shall
be signed by such person. Those persons authorized to give proper instructions
may be identified by the Board of Directors or Trustees by name, title or
position and will include at least one officer empowered by the Board to name
other individuals who are authorized to give proper instructions on behalf of
the Fund. Telephonic or other oral instructions given by any one of the above
persons will be considered proper instructions if the Custodian reasonably
believes them to have been given by a person authorized to give such
instructions with respect to the transaction involved. Oral instructions will be
confirmed by tested telex or in writing in the manner set forth above but the
lack of such confirmation shall in no way affect any action taken by the
Custodian in reliance upon such oral instructions. The Fund authorizes the
Custodian to tape record any and all telephonic or other oral instructions given
to the Custodian by or on behalf of the Fund (including any of its officers,
Directors, Trustees, employees or agents) and will deliver to the Custodian a
similar authorization from any investment manager or adviser or person or entity
with similar reponsibilities which is authorized to give proper instructions on
behalf of the Fund to the Custodian. Proper instructions may relate to specific
transactions or to types or classes of transactions, and may be in the form of
standing instructions.
Proper instructions may include communications effected directly between
electromechanical 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 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 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
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 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 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 3la-1 and 3la-2 thereunder) and under
applicable Federal and State tax laws. All such records will be the property of
the Fund and in the event of termination of this Agreement shall be delivered to
the successor custodian.
B. Accounts - To keep books of account and render statements, including interim
monthly and complete quarterly financial statements, or copies thereof, from
time to time as reasonably requested by proper instructions.
C. Access to Records - The books and records maintained by the Custodian
pursuant to Sections 5A and 5B shall at all times during the Custodian's regular
business hours be open to inspection and audit by officers of, attorneys for and
auditors employed by the Fund and by employees and agents of the Securities and
Exchange Commission, provided that all such individuals shall observe all
security requirements of the Custodian applicable to its own employees having
access to similar records within the Custodian and such regulations as may be
reasonably imposed by the Custodian.
D. Disbursements - Upon receipt of proper instructions, to pay or cause to be
paid, insofar as funds are available for the purpose, bills, statements and
other obligations of the Fund (including but not limited to interest charges,
taxes, management fees, compensation to Fund officers and employees, and other
operating expenses of the Fund).
6. Standard of Care and Related Matters:
A. Liability of the Custodian with Respect to Proper
Instructions; Evidence of Authority, Etc. The Custodian shall not be liable for
any action taken or omitted in reliance upon proper instructions believed by it
to be genuine or upon any other written notice, request, direction, instruction,
certificate or other instrument believed by it to be genuine and signed by the
proper party or parties.
The Secretary or Assistant Secretary of the Fund shall certify to the Custodian
the names, signatures and scope of authority of all persons authorized to give
proper instructions or any other such notice, request, direction, instruction,
certificate or instrument on behalf of the Fund, the names and signatures of the
officers of the Fund, the name and address of the Shareholder Servicing Agent,
and any resolutions, votes, instructions or directions of the Fund's Board of
Directors or Trustees or shareholders. Such certificate may be accepted and
relied upon by the Custodian as conclusive evidence of the facts set forth
therein and may be considered in full force and effect until receipt of a
similar certificate to the contrary.
So long as and to the extent that it is in the exercise of reasonable care, the
Custodian shall not be responsible for the title, validity or genuineness of any
property or evidence of title thereto received by it or delivered by it pursuant
to this Agreement.
The Custodian shall be entitled, at the expense of the Fund, to receive and act
upon advice of (i) counsel regularly retained by the Custodian in respect of
custodian matters, (ii) counsel for the Fund, or (iii) such other counsel as the
Fund and the Custodian may agree upon, with respect to all matters, and the
Custodian shall be without liability for any action reasonably taken or omitted
pursuant to such advice.
B. Liability of the Custodian with Respect to Use of Securities System - With
respect to the portfolio securities, cash and other property of the Fund held by
a Securities System, the Custodian shall be liable to the Fund only for any loss
or damage to the Fund resulting from use of the Securities System if caused by
any negligence, misfeasance or misconduct of the Custodian or any of its agents
or of any of its or their employees or from any failure of the Custodian or any
such agent to enforce effectively such rights as it may have against the
Securities System. At the election of the Fund, it shall be entitled to be
subrogated to the rights of the Custodian with respect to any claim against the
Securities System or any other person which the Custodian may have as a
consequence of any such loss or damage to the Fund if and to the extent that the
Fund has not been made whole for any such loss or damage.
C. Liability of the Custodian with respect to Subcustodians The Custodian shall
be liable to the Fund for any loss or damage to the Fund caused by or resulting
from the acts or omissions of any Subcustodian to the extent that under the
terms set forth in the subcustodian agreement between the Custodian and the
Subcustodian (or in the subcustodian agreement between a Subcustodian and any
secondary Subcustodian), the Subcustodian (or secondary Subcustodian) has failed
to perform in accordance with the standard of conduct imposed under such
subcustodian agreement as determined in accordance with the law which is
adjudicated to govern such agreement and in accordance with any determination of
any court as to the duties of said Subcustodian pursuant to said agreement. The
Custodian shall also be liable to the Fund for its own negligence in
transmitting any instructions received by it from the Fund and for its own
negligence in connection with the delivery of any securities or funds held by it
to any Subcustodian.
D. Standard of Care; Liability; Indemnification - The Custodian shall be held
only to the exercise of reasonable care and diligence in carrying out the
provisions of this Agreement, provided that the Custodian shall not thereby be
required to take any action which is in contravention of any applicable law.
The Fund agrees to indemnify and hold harmless the Custodian and its nominees
from all claims and liabilities (including counsel fees) incurred or assessed
against it or its nominees in connection with the performance of this Agreement,
except such as may arise from its or its nominee's breach of the relevant
standard of conduct set forth in this Agreement. Without limiting the foregoing
indemnification obligation of the Fund, the Fund agrees to indemnify the
Custodian and any nominee in whose name portfolio securities or other property
of the Fund is registered against any liability the Custodian or such nominee
may incur by reason of taxes assessed to the Custodian or such nominee or other
costs, liability or expense incurred by the Custodian or such nominee resulting
directly or indirectly from the fact that portfolio securities or other property
of the Fund is registered in the name of the Custodian or such nominee.
It is also understood that the Custodian shall not be liable for any loss
involving any securities, currencies, deposits or other property of the Fund,
whether maintained by it, a Subcustodian, a securities depository, an agent of
the Custodian or a Subcustodian, a Securities System, or a Banking Institution,
or for any loss arising from a foreign currency transaction or contract, where
the loss results from a Sovereign Risk or where the entity maintaining such
securities, currencies, deposits or other property of the Fund, whether the
Custodian, a Subcustodian, a securities depository, an agent of the Custodian or
a Subcustodian, a Securities System or a Banking Institution, has exercised
reasonable care maintaining such property or in connection with the transaction
involving such property. A "Sovereign Risk" shall mean nationalization,
expropriation, devaluation, revaluation, confiscation, seizure, cancellation,
destruction or similar action by any governmental authority, de facto or de
jure; or enactment, promulgation, imposition or enforcement by any such
governmental authority of currency restrictions, exchange controls, taxes,
levies or other charges affecting the Fund's property; or acts of war,
terrorism, insurrection or revolution; or any other act or event beyond the
Custodian's control.
E. Reimbursement of Advances - The Custodian shall be entitled to receive
reimbursement from the Fund on demand, in the manner provided in Section 7, for
its cash disbursements, expenses and charges (including the fees and expenses of
any Subcustodian or any Agent) in connection with this Agreement, but excluding
salaries and usual overhead expenses.
F. Security for Obligations to Custodian - If the Fund shall require the
Custodian to advance cash or securities for any purpose for the benefit of the
Fund, including in connection with foreign exchange contracts or options
(collectively, an "Advance"), or if the Custodian or any nominee thereof shall
incur or be assessed any taxes, charges, expenses, assessments, claims or
liabilities in connection with the performance of this Agreement (collectively a
"Liability"), except such as may arise from its or such nominee's breach of the
relevant standard of conduct set forth in this Agreement, then in such event any
property at any time held for the account of the Fund by the Custodian or a
Subcustodian shall be security for such Advance or Liability and if the Fund
shall fail to repay or indemnify the Custodian promptly, the Custodian shall be
entitled to utilize available cash and to dispose of the Fund's property,
including securities, to the extent necessary to obtain reimbursement or
indemnification.
G. Appointment of Agents - The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust company
as its agent (an "Agent") to carry out such of the provisions of this Agreement
as the Custodian may from time to time direct, provided, however, that the
appointment of such Agent (other than an Agent appointed pursuant to the third
paragraph of Section 3) shall not relieve the Custodian of any of its
responsibilities under this agreement.
H. Powers of Attorney - Upon request, the Fund shall deliver to the Custodian
such proxies, powers of attorney or other instruments as may be reasonable and
necessary or desirable in connection with the performance by the Custodian or
any Subcustodian of their respective obligations under this Agreement or any
applicable subcustodian agreement.
7. Compensation of the Custodian: The Fund shall pay the Custodian a custody fee
based on such fee schedule as may from time to time be agreed upon in writing by
the Custodian and the Fund. Such fee, together with all amounts for which the
Custodian is to be reimbursed in accordance with Section 6D, shall be billed to
the Fund in such a manner as to permit payment by a direct cash payment to the
Custodian.
8. Termination; Successor Custodian: This Agreement shall continue in full force
and effect until terminated by either party by an instrument in writing
delivered or mailed, postage prepaid, to the other party, such termination to
take effect not sooner than seventy five (75) days after the date of such
delivery or mailing. In the event of termination the Custodian shall be entitled
to receive prior to delivery of the securities, funds and other property held by
it all accrued fees and unreimbursed expenses the payment of which is
contemplated by Sections 6D and 7, upon receipt by the Fund of a statement
setting forth such fees and expenses.
In the event of the appointment of a successor custodian, it is agreed that the
funds and securities owned by the Fund and held by the Custodian or any
Subcustodian shall be delivered to the successor custodian, and the Custodian
agrees to cooperate with the Fund in execution of documents and performance of
other actions necessary or desirable in order to substitute the successor
custodian for the Custodian under this Agreement.
9. Amendment: This Agreement constitutes the entire understanding and agreement
of the parties hereto with respect to the subject matter hereof. No provision of
this Agreement may be amended or terminated except by a statement in writing
signed by the party against which enforcement of the amendment or termination is
sought.
In connection with the operation of this Agreement, the Custodian and the Fund
may agree in writing from time to time on such provisions interpretative of or
in addition to the provisions of this Agreement as may in their joint opinion be
consistent with the general tenor of this Agreement. No interpretative or
additional provisions made as provided in the preceding sentence shall be deemed
to be an amendment of this Agreement.
The section headings in this Agreement are for the convenience of the parties
and in no way alter, amend, limit or restrict the contractual obligations of the
parties set forth in this Agreement.
10. Governing Law: This instrument is executed and delivered in The Commonwealth
of Massachusetts and shall be governed by and construed according to the laws of
said Commonwealth.
11. Notices: Notices and other writings delivered or mailed postage prepaid to
the Fund addressed to the Fund at 60 State Street, Boston, Massachusetts 02109
or to such other address as the Fund may have designated to the Custodian in
writing, or to the Custodian at 40 Water Street, Boston, Massachusetts 02109,
Attention: Manager, Securities Department, or to such other address as the
Custodian may have designated to the Fund in writing, shall be deemed to have
been properly delivered or given hereunder to the respective addressee.
12. Binding Effect: This Agreement shall be binding on and shall inure to the
benefit of the Fund and the Custodian and their respective successors and
assigns, provided that neither party hereto may assign this Agreement or any of
its rights or obligations hereunder without the prior written consent of the
other party.
13. Counterparts: This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original. This Agreement shall become effective
when one or more counterparts have been signed and delivered by each of the
parties.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
in its name and behalf on the day and year first above written.
PIONEER II BROWN BROTHERS HARRIMAN & CO.
By per pro
INVESTMENT COMPANY SERVICE AGREEMENT
January 1, 1986
Pioneer II, a Massachusetts business trust with its principal place of
business at 60 State Street, Boston, Massachusetts 02109 ("Customer") and The
First National PSC of Boston, a national banking association with its principal
place of business in Boston, Massachusetts ("PSC") agree as follows:
l. SERVICES TO BE PROVIDED BY PSC. During the term of this Agreement,
PSC will provide Customer with the services described in Exhibits A, B, C and D
(collectively, the "Exhibits") which are affixed hereto and incorporated herein
by reference.
2. EFFECTIVE DATE. This Agreement shall become effective on the January
1, 1986 (the "Effective Date") and shall continue in effect until it is
terminated in accordance with Section 11 below.
3. DELIVERY, VERIFICATION AND RECEIPT FOB 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 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, 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, 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 times 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 the 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 the
Customer in the event of a material adverse change in such insurance coverage.
In the event of damage or loss occurring to the 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.
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<PAGE>
6. CONFIDENTIALITY. PSC will keep confidential all records and
information provided by the Customer or by the shareholders to PSC, except to
the extent disclosures are required by the Agreement, are required by the
Customer's prospectus, 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
the 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 the Customer or Customer's agents, including
reasonable visitation by the Customer or Customer's agent, 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. The Customer will keep confidential and will cause to
keep confidential all confidential information obtained by its employees or
agents or any other individual representing the Customer while on PSC's
premises. Confidential information shall include (l) 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
the 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
3
<PAGE>
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 paragraph 13 of this Agreement, Customer
agrees to indemnify and hold PSC, its employees, agents and nominees harmless
from and against any and all claims, demands, actions and suits, whether
groundless or otherwise, and from and against any and all judgments,
liabilities, losses, damages, costs, charges, counsel fees and other expenses of
every nature and character arising out of or in any way relating to PSC's action
or non-action upon information, instructions or requests given or made to PSC by
the Customer.
Notwithstanding the above, whenever the Customer may be asked to
indemnify or hold PSC harmless, the Customer shall be advised of all pertinent
facts arising from the situation in question. Additionally, PSC will use
reasonable care to identify and notify the Customer promptly concerning any
situation which presents, actually or potentially, a claim for indemnification
against the Customer. The Customer shall have the option to defend PSC against
any claim for which PSC is entitled to indemnification from the Customer under
the terms hereof, and in the event the Customer so elects, it will notify PSC
and, thereupon, the Customer shall take over complete defense of the claim and
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 the Customer will be asked to
indemnify PSC except with the Customer's prior written consent.
9. MAINTENANCE OF DEPOSIT ACCOUNTS. PSC shall maintain on behalf of the
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 a monthly fee to PSC, such fee
to be $.875 per open account and $.40 per closed account (commencing the month
after an account closes). In addition, Customer shall reimburse PSC monthly for
out-of-pocket expenses such as postage, forms, envelopes, checks, "outside"
mailings, telephone lines, mailgrams, mail insurance on certificates and data
processing file recovery insurance, provided that Customer shall not be
responsible for PSC's payments to The First National Bank of Boston ("FNB")
under
4
<PAGE>
certain agreements between FNB and PSC pursuant to which FNB will furnish to PSC
data processing and check processing services and assistance with dividend,
capital gain and year-end mailings. PSC has agreed with FNB on behalf of
Customer that Customer shall receive interest on all cash balances at FNB equal
to 87 1/2% of the 90-day U.S. Treasury Bill rate (from time to time).
11. TERMINATION. Either PSC or Customer may at any time terminate this
agreement by giving 60 days written notice in advance to the other. This
Agreement shall terminate upon the assignment by either party of its rights
hereunder without the consent of the other party. The continuation of this
Agreement beyond one year shall be subject to annual approval by a majority of
Customer's non-interested Trustees.
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:
A. Two (2) copies of the Declaration of Trust of Customer, and of
any amendments thereto, certified by the proper official of the
State where this Declaration of Trust is filed.
B. Two (2) copies of the following documents, currently certified by
the Secretary or Clerk of Customer.
a. Customer's By-laws and any amendment thereto.
b. Certificate copies of resolutions of Customer's Board of
Trustees covering the following matters.
(1) Approval of this Agreement, authorization for a
specified officer to execute and deliver this Agreement
and authorization of specified officers to instruct PSC
hereunder.
5
<PAGE>
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. Underwriting Agreement
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 and the Investment
Company Act of 1940 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 becoming effective.
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 the Trust or the
Trustees set forth herein to indemnify any party to this Agreement or any other
person, shall be satisfied out of the assets of the Trust and that no Trustee,
officer or holder of shares of beneficial interest of the Trust shall be
personally liable for any of the foregoing liabilities. The Trust's Declaration
of Trust, as amended from time to time, is on file in the Office of the
Secretary of State of The Commonwealth of Massachusetts. Such Declaration of
Trust describes in detail the respective responsibilities and limitations on
liability of the Trustees, officers, and holders of shares of beneficial
interest.
14. 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
6
<PAGE>
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.
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.
PIONEERING SERVICES CORPORATION
By: /s/ William H. Smith
William H. Smith, President
PIONEER II
By: /s/Albert L. Runge
Albert L. Runge, Treasurer
7
<PAGE>
EXHIBIT A. TO INVESTMENT COMPANY SERVICE AGREEMENT
Shareholder Account Service --
As Servicing Agent for Plan Accounts in accordance with either the provisions of
standard Plan Applications or Customer's prospectus, PSC will:
1. Open, maintain and close accounts.
2. Purchase shares for the planholder.
3. Out of the money received in payment for share sales 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 monthly
basis.
4. Redeem shares by systematic withdrawal orders. (See Exhibit B)
5. Issue certificates, upon instruction, resulting from withdrawals from
plan accounts. Maintain records showing name, address, certificate
numbers and number of shares.
6. Deposit certificates to plan 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 proxy proofs checked by Customer, mail
shareholder reports, proxies and related
<PAGE>
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 planholders in a timely fashion.
16. Provide Customer with such information regarding correspondence as will
enable Customer to comply with related N-SAR requirements.
17. Maintain continuous proof of the outstanding shares of the Company.
18. Solicit taxpayer identification numbers.
19. Provide data to enable the Company 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 some on a monthly basis.
21. Provide management information reports on a quarterly basis to the
Board of Trustees 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 Redemption function, PSC will:
1. Where applicable, establish accounts payable based on information
furnished to PSC of behalf of the 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.
b. Written authorization (where no share certificate are issued).
3. Verify there are sufficient shares in an account to cover redemption
requests.
4. Transfer the redeemed or repurchased shares to the 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 the prospectus of the Customer and the 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 the Customer and the underwriter for the 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
<PAGE>
value applicable at the date and time of receipt of such documents.
8. Produce periodic reports of unsettled items, if any.
9. Adjust unsettled items, if any, relative to dividends and
distributions.
10. Report to Customer any late redemptions which must be included in
Customer's N-SAR.
<PAGE>
EXHIBIT C TO INVESTMENT COMPANY SERVICE AGREEMENT
Exchange Service
1. Receive and process exchanges in accordance with a duly executed
exchange authorization. PSC will redeem existing shares and use the
proceeds to purchase new shares. Shares of the Fund 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. Shares of the
Fund 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.
3. Register new shares identically with the shares surrendered for
exchange. Mail new shares or a plan 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 the 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.
<PAGE>
EXHIBIT E. TO INVESTMENT COMPANY SERVICE AGREEMENT
Shareholder Accounting Service - Trustee or Custodian Under Retirement Plans
(Keogh and IRA) and Corporate Retirement Plans.
After acceptance as Trustee or Custodian, PSC will:
1. Receive, invest and account for funds paid to PSC under a plan.
2. Out of the money received in payment for share sales, pay to the
customer's Custodian the net asset value per share and pay to the
underwriter its commission if any, on a periodic basis.
3. Hold all trust property received by PSC in safekeeping.
4. File required tax information returns.
5. Make distributions from a plan in accordance with the employer's
instruction.
6. Upon receiving appropriate detailed instructions and written materials
prepared by Customer and proxy proofs checked by Customer, mail to
employers shareholders reports, proxies and related materials of
suitable design for automatic enclosing, and receive and tabulate
executed proxies.
7. Respond to planholder correspondence and telephone inquiries.
8. Maintain dealer and salesperson records. Prepare and mail monthly
dealer commission statements and checks.
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 II's 1995 Annual Report (and to all
references to our firm) included in or made a part of the Pioneer II
Post-Effective Amendment No. 44 and Amendment No. 27 to Registration Statement
File No. 2-32773.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
January 24, 1996
DISTRIBUTION PLAN
PIONEER II
DISTRIBUTION PLAN, dated as of November 1, 1991, of PIONEER II, a
Massachusetts business trust (the "Fund").
WITNESSETH
WHEREAS, the Fund 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 Fund intends to distribute its shares of beneficial
interest (the "Shares") in accordance with Rule l2b-l promulgated by the
Securities and Exchange Commission under the 1940 Act ("Rule l2b-l"), and
desires to adopt this Distribution Plan (the "Plan");
WHEREAS, the Fund desires to engage Pioneer Funds Distributor, Inc., a
Massachusetts corporation ("PFD"), to provide certain distribution services for
the Fund in connection with the Plan;
WHEREAS, the Fund desires to amend its existing underwriting agreement
with PFD, whereby PFD will provide facilities and personnel and render services
to the Fund in connection with the offering and distribution of the Shares (such
amended underwriting agreement to be referred to as the "Underwriting
Agreement");
WHEREAS, the Fund 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 Shares in connection with the offering of
Shares, (b) PFD may compensate any Dealer that sells 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, its profits or any other source available to
it; and
WHEREAS, the Board of Trustees of the Fund, in considering whether the
Fund should adopt and implement this Plan, has evaluated such information as it
deemed necessary to an informed determination whether this 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 Fund for
<PAGE>
such purposes, and has determined that there is a reasonable likelihood that the
adoption and implementation of this Plan will benefit the Fund and its
shareholders;
NOW, THEREFORE, the Board of Trustees of the Fund hereby adopts this
Plan for the Fund as a plan for distribution in accordance with Rule l2b-l, on
the following terms and conditions:
l. The Fund may expend pursuant to this Plan amounts not to exceed .25%
of 1% of the average daily net assets of the Fund per annum.
2. Subject to the limit in paragraph l, the Fund shall reimburse PFD
for amounts expended by PFD to finance any activity which is primarily intended
to result in the sale of Shares of the Fund or the provision of services to
shareholders of the Fund, 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 Fund 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 25/lOO of l% per annum of
the Fund's daily net assets; (ii) reimbursement to PFD for its expenditures for
broker-dealer commissions and employee compensation on certain sales of the
Fund's Shares with no initial sales charge; and (iii) reimbursement to PFD for
expenses incurred providing services to shareholders and supporting
broker-dealers and other organizations, such as banks and trust companies, in
their effort to provide such services (any addition of such categories shall be
subject to the approval of the Qualified Trustees, as defined below, of the
Fund). 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.
Reimbursable expenses will not carryover beyond twelve months from the time they
are incurred. The Fund acknowledges that PFD will charge a sales load in
connection with sales of such Shares and that PFD will reallow to Dealers all or
a portion of such sales load, as described in the Fund's Prospectus from time to
time. Nothing contained herein is intended to have any effect whatsoever on
PFD's ability to charge any such sales load or to reallow all or any portion
thereof to Dealers.
3. The Fund understands that agreements between PFD and Dealers may
provide for payment of fees to Dealers in connection with the sale of Shares and
the provision of services to shareholders of the Fund. Nothing in this Plan
shall be construed
-2-
<PAGE>
as requiring the Fund to make any payment to any Dealer or to have any
obligations to any Dealer in connection with services as a dealer of the 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 Fund.
4. Nothing herein contained shall be deemed to require the Fund 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 Fund's Board of Trustees of the
responsibility for and control of the conduct of the affairs of the Fund.
5. This Plan shall become effective upon approval by (i) a vote of the
Board of Trustees and a vote of a majority of the Trustees who are not
"interested persons" of the Fund and who have no direct or indirect financial
interest in the operation of the Plan or in any agreement related to the Plan
(the "Qualified Trustees") such votes to be cast in person at a meeting called
for the purpose of voting on this Plan and (ii) a vote of the "majority of the
outstanding voting securities of the Fund."
6. This 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 Fund and a majority of the Qualified Trustees.
This Plan shall expire on September 30 of any year, beginning September 30,
1992, in which such approval is not obtained. In the event of termination or
non-continuance of this Plan, the Fund has twelve months to reimburse any
expense which it incurs prior to such termination or non-continuance, provided
that payments by the Fund during such twelve-month period shall not exceed
25/lOO of 1% of the Fund's average daily net assets during such period.
7. This Plan may be amended at any time by the Board of Trustees,
provided that this Plan may not be amended to increase materially the limitation
on the annual percentage of average net assets which may be expended hereunder
without the approval of holders of a "majority of the outstanding voting
securities" of the Fund 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 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
-3-
<PAGE>
paragraph l above. This 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 Fund.
8. The Fund and PFD shall provide the Fund's Board of Trustees, and the
Board of Trustees shall review, at least quarterly, a written report of the
amounts expended under this Plan and the purposes for which such expenditures
were made.
9. While this 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 Fund.
l0. For the purposes of this Plan, the terms "interested persons,"
"majority of the outstanding voting securities" and "specifically approved at
least annually" are used as defined in the 1940 Act.
ll. The Fund shall preserve copies of this Plan, and each agreement
related hereto and each report referred to in paragraph 8 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.
l2. This Plan shall be construed in accordance with the laws of the
Commonwealth of Massachusetts and the applicable provisions of the 1940 Act.
13. If any provision of this Plan shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
-4-
Exhibit 16
PIONEER II
Description of Average Annual Total Return
1/n
T=(ERV/P) -1, where:
T=Average annual total return
n=Number of years
ERV=Ending redeemable value of a
hypothetical $1,000 payment made
at maximum offering price
at the beginning of n years
p=Hypothetical $1,000 initial payment
----------------------------------------------------------------
Pioneer II Average Annual Total Returns
Periods Ending 9/30/91
One Year
1/1
T= ($1,174.26/$1,000.00) -1
T= 17.43%
Five Year
1/5
T= ($1,530.67/$1,000.00) -1
T= 8.89%
Ten Year 1/10
T= ($3,594.05/$1,000.00) -1
T= 13.65%
[ARTICLE] 6
[CIK] 0000078758
[NAME] PIONEER II
[MULTIPLIER] 1000
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] SEP-30-1995
[PERIOD-END] SEP-30-1995
[INVESTMENTS-AT-COST] 4171726
[INVESTMENTS-AT-VALUE] 5079767
[RECEIVABLES] 59992
[ASSETS-OTHER] 132
[OTHER-ITEMS-ASSETS] 23368
[TOTAL-ASSETS] 5163259
[PAYABLE-FOR-SECURITIES] 34278
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 14018
[TOTAL-LIABILITIES] 48296
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 3829049
[SHARES-COMMON-STOCK] 247541
[SHARES-COMMON-PRIOR] 232692
[ACCUMULATED-NII-CURRENT] 44394
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 333699
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 907821
[NET-ASSETS] 5114963
[DIVIDEND-INCOME] 114455
[INTEREST-INCOME] 14628
[OTHER-INCOME] 0
[EXPENSES-NET] (42056)
[NET-INVESTMENT-INCOME] 87027
[REALIZED-GAINS-CURRENT] 402697
[APPREC-INCREASE-CURRENT] 377142
[NET-CHANGE-FROM-OPS] 866866
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (71692)
[DISTRIBUTIONS-OF-GAINS] (415685)
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 14703
[NUMBER-OF-SHARES-REDEEMED] 27190
[SHARES-REINVESTED] 27336
[NET-CHANGE-IN-ASSETS] 605738
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 389305
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 21051
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 43240
[AVERAGE-NET-ASSETS] 4648535
[PER-SHARE-NAV-BEGIN] 19.38
[PER-SHARE-NII] 0.35
[PER-SHARE-GAIN-APPREC] 3.04
[PER-SHARE-DIVIDEND] 0.30
[PER-SHARE-DISTRIBUTIONS] 1.81
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 20.66
[EXPENSE-RATIO] 0.93
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
POWER OF ATTORNEY
I, the undersigned trustee of Pioneer Bond Fund, Pioneer Europe Fund,
Pioneer Fund, Pioneer Growth Trust, Pioneer International Growth Fund, Pioneer
Money Market Trust, Pioneer Municipal Bond Fund, Pioneer Short-Term Income
Trust, Pioneer Tax-Free State Series Trust, Pioneer II, Pioneer Three and
Pioneer U.S. Government Trust (collectively, the "Funds"), all Massachusetts
business trusts, do hereby constitute and appoint John F. Cogan, Jr., Joseph P.
Barri and William H. Keough, and each of them acting singly, to be my true,
sufficient and lawful attorneys, with full power to each of them, and each of
them acting singly, to sign for me, in my name and in the capacity indicated
below, any and all amendments to the Registration Statements on Forms N-1A to be
filed by the Funds under the Investment Company Act of 1940, as amended, and
under the Securities Act of 1933, as amended, with respect to the offering of
the Funds' shares of beneficial interest, no par value, and any and all other
documents and papers relating thereto, and generally to do all such things in my
name and on my behalf in the capacity indicated to enable the Funds to comply
with the Investment Company Act of 1940, as amended, and the Securities Act of
1933, as amended, and all requirements of the Securities and Exchange Commission
thereunder, hereby ratifying and confirming my signature as it may be signed by
said attorneys or each of them to any and all amendments to said Registration
Statements.
IN WITNESS WHEREOF, I have hereunder set my hand on the date set
opposite my signature.
Dated: September 24, 1993 /s/Stephen K. West
Stephen K. West
Trustee
<PAGE>
POWER OF ATTORNEY
We, the undersigned trustees of Pioneer Money Market Trust, Pioneer
Bond Fund, Pioneer U.S. Government Trust, Pioneer Fund, Pioneer II, Pioneer
Three, Pioneer Europe Fund, Pioneer Growth Trust, Pioneer Municipal Bond Fund
and Pioneer Short-Term Income Trust (collectively, the "Funds"), all
Massachusetts business trusts, do hereby severally constitute and appoint John
F. Cogan, Jr., Joseph P. Barri and William H. Keough, 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 capacities indicated below, any and all amendments to the
Registration Statements on Forms N-1A to be filed by the Funds under the
Investment Company Act of 1940, as amended, and under the Securities Act of
1933, as amended, with respect to the offering of the Funds' shares of
beneficial interest, no par value, 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 capacities indicated to enable the Funds to
comply with the Investment Company Act of 1940, as amended, and the Securities
Act of 1933, as amended, 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 Statements.
IN WITNESS WHEREOF, we have hereunder set our hands on the dates set
opposite our respective signatures.
Dated: February 5, 1993 /s/ Richard H. Egdahl, M.D.
----------------------------- ---------------------------
Richard H. Egdahl, M.D.
Trustee
Dated: February 5, 1993 /s/ Margaret B. W. Graham
----------------------------- -------------------------
Margaret B. W. Graham
Trustee
<PAGE>
POWER OF ATTORNEY
I, William H. Keough, the Treasurer and Principal Accounting and
Financial Officer of Pioneer Fund, Pioneer II, Pioneer Three, Pioneer Bond Fund,
Pioneer Municipal Bond Fund, Pioneer U.S. Government Trust and Pioneer Money
Market Trust (collectively, the "Funds"), hereby constitute and apoint Joseph P.
Barri my true and lawful attorney with full power to him to sign for me and in
my name and in the capacities listed above the Registration Statements on Form
N-1A for each of the Funds and any and all post-effective amendments to said
Registration Statements, including the post-effective amendment filed herewith,
and generally to do all such things in my name and on my behalf in my capacity
as an officer of the Funds to enable the Funds to comply with the provisions of
the Securities Act of 1933, as amended, the Investment Company Act of 1940, as
amended, and all requirements of the Securities and Exchange Commission.
Witness my hand on the date set forth below.
Date January 24, 1990 /s/ William H. Keough
- ------------------------------ ---------------------
William H. Keough
Subscribed and sworn to
before me this 24th day of
January, 1990.
Notary Public
My commission expires: August 3, 1990
